Another 870,000 Americans filed new unemployment claims last week

https://finance.yahoo.com/news/jobless-claims-coronavirus-unemployment-week-ended-september-19-2020-184747657.html

Another 870,000 Americans filed for first-time unemployment benefits last week, unexpectedly rising slightly from the prior week to reaffirm a slowdown in the U.S. economic recovery.

The U.S. Department of Labor (DOL) released its weekly jobless claims report at 8:30 a.m. ET Thursday. Here were the main metrics from the report, compared to Bloomberg estimates:

  • Initial jobless claims, week ended Sept. 19: 870,000 vs. 840,000 expected, and 866,000 during the prior week
  • Continuing claims, week ended Sept. 12: 12.580 million vs. 12.275 million expected, and 12.747 million during the prior week

At 870,000, Thursday’s figure represented the fourth consecutive week that new jobless claims came in below the psychologically important 1 million level, but was still high on a historical basis. Nevertheless, the labor market has made strides in recovering from the pandemic-era spike high of nearly 7 million weekly new claims seen in late March.

“While jobless claims under a million for four straight weeks could be considered a positive, we’re staring down a pretty stagnant labor market,” Mike Loewengart, managing director of investment strategy for E-Trade Financial Corporation, said in an email Thursday. “This has been a slow roll to recovery and with no signs of additional stimulus from Washington, jobless Americans will likely continue to exist in limbo. Further, a shaky labor market translates into a skittish consumer, and in the face of a pandemic that seemingly won’t go away without a vaccine, the outlook for the economy certainly comes into question.”

On an unadjusted basis, initial jobless claims rose by a greater margin, or about 28,500, from the previous week to about 824,500. The seasonally adjusted level of new claims rose by 4,000 week on week.

By state, unadjusted claims in California – where joblessness due to the pandemic has compounded with labor market stress due to wildfires – were again the highest in the country at more than 230,000, for an increase of about 4,400 week-over-week. Georgia, New York, New Jersey and Massachusetts also reported significant increases in new claims relative to the rest of the country. Most states reported at least increases in new claims last week.

Continuing claims have also trended lower after a peak of nearly 25 million in May, and fell for a second straight week in this week’s report. But these claims, which capture the total number of individuals still receiving unemployment insurance, have not broken below the 12 million mark since before the pandemic took hold of the labor market in mid-March.

Consistently high numbers of individuals have been filing for, and receiving, jobless benefits from regular state programs, and those newly created during the pandemic. The number of individuals claiming benefits in all programs for the week ended September 5 – the latest reported week – fell for the first time following three straight weeks of increases to 26.04 million, from the nearly 29.8 million reported during the prior week.

Of that total, more than 11.5 million comprised individuals receiving Pandemic Unemployment Assistance, which is aimed at self-employed and gig workers who don’t qualify for regular unemployment compensation but have still been impacted by the pandemic.

One of the major downside risks to further improvement in the labor market has been concern that Congress may not soon pass another round of fiscal stimulus aimed at keeping individuals on payrolls during the pandemic. Economists have already said that the end of the last round of augmented federal unemployment benefits in late July has weighed on improvements in joblessness.

“The current picture suggests that growth has slowed sharply in the past three months, and that the labor market is stalling again in the face of rising infections and the sudden ending of federal government support to unemployed people,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, said in a note Wednesday.

The need for more fiscal stimulus to encourage the economy’s ongoing recovery has become a key talking point of policymakers including Federal Reserve Chair Jerome Powell and his colleagues at the central bank. In congressional testimony Tuesday and Wednesday, the Fed leader said further fiscal stimulus is “unequaled” by any other form of support that could be unleashed, with the central bank’s lending facilities having gone largely untouched by Main Street.

“The concept of the [congressionally authorized] Paycheck Protection Program was helpful because for many of those kinds of businesses – those businesses that don’t have cash reserves – the ability to get a forgivable loan if they stay open, if they keep people employed, was sound, and did give them the prospect of staying in business,” Joseph Minarik, The Conference Board chief policy economist and former Office of Management and Budget chief economist, told Yahoo Finance. “The notion that you have businesses that have been weak over the last few months and now have simply had to shut their doors, that’s a real problem, and it is not necessity going to be solved with a loan.”

 

 

 

 

Jefferson Health CFO walks back stance that Einstein is at risk without merger

https://www.beckershospitalreview.com/finance/jefferson-health-cfo-walks-back-stance-that-einstein-is-at-risk-without-merger.html?utm_medium=email

Jefferson Health Announces Partnership with Prepared Health to Coordinate  Care Transitions from Hospital to Home - Dina

Jefferson Health walked back its stance that Einstein Health Network’s flagship hospital is at risk of financial failure without a merger during the first day of arguments at a trial, according to Law360.

The Federal Trade Commission’s legal challenge to block the proposed merger of Einstein Healthcare Network and Jefferson Health started in court Sept. 14. The FTC argues that combining the two Philadelphia-based systems would reduce competition in the Philadelphia region and Montgomery County.

In response to the legal challenge, Jefferson Health and Einstein argued that the merger is a matter of survival for Einstein’s flagship hospital

The health systems argued that Einstein, which has only had annual operating profits twice since 2012, is on a path to financial failure without the deal and needs $500 million to invest in key capital projects and deferred maintenance. Further, the organizations said that without the infusion, Einstein will continue to weaken “as it is forced to cut services or close facilities.”

