Employed physicians could see job losses or salary cuts if the recession continues.
By Karen Caffarini, AMNews staff. Posted Jan. 26, 2009.
Increasing numbers of hospitals nationwide are instituting mass layoffs as they try to stay solvent in what some administrators and consultants have called the most challenging time for the industry in at least 40 years.
Some smaller hospitals have even laid off employed doctors or slashed physician pay, and consultants warn that as the economy gets worse, more hospitals will likely follow.
The U.S. Dept. of Labor's Bureau of Labor Statistics reported that as of Nov. 30, 2008, 107 hospitals had reported mass layoffs, defined as 50 or more unemployment claims filed against one company at one time. That was the highest yearly number since the bureau began keeping these statistics in 1995, surpassing the previous high of 100 mass layoffs during 2003.
There were at least 10 incidents of mass layoffs every month for six months from June 2008 through November 2008. No previously recorded year had more than two straight months with 10 or more layoffs.
These statistics don't include incidents of layoffs of fewer than 50 people at a time. The American Hospital Assn. has no data on that, but a survey it conducted in October 2008 found that 53% of the 736 hospitals responding were considering staff cutbacks due to financial stress.
Hospital administrators say a combination of factors resulting from the recession have caused an economic meltdown unlike any they've seen.
Layoffs throughout the overall business community have swelled the number of uninsured patients at the same time that cash-strapped states have slashed Medicare and Medicaid reimbursements. A bear market has resulted in investment losses straining hospital endowments and reserves. Donations are down. And skittish banks have made it more difficult or more expensive to borrow or have frozen credit altogether.
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