Perspective: Health Care Regains Half of Jobs Lost This Spring

Based on today’s Employment Situation-July 2020 release, the U.S. health sector is continuing to regain jobs, but at a slower pace than in May and June. Adding 125,000 jobs in July, the health sector has regained more than 780,000 jobs, or about half of the 1.58 million jobs lost in March and April of this year.

Month-over-month change in health care employment, seasonally adjusted

Source: Altarum analysis of BLS Current Employment Statistics data

In ambulatory care settings, where most of the job losses occurred, two-thirds of jobs have returned. As we have noted in previous analyses, dental offices have experienced particularly dramatic swings in employment, losing more than half the jobs in this setting (549,000 jobs) in March and April, but rebounding quickly in May and June. Dental offices added another 45,000 in July and have now regained 483,000 jobs since April, or 94% of the jobs lost.

Hospitals were slower to lose jobs than ambulatory care settings, lost a smaller percentage of jobs, and have been slower to regain them. Hospitals lost 161,000 jobs in April and May and have gained back 30,000 jobs, or 18% of jobs lost, through July. At the current level of employment, the hospital workforce has shrunk by about 3%. Note that hospital employment includes inpatient care, including care of Covid-19 hospitalizations, and hospital-based outpatient clinics and ancillary services, as well as administrative and other non-health care service jobs.

Nursing and residential care employment continues to fall. Job losses in these settings have not been as dramatic as in ambulatory care but both nursing homes and other residential care have shed jobs for five straight months, for a total of 220,000 jobs lost.

The overall economy regained jobs in July, also at a slower pace than in May and June, adding 1.76 million jobs. Including health care, the economy has regained 42% of jobs lost. Comparing July 2020 to July 2019, health care jobs are down by 3.5%, while non-health jobs are down by 8.0%, for a total year-over-year decline of 7.5% in U.S employment.

What lies ahead for health jobs? Our crystal ball is as cloudy as anyone’s, but it seems reasonable to project slower job recovery in the health sector (and overall) in the near-term. The surge in Covid-19 cases and deaths in July and August (with one highly respected model now projecting over 300,000 U.S. Covid-19 deaths by the end of the year) can be expected to put a damper on what had been a steady increase in health care utilization, especially for elective care. The large for-profit hospital companies reported better-than-expected earnings in the second quarter of 2020 because of government relief, aggressive cost cutting, but also a strong utilization recovery. The continuing spread of the virus will likely inhibit this elective care recovery especially in the most affected regions of the country.

Longer term, it is possible that health care in all settings may learn to manage with less staff as revenue is reduced and use of technology increases – good for efficiency, obviously not so for furloughed workers. Nonetheless, the health sector has not only been heroic in its care of Covid-19 patients, it has also been innovative in adapting to what may be the health care delivery environment for the long haul. This includes everything from instant temperature checks for arriving patients, to expedited Covid-19 testing protocols before outpatient procedures, to social distancing in waiting rooms, routine use of personal protective equipment, and a rapid ramp up in the use of telemedicine.