Health Care Employment Anemic as Sequestration Cuts Continue

When the accross-the-board cuts to Medicare reimbursement mandated by the sequestration provision in the Budget Control Act of 2011 were about to go into effect, the American Hospital Association (AHA), the American Medical Association (AMA) and the American Nurses Association (ANA) warned that the cuts would lead to reductions in health care employment. Now that the cuts have been in place for a year, growth in health care employment does seem to be slowing.

January employment number by the U.S. Bureau of Labor Statisticts (BLS) show that health care employment remained essentially unchanged from December, 2013. Employment in physician offices grew by 900 jobs while employement in outpatient centers added just 200 jobs. Hospital employment declined to 4,788,300 jobs, a loss of 4,500 jobs between December and January.

In an independent report comissioined by the AHA, AMA and ANA in the fall of 2012, hospital employment was expected to be hardest hit by sequestration. Total direct health care employement loss for 2013 — the first year of the 2 percent across-the-board sequester cut to Medicare reimbursement — would be 211,756 fewer jobs, with 92,984 of those lost jobs coming from the hospital sector, the report authors predicted.

BLS numbers may not have shown as steep a loss as the report authors predicted, but relative to other employment figures that have been rising as the economy recovers, health care is no longer the employment leader it once was.

The 2012 report also predicted that health care job losses would continue to grown with each year that the sequestration cuts remained in place. The report authors expected 330,127 direct health care sector job losses by 2021 when sequestration expires

The Republican debt ceiling deal that had been in the works since December had included extension of the sequestration cuts to Medicare for another one or two years beyond 2021. However, with pressure mounting to pass a debt ceiling deal before February 27 (the date when the U.S. Government will officially be unable to pay its debts unless Congress acts), House Speaker John Boehner on Tuesday, Feb. 11, pulled the deal his party had introduced and replaced it with a bill that only raises the debt ceiling without any additional provisions.