An estimated 803,000 people applied for unemployment aid for the first time last week, the Labor Department said Wednesday, showing the economy’s persistent weakness as new drama swirls over Washington’s response to the crisis. The figure was a slight decrease from the previous week but still much higher than normal.
The new Labor Department data show how weak the economy is, particularly the labor market. The surge in new coronavirus cases and deaths in the past few months has cooled the partial economic recovery from the summer.
Retail sales have weakened, and hiring has slowed markedly. The travel and tourism industries have not recovered much of the business lost since March, and thousands of companies — particularly restaurants and bars — have closed. U.S. household spending slipped in November, marking the first drop since April.
After months of stop-and-start negotiations, the bipartisan stimulus package finally offered some hope for households and businesses fighting to make it through the winter.
If Trump does not sign the bill, up to 14 million Americans would lose unemployment aid after Christmas. An eviction moratorium will expire at the end of the year, and $25 billion in emergency rental assistance will not get out the door. Billions of dollars for nutrition assistance, aid for small businesses, child care, transportation services and more will be in jeopardy, and the government will shut down on Dec. 29.
Trump did not play much of a role in the economic relief talks that resulted in Congress passing the $900 billion stimulus package. In the video Trump posted Tuesday night, his main complaint was that he wanted the $600 stimulus checks in the package to be increased to $2,000. This would add $370 billion to the measure.
Democrats quickly rallied around Trump’s demand, and House Speaker Nancy Pelosi (D-Calif.) plans to try to hold a vote on it as soon as Thursday. But it could be virtually impossible to pass such a measure through Congress with unanimous support, leaving the entire bill’s future uncertain.
The stimulus package would extend unemployment benefits of up to $300 per week, beginning as soon as Dec. 27 and run at least through mid-March. The measure also would extend Pandemic Unemployment Assistance — which targets part-time and gig workers who did not qualify for state unemployment insurance benefits — for 11 weeks.
Wednesday’s data showed nearly 400,000 new claims for the Pandemic Unemployment Assistance program.
Congressional leaders have reached an agreement on a $900 billion COVID-19 relief package and $1.4 trillion government funding deal with several healthcare provisions, according to Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y.
Here are seven things to know about the relief aid and funding deal:
1. Congressional leaders have yet to release text of the COVID-19 legislation, but have shared a few key details on the measure, according to CNBC.Becker’s breaks down the information that has been released thus far.
2. The COVID-19 package includes $20 billion for the purchase of vaccines, about $9 billion for vaccine distribution and about $22 billion to help states with testing, tracing and other COVID-19 mitigation programs, according to Politico.
3. Lawmakers are also expected to include a provision changing how providers can use their relief grants. In particular, the bill is expected to allow hospitals to calculate lost revenue by comparing budgeted revenue for 2020. Hospitals have said this tweak will allow them to keep more funding.
4. The agreement also allocates $284 billion for a new round of Paycheck Protection Program loans.
5. The COVID-19 relief bill also provides$600 stimulus checks to Americans earning up to $75,000 per year and $600 for their children, according to NBC. It also provides a supplemental $300 per week in unemployment benefits.
6. The year-end spending bill includes a measure to ban surprise billing. Under the measure, hospitals and physicians would be banned from charging patients out-of-network costs their insurers would not cover. Instead, patients would only be required to pay their in-network cost-sharing amount when they see an out-of-network provider, according to The Hill.The agreement gives insurers 30 days to negotiate a payment on the outstanding bill. After that period, they can enter into arbitration to gain higher reimbursement.
7. Lawmakers plan to pass the relief bill and federal spending bill Dec. 21.
Applications for jobless benefits resumed their upward march last week as the worsening pandemic continued to take a toll on the economy.
More than 947,000 workers filed new claims for state unemployment benefits last week, the Labor Department said Thursday. That was up nearly 229,000 from the week before, reversing a one-week dip that many economists attributed to the Thanksgiving holiday. Applications have now risen three times in the last four weeks, and are up nearly a quarter-million since the first week of November.
On a seasonally adjusted basis, the week’s figure was 853,000, an increase of 137,000.
