Unemployment claims jumped to 419,000 last week, a sudden increase reflecting an unsettled labor market

Unemployment claims jumped last week, as the delta variant of the coronavirus sparked rising caseloads around the country and renewed fears about the potential for more restrictions and business closures.

The number of new claims grew to 419,000 from 368,000, the third time in six weeks that they had ticked up, according to data from the Department of Labor.

Economists said the uptick was concerning but cautioned that it was too early to tell whether it was a one week aberration or telegraphed a more concerning turn for the labor market.

“The unexpected bump in claims could be noise in the system, but it’s also not hard to see how the rise of the covid-19 delta variant could add thousands of layoffs to numbers that already are double what they were pre-Covid,” said Robert Frick, corporate economist at Navy Federal Credit Union.

Overall, unemployment numbers have been falling gradually from the peaks at other stages of the pandemic, but they are still well above pre-pandemic averages.

The jobless numbers have provided a jarring catalogue about the economic devastation wrought by the pandemic — spiking to records as the pandemic unfolded in March 2020, and remaining at historic high levels throughout most of 2020.

The coronavirus surge last fall helped precipitate a rise in claims that saw the labor market, as seen in the monthly jobs report, slide backward too.

But until recently, the last few months been marked by strong jobs growth and a sense of optimism as vaccinations picked up, giving economists hope that the country was back on track to recovering the nearly 7 million jobs it is still down from before the pandemic.

Now, the delta variant is driving an alarming increase in covid-19 cases around the country, according to public health officials: the number of new cases increased more than 40 percent in the last week, sending jitters through the stock market, and is raising questions about whether state and local health authorities will reinstitute restrictions to slow the virus’ spread.

A new mandate in Los Angeles county to wear masks indoors has sparked protests and anger from local officials, as other counties where cases are increasing mull similar actions.

Frick said that the report showed the potential for unemployment claims to start trending upward after months of steady declines.

“There’s definitely a correlation, however loose, that the rise in covid does cause a rise in claims,” he said. “My fear is that the rise in the delta variant could cause claims to go back up…Certainly one week doesn’t show that. But I wouldn’t be surprised if we start to see claims rise.”

Texas for example, where cases have grown 54 percent in the last week, lead the way with an increase of 10,000 new claims.

However, there are also lots of signs that the economy continues to rebound despite rising caseloads.

The more than 2.2 million people that the Transportation Security Administration said it screened at airports on Sunday was the most since late February 2020 — and nearly three times the amount it was on the same day last year.

Restaurant dining has largely rebounded in recent months, at times surpassing the levels from before the pandemic — on Saturday the number of diners was 1 percent higher than the same day in 2019, according to data from Open Table.

Last week, some 12.5 million claims were filed for unemployment insurance overall, according to the most recent numbers — down from 32.9 million filed at the same point last year.

Nevada, Rhode Island and California topped the list of states with the highest number of people on unemployment, the Labor Department said.

Economic concerns in recent months have been more focused on the ways that workers are still held back from filling some of the more than 9 million job openings in the country, than unemployment, with high hopes that school re-openings in the fall will help many parents get back into the labor force.

Pay cut forces Health Partners to lay off 560 workers

When layoffs become inevitable: The painful story

Health Partners, one of the largest home healthcare providers in Michigan, laid off 560 employees at the beginning of July, including nurses, nursing assistants, therapists and direct care workers, according to Crain’s Detroit Business

The layoffs occurred July 1 and happened as the Bingham Farms-based company is winding down business. The job losses are attributed to a 2019 state law capping Health Partners’ payment rates at 55 percent of what it bills insurance companies to care for injured motorists, said Chad Livengood, a senior editor at Crain’s Detroit Business

Health Partners owner John G. Prosser II, who has been in the home health business for decades, said the company couldn’t absorb the losses from the new fee schedule, which cuts payments by 45 percent, according to Crain’s

Other home healthcare companies in Michigan haven’t met the same fate as Health Partners because they rely more heavily on Medicaid, workers’ compensation insurance or private payers, according to the report. 

Read more here

7 hospitals laying off workers

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Many U.S. hospitals are turning to layoffs to cut costs as they recover from the financial hit of the COVID-19 pandemic. 

Here are seven hospitals or health systems that recently announced layoffs or job cuts:

1. Mishawaka, Ind.-based Franciscan Health will lay off 83 employees of its 100-year-old hospital in Hammond, Ind., according to a notice filed with the state. The layoff notice comes as the health system works to shrink the 226-bed Franciscan Health Hammond Hospital to an eight-bed acute care facility with an emergency department and primary care practice. The layoffs are slated to begin Aug. 21 and will be permanent, the health system said.