However, at day one of the trial, Jefferson Health CFO Peter DeAngelis conceded during arguments that Jefferson had no evidence that Einstein is in danger of insolvency, despite painting the finances as bleak, according to Law360. 

The hearing on the preliminary injunction is expected to last the entire week, but a decision won’t happen by the end of the week. An additional round of filings must be submitted by the FTC and the two health systems by Sept. 28. The judge overseeing the case hopes to issue a decision before Jan. 1, according to The Philadelphia Inquirer. 

 

 

 

 

A New Front in America’s Pandemic: College Towns

The coronavirus is spiking around campuses from Texas to Iowa to North Carolina as students return.

Last month, facing a budget shortfall of at least $75 million because of the pandemic, the University of Iowa welcomed thousands of students back to its campus — and into the surrounding community.

Iowa City braced, cautious optimism mixing with rising panic. The university had taken precautions, and only about a quarter of classes would be delivered in person. But each fresh face in town could also carry the virus, and more than 26,000 area residents were university employees.

“Covid has a way of coming in,” said Bruce Teague, the city’s mayor, “even when you’re doing all the right things.”

Within days, students were complaining that they couldn’t get coronavirus tests or were bumping into people who were supposed to be in isolation. Undergraduates were jamming sidewalks and downtown bars, masks hanging below their chins, never mind the city’s mask mandate.

Now, Iowa City is a full-blown pandemic hot spot — one of about 100 college communities around the country where infections have spiked in recent weeks as students have returned for the fall semester. Though the rate of infection has bent downward in the Northeast, where the virus first peaked in the U.S., it continues to remain high across many states in the Midwest and South — and evidence suggests that students returning to big campuses are a major factor.

In a New York Times review of 203 counties in the country where students comprise at least 10 percent of the population, about half experienced their worst weeks of the pandemic since Aug. 1. In about half of those, figures showed the number of new infections is peaking right now.

Despite the surge in cases, there has been no uptick in deaths in college communities, data shows. This suggests that most of the infections are stemming from campuses, since young people who contract the virus are far less likely to die than older people. However, leaders fear that young people who are infected will contribute to a spread of the virus throughout the community.

The surge in infections reported by county health departments comes as many college administrations are also disclosing clusters on their campuses.

*Brazos County, Tex., home to Texas A&M University, added 742 new coronavirus cases during the last week of August, the county’s worst week so far, as the university reported hundreds of new cases.

*Pitt County, N.C., site of East Carolina University, saw its coronavirus cases rise above 800 in a single week at the end of August. The Times has identified at least 846 infections involving students, faculty and staff since mid-August.

*In South Dakota’s Clay and Brookings counties, ballooning infections in the past two weeks have reflected outbreaks at the state’s major universities. In McLean County, Ill., the virus has been spreading as more than 1,200 people have contracted the virus at Illinois State University.

*At Washington State University and the University of Idaho, about eight miles apart, combined coronavirus cases have risen since early July to more than 300 infections. In the surrounding communities — rural Whitman County, Wash., and Latah County, Idaho — cases per week have climbed from low single-digits in the first three months of the pandemic, to double-digits in July, to more than 300 cases in the last week of August.

The Times has collected infection data from both state and local health departments and individual colleges. Academic institutions generally report cases involving students, faculty and staff, while the countywide data includes infections for all residents of the county.

It’s unclear precisely how the figures overlap and how many infections in a community outside of campus are definitively tied to campus outbreaks. But epidemiologists have warned that, even with exceptional contact tracing, it would be difficult to completely contain the virus on a campus when students shop, eat and drink in town, and local residents work at the college.

The potential spread of the virus beyond campus greens has deeply affected the workplaces, schools, governments and other institutions of local communities. The result often is an exacerbation of traditional town-and-gown tensions as college towns have tried to balance economic dependence on universities with visceral public health fears.

In Story County, Iowa, a local outcry following a burst of new Iowa State University cases pressured the university on Wednesday to reverse plans to welcome 25,000 football fans for its Sept. 12 opener against the University of Louisiana at Lafayette. In Monroe County, Indiana, the health department quarantined 30 Indiana University fraternity and sorority houses, prompting the university to publicly recommend that members shut them down and move elsewhere.

In Johnson County, where the University of Iowa is located, cases have more than doubled since the start of August, to more than 4,000. Over the past two weeks, Iowa City’s metro area added the fourth-most cases per capita in the country. The university has recorded more than 1,400 cases for the semester.

With a population of roughly 75,000, Iowa City relies on the university as an economic engine. The University of Iowa is by far the community’s largest employer, and its approximately 30,000 students are a critical market. Hawkeye football alone brings $120 million a year into the community, said Nancy Bird, executive director of the Iowa City Downtown District.

When the pandemic first hit in March, the university sent students home and pivoted to remote instruction, like most of the country’s approximately 5,000 colleges and universities. That exodus, heightened by health restrictions, has been an existential challenge for many downtown businesses, Ms. Bird said.

Jim Rinella, who owns The Airliner bar and restaurant, said the 76-year-old landmark across the street from campus “had zero revenue the whole month of April.” May was almost as scant, he said, and in June, he shut down after a couple of employees became infected.

By the time he reopened after July 4, too few students were in town to come close to making up the losses. He and his wife, Sherry, had hoped the campus reopening in August might be a lifeline.