Nearly 428,000 applied for Pandemic Unemployment Assistance, a federal program that covers freelancers, self-employed workers and others who don’t qualify for regular state benefits.
Unemployment filings have fallen greatly since last spring, when as many as six million people a week applied for state benefits. But progress had stalled even before the recent increases, and with Covid-19 cases soaring and states reimposing restrictions on consumers and businesses, economists fear that layoffs could surge again.
“It’s very clear the third wave of the pandemic is causing businesses to have to lay people off and consumers to cut back spending,” said Daniel Zhao, senior economist for the career site Glassdoor. “It seems like we’re in for a rough winter economically.”
Jobless claims rose in nearly every state last week. In California, where the state has imposed strict new limits on many businesses, applications jumped by 47,000, more than reversing the state’s Thanksgiving-week decline.
The monthly jobs report released on Friday showed that hiring slowed sharply in early November and that some of the sectors most exposed to the pandemic, like restaurants and retailers, cut jobs for the first time since the spring. More up-to-date data from private sources suggests that the slowdown has continued or deepened since the November survey was conducted.
“Every month, we’re just seeing the pace of the recovery get slower and slower,” said AnnElizabeth Konkel, an economist with the job site Indeed. Now, she said, the question is, “Are we actually going to see it slide backward?”
Many economists say the recovery will continue to slow if the government does not provide more aid to households and businesses. After months of gridlock in Washington, prospects for a new round of federal help have grown in recent days, with congressional leaders from both parties signaling their openness to a compromise and the White House proposing its own $916 billion spending plan on Tuesday. But the two sides remain far apart on key issues.
The stakes are particularly high for jobless workers depending on federal programs that have expanded and extended unemployment benefits during the pandemic. Those programs expire later this month, potentially leaving millions of families with no income during what epidemiologists warn could be some of the pandemic’s worst months.
The financial challenges caused by the COVID-19 pandemic have 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 volumes, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for hospitals. U.S. hospitals are estimated to lose more than $323 billion this year, according to a report from the American Hospital Association.
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 this year and dozens of others have implemented layoffs.
Below are 15 hospitals and health systems that announced layoffs since Sept. 1, many of which were attributed to financial strain caused by the pandemic.
1. Minneapolis-based Children’s Minnesota is laying off 150 employees, or about 3 percent of its workforce. Children’s Minnesota cited several reasons for the layoffs, including the financial hit from the COVID-19 pandemic. Affected employees will end their employment either Dec. 31 or March 31.
2. Dallas-based Baylor Scott & White Health announced in early December that it will lay off 102 employees in finance and accounting roles. The duties of the affected workers will be outsourced to a third-party vendor in India.
3. Eastern Niagara Hospitalin Lockport, N.Y., announced in early November that it plans to end intensive care unit services and move surgical services from the hospital to a surgery center. The changes will result in the loss of 80 jobs.
4. Detroit Medical Centerconfirmed in November that it laid off employees but declined to disclose the number of employees affected. Clinical staff, administrative assistants and employees at the management level were affected by the layoffs, sources told Crain’s Detroit Business.
5. Mercy Iowa City (Iowa) laid off 29 employees in November to address financial strain tied to the COVID-19 pandemic.
6. NorthBay Healthcare, a nonprofit health system based in Fairfield, Calif., announced Nov. 2 that it is laying off 31 of its 2,863 employees as part of its pandemic recovery plan.
7. Brattleboro Retreat, a psychiatric and addiction treatment hospital in Vermont, notified 85 employees in late October that they would be laid off within 60 days.
8. Oakland, Calif.-based Kaiser Permanente notified the state of Hawaii in November that it planned to lay off 45 employees within 60 days. “The COVID-19 public health crisis has placed unprecedented demands on the entire health care system, including Kaiser Permanente,” a Kaiser spokesperson said in an email to Pacific Business News. “Even before the pandemic, we had been transparent in sharing that Kaiser Permanente Hawaii faced ongoing financial challenges and that we were on a path to address our internal structure in a way that ensured we would be able to continue to deliver high-quality, affordable care and coverage to our members in Hawaii for years to come.” The health system said most of the positions eliminated were administrative or in non-patient facing areas.
