This week’s contributor is Larry Levitt, the Executive Vice President for Health Policy at the Kaiser Family Foundation.
For the first time in an economic downturn, the Affordable Care Act (ACA) exists as a health care safety net for people losing their jobs and employer-provided health insurance. A new study provides some clues as to how well the health care law works for people who lose their jobs and insurance.
The study– by Sumit Agarwal and Benjamin Sommers, published in the New England Journal of Medicine – compares people who lost their jobs before and after the ACA went into effect in 2014 to see if there is a difference in how many people retained health insurance. During the pre-ACA period (2011-2013), there was about a 5% increase in the uninsured rate for people following a job loss. After the ACA went into effect (2014-2016), no such increase occurred. Instead, Medicaid and the marketplaces saw large increases in utilization.
With millions of Americans losing their jobs during the pandemic, the number of people without health coverage has undoubtedly risen. However, by how much is unknown, since we don’t track insurance coverage in real-time like we do employment. Many who have lost jobs may not have had employer-sponsored insurance in the first place, if they worked an industry like food service or retail. And the vast majority of people who are unemployed are classified as on temporary layoff, with employers who may be continuing health benefits for their furloughed workers, at least for now. However, the share of unemployed workers who have permanently lost their jobs is growing.
If the economic crisis persists, the number of people losing job-based health insurance will climb, making the ACA’s role as a safety net more relevant than ever.
The healthcare industry added 75,000 jobs last month, a decline compared with the 126,000 that were added in July, the latest federal jobs report shows.
But there are some bright spots for the industry that is still recovering from major unemployment earlier this year sparked by job losses due to the COVID-19 pandemic.
The Bureau of Labor Statistics’ jobs report released Friday showed that hospitals continue to add more jobs after several major subsystems furloughed and laid off workers at the onset of the pandemic in March.
Hospitals added 14,000 jobs in August, which was below the 27,000 jobs the industry added in July.
The industry shed 26,000 jobs in May as hospitals took massive revenue hits from the cancellation of elective procedures and lower patient volume due to COVID-19.
Job numbers continue to recover robustly for other sectors of the healthcare industry.
Physician offices added 27,000 jobs and dentists another 22,000 in August. Home healthcare agencies added 12,000 positions in August.
But things continue to get worse for nursing homes.
Nursing homes and residential care facilities lost 14,000 jobs. But it was the lowest number of job losses the industry has faced in months.
In July the sector lost 28,000 jobs. In June, 20,000 positions were shed.
While several parts of the healthcare industry are adding jobs, the overall picture has been bleak. The federal government reported last month that healthcare employment has been down by nearly 800,000 jobs since February.
Things could continue to get worse for both hospitals and physician offices. Experts predict that hospital volumes, which have rebounded since major drops in March and April, are still below pre-pandemic levels for some facilities.
About half of Americans in the COVID-19 era fear a health-related incident could drive them into bankruptcy, according to a new survey Tuesday by Gallup and West Health.
Gallup and West Health said 50% of respondents said they’re concerned about medical bankruptcy — a 5% increase from early this year, before the pandemic. That concern rose 12 points among U.S. adults between 18 and 29 and non-White Americans.
“Dovetailing with the new health-related concerns brought on by the coronavirus outbreak is the economic catastrophe that — despite the recouping of millions of jobs since May — persists in form of 28 million people receiving some form of unemployment aid at the end of July,” Gallup wrote.
“As such, Americans’ concerns about a major health event putting them in bankruptcy, while substantial in early 2019, are likely only intensified today because of the pandemic.”
The study found that 15% of respondents said at least one person in their home currently has medical debt that will not be repaid in the next 12 months.
“Those in households earning less than $40,000 per year are more than four times as likely as those in households earning $100,000 or more to be carrying long-term medical debt (28% vs. 6%, respectively),” Gallup added. “The rate is also about twice as high among self-identified political independents (18%) and Democrats(16%) as among Republicans (8%).”
More than a quarter of adults said they’d need to borrow to pay a medical bill of just $500. Many others said they would have to go into debt.
Gallup polled more than 1,000 U.S. adults for the survey, which has a margin of error of 4 points.
Those on the front lines of the fight against the novel coronavirus worry about keeping themselves, their families and their patients safe.
This story is part of a series examining the state of healthcare six months into the public health emergency declared for COVID-19.
There’s no end in sight for the country as it grapples with another surge of COVID-19 cases.
That’s especially true for nurses seeking the reprieve of their hospitals returning to normal operations sometime this year. Many in the South and West are now treating ICUs full of COVID-19 patients they hoped would never arrive in their states, largely spared from spring’s first wave.