The Rinellas live in Detroit, where they have other businesses, and Mr. Rinella said he was out of town when crowds jammed downtown on the weekend before the Aug. 24 start of classes. He said he immediately called his manager to make sure they were following state and local health rules.

But the photos taken by the local press from outside his establishment and others were damning. In an open letter, the university president lashed out, saying he was “exceedingly disappointed” in the failure of local businesses to keep students masked and socially distanced. Days later, the governor cited high infection rates among young people as she closed bars and restricted restaurants in Johnson County and five other counties with high concentrations of students.

Now The Airliner — where a booth is named for the University of Iowa’s most famous dropout, Tom Brokaw, and a modeling scout is said to have discovered Ashton Kutcher — has to close at 10 p.m. as well as require customers to buy a meal and sit far apart if they want to drink there.

“I’m at a pain point,” Mr. Rinella said. “If my grandfather hadn’t started the place, I’d question whether I want to be in the restaurant business.” A recent lunch hour visit found one customer at the bar drinking a beer.

The rise in local case counts reverberated at the county’s community college, which decided to start its fall semester with continued online instruction. Iowa City’s K-12 schools followed suit, which also meant canceling extracurricular activities, including sports, until students come back to the classroom in person.

“This is one of our last chances for college coaches to see us play or to get recent films sent out to college coaches. For some of us, playing in college is a goal we have been working toward since we were 11 or 12,” Lauren Roman, a 17-year-old high school volleyball player, told the school board last month. She burst into tears as she explained that she has waited since March for college recruiters to see her play. “Some of us really do need that scholarship money.”

“This sucks,” the board vice-president Ruthina Malone, agreed at the same meeting, choking up as she described emails she had received from families of children whose education relies on in-person instruction. But, she told the board, “we do not operate in isolation.” Her husband, she said, is an art teacher who would like nothing more than to teach again in person, and she works at the university.

The pandemic has hurt colleges’ finances in multiple ways, adding pressure on many schools to bring students back to campus. It has caused enrollment declines as students have opted for gap years or chosen to stay closer to home, added substantial costs for safety measures, reduced revenue from student room and board and canceled money-generating athletic events.

Governments have not always stepped into the breach: In Iowa, the state cut $8 million from its higher education appropriation even after the Board of Regents, which oversees the state’s universities, requested an $18 million increase. Over the summer, the University of Iowa announced a salary freeze and other significant cuts. This was before the Big Ten Conference postponed fall competition, erasing more than $60 million from the university’s athletics program.

When the university announced its plans for reopening with a combination of in-person and virtual instruction, it did not mention its finances as a factor, though it froze tuition rather than reduce it, as some universities have done. It also mandated mask wearing inside buildings and said it would test students with symptoms or who had been exposed to the virus.

Still, its decision to hold in-person classes drew criticism from some faculty. “We’re scared for our health and yours,” one group of instructors wrote in an open letter to students in July.

And its decision not to test asymptomatic students unless they had been exposed unnerved some city officials. Dr. Dan Fick, the campus health officer, said the university wanted to avoid a false sense of security.

But Janice Weiner, who represented the City Council in meetings with the business community and campus, questioned the approach. “We have a robust and capable medical community, we have good public health officials, we have everything we need,” she said. “But then the university didn’t require everyone coming back to campus to be tested.”

Iowa City is a blue town in a state with a pro-Trump Republican governor, Kim Reynolds, who has clashed with the state’s cities over masks and Covid policies.

Though the governor in March restricted large gatherings, closed Iowa schools and banned indoor operations of many businesses, she began relaxing those orders in May and has argued that face-mask mandates couldn’t be legally enforced.

Several municipalities have nonetheless passed ordinances requiring face masks, including Johnson County and Iowa City — largely in preparation for the return of students. But because state health rules have become a patchwork, not all returning students come from places where mask wearing is required, said Ms. Weiner. And, she said, the inconsistency offers an excuse to those who don’t want to wear them.

Interviews with students suggested that concern had at least some justification.

“If people get sick, they get sick — it happens,” Mady Hanson, a 21-year-old exercise science major, said last week on campus. She added that she and her family had survived Covid-19 and that she resented the city’s “ridiculous” restrictions.

“We’re all farmers and don’t really care about germs, so if we get it, we get it and we have the immunity to it.”

Both university and city officials said they believe the spike in cases has been a wake-up. “When we look back,” said Dr. Fick, “I think we’ll be proud that when students got the message, a majority stepped up.”

On the City Council, Ms. Weiner was less upbeat.

“There’s not a whole use in placing blame — we have to figure out a way forward,” she said. “But it’s going to take a herculean effort here for our numbers to start to go down.”

 

 

 

Despite turbulence in H1, no avalanche of health systems downgrades

https://www.healthcaredive.com/news/despite-turbulence-in-h1-no-avalanche-of-health-systems-downgrades/584353/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-09-02%20Healthcare%20Dive%20%5Bissue:29437%5D&utm_term=Healthcare%20Dive

“It’s new territory, which is why we’re taking that measured approach on rating actions,” Suzie Desai, senior director at S&P, said.

The healthcare sector has been bruised from the novel coronavirus and the effects are likely to linger for years, but the first half of 2020 has not resulted in an avalanche of hospital and health system downgrades.