9. Citing a need to offset financial losses, Minneapolis-based M Health Fairview said in October it plans to downsize its hospital and clinic operations. As a result of the changes, 900 employees, about 3 percent of its 34,000-person workforce, will be laid off.
10. Lake Charles (La.) Memorial Health System laid off 205 workers, or about 8 percent of its workforce, in October as a result of damage sustained from Hurricane Laura. The health system laid off employees at Moss Memorial Health Clinic and the Archer Institute, two facilities in Lake Charles that sustained damage from the hurricane.
11. Burlington, Mass.-based Wellforcelaid off 232 employees in September as a result of operating losses linked to the COVID-19 pandemic. The health system, comprising Tufts Medical Center, Lowell General Hospital and MelroseWakefield Healthcare, experienced a drastic drop in patient volume earlier this year due to the suspension of outpatient visits and elective surgeries.
12. Baptist Health Floydin New Albany, Ind., part of Louisville, Ky.-based Baptist Health, eliminated 36 positions in late September. The hospital said the cuts, which primarily affected administrative and nonclinical roles, are due to restructuring that is “necessary to meet financial challenges compounded by COVID-19.”
13. Cincinnati-based UC Health laid off about 100 employees in September. The job cuts affected both clinical and non-clinical staff. A spokesperson for the health system said no physicians were laid off.
14. Springfield, Ill.-based Memorial Health System laid off 143 employees in September, or about 1.5 percent of the five-hospital system’s workforce. The health system cited financial pressures tied to the pandemic as the reason for the layoffs.
15. Watertown, N.Y.-based Samaritan Health announced Sept. 8 that it laid off 51 employees and will make other cost-cutting moves to offset financial stress tied to the COVID-19 pandemic.
Many hospitals are temporarily or permanently reducing the size of their workforce as they grapple with depleted revenues and the thorny question of when they can return to normal operating capacity. Here’s a tracker to follow the latest updates.
Hospitals across the country, financially battered as they face the dual challenges of sick COVID-19 patients and a precipitous decline in patient volume, are struggling to balance quickly shifting staffing needs. While some face and others brace for intense demand, many have announced furloughs of specialists and others that work in elective surgeries that have been drastically scaled back.
Thousands of healthcare workers at hospitals big and small have been asked not to return to work, and it’s still unclear how soon non-essential services will return. While some governors announce plans to reopen businesses, others have extended stay-at-home orders.
Most recent data from the U.S Bureau of Labor doesn’t cover the second half of March or early April, but during the first half of March, the healthcare industry shed 43,000 jobs — reversing a decade of growth in the sector. According to BLS data, the industry added 49,000 jobs in March 2019.
“Even our emergency room has seen a significant drop in patients coming in,” Sue Philips, an ICU nurse at Palomar Pomerado Health in Northern San Diego, told Healthcare Dive.
Phillips is a spokesperson with National Nurses United, the country’s largest nurses union.Palomar Health, which runs three medical centers in northern San Diego County, recently instituted 21-day temporary layoffs of 221 employees.
On April 28, Palomar announced that most of those layoffs were becoming permanent. The system laid off 5% of its workforce, eliminating 317 positions. Fifty of those employees were clinical RNs, mostly in part-time positions, and the rest spread across the organization ranging from clerical staff to technicians.
Due to a 50% decrease in patient volumes, Palomar lost $10 million in revenue in March alone, according to a statement. In April the system said it stands to lose $20 million or more.
“I’m an ICU nurse, so my job is pretty much protected,” Phillips said. “But you didn’t think you were expendable until you became expendable, and that’s a hard pill for nurses and caregivers to swallow.”
Congress has attempted to financially support struggling hospitals through ongoing coronavirus relief legislation, approving some $175 billion thus far. But without knowing what will come next, hospitals are attempting to remain nimble while reining in one of their most costly expenses — paying employees.
The following information is based on publicly reported data, along with interviews with hospital representatives and union members.