And like many other essential workers, those in healthcare are falling ill and dying from COVID-19. The total number of nurses stricken by the virus is still unclear, though the Centers for Disease Control and Prevention has reported 106,180 cases and 552 deaths among healthcare workers. That’s almost certainly an undercount.
National Nurses United, the country’s largest nurses union, told Healthcare Dive it has counted 165 nurse deaths from COVID-19 and an additional 1,060 healthcare worker deaths.
Safety concerns have ignited union activity among healthcare workers during the pandemic, and also given them an opportunity to punctuate labor issues that aren’t new, like nurse-patient ratios, adequate pay and racial equality.
At the same time, the hospitals they work for are facing some of their worst years yet financially, after months of delayed elective procedures and depleted volumes that analysts predict will continue through the year. Many have instituted furloughs and layoffs or other workforce reduction measures.
Healthcare Dive had in-depth conversations with three nurses to get a clearer picture of how they’re faring amid the once-in-a-century pandemic. Here’s what they said.
Elizabeth Lalasz, registered nurse, John H. Stroger Hospital in Chicago
Elizabeth Lalasz has worked at John H. Stroger Hospital in Chicago for the past 10 years. Her hospital is a safety net facility, catering to those who are “Black, Latinx, the homeless, inmates,” Lalasz told Healthcare Dive. “People who don’t actually receive the kind of healthcare they should in this country.”
Data from the CDC show racial and ethnic minority groups are at increased risk of getting COVID-19 or experiencing severe illness, regardless of age, due to long-standing systemic health and social inequities.
CDC data reveal that Black people are five times more likely to contract the virus than white people.
This spring Lalasz treated inmates from the Cook County Jail, an epicenter in the city and also the country. “That population gradually decreased, and then we just had COVID patients, many of them Latinx families,” she said.
Permission granted by Elizabeth Lalasz
Once Chicago’s curve began to flatten and the hospital could take non-COVID patients, those coming in for treatment were desperately sick. They’d been delaying care for non-COVID conditions, worried a trip to the hospital could risk infection.
A Kaiser Family Foundation poll conducted in May found that 48% of Americans said they or a family member had skipped or delayed medical care because of the pandemic. And 11% said the person’s condition worsened as a result of the delayed care.
When patients do come into Lalasz’s hospital, many have “chest pain, then they also have diabetes, asthma, hypertension and obesity, it just adds up,” she said.
“So now we’re also treating people who’ve been delaying care. But after the recent southern state surges, the hospital census started going down again,” she said.
Amy Arlund, registered nurse, Kaiser Permanente Medical Center in Fresno, California:
Amy Arlund works the night shift at Kaiser Fresno as an ICU nurse, which she’s done for the past two decades.
She’s also on the hospital’s infection control committee, where for years she’s fought to control the spread of clostridium difficile colitis, or C. diff., in her facility. The highly infectious disease can live on surfaces outside the body for months or sometimes years.
The measures Arlund developed to control C. diff served as her litmus test, as “the top, most stringent protocols we could adhere to,” when coronavirus patients arrived at her hospital, she told Healthcare Dive.
But when COVID-19 cases surged in northern states this spring, “it’s like all those really strict isolation protocols that prior to COVID showing up would be disciplinable offenses were gone,” Arlund said.
Widespread personal protective equipment shortages at the start of the pandemic led the CDC and the Occupational Safety and Health Administration to change their longstanding guidance on when to use N95 respirator masks, which have long been the industry standard when dealing with novel infectious diseases.
The CDC also issued guidance for N95 respirator reuse, an entirely new concept to nurses like Arlund who say those changes go against everything they learned in school.
“I think the biggest change is we always relied on science, and we have always relied heavily on infection control protocols to guide our practice,” Arlund said. “Now infection control is out of control, we can no longer rely on the information and resources we always have.”
In Arlund’s ICU, she’s taken care of dozens of COVID positive patients and patients ruled out for coronavirus, she said. After a first wave in the beginning of April, cases dropped, but are now rising again.
Other changing guidance weighing heavily on nurses is how to effectively treat coronavirus patients.
“Are we doing remdesivir this week or are we going back to the hydroxychloroquine, or giving them convalescent plasma?”Arlund said. “Next week I’m going to be giving them some kind of lavender enema, who knows.”
Erik Andrews, registered nurse, Riverside Community Hospital in Riverside, California:
Erik Andrews, a rapid response nurse at Riverside Community Hospital in California, has treated coronavirus patients since the pandemic started earlier this year. He likens ventilating them to diffusing a bomb.
“These types of procedures generate a lot of aerosols, you have to do everything in perfectly stepwise fashion, otherwise you’re going to endanger yourself and endanger your colleagues,” Andrews, who’s been at Riverside for the past 13 years, told Healthcare Dive.
