Healthcare No Longer Immune From an Economic Downturn

July 22, 2020
We watched the data carefully the past few months, and started seeing statistics and stories we could not believe

Well, it finally happened. We found a breaking point and learned the U.S. healthcare employment market isn’t as immune as we thought it was, or even close. In 2008 and 2009, when almost every sector around us was in a severe downturn, the healthcare employment market and hiring held steady and strong, as it always does. Many looked at the sector as recession proof. Not this time.

While healthcare providers waited for the swarms of sick COVID-19 patients to flood their facilities, many patients were at home fearful of catching the virus, and opted to stay away from hospitals and clinics as we all began to lockdown. The government asked hospitals to stop elective procedures, and within weeks everything came to a screeching halt. I watched the data carefully and started seeing statistics and stories I could not believe. One of the most respected academic health systems laid off or furloughed 30,000 employees, while a boutique chain of 24 hospitals declared bankruptcy. Rural hospitals with challenging balance sheets were closing down—some permanently. Nurses who were hard to find and hot demand for years were either laid off or became travel nurses. In a few cases they traded their scrubs to work as janitors or worked other healthcare jobs to maintain their livelihood and support their families.

The healthcare industry, always able to weather downturns, is a huge part of our economy, forecasted to reach 19.4 perrcent of the GDP by 2027. Well, maybe…those estimates are likely to change due to COVID-19. Healthcare lost 43,000 jobs in March, and another 1.4 million in April, with most of those job losses concentrated in ambulatory care, dentist’s offices and doctor’s offices. All of this is so hard to wrap your head around and comprehend the shock of what actually happened. The trickle-down effect of the entire supply chain was impacted.

Ultimately, in May things started to turn around. Job gains in May were in outpatient care centers with 10,800 jobs added, up 1.2 percent, and medical and diagnostic laboratories with 400 new jobs, a 0.16 percent increase. The increase for outpatient centers is expected as states begin to lift stay-at-home restrictions and health systems restarted elective procedures. Nursing and residential care facilities lost 37,000 jobs in May, and community care facilities for the elderly lost 8,300 jobs. Hospitals continue to see job losses (27,000 jobs in May) after losing nearly 135,000 jobs in April. It’s just hard to watch.

We received calls from physicians, IT leaders, informaticists, clinicians and a number of executives across the sector, as all were impacted. Many just wanted someone to talk to and get another perspective and to find hope. We listened and we talked—but mostly listened. It was good for them and good for us to have conversations and compare notes. I found it therapeutic to talk with clients and candidates, and none of those conversations were about business. We were trying to become a sounding board for them. It was an amazing and fulfilling experience to share, and to encourage our fellow colleagues. We are still having those conversations as we head into the third quarter of 2020. It’s getting better.

Things are looking more optimistic overall and there is some upside to celebrate. Telemedicine is likely here to stay, and it should have been used more broadly anyway to save time, money and the aggravation of traveling to see your doctor. Hospitals are now sharing more information with one another, and consumer information regarding COVID-19 and the most recent statistics can be found all over the Internet. This will help everyone.

We will persevere as we always do, but there are a lot of things we will never take for granted any longer. I hope we have learned from COVID-19. I know I will.

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