It’s not an exhaustive list, but features nonprofit and for-profit hospital systems that reported revenue above $10 billion in 2019. It also takes a look at smaller, more regionally based systems that have announced similar cutbacks.
Use the dropdown to find a company (Click on link above to access layoff tracker)
The U.S. economy added back the smallest number of jobs in seven months in November, as the labor market endured mounting pressure from the coronavirus pandemic while businesses wait for a vaccine to be distributed next year.
The U.S. Department of Labor released its monthly jobs report Friday morning at 8:30 a.m. ET. Here were the main results from the report, compared to Bloomberg consensus data as of Friday morning:
Change in non-farm payrolls: +245,000 vs. +460,000 expected and a revised +610,000 in October
Unemployment rate: 6.7% vs. 6.7% expected and 6.9% in October
Average Hourly Earnings month-over-month: 0.3% vs. +0.1% expected and +0.1% in October
Average Hourly Earnings year-over-year: 4.4% vs. +4.2% expected and a revised +4.4% in October
During November, a plethora of new stay-in-place measures and curfews swept the nation as COVID-19 cases, hospitalizations and deaths swelled to record levels. These renewed restrictions weighed on the rate of the recovery in the labor market, which had already been slowing after a record surge in rehiring followed the initial wave of lockdowns in the spring.
To that end, job gains in November sharply missed expectations. Non-farm payrolls grew by just 245,000 during the month for the smallest number since April’s record, virus-induced decline. October’s payroll gain was downwardly revised to 610,000 from the 638,000 reported earlier, while September’s gain was raised to 711,000 from 672,000.
A third straight month of declining government employment served as a drag on the headline payrolls figure, as another 93,000 temporary workers hired for the 2020 Census were let go.
In the private sector, retail trade industries shed nearly 35,000 jobs following a gain of 95,000 in October. Leisure and hospitality employers added just 31,000 jobs during November, declining by nearly 90% from October. And in goods-producing industries, manufacturing jobs rose by only 27,000 for the month, falling short of the 40,000 expected.
But a handful of other industries added more jobs in November from October: Transportation and warehousing jobs grew by 145,000 to more than double October’s advance, and growth in wholesale trade positions also doubled to 10,400.
November’s unemployment rate also improved just marginally to 6.7% from the 6.9% reported in October. While down from a pandemic-era high of 14.7% in April, the jobless rate remains nearly double that from before the pandemic.
Other employment reports this week underscored the decelerating trend. Private-sector hiring fell to the lowest level in four months in November, according to data tracked by ADP. New weekly jobless claims began rising again around the 12th of the month, when the Labor Department conducts its surveys for its monthly jobs report. And in the Federal Reserve’s November Beige Book, the central bank noted that nearly all districts reported rising employment, “but for most, the pace was slow, at best, and the recovery remained incomplete.”
The U.S. economy still has a ways to go before fully making up for the drop in payrolls induced by the pandemic.Even with a seventh straight month of net job gains, the economy remains about 9.8 million jobs short of its pre-pandemic level in February. The U.S. economy lost more than 22 million jobs between March and April.
And worryingly, the number of the long-term unemployed has kept climbing. Those classified as “permanent job losers” totaled 3.7 million in November, eclipsing the number of individuals on temporary layoff for the second time since the start of the pandemic. Permanent job losers have increased by 2.5 million since February, before the pandemic meaningfully hit the U.S. economy.
In Washington, congressional lawmakers have for months been at a stalemate over the size and scope of another stimulus package, which could help provide funds for businesses to help keep workers employed, and offer extended unemployment benefits for those the pandemic has kept out of work. Federal unemployment programs authorized under the CARES Act in the spring are poised to expire at the end of the month. These include the Pandemic Emergency Unemployment Compensation and Pandemic Unemployment Assistance programs, which together provide benefits for more than 13 million Americans.
“The only thing that matters about today’s NFP [non-farm payrolls] report is whether it increases the likelihood of a stimulus deal getting done during the lame duck session,” Peter Tchir, head of macro strategy for Academy Securities, said in an email Friday morning. “While the unemployment rate shrunk and wages ticked up nicely, the headline number dropped significantly, was well below average expectations, and included some downward revisions to last month (and upward revisions to 2 months ago) – all of which point to a less robust job market.”