At the outset of the pandemic, some hospitals warned of dire financial pressures as they burned through cash while revenue plunged. In response, the federal government unleashed $175 billion in bailout funds to help prop up the sector as providers battled the effects of the virus.

Still, across all of public finance — which includes hospitals — the second quarter saw downgrades outpacing upgrades for the first time since the second quarter of 2017.

S&P characterized the second quarter as a “historic low” for upgrades across its entire portfolio of public finance credits.

“While only partially driven by the coronavirus, the second quarter was the first since Q2 2017 with the number of downgrades surpassing upgrades and by the largest margin since Q3 2014,” according to a recent Moody’s Investors Service report.

Through the first six months of this year, Moody’s has recorded 164 downgrades throughout public finance and, more specifically, 27 downgrades among the nonprofit healthcare entities it rates.

By comparison, Fitch Ratings has recorded 14 nonprofit hospital and health system downgrades through July and just two upgrades, both of which occurred before COVID-19 hit.

“Is this a massive amount of rating changes? By no means,” Kevin Holloran, senior director of U.S. Public Finance for Fitch, said of the first half of 2020 for healthcare.

Also through July, S&P Global recorded 22 downgrades among nonprofit acute care hospitals and health systems, significantly outpacing the six healthcare upgrades recorded over the same period.

“It’s new territory, which is why we’re taking that measured approach on rating actions,” Suzie Desai, senior director at S&P, said.

Still, other parts of the economy lead healthcare in terms of downgrades. State and local governments and the housing sector are outpacing the healthcare sector in terms of downgrades, according to S&P.

Virus has not ‘wiped out the healthcare sector’

Earlier this year when the pandemic hit the U.S., some made dire predictions about the novel coronavirus and its potential effect on the healthcare sector.

Reports from the ratings agencies warned of the potential for rising covenant violations and an outlook for the second quarter that would result in the “worst on record, one Fitch analyst said during a webinar in May.

That was likely “too broad of a brushstroke,” Holloran said. “It has not come in and wiped out the healthcare sector,” he said. He attributes that in part to the billions in financial aid that the federal government earmarked for providers.

Though, what it has revealed is the gaps between the strongest and weakest systems, and that the disparities are only likely to widen, S&P analysts said during a recent webinar.

The nonprofit hospitals and health systems pegged with a downgrade have tended to be smaller in size in terms of scale, lower-rated already and light on cash, Holloran said.

Still, some of the larger health systems were downgraded in the first half of the year by either one of the three rating agencies, including Sutter Health, Bon Secours Mercy Health, Geisinger, University of Pittsburgh Medical Center and Care New England.

“This is something that individual management of a hospital couldn’t control,” said Rick Gundling, senior vice president of Healthcare Financial Management Association, which has members from small and large organizations. “It wasn’t a bad strategy — that goes into a downgrade. This happened to everybody.”

Deteriorating payer mix

Looking forward, some analysts say they’re more concerned about the long-term effects for hospitals and health systems that were brought on by the downturn in the economy and the virus.

One major concern is the potential shift in payer mix for providers.

As millions of people lose their job they risk losing their employer-sponsored health insurance. They may transition to another private insurer, Medicaid or go uninsured.

For providers, commercial coverage typically reimburses at higher rates than government-sponsored coverage such as Medicare and Medicaid. Treating a greater share of privately insured patients is highly prized.

If providers experience a decline in the share of their privately insured patients and see a growth in patients covered with government-sponsored plans, it’s likely to put a squeeze on margins.

The shift also poses a serious strain for states, and ultimately providers. States are facing a potential influx of Medicaid members at the same time state budgets are under tremendous financial pressure. It raises concerns about whether states will cut rates to their Medicaid programs, which ultimately affects providers.

Some states have already started to re-examine and slash rates, including Ohio.

 

 

 

 

Hospitals face closure as $100B in Medicare loans come due

https://www.beckershospitalreview.com/finance/hospitals-face-closure-as-100b-in-medicare-loans-come-due.html?utm_medium=email

HCA posts a billion-dollar profit, bolstered by CARES Act funds - MedCity  News

CMS accelerated payments to hospitals and other healthcare providers at the beginning of the COVID-19 pandemic to help temporarily relieve financial strain. It’s time to begin repaying the Medicare loans but that isn’t possible for some rural hospitals, according to NPR

CMS expanded the Accelerated and Advance Payment Program in late March to help offset financial damage caused by the COVID-19 pandemic. CMS announced April 26 that it was reevaluating pending and new applications for advance payments due to the availability of funds under the Coronavirus Aid, Relief and Economic Security Act. As of May, CMS had paid out $100 billion in advance payments, the bulk of which went to hospitals. 

Hospitals and other healthcare providers are required to start repaying the Medicare loans this month. Most hospitals will have one year from the date the first loan payment was made to repay the loans, according to Kaiser Family Foundation.

Ozarks Community Hospital, 25-bed critical access hospital in Gravette, Ark., is one of the hospitals that applied for and accepted the Medicare loans. The hospital also received grants made available under the CARES Act, which do not have to be repaid.

CEO Paul Taylor said Ozarks Community Hospital’s revenue is still constrained, and he doesn’t know how it will pay back its $8 million Medicare loan. Payments for new Medicare claims will be offset to repay the loans, but losing those payments could force the hospital to close, Mr. Taylor told NPR.

“If I get no relief and they take the money … we won’t still be open,” he said.

