The U.S. healthcare sector added 358,000 jobs in June, continuing a rebound after losing over 1.4 million jobs in April as the industry largely shut down elective care.
Much like May's report, dentists' practices saw the largest gains with 190,400 jobs added in June, according to a July 2 report from the U.S. Bureau of Labor Statistics. Job numbers for offices of physicians and other health practitioners also increased by 80,000 and 47,500, respectively.
Job gains for May were revised up from 312,400 to 315,600, according to BLS data.
While having two months of growth is encouraging for coming out of the effects of the coronavirus pandemic, the resurgence of COVID-19 cases in the U.S. could derail the healthcare industry's and U.S. economy's recovery, Dante DeAntonio, an economist at Moody's Analytics, said in an interview.
"We can feel good about June data but it's much, much less clear today that next month will be good," DeAntonio said. "There's a much bigger weight hanging over us today than there was a month ago."
Overall, nonfarm payroll employment rose by 4.8 million in June, and the unemployment rate dropped from 13.3% to 11.1%, according to the report.
While most of the healthcare sector saw gains in May and June, losses continued for nursing care facilities and community care facilities for the elderly. Nursing care facilities lost 18,300 jobs in the month — the most in the healthcare industry — and community care facilities for the elderly followed with 1,400 jobs lost.
Hospitals added jobs for the first month since March, with an increase of 6,700 jobs in June. The subindustry lost 34,500 jobs in May and 126,200 in April, according to BLS data.
Elective care restarts
The now two-month bounceback for the healthcare industry comes as hospitals are seeing patient and surgery volumes return, albeit at lower levels than before the pandemic intensified in the U.S.
Tenet Healthcare Corp. reported in June that certain patient volumes in May and the first half of June were at 65% to 95% compared to pre-pandemic levels.
However, the decline of patient volumes is likely to continue throughout the year, possibly costing the industry tens of billions of dollars a month. U.S. hospitals could lose at least $323.1 billion in 2020, primarily due to the drop off in elective care and the loss of patient volumes overall, according to a June 30 report from the American Hospital Association, an industry trade group.
States are also seeing COVID-19 cases spike after implementing re-opening plans, which could once again impact continuing nonemergent and elective care.
Texas Gov. Greg Abbott further restricted elective care for multiple counties in the state on June 30 due to COVID-19 cases climbing and hospital beds being taken up. The Republican governor expanded a June 25 executive order that limited some nonemergent care.
Analysts from Moody's Investors Service said in a June 30 report that the expansion of the executive order was credit negative for the for-profit hospital industry. While the order is not as expansive as the nationwide shutdown of elective care in March and April, Abbott's decision "will likely disrupt what had been the beginning of a healthy recovery in hospital volumes in late-May and early-June."
HCA Healthcare Inc. and Universal Health Services Inc. derive about 26% and 16% of their revenue from Texas, respectively, according to the report. Meanwhile, Dallas-based Tenet Healthcare has about 23% of its hospital beds in the state.
"As other hot spots emerge, like Florida (another important market for for-profit hospitals), additional moves to restrict elective surgeries or reinstate lock-down measures in certain areas will further disrupt the recovery," the report stated.
At least 2,699,658 people in the U.S. have been infected by the virus, leading to 128,184 deaths, according to Johns Hopkins University's Center for Systems Science and Engineering.
Any pause to re-opening plans is more likely to impact sectors like the hospitality industry rather than the healthcare industry, Moody Analtytics's DeAntonio said. If elective care is suspended again, it's more likely to see a similar situation as March and April when losses were driven by physicians' and dentists' offices, which are primarily reliant on nonemergent or elective care.
"Unless we get to a point where those places start to shut down again...you're probably not going to get a huge collapse in overall healthcare employment," he said.