Millions of Americans are in danger of losing their homes when federal and local limits on evictions expire at the end of the year, a growing body of research shows.
A report issued this month from the National Low Income Housing Coalition (NLIHC) and the University of Arizona estimates that 6.7 million households could be evicted in the coming months. That amounts to 19 million people potentially losing their homes, rivaling the dislocation that foreclosures caused after the subprime housing bust.
Apart from being a humanitarian disaster, the crisis threatens to exacerbate the coronavirus pandemic, according to a forthcoming study in the Journal of Urban Health.
“Our concern is we’re going to see a huge increase in evictions after the CDC moratorium is lifted,” said Andrew Aurand, vice president of research at the NLIHC and a co-author of the report.
The number of Americans struggling to pay rent has steadily risen since this summer, according to the Census Bureau’s Household Pulse Survey. In the latest survey, from early November, 11.6 million people indicated they wouldn’t be able to pay the rent or mortgage next month.
Meanwhile, some renters who are still paying rent are relying on “unsustainable” income to make ends meet. Among those who report trouble making rent, “More than half are borrowing from family and friends to meet their spending needs, one-third are using credit cards, and one-third are spending down savings,” the NLIHC report found.
Approaching a “payment cliff”
In early September, the U.S. Centers for Disease Control and Prevention barred evictions through year-end, describing the move as a public health measure to reduce spread of the coronavirus. The CDC order protects renters earning less than $99,000 if they have lost income during the pandemic and are likely to become homeless if they’re evicted.
Many states and cities also imposed renter protections during the spring and summer, and others established rental assistance programs to help tenants make ends meet. However, both types of programs are quickly expiring.
Once the CDC moratorium expires,Aurand said, “We expect to see a jump in [eviction] filings, and we know that even now, filings are already occurring. Come January, sadly, for a number of tenants, the next step is the landlord will evict them.”
The situation could reach crisis levels in the new year. With Congress yet to pass another coronavirus relief package, about 12 million Americans are set to lose their unemployment benefits the day after Christmas, a sharp fall in income that would make it harder for many people to pay rent. An abrupt cutoff would slash income by about $19 billion per month, Nancy Vanden Houten, lead economist at Oxford Economics, said in a research note.
Although the Trump Administration has restricted evictions for most households through the end of the year, it did not relieve renters of the need to pay rent. That means many renters may face a “payment cliff” at year’s end, when they must pay several months’ worth of back rent or face eviction.
“If renters are required to quickly repay past due rent or face eviction, the hardship will fall predominantly on lower-income families who have already been disproportionately affected by the coronavirus crisis,” Vanden Houten wrote.
Said Aurand, “If you were a low-income renter before the pandemic and you were hit financially, even if your income starts to recover, you’re going to have a very hard time paying back that rental debt.”
“What we really need is rental assistance,” he noted. “The underlying problem is renters struggling to pay their rent because we’re in an economic crisis, and the moratorium doesn’t address that.”
Long-term impact
Academics have also pushed for direct aid to renters and homeowners, citing the extreme economic fallout from the coronavirus and related shutdowns. In Los Angeles, where 1 in 5 renters were late on rent at some point this summer, residents are facing “an income crisis layered atop of a housing crisis,” researchers at the University of California – Los Angeles have said.
“Delivering assistance to renters now can not just stave off looming evictions, but also prevent quieter and longer-term problems that are no less serious, such as renters struggling to pay back credit card or other debt, struggling to manage a repayment plan, or emerging from the pandemic with little savings left,” they wrote in August report. “Renter assistance can also help the smaller landlords who are disproportionately seeing tenants unable to pay.”
A groundswell of evictions would cause enormous financial hardship. Losing a home is one of the most traumatic events a family can experience, with research showing that people who have experienced eviction are more likely to lose their jobs, fall ill or suffer from mental-health consequences. Children whose families are evicted are more likely to drop out of school, while evictions also contribute to the spread of COVID-19, according to a forthcoming study from UCLA viewed by “60 Minutes.“
“We’ve got a country that’s about to witness evictions like they’ve never witnessed before,” Laura Tucker, a social worker for Florida’s Hillsborough County School District, told “60 Minutes.”
