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Healthcare sector lost 42,500 jobs in March as coronavirus outbreak accelerated

The U.S. healthcare sector lost 42,500 jobs in March, showing some of the first impacts on employment across the industry as the coronavirus pandemic accelerates in the country, according to data from the Bureau of Labor Statistics.

The month's losses were in line with expectations and not as severe as other industries, such as the over 450,000 losses in the leisure and hospitality sector, Dan White, head of fiscal policy research for Moody's Analytics, told S&P Global Market Intelligence.

White said the healthcare and social assistance industry, which makes up 14% or 15% of the U.S. economy, accounted for only 9% of the job losses last month.

The data provide the first in-depth look at the pandemic's impact on healthcare jobs. February's report was produced earlier in the U.S. outbreak and showed another month of gains for the sector.

As of April 6, there have been at least 337,971 confirmed U.S. cases of COVID-19, the respiratory disease caused by the novel coronavirus, and 9,654 confirmed deaths in that country, according to Johns Hopkins University's Center for Systems Science and Engineering.

The BLS report, released April 3, showed overall job losses of 701,000 and found the unemployment rate increased from 3.5% to 4.4%, the largest one-month jump since 1975. The data comes a day after it was reported that U.S. jobless claims increased to 6.65 million in the week ended March 28.

Next month's report may be worse for the healthcare industry because the BLS will collect data for it in the next two weeks, ahead of additional guidance for how the more than $100 billion in stimulus money will be given out to hospitals and major healthcare providers, White said.

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Ambulatory healthcare services, which is usually the driver of the sector's consistent growth, made up the overwhelming majority of the healthcare sector's losses with 40,700. Losses of 17,200 jobs for dentists' offices and 12,000 for physicians' offices led the subsector. Outpatient care centers saw a gain of about 5,200 jobs.

White said losses in ambulatory services are primarily the result of elective or nonessential care being canceled, a strategy the industry is using to stop the spread of the virus and free up beds and staff for the surge in coronavirus patients.

More losses should be expected in ambulatory services in the coming months, but the numbers for categories like dentists and physicians should eventually plateau, according to White.

Jeff Loo, associate director with S&P Global Ratings, said March 26 that practices like dental service organizations are particularly vulnerable to financial losses from the pandemic because of the canceling of elective or nonessential procedures, which tend to be their primary or sole business line.

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Nursing and residential care facilities lost 2,000 jobs in March. The gain of 1,300 jobs for residential mental health facilities was offset by losses of 1,800 and 1,500 for nursing care facilities and community care facilities for the elderly, respectively.

Hospitals see jobs increase

Hospitals was the only subindustry to see a gain in March, with an addition of 200 jobs. However, recent reports have shown that healthcare facilities across the U.S. are beginning to layoff or furlough staff members.

Tenet Healthcare Corp. said April 2 that it plans to furlough approximately 500 corporate or nonpatient staff members due to volume reductions.

Similarly, Appalachian Regional Healthcare Inc., a 13-hospital health system serving eastern Kentucky and southern West Virginia, said March 27 that it was furloughing 500 employees, which is about 8% of its workforce. The temporary furloughs were due to a 30% decrease in the system's overall business operations, Appalachian Regional said.

The system also said it would be temporarily closing some clinics and outpatient services.

White expects staffing cuts for hospitals to be temporary, and he said they could be offset by physicians and nurses being relocated to hospitals that are harder-hit by the pandemic.

"[Hospitals] may be furloughing some more long-term employees but bringing in temporary workers who are more on the front lines, and they're going to have to try and make that work from a financial perspective," White said.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.