2. HealthAlliance of the Hudson Valley, a three-hospital system in the Westchester Medical Center Health Network, laid off an undisclosed number of workers June 14. Westchester Medical Center Health Network in Valhalla, N.Y., said it laid off HealthAlliance hospital employees in Kingston, N.Y., to eliminate redundancies as it begins to consolidate inpatient services to one location.

3. As part of a financial restructuring plan, Sacramento, Calif.-based Sutter Health will issue another round of layoffs this year. The health system said in early June it plans to lay off 400 employees. These newly announced layoffs are in addition to 277 information technology jobs that were cut April 2. Sutter said most of the new layoffs affect employees in administrative positions in benefits, human resources, data services and accounting. The layoff notice said many of these employees were working remotely or in the field. 

4. A little over a month after filing a notice to complete about 651 layoffs this year, Ascension Technologies, the IT subsidiary of St. Louis-based Ascension, eliminated 92 remote IT jobs in Indiana, according to a June 3 report. Most of the laid-off employees are based in Indianapolis and Evansville, Ind., the Indiana Department of Workforce Development said June 2

5. Lawrence (Mass.) General Hospital plans to lay off 56 employees and is warning of more cuts unless it receives government aid quickly, according to a May 25 report. The layoffs will affect employees working in administration and patient care. The layoffs affect about 2.5 percent of the 186-bed hospital’s workforce. Lawrence General attributed the layoffs to the COVID-19 pandemic weakening its financial profile. 

6. Boca Raton, Fla.-based Cancer Treatment Centers of America closed its hospital in Tulsa, Okla. About 400 employees will be affected by the closure. The hospital saw its last patient on May 27

7. Boca Raton, Fla.-based Cancer Treatment Centers of America is selling its hospital in Philadelphia and will lay off the facility’s 365 employees, according to a closure notice filed with the state. The cancer care network said it anticipates the layoffs in Philadelphia will begin after May 30.

Sutter Health to lay off 400 workers

Sutter Health fined again over not notifying nurses about COVID-19 exposure

As part of a financial restructuring plan, Sacramento, Calif.-based Sutter Health will issue another round of layoffs this year, according to the Sacramento Business Journal.  

The health system said it plans to lay off 400 more employees. These newly announced layoffs are in addition to 277 information technology jobs that were cut April 2. 

Sutter said most of the new layoffs affect employees in administrative positions in benefits, human resources, data services and accounting. The layoff notice said many of these employees were working remotely or in the field. 

Sutter told the Business Journal that it’s working to evaluate every aspect of its business model.

“Moving forward, we will continue to work to minimize staff reductions and their impact on our dedicated employees as we look for ways to eliminate variation, streamline resources and more efficiently manage our indirect costs,” Sutter told the Business Journal.

Sutter ended 2020 with a $321 million operating loss, including $800M in funding from the Coronavirus, Aid, Relief and Economic Security Act. Without the funding, Sutter’s operating loss would have been $1.1 billion. As a result, Sutter initiated a sweeping review of its finances in March 2021. 

Sutter Health also gave voluntary severance packages to 800 workers in 2020.

CommonSpirit and Essentia call off 14-hospital deal following nurse complaints

Dive Brief:

  • CommonSpirit Health and Essentia Health have called off a deal for Essentia to acquire 14 CommonSpirit facilities in North Dakota and Minnesota, the two Catholic systems announced Tuesday.
  • The deal, nixed just four months after being announced, would have doubled the size of Duluth, Minn.-based Essentia’s hospital network. One of the facilities up for grabs, CHI St. Alexius Medical Center, is a tertiary hospital and the other 13 are critical access hospitals. The deal would also have included associated clinics and living communities.
  • The systems did not provide details as to why they scrapped the deal in their release, and an Essentia representative did not respond to a request for comment by time of publication.

Dive Insight:

CommonSpirit and Essentia signed a letter of intent in January to explore the sale, but talks have now fizzled following months of deliberation.

“While we share a similar mission, vision, values and strong commitment to sustainable rural healthcare, CommonSpirit and Essentia were unable to come to an agreement that would serve the best interests of both organizations, the people we employ and the patients we serve,” a joint statement from the two systems said.

Earlier this month, more than 700 nurses and medical workers filed a petition noting their concern over the deal. In the petition, the Minnesota Nurses Association and employees at Essentia and CommonSpirit said they feared layoffs and restricted access to patient care resulting from the acquisition.

Nurses cited Essentia’s partnership with Mercy Hospital in Moose Lake, Minn., last summer, which they claimed hurt the quality of patient care.

“Ever since the takeover, we’ve lost numerous staff, causing shortages in how we care for patients,” a nurse wrote in a news release about the petition May 4. “We don’t want CHI’s hospitals and clinics to lay off workers, cut the services they offer or close entirely.”

Essentia did not respond to a request for comment about whether workers’ concerns affected the decision to call off the deal.