“An eviction can impact a family’s ability to re-house for more than 10 years,” she said.
For that reason, housing and public health experts have said that rental aid now
“Now is the time for action to provide emergency rental assistance. A failure to do so will result in millions of renters spiraling deeper into debt and housing poverty, while public costs and public health risks of eviction-related homelessness increase,” the NLIHC report says. “These outcomes are preventable.”
26 million now say they don’t have enough to eat, as the pandemic worsens and holidays near.
It was 5 a.m., not a hint of sun in the Houston sky, as Randy Young and his mom pulled into the line for a free Thanksgiving meal. They were three hours early. Hundreds of cars and trucks already idled in front of them outside NRG Stadium. This was where Young worked before the pandemic. He was a stadium cook. Now, after losing his job and struggling to get by, he and his 80-year-old mother hoped to get enough food for a holiday meal.
“It’s a lot of people out here,” said Young, 58. “I was just telling my mom, ‘You look at people pulling up in Mercedes and stuff, come on.’ If a person driving a Mercedes is in need of food, you know it’s bad.”
More Americans are going hungry now than at any point during the deadly coronavirus pandemic, according to a Post analysis of new federal data — a problem created by an economic downturn that has tightened its grip on millions of Americans and compounded by government relief programs that expired or will terminate at the end of the year. Experts say it is likely that there’s more hunger in the United States today than at any point since 1998, when the Census Bureau began collecting comparable data about households’ ability to get enough food.
One in 8 Americans reported they sometimes or often didn’t have enough food to eat in the past week, hitting nearly 26 million American adults, an increase several times greater than the most comparable pre-pandemic figure, according to Census Bureau survey data collected in late October and early November. That number climbed to more than 1 in 6 adults in households with children.
“It’s been driven by the virus and the unpredictable government response,” said Jeremy K. Everett, executive director of the Baylor Collaborative on Hunger and Poverty in Waco, Tex.
Nowhere has there been a hunger surge worse than in Houston, with a metro-area population of 7 million people.Houston was pulverized in summer when the coronavirus overwhelmed hospitals, and the local economy was been particularly hard hit by weak oil prices, making matters worse.
More than 1 in 5 adults in Houston reported going hungry recently, including 3 in 10 adults in households with children. The growth in hunger rates has hit Hispanic and Black households harder than White ones, a devastating consequence of a weak economy that has left so many people trying to secure food even during dangerous conditions.
On Saturday, these statistics manifested themselves in the thousands of cars waiting in multiple lines outside NRG Stadium. The people in these cars represented much of the country. Old. Young. Black. White. Asian. Hispanic. Families. Neighbors. People all alone.
Inside a maroon Hyundai Santa Fe was Neicie Chatman, 68, who had been waiting since 6:20 a.m., listening to recordings of a minister’s sermon piped into large earphones.
“I’ve been feeding my spirit,” she said.
Her hours at her job as an administrator have been unsteady since the pandemic began. Her sister was laid off. They both live with their mother, who has been sick for the past year. She planned to take the food home to feed her family and share with her older neighbors.
“It’s been hard to survive. Money is low. No jobs. Hard to find work.”
— Randy Young
“I lost my business and I lost my dream.”
— Adriana Contreras
Now, a new wave of coronavirus infections threatens more economic pain.
Yet the hunger crisis seems to have escaped widespread notice in a nation where millions of households have weathered the pandemic relatively untouched. The stock market fell sharply in March before roaring back and has recovered all of its losses. This gave the White House and some lawmakers optimism about the economy’s condition. Congress left for its Thanksgiving break without making any progress on a new pandemic aid deal even as food banks across the country report a crush of demand heading into the holidays.
“The hardship is incredibly widespread. Large parts of America are saying, ‘I couldn’t afford food for my family,’ ” said Stacy Dean, who focuses on food-assistance policy at the Center on Budget and Policy Priorities. “It’s disappointing this hasn’t broken through.”