Ozarks Community Hospital is one of more than 850 critical access hospitals in rural areas that received Medicare loans, according to NPR. Given the shaky financial footing of many rural hospitals before the pandemic, the strain of having Medicare payments withheld could be enough to force others to shut down. 

Before the pandemic, more than 600 rural hospitals across the U.S. were vulnerable to closure, according to an estimate from iVantage Health Analytics, a firm that compiles a hospital strength index based on data about financial stability, patients and quality indicators.

If the financial pressures tied to the pandemic force any of those hospitals to shut down, they’ll join the list of 131 rural hospitals that have closed over the past decade, according to the Cecil G. Sheps Center for Health Services Research.

 

 

 

 

Executive Order On Housing Doesn’t Guarantee An Eviction Moratorium

https://www.forbes.com/sites/advisor/2020/08/10/trumps-executive-order-on-housing-doesnt-guarantee-an-eviction-moratorium/?tid=newsletter-dailydozen&utm_source=newsletter&utm_medium=email&utm_campaign=dailydozen&cdlcid=5d2c97df953109375e4d8b68#3a33cbc3359a

After negotiations for another stimulus package hit a dead end in Washington last week, President Donald Trump signed executive orders to extend relief in the meantime. One order, according to the president, would extend the federal eviction moratorium. 

The original moratorium, included in the CARES Act, prohibited landlords or housing authorities from filing eviction actions, charging nonpayment fees or penalties or giving notice to vacate. It expired on July 24 and only applied to federally subsidized or federally backed housing.

But housing advocates are pushing back, saying Trump’s executive order to extend an eviction moratorium actually does nothing at all—and keeps struggling Americans at risk of losing their housing. 

 

Details on the Order

Trump’s order doesn’t actually extend the federal eviction moratorium. Instead, it calls on the Department of Health and Human Services and the Centers for Disease Control and Prevention to “consider” whether an additional eviction ban is needed.

“The Secretary of Health and Human Services and the Director of CDC shall consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19 from one State or possession into any other State or possession,” reads the order.

Additionally, the executive order does not provide any new money to help struggling renters during the pandemic. Instead, it says the secretary of Treasury and the secretary of Housing and Urban Development—Steven Mnuchin and Ben Carson, respectively—can identify “any and all available federal funds” to provide temporary rental assistance to renters and homeowners who are facing financial hardships caused by COVID-19.

During a White House press briefing on Monday, Kayleigh McEnany said the president did “did what he can within his executive capacity…to prevent resident evictions.”At the time of publishing, officials mentioned in Trump’s executive order have not released guidelines on extending the federal eviction moratorium.

 

Housing Advocates React to Trump’s Eviction Order

Housing advocates have not reacted positively to Trump’s executive order, suggesting officials extend an eviction moratorium.

“The executive order that he signed this weekend is really nothing more than an empty shell that creates chaos and confusion, and it offers nothing more than false hope to renters who are at risk of eviction because that executive order does literally nothing to prevent or stop evictions,” Diane Yentel, president and CEO of the National Low Income Housing Coalition, said on Sunday during an MSNBC interview.

The House of Representatives included a more thorough plan to prevent evictions in its HEROES Act proposal. The proposal included $175 billion in rent and mortgage assistance and would replace the original federal eviction moratorium with a 12-month moratorium from all rental housing, not just federally subsidized ones. There also would be funds available to provide homeowners with assistance to cover mortgage and utility payments, property taxes or other resources to help keep Americans housed.

Sen. Richard Shelby (R-AL) introduced the Coronavirus Response Additional Supplemental Appropriations Act as part of the GOP’s HEALS Act proposal. Shelby’s bill included significantly less money for housing assistance than the HEROES Act—$3.2 billion—and would be used for tenant-based rental assistance. Shelby’s proposal did not include any language about extending the CARES Act eviction moratorium. 

A recent report by a group of housing advocates finds there could be as much as 40 million renters at risk of eviction in the coming months. The U.S. unemployment rate currently sits at 10.2%. 

Individuals who are struggling to pay rent might have assistance options available. Some cities and states have implemented their own eviction moratoriums—you can learn more about them by visiting the Eviction Lab at Princeton University. There are also legal aid options, like Just Shelter, that will help tenants who are facing eviction for low-cost or free.

 

 

 

 

Cartoon – Unemployment Insurance vs. Raising the Minimum Wage

If you make less than $600 week, you’re underpaid. Period.

No photo description available.

Pandemic relief funds pivotal in keeping hospitals afloat during Q2

https://www.fiercehealthcare.com/hospitals/hospital-earnings-highlight-pivotal-role-federal-relief-funds-staying-afloat-during?mkt_tok=eyJpIjoiTURoaU9HTTRZMkV3TlRReSIsInQiOiJwcCtIb3VSd1ppXC9XT21XZCtoVUd4ekVqSytvK1wvNXgyQk9tMVwvYXcyNkFHXC9BRko2c1NQRHdXK1Z5UXVGbVpsTG5TYml5Z1FlTVJuZERqSEtEcFhrd0hpV1Y2Y0sxZFNBMXJDRkVnU1hmbHpQT0pXckwzRVZ4SUVWMGZsQlpzVkcifQ%3D%3D&mrkid=959610

Hospital system earnings for the second quarter of the year painted a stark picture of how federal relief funding helped offset massive losses in patient volume sparked by the COVID-19 pandemic.