He and about 600 other nurses at the hospital went on strike for 10 days this summer after a staffing agreement between the hospital and its owner, HCA Healthcare, and SEIU Local 121RN, the union representing RCH nurses, ended without a renewal.
The nurses said it would lead to too few nurses treating too many patients during a pandemic. Insufficient PPE and recycling of single-use PPE were also putting nurses and patients at risk, the union said, and another reason for the strike.
But rapidly changing guidance around PPE use and generally inconsistent information from public officials are now making the nurses at his hospital feel apathetic.
“Unfortunately I feel like in the past few weeks it’s gotten to the point where you have to remind people about putting on their respirator instead of face mask, so people haven’t gotten lax, but definitely kind of become desensitized compared to when we first started,” Andrews said.
Permission granted by Erik Andrews
With two children at home, Andrews slept in a trailer in his driveway for 12 weeks when he first started treating coronavirus patients. The trailer is still there, just in case, but after testing negative twice he felt he couldn’t spend any more time away from his family.
He still worries though, especially about his coworkers’ families. Some coworkers he’s known for over a decade, including one staff member who died from COVID-19 related complications.
“It’s people you know and you know that their families worry about them every day,” he said. “So to know that they’ve had to deal with that loss is pretty horrifying, and to know that could happen to my family too.”
“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 firstsince 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.
Just over one million Americans filed new claims for state jobless benefits last week, the latest sign that the economy is losing momentum just as federal aid to the unemployed has been pulled away.
Weekly claims briefly dipped below the one million mark early this month, offering a glimmer of hope in an otherwise gloomy job market. But filings jumped to 1.1 million the next week, and stayed above one million last week, the Labor Department said Thursday.
“It’s devastating how stubbornly high initial claims are,” said Julia Pollak, a labor economist at the employment site ZipRecruiter. “There are still huge numbers of layoffs taking place.”
Another 608,000 people filed for benefits under the federal Pandemic Unemployment Assistance program, which offers aid to independent contractors, self-employed workers and others not covered by regular state programs. That number, unlike the figures for state claims, is not seasonally adjusted.
Other recent indicators also suggest that the recovery is faltering. Job growth slowed in July, and real-time data from private-sector sources suggests that hiring has slumped further in August. On Tuesday, American Airlines said it will furlough 19,000 workers on Oct. 1, the latest in a string of such announcements from major corporations.
“It is worrying because it does signal that these large companies are pessimistic about the state of the recovery and don’t think that we are going to be returning to normal anytime soon,” said Daniel Zhao, senior economist at the career site Glassdoor.
Unemployment filings have fallen sharply since early April, when 6.6 million applied for benefits in a single week. But even after that decline, weekly filings far exceed any previous period. Close to 30 million Americans are receiving benefits under various state and federal programs.
The rate of job losses remains high as government support for the unemployed is waning. A $600-a-week federal supplement to state unemployment benefits expired at the end of July, and efforts to replace it have stalled in Congress. President Trump announced this month that he was using his executive authority to give jobless workers an additional $300 or $400 a week, but few states have begun paying out the new benefit.
Economists warn that the loss of federal support could act as a brake on the recovery. Nancy Vanden Houten, lead economist for the forecasting firm Oxford Economics, estimated that the lapse in extra unemployment benefits would reduce household income by $45 billion in August. That could lead to a drop in consumer spending and further layoffs, she said.
The benefit initiated by Mr. Trump would use federal emergency funds to provide $300 a week in extra payments to most unemployed workers. (States can choose to chip in an additional $100 a week, but few are doing so.) As of Wednesday, 34 states had been approved for grants under the program, known as Lost Wages Assistance.
Arizona, the first state to turn the grants into payments, sent $252.6 million to about 400,000 recipients last week, a sum that included retroactive payments for the first two weeks of August. Texas this week has paid out $424 million and expects to deliver nearly $1 billion more to cover the first three weeks of benefits. A handful of other states are paying benefits or expect to begin doing so within days.
Most, however, said it could take until mid-September or later.
Once the money starts flowing, it may not last long. Mr. Trump’s order authorized spending up to $44 billion, which federal officials said last week would cover four or five weeks of payments. That means jobless workers in many states may receive a lump sum covering several weeks of retroactive benefits, but nothing more without congressional action.
The wait for the $300 benefit can depend on a state’s computers.
A crowd thronged a temporary unemployment office in Kentucky in June. Adapting computer systems to new benefits has been a crucial factor in processing claims.
On the surface, the new lost wages program looks like the earlier $600-a-week federal supplement, just cut in half. But there are subtle differences: The program has a different funding source (the Federal Emergency Management Agency instead of the Labor Department) and new restrictions (people receiving less than $100 a week in regular benefits don’t qualify).