No place has been spared.In one of the nation’s richest counties, not far from Trump National Golf Club in Virginia, Loudoun Hunger Relief provided food to a record 887 households in a single week recently. That’s three times the Leesburg, Va.-based group’s pre-pandemic normal.
“We are continuing to see people who have never used our services before,” said Jennifer Montgomery, the group’s executive director.
Hunger rates spiked nationwide after shutdowns in late March closed large chunks of the U.S. economy. The situation improved somewhat as businesses reopened and the benefits from a $2.2 trillion federal pandemic aid package flowed into people’s pockets, with beefed-up unemployment benefits, support for food programs and incentives for companies to keep workers on the payroll.
But those effects were short-lived. The bulk of the federal aid had faded by September. And more than 12 million workers stand to lose unemployment benefits before year’s end if Congress doesn’t extend key programs.
“Everything is a disaster,” said Northwestern University economist Diane Whitmore Schanzenbach, a leading expert on the economics of food insecurity. “I’m usually a pleasant person, but this is just crazy.”
Economic conditions are the main driver behind rising rates of hunger, but other factors play a role, Schanzenbach said. In the Great Recession that began in 2008, people received almost two years of unemployment aid — which helped reduce hunger rates. Some long-term unemployed workers qualified for even more help.
But the less-generous benefits from the pandemic unemployment assistance programs passed by Congress in March have already disappeared or soon will for millions of Americans.
Even programs that Congress agreed to extend have stumbled. A program giving families additional cash assistance to replace school meals missed by students learning at home was renewed for a year on Oct. 1. But the payments were delayed because many states still needed to get the U.S. Agriculture Department’s approval for their plans. The benefit works out to only about $6 per student for each missed school day. But experts say the program has been a lifeline for struggling families.
One program that has continued to provide expanded emergency benefits is the Supplemental Nutrition Assistance Program, or SNAP. The Agriculture Department issued an emergency order allowing states to provide more families the maximum benefit and to suspend the time limit on benefits for younger unemployed adults without children.
The sharpest rise in hunger was reported by groups who have long experienced the highest levels of it, particularly Black Americans. Twenty-two percent of Black U.S. households reported going hungry in the past week, nearly twice the rate faced by all American adults and more than two-and-a-half times the rate for White Americans.
The Houston area was posting some of its lowest hunger rates before the pandemic, thanks to a booming economy and a strong energy sector, Everett said. Then, the pandemic hit. Hunger surged, concentrated among the city’s sizable low-income population, in a state that still allows for the federally mandated minimum wage of $7.25 an hour. Houston’s hunger rates — like those nationwide — fell significantly after the $1,200 stimulus checks were mailed out in April and other pandemic aid plans took effect, Everett said.
But most of the effects of that aid are gone.
“Without sustained aid at the federal level, we’ll be hard pressed to keep up,” said Celia Call, chief executive of Feeding Texas, which advocates for 21 food banks in the state. “We’re just bracing for the worst.”
Schools are one of the most important sources of food for low-income families in Houston. The Houston Independent School District has 210,000 students — many of whom qualify for free or reduced-priced meals. But the pandemic closed schools in the spring. They reopened in the fall with less than half of the students choosing a hybrid model of in-school and at-home instruction. That has made feeding these children a difficult task.
“We’ve made an all-out effort to capture these kids and feed them,” said Betti Wiggins, the school district’s nutrition services officer.
The district provided curbside meal pickups outside schools. Anyone could come, not just schoolchildren. School staffers set up neighborhood distribution sites in the areas with the highest need. They started a program to serve meals to children living in apartment buildings. Sometimes the meal program required police escorts.
“I’m doing everything but serving in the gas station when they’re pumping the gas,” Wiggins said.
Wiggins said the normal school meals program she ran before the pandemic has been transformed into providing food for entire families far beyond a school’s walls. She has noticed unfamiliar faces in her meal lines. The “new poor,” she calls them, parents who might have worked in the airline or energy industries crushed by the pandemic.
“I’m seeing folks who don’t know how to handle the poverty thing,” she said, adding that it became her mission to make sure they had food.