But a full financial recovery may not happen until next year, some analysts warn.

Major hospital systems such as HCA Health and Universal Health Services posted profits in the second quarter despite plummeting volumes sparked by the cancellation of elective procedures and patients avoiding care due to fears of exposure to the virus. A key boost, however, came from a $175 billion fund passed by Congress and loans under the Medicare Accelerated and Advance Payments Program.

“These companies survived the June quarter and exited the quarter with substantial amounts of liquidity,” said Jonathan Kanarek, vice president and senior credit officer for Moody’s Investors Services. “We think [liquidity] is probably the most critical factor for them as far as weathering the storm.”

Congress has approved $175 billion to help prop up providers, of which the Department of Health and Human Services has distributed more than $100 billion.

The Centers for Medicare & Medicaid Services also gave out $100 billion in advance Medicare payments before suspending the program in late April. But the payments are loans that hospitals have to start repaying as soon as this month, as opposed to the congressional funding that does not have to get paid back.

Hospital system earnings illustrated how pivotal the relief funds were to combat massive holes in patient volumes.

Tenet Healthcare, which operates 65 hospitals across the country, reported Monday that it earned in the second quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $732 million. But of that $732 million, more than 70% of it was aid from the relief fund.

Tenet wasn’t the only for-profit system where relief funding was a large part of their adjusted EBITDA.

Community Health Systems, which operates 95 facilities, reported an adjusted EBITDA of $454 million in the second quarter. But most of that figure was due to the $448 million that it got from the relief funds.

The provider funding made up a smaller portion of HCA Healthcare’s earnings. The system of 184 hospitals reported that the funding made up 31% of its adjusted EBITDA.

Hospital system volumes greatly declined in April as facilities were forced to cancel elective procedures and patients were scared of going to the hospital.

For example, Tenet’s hospital admissions in April were 33% of what it had in the same month in 2019. But volumes started to recover as shelter-in-place orders expired and some states got a better handle on the pandemic.

Tenet saw admissions grow in June to 90% of what they were in June 2019.

But it remains unclear what hospital finances will look like for the rest of the year. Major systems like Tenet and HCA have scrapped their 2020 financial outlook because of the pandemic.

“We don’t think the shape of this recovery or trajectory will be linear in nature,” Kanarek said. “We think there will be a lot of starts and stops.”

Those starts and stops will depend on the extent of the spread of the virus in an area.

Some states such as Florida, Texas and Arizona have seen massive spikes in the virus in recent weeks, which has put renewed strain on systems. Texas’ governor canceled elective procedures in eight counties back in June, some of which included major cities such as Houston and Dallas.

“I am a little skeptical that we are going to be back to normal before we ultimately have a vaccine,” Kanarek said.

It is also murky on whether hospitals will continue to get more financial help from Congress.

The House passed the HEROES Act more than a month ago that gives providers another $100 billion, but it has stalled in the Senate.

Congress and the White House have been in extensive talks for more than a week on a new relief package. Senate Majority Leader Mitch McConnell released a package last week that had $25 billion in relief funding and lawsuit liability protections for providers.

But even without the additional funding, for-profit hospitals have made some moves to prepare for more shutdowns such as accessing capital markets to add additional lawyers of bank liquidity, Kanarek said.

“We can only hope 2021 will look like a more normal year for hospitals, perhaps more like 2019, but there is still a lot of uncertainty out there,” he said.

 

 

 

 

Industry Voices—6 ways the pandemic will remake health systems

https://www.fiercehealthcare.com/hospitals/industry-voices-6-ways-pandemic-will-remake-health-systems?mkt_tok=eyJpIjoiTURoaU9HTTRZMkV3TlRReSIsInQiOiJwcCtIb3VSd1ppXC9XT21XZCtoVUd4ekVqSytvK1wvNXgyQk9tMVwvYXcyNkFHXC9BRko2c1NQRHdXK1Z5UXVGbVpsTG5TYml5Z1FlTVJuZERqSEtEcFhrd0hpV1Y2Y0sxZFNBMXJDRkVnU1hmbHpQT0pXckwzRVZ4SUVWMGZsQlpzVkcifQ%3D%3D&mrkid=959610

Industry Voices—6 ways the pandemic will remake health systems ...

Provider executives already know America’s hospitals and health systems are seeing rapidly deteriorating finances as a result of the coronavirus pandemic. They’re just not yet sure of the extent of the damage.

By the end of June, COVID-19 will have delivered an estimated $200 billion blow to these institutions with the bulk of losses stemming from cancelled elective and nonelective surgeries, according to the American Hospital Association

A recent Healthcare Financial Management Association (HFMA)/Guidehouse COVID-19 survey suggests these patient volumes will be slow to return, with half of provider executive respondents anticipating it will take through the end of the year or longer to return to pre-COVID levels. Moreover, one-in-three provider executives expect to close the year with revenues at 15 percent or more below pre-pandemic levels. One-in-five of them believe those decreases will soar to 30 percent or beyond. 

Available cash is also in short supply. A Guidehouse analysis of 350 hospitals nationwide found that cash on hand is projected to drop by 50 days on average by the end of the year — a 26% plunge — assuming that hospitals must repay accelerated and/or advanced Medicare payments.

While the government is providing much needed aid, just 11% of the COVID survey respondents expect emergency funding to cover their COVID-related costs.