Those kinds of adjustments would be trivial on a modern computer system. But many state unemployment systems are running on computers that are anything but modern.
In Oklahoma, for example, the unemployment system uses a 40-year-old mainframe computer that turns even minor adjustments into a major programming task. As a result, even though the state was among the first to apply for the $300 benefit this month, it doesn’t expect to begin paying the new benefit until late September.
“The fact that I’m working with a mainframe from 1978 to process claims is just crippling to the agency,” said Shelley Zumwalt, interim executive director of the agency that oversees Oklahoma’s unemployment system. “We are just holding that system together with masking tape and chewing gum.”
When the pandemic hit, Arizona, too, was stuck with archaic computer systems. It built a new system virtually from scratch to begin paying out federally funded emergency benefits, and it was among the last states to do so.
But the approach left Arizona better able to handle curveballs like the new $300 benefit.
“Through that chaos, we created a pandemic unemployment system,” said Michael Wisehart, director of the Arizona Department of Economic Security.
Since the $600-a-week benefit lapsed, her savings have been dwindling.
Christy Miller says there are three things that shape her identity: making people laugh, making people strong and lifting heavy objects. She can’t do any of those right now, and she isn’t sure when she will be able to again.
Ms. Miller, 49, is a standup comedian in New York, where comedy clubs have been closed since March. She is also a personal trainer and an amateur power lifter — activities she has had to give up because gyms, too, remain closed in the city.
The $600-a-week supplement to her unemployment pay didn’t just allow her to pay rent and buy food. It also freed up the time and mental energy for her to learn video production, podcasting and other skills to help her survive the pandemic-driven shutdown of her industry.
“I would give up the $600 a week any day for this coronavirus to go away and get back to work,” she said. “But the $600 has allowed me not to be homeless, to learn more computer stuff that I never would have learned or had the time to learn.”
None of those ventures are producing much income yet, though. She saved as much of her unemployment benefits as she could, and has enough to cover rent through the end of the year. But other bills are another matter. And there is little guarantee that her business will bounce back before her savings run out.
“If they don’t fix this pandemic thing, I may have to leave New York because I can’t afford to stay here,” she said.
Even getting back to work doesn’t always bring security.
Kris Fusco is finally back at work. That doesn’t mean her coronavirus worries are behind her.
When Ms. Fusco’s employer — a small, family-owned business in Massachusetts that rents musical instruments to students — laid her off in March, she expected to be out of work for a couple of weeks. That got extended to April, then to June. Eventually one of the owners called her to tell her they didn’t know when they could reopen.
“I said, ‘You do what you need to do to keep your business afloat, and I’m just going to hold on as long as I can,’” she said. Fortunately, her employer called her back shortly after the $600 supplement expired. She returned to work last week, and, despite some nervousness about going into the office with the virus still spreading, she said she was grateful for the paycheck.
But Ms. Fusco, 50, doesn’t know how long her good fortune will last. With many schools still teaching remotely or canceling activities like band, she worries that her company’s business will suffer. Already, she has noticed a large number of instruments being returned.
“It’s very worrisome for me because I can see the snowball effect from Covid-19 all around me,” she said. “It’s always lurking right behind my eyeballs that in six months I might be out of a job again.”
The number of jobless people saying that unemployment insurance does not cover basic expenses including food, clothing, housing and transportation nearly doubled after key benefits expired in July.
A new survey from Morning Consult found that 50 percent of unemployed people said their benefits fell short of covering basic expenses, up from 27 percent in July.
The $600 in extra weekly benefits that Congress passed in March expired at the end of July, leaving many with significantly lower payments.
Republicans argued the $600 increase was too high and discouraged people from returning to work. Democrats countered that at a time of record high unemployment and limited job openings, the extra pay was unlikely to prevent jobs from getting filled.
A month later, negotiations between the White House and congressional Democrats remain stalled. Senate Republicans are setting a goal of voting on a more limited package of COVID-19 relief measures next week, though Speaker Nancy Pelosi (D-Calif.) has dismissed the idea of approving a limited bill.
An executive order by President Trump to provide $300 in additional benefits to a more limited pool of recipients has lagged in implementation, with only a handful of states able to start making new payments.
In the meantime, the pandemic continues to stifle the economy.
A CNBC poll found that 14 percent of those surveyed had completely wiped out their emergency savings during the pandemic, and 39 percent were forced to take some sort of emergency measures to shore up their finances.
Among those who took emergency measures, 17 percent tapped into savings, 11 percent borrowed money, 6 percent stopped retirement contributions and 4 percent moved in with a family member.
HENRY KOTULA 