Hospitals maintain consolidation betters the patient experience and improves care quality, but numerous studies have suggested that’s not the case. One from early last year published in the New England Journal of Medicine found acquired hospitals actually saw moderately worse patient experience, along with no change in 30-day mortality or readmission rates, while another from 2019 found mergers and acquisitions drive up prices for consumers.

Despite that, provider mergers and acquisitions have continued at a rapid clip even during COVID-19, as hospitals look to divest underperforming assets and bulk up market share in more lucrative geographies. The letter of intent CommonSpirit signed with Essentia suggests the roughly 140-hospital system is taking stock of its smaller rural facilities.

Chicago-based CommonSpirit was formed in 2019 by the merger of nonprofit giants Catholic Health Initiatives and Dignity Health. The nonprofit giant was hit hard by the pandemic, losing $550 million in the 2020 fiscal year.

Ascension’s technology business to lay off 651 employees

Layoffs hitting more white collar jobs — and even health care workers

Ascension Technologies, the IT subsidiary of St. Louis-based Ascension, plans to lay off an estimated 651 remote workers this year, according to an April 30 St. Louis Post-Dispatch report. 

Ascension Technologies said it will begin working with a third party to take on the tech support for EHR and revenue cycle management responsibilities its employees had been performing, the company said in an April 27 notice it filed with the state. 

None of the employees affected by the layoffs are based in Missouri, but all the positions report to an office in St. Louis. Ascension Technologies plans to facilitate the layoffs between Aug. 8 and Dec. 10. 

Ascension Technologies employees affected by the layoffs can apply for other positions within the company or with the new vendor. Ascension will also provide severance and outplacement services to employees who are unable to get another job with the company.

9 hospitals laying off workers

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The financial challenges caused by the COVID-19 pandemic forced hundreds of hospitals across the nation to furlough, lay off or reduce pay for workers, and others have had to scale back services or close.

Lower patient volume, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for hospitals, and hospitals are taking a number of steps to offset financial damage. Executives, clinicians and other staff are taking pay cuts, capital projects are being put on hold, and some employees are losing their jobs. More than 260 hospitals and health systems furloughed workers in the last year, and dozens of others have implemented layoffs.

Below are nine hospitals and health systems that are laying off employees. Some of the layoffs were attributed to financial strain caused by the pandemic. 

1. Boca Raton, Fla.-based Cancer Treatment Centers of America is selling its hospital in Philadelphia and will lay off the facility’s 365 employees, according to a closure notice filed with the state. Cancer Treatment Centers of America said it anticipates the layoffs in Philadelphia will begin after May 30, according to the Philadelphia Business Journal

2. Providence Queen of the Valley Medical Center in Napa, Calif., will lay off 10 employees, The Napa Valley Register reported April 11. The layoffs will affect six emergency department technicians and four cooks. The COVID-19 pandemic had a “profound effect” on the hospital system, including volume and revenue reductions, a Providence spokesperson told The Napa Valley Register. As a result of volume declines in its ED, the health system is reducing staffing. 

3. Olympia Medical Center in Los Angeles closed March 31. The closure resulted in the layoffs of 451 employees.

4. The outgoing owners of Providence Behavioral Health Hospital in Holyoke, Mass., are laying off the hospital’s 151 employees, effective April 20, according to MassLive. Trinity Health of New England, part of Livonia, Mich.-based Trinity Health, is selling the hospital to Health Partners New England, which plans to take over the hospital April 20. 

5. Boca Raton, Fla.-based Cancer Treatment Centers of America plans to close its hospital in Tulsa, Okla., June. 1. About 400 employees will be affected by the closure. 

6. Plattsburgh, N.Y.-based Champlain Valley Physicians Hospital plans to cut 60 jobs. The hospital, which is facing a $6.5 million deficit in fiscal year 2021, said the cuts include 10 people who were laid off or had permanent hour reductions, 12 people who are planning retirement, and the rest are open positions that will not be filled, according to a March 9 NBC 5 report. 

7. Buffalo, N.Y.-based Catholic Health announced March 19 that it plans to end inpatient services and close the intensive care unit at its St. Joseph campus in Cheektowaga, N.Y. The changes will result in some positions being eliminated. Catholic Health said it will try to find affected employees comparable positions within the system. 

8. Upper Allegheny Health System, a two-hospital system based in Olean, N.Y., plans to reduce acute care and surgical services at Bradford (Pa.) Regional Medical Center. Under the plan, the acute care and surgical services will be moved to the health system’s other hospital, Olean General Hospital, effective May 1. There will be a minimal number of layoffs resulting from the consolidation of services, a spokesperson told WHYY. 

9. Philadelphia-based Tower Health laid off 15 workers at St. Christopher’s Hospital for Children, including four physicians, in March, according to The Philadelphia Inquirer. Tower Health ended the second half of last year with an operating loss of $31 million, according to the report.