The figures illustrate how the virus has hurled American medicine into unparalleled volatility. No one knows how long patients will continue to avoid getting elective care, or how state restrictions and climbing unemployment will affect their decision making once they have the option.

All of which leaves one thing for certain: Healthcare’s delivery, operations, and competitive dynamics are poised to undergo a fundamental and likely sustained transformation. 

Here are six changes coming sooner rather than later.

 

1. Payer-provider complexity on the rise; patients will struggle.

The pandemic has been a painful reminder that margins are driven by elective services. While insurers show strong earnings — with some offering rebates due to lower reimbursements — the same cannot be said for patients. As businesses struggle, insured patients will labor under higher deductibles, leaving them reluctant to embrace elective procedures. Such reluctance will be further exacerbated by the resurgence of case prevalence, government responses, reopening rollbacks, and inconsistencies in how the newly uninsured receive coverage.

Furthermore, the upholding of the hospital price transparency ruling will add additional scrutiny and significance for how services are priced and where providers are able to make positive margins. The end result: The payer-provider relationship is about to get even more complicated. 

 

2. Best-in-class technology will be a necessity, not a luxury. 

COVID has been a boon for telehealth and digital health usage and investments. Two-thirds of survey respondents anticipate using telehealth five times more than they did pre-pandemic. Yet, only one-third believe their organizations are fully equipped to handle the hike.

If healthcare is to meet the shift from in-person appointments to video, it will require rapid investment in things like speech recognition software, patient information pop-up screens, increased automation, and infrastructure to smooth workflows.

Historically, digital technology was viewed as a disruption that increased costs but didn’t always make life easier for providers. Now, caregiver technologies are focused on just that.

The new necessities of the digital world will require investments that are patient-centered and improve access and ease of use, all the while giving providers the platform to better engage, manage, and deliver quality care.

After all, the competition at the door already holds a distinct technological advantage.

 

3. The tech giants are coming.

Some of America’s biggest companies are indicating they believe they can offer more convenient, more affordable care than traditional payers and providers. 

Begin with Amazon, which has launched clinics for its Seattle employees, created the PillPack online pharmacy, and is entering the insurance market with Haven Healthcare, a partnership that includes Berkshire Hathaway and JPMorgan Chase. Walmart, which already operates pharmacies and retail clinics, is now opening Walmart Health Centers, and just recently announced it is getting into the Medicare Advantage business.

Meanwhile, Walgreens has announced it is partnering with VillageMD to provide primary care within its stores.

The intent of these organizations clear: Large employees see real business opportunities, which represents new competition to the traditional provider models.

It isn’t just the magnitude of these companies that poses a threat. They also have much more experience in providing integrated, digitally advanced services. 

 

4. Work locations changes mean construction cost reductions. 

If there’s one thing COVID has taught American industry – and healthcare in particular – it’s the importance of being nimble.

Many back-office corporate functions have moved to a virtual environment as a result of the pandemic, leaving executives wondering whether they need as much real estate. According to the survey, just one-in-five executives expect to return to the same onsite work arrangements they had before the pandemic. 

Not surprisingly, capital expenditures, including new and existing construction, leads the list of targets for cost reductions.

Such savings will be critical now that investment income can no longer be relied upon to sustain organizations — or even buy a little time. Though previous disruptions spawned only marginal change, the unprecedented nature of COVID will lead to some uncomfortable decisions, including the need for a quicker return on investments. 

 

5. Consolidation is coming.

Consolidation can be interpreted as a negative concept, particularly as healthcare is mostly delivered at a local level. But the pandemic has only magnified the differences between the “resilients” and the “non-resilients.” 

All will be focused on rebuilding patient volume, reducing expenses, and addressing new payment models within a tumultuous economy. Yet with near-term cash pressures and liquidity concerns varying by system, the winners and losers will quickly emerge. Those with at least a 6% to 8% operating margin to innovate with delivery and reimagine healthcare post-COVID will be the strongest. Those who face an eroding financial position and market share will struggle to stay independent..

 

6. Policy will get more thoughtful and data-driven.

The initial coronavirus outbreak and ensuing responses by both the private and public sectors created negative economic repercussions in an accelerated timeframe. A major component of that response was the mandated suspension of elective procedures.

While essential, the impact on states’ economies, people’s health, and the employment market have been severe. For example, many states are currently facing inverse financial pressures with the combination of reductions in tax revenue and the expansion of Medicaid due to increases in unemployment. What’s more, providers will be subject to the ongoing reckonings of outbreak volatility, underscoring the importance of agile policy that engages stakeholders at all levels.

As states have implemented reopening plans, public leaders agree that alternative responses must be developed. Policymakers are in search of more thoughtful, data-driven approaches, which will likely require coordination with health system leaders to develop flexible preparation plans that facilitate scalable responses. The coordination will be difficult, yet necessary to implement resource and operational responses that keeps healthcare open and functioning while managing various levels of COVID outbreaks, as well as future pandemics.

Healthcare has largely been insulated from previous economic disruptions, with capital spending more acutely affected than operations. But the COVID-19 pandemic will very likely be different. Through the pandemic, providers are facing a long-term decrease in commercial payment, coupled with a need to boost caregiver- and consumer-facing engagement, all during a significant economic downturn.

While situations may differ by market, it’s clear that the pre-pandemic status quo won’t work for most hospitals or health systems.

