Accounting and Financial Reporting

Hospitals shed 135,000 jobs in April while losing an estimated $51 billion

May 26, 2020 6:18 pm
  • Hospitals lost 135,000 positions in April. 
  • Hospitals have been losing an estimated $50.7 billion per month from the pandemic and related policies.
  • About 142,000 providers have received CARES Act funding and accepted the terms and conditions.

Hospitals eliminated 135,000 seasonally adjusted jobs in April, or about 3% of their workforce, as the sector struggled with an estimated $51 billion in monthly revenue loss from the coronavirus and shutdowns.

The historic job losses, which amounted to 138,100 when not seasonally adjusted, came as most states trying to contain the pandemic ordered shutdowns in elective procedures, which provide much of hospitals’ revenue.

Among the 1.4 million April job losses in all of healthcare, examples of severe cuts identified in May 8 data from the Bureau of Labor Statistics, included:

  • 503,000 positions in dentist offices
  • 243,000 positions in physician offices
  • 205,000 positions in “offices of other healthcare practitioners”
  • 113,000 positions in nursing and residential care facilities
  • 87,900 positions in outpatient healthcare centers

Overall revenue losses

The job-loss data came the same week that the American Hospital Association (AHA) issued a report estimating that hospitals will lose a cumulative $202.6 billion in revenue between March 1 and June 30, for an average loss per month of $50.7 billion.

The four-month costs for hospitals include:

  • $161.4 billion in lost revenue from canceled elective and nonelective surgeries and outpatient care, and reduced emergency department services
  • $2.4 billion in costs of personal protective equipment (PPE)
  • $36.6 billion in treatment costs, even when accounting for payments for COVID-19 patients
  • $2.2 billion in support for frontline hospital workers in COVID-19 hotspots

Other costs tangentially related to the pandemic but not included in the AHA estimates include:

  • $400 million in ongoing drug shortage costs
  • Increased wage and labor costs to cover bonus pay for high-risk staff and to pay increasingly expensive staffing firms
  • Increased costs for non-PPE medical supplies and equipment in preparation for COVID-19 patients
  • Increased capital costs, such as expanded treatment and testing capacity

New details on hospital assistance

Congress responded to the pandemic’s effect on hospital finances by allocating $100 billion for provider relief in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and $75 billion more in the Paycheck Protection Program and Health Care Enhancement (PPPHCE) Act.

However, AHA has complained that much of the CARES Act funding has gone to nonhospital providers and been slow to arrive. The U.S. Department of Health and Human Services (HHS) has begun distribution of about four-fifths of the CARES Act funding but is still finalizing plans to disburse the PPPHCE funding.

This week, the Healthcare Resources and Services Administration (HRSA) released the list of the 142,000 providers that have received some of the $50 billion in CARES Act “general distribution” funding and agreed to the accompanying terms and conditions. Hospitals comprised a smaller share of the providers listed, although their funding totals tended to be much larger.

The Trump administration this week extended the attestation period for the funding from 30 days to 45 days after receipt. A HRSA spokesman said no recipient has reached the 45-day mark.

The extension followed concerns raised by some hospital advisers about some of the terms and conditions, with requests for more time to consider them.

A senior HHS official previously confirmed that some providers had opted to return the CARES Act funds, which generally are automatically deposited in providers’ bank accounts.

“HHS does not plan to release the names of those who return or do not accept the funding,” the HRSA spokesman said.



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