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Provider Hiring Cutbacks May Signal Response to Repeal and Replace

Provider hiring dipped in January, fueling speculation that “repeal and replace” efforts will affect hospitals’ and physicians’ financial health.


The totals for January, reported by the Healthcare Financial Management Association (HFMA), are as follows:


  • Hospitals—4,200 positions in January compared to 10,000+ jobs per month over the last two years
  • Outpatient settings—11,000 in January, compared with 20,000 per month over the last two years
  • Specifically, physician offices—800 jobs in January, compared with about 5,000 per month over the past two years


Industry observers, however, note that it is too soon to view the drop in new positions as indicative of a larger trend. It could just be a slowing down in hiring, said one analyst.


That said, these observers speculate that the slowdown could be attributed either to a leveling off of Affordable Care Act (ACA) coverage expansions, or the increased uncertainty around plans to repeal and replace the ACA.


If the ACA were repealed and replaced, the major areas affected would be the breadth of insurance coverage, the allocation of payments for hospital uncompensated care costs and the status of Medicare pay cuts that have been required by the ACA. In addition, hospitals could be particularly vulnerable to a reduction or elimination of the ACA’s expansion of Medicaid eligibility. (Hospital Hiring Slows in January,” HFMA Weekly, February 10, 2017)


The elimination of the expansion of Medicaid eligibility would directly affect funding to the 31 states that expanded eligibility; the loss of that $78.5 billion funding in 2019 would result in 451,000 fewer healthcare jobs that year, according to a new projection. Another 86,000 healthcare jobs would be lost in non-expansion states because of indirect economic impacts from expansion states.


“ . . . it would make absolute sense that hospitals are going to be tightening their belts at this point until they see what happens,” said Patricia Pittman, PhD, co-director of the GW Health Workforce Institute at George Washington University and an associate professor of health policy and management. (Read the report The Economic and Employment Consequences of Repealing Federal Health Reform: A 50 State Analysis, Milken Institute School of Public Health at George Washington University)


An HFMA executive noted, “It’s unclear if hospitals have tightened hiring in response to uncertainty related to the continued coverage of some portion of the expansion population. That said, cash conservation strategies are a reasonable response until there’s more clarity on health policy moving forward.” (Hospital Hiring Slows in January,” HFMA Weekly, February 10, 2017)


Another expert said that freezing hiring—a commonly used cost control measure—could shrink hospitals’ workforces by up to 20 percent in one year. He noted that hospital executives see repeal and replace as impacting jobs.


The latest hiring numbers thus may be the first indication of post-election caution regarding employment. (Hospital Hiring Slows in January,” HFMA Weekly, February 10, 2017)




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