 

 

 

Pandemic reveals flaws of unemployment insurance programs

https://thehill.com/policy/finance/510368-pandemic-reveals-flaws-of-unemployment-insurance-programs

Pandemic reveals flaws of unemployment insurance programs

The lapse of enhanced jobless benefits amid a record-breaking crush of applications is exposing the flaws and shortcomings of how the U.S. provides unemployment insurance.

The economic toll of the coronavirus pandemic has torn holes in a federal safety net woven by individual systems for every state plus the District of Columbia, Puerto Rico and the Virgin Islands. More than 30.2 million Americans were on some form of unemployment insurance as of mid-July, with the Labor Department reporting a growing number of new applications in subsequent weeks.

Friday’s expiration of a $600 weekly add-on to state benefits plunged those vulnerable Americans into financial peril.

Congressional Democrats and Trump administration officials are now deadlocked over negotiations for a broader coronavirus relief package that’s expected to include some form of federal unemployment benefits.

But short-staffed unemployment offices across the U.S. grappling with outdated technology and unprecedented demand would face challenges from implementing a scaled-down or more complicated approach to the weekly payments.

Economists and labor market experts also warn that any solution that emerges from the negotiations would take weeks, if not months, to get up and running, risking a potentially catastrophic fiscal cliff for tens of millions of U.S. households.

“You ought to be able to deliver the program that’s on the books,” said Douglas Holtz-Eakin, former director of the Congressional Budget Office and a White House economist under former President George W. Bush.

“The states, collectively, seem to have not kept up the systems and we now have a big problem because of that,” he added.

The unprecedented size and speed of the pandemic-driven economic collapse has posed a brutal challenge for state unemployment agencies. After 10 years of steady economic expansion, the labor market quickly went from the lowest unemployment rate in 50 years to the highest level of joblessness since the Great Depression.

New claims for unemployment benefits were averaging roughly 200,000 nationwide a week before the pandemic — a manageable level for state agencies that had largely been neglected during the longest stretch of growth in modern U.S. history. But the coronavirus lockdowns spurred 3.3 million new claims between March 15 and March 22, a then-record that would be doubled the following week. Before the COVID-19 outbreak, the previous record was 695,000 from the first week of October 1982.

A little more than four months after the pandemic hit, state agencies are now processing roughly 2 million new claims a week for both unemployment insurance and Pandemic Unemployment Assistance (PUA), a program designed to cover those who don’t qualify for typical benefits.

“On some level, you can’t really blame states for not being prepared for that level of onslaught,” said Michele Evermore, senior policy analyst at the National Employment Law Project.

“Usually, you see the recession starting up and state agencies say ‘You know, this looks like a recession here, so let’s start to staff up.’ This came on all at once, so we’ve had these neglected, antiquated systems and then there’s all these other stressors.”

The U.S. economy has been in recession since February, according to the National Bureau of Economic Research.

Processing the massive surge of unemployment claims on shoddy technology would have been hard enough for states. Adding enhanced benefits and PUA claims to the mix strained state agencies even more.

“It took time to upgrade those systems. It took time to hire and train new staff who could deal with the volumes of the calls, and all in a pandemic, when face-to-face contact and training and being together in office were not possible,” said Julia Pollak, labor economist at job recruitment and posting company ZipRecuriter.

“So it’s easy to see in hindsight why it all fell apart.”

Enhanced unemployment benefits are among the biggest obstacles to reaching a deal on what’s likely to be the last coronavirus relief package before the election. While President Trump and Republicans are divided over how and whether to extend the federal boost, Democrats are largely united behind extending the benefits and reducing them gradually along a curve tied to the unemployment rate.

Speaker Nancy Pelosi (D-Calif.) has called for including such a mechanism, known as an automatic stabilizers, in the coronavirus package being negotiated.

Rep. Don Beyer (D-Va.), vice chair of the Joint Economic Committee, introduced a separate bill designed to tackle economic downturns beyond the coronavirus recession. His measure would establish a six-tier system for reducing the federal benefit in line with a state’s unemployment rate.

The approach was endorsed by former Federal Reserve Chairman Ben Bernanke, who oversaw the central bank’s response to the Great Recession, and his successor, Janet Yellen.

“Every time you get close to a cliff and there’s a political battle and political price to be paid, probably by both sides, rather than just saying ‘This is what’s needed,’ let’s kick it in,” Beyer said in an interview.

“We talked to economists all across the country and virtually everyone we talked to said this makes the most sense.”

But Republican lawmakers and right-leaning economists have pushed back on efforts to codify mandatory spending and make decisions now about what will be needed to mitigate future crises.

“It’s hard for me to understand why it’s appropriate now to anticipate the economic conditions in the future and tie the hands of future elected representatives of Congress,” Holtz-Eakin said.

“It forked out $2.3 trillion in [the CARES Act] across the board in ways that got to small businesses, to households, to the employed, the unemployed. If you’re going to have one in 100-year events, that’s how you deal with them,” he added.

Republicans have instead proposed replacing the flat $600 weekly boost with a percentage of the worker’s pre-pandemic earnings in addition to what is prescribed by each state. While the wage-replacement is more tailored, Evermore warned that making the necessary calculations for each claimant could overwhelm an already teetering system.

“If you told states that they had to do a percentage replacement — oh, my gosh, that’s a recipe for crashing everything,” she said.

“It’s just not how the system is set up to work.”