The Houston Food Bank is the nation’s largest, serving 18 counties in Southeast Texas with help from 1,500 partner agencies. Last month, the food bank distributed 20.6 million pounds of food — down from the 27.8 million pounds handed out in May, but still 45 percent more than what it distributed in October 2019, with no end in sight.
The biggest worry for food banks right now is finding enough food, said Brian Greene, president of the Houston Food Bank. Food banks buy bulk food with donations. They take in donated food items, too. Food banks also benefited from an Agriculture Department program that purchased excess food from U.S. farmers hurt by the ongoing trade war with China, typically apples, milk and pork products. But funding for that program ended in September. Other federal pandemic programs are still buying hundreds of millions of dollars in food and donating it to food banks. But Greene said he worries about facing “a commodity cliff” even as demand grows.
Teresa Croft, who volunteers at a food distribution site at a church in the Houston suburb of Manvel, said the need is still overwhelming. She handles the paperwork for people visiting the food bank for the first time. They’re often embarrassed, she said. They never expected to be there. Sometimes, Croft tries to make them feel better by telling her own story — how she started at the food bank as a client, but got back on her feet financially more than a decade ago and is now a food bank volunteer.
“They feel so bad they’re having to ask for help. I tell them they shouldn’t feel bad. We’re all in this together,” Croft said. “If you need it, you need it.”
The pandemic changed how the Houston Food Bank runs. Everything is drive-through and walk-up. Items are preselected and bagged. The food bank has held several food distribution events in the parking lots outside NRG Stadium — a $325 million, retractable-roof temple to sports and home to the National Football League’s Houston Texans.
Last weekend, instead of holding the 71st annual Thanksgiving Day Parade in Houston, the city and H-E-B supermarkets decided to sponsor the food bank’s distribution event at NRG Stadium. The plan was to feed 5,000 families.
The first cars arrived at the stadium around 1 a.m. Saturday, long before the gates opened for the 8 a.m. event. By the time Young and his mother drove up, the line of vehicles stretched into the distance. Organizers opened the gates early. The cars and trucks began to slowly snake through the stadium’s parking lot toward a series of white tents, where the food was loaded into trunks by volunteers. The boxes contained enough food for multiple meals during the holiday week, with canned vegetables such as corn and sweet potatoes, a package of rolls, cranberry sauce and a box of masks. People picking up food were also given a bag of cereal and some resealable bags, a ham, a gallon of milk, and finally a turkey and pumpkin pie.
The food for 5,000 families ran out. The Houston Food Bank — knowing that would not be enough — was able to assemble more.
It provided food to 7,160 vehicles and 261 people who walked up to the event.
Troy Coakley, 56, came to the event looking for food to feed his family for the week. He still had his job breaking apart molds at a plant that makes parts for oil field and water companies. But his hours were cut when the economy took a hit in March. Coakley went from working overtime to three days a week.
He was struggling. Behind on rent. Unsure what was to come.
But for the moment, his trunk filled with food, he had one less thing to worry about.
“Other than [the pandemic], we were doing just fine,” Coakley said. “But now it’s getting worse and worse.”
President-elect Joe Biden’s healthcare agenda: building on the ACA, value-based care, and bringing down drug prices.
In many ways, Joe Biden is promising a return to the Obama administration’s approach to healthcare:
Building on the Affordable Care Act (ACA) through incremental expansions in government-subsidized coverage
Continuing CMS’ progress toward value-based care
Bringing down drug prices
Supporting modernization of the FDA
Bolder ideas, such as developing a public option, resolving “surprise billing,” allowing for negotiation of drug prices by Medicare, handing power to a third party to help set prices for some life sciences products, and raising the corporate tax rate, could be more challenging to achieve without overwhelming majorities in both the House and the Senate.
Biden is likely to mount an intensified federal response to the COVID-19 pandemic, enlisting the Defense Production Act to compel companies to produce large quantities of tests and personal protective equipment as well as supporting ongoing deregulation around telehealth. The Biden administration also will likely return to global partnerships and groups such as the World Health Organization, especially in the area of vaccine development, production and distribution.
What can health industry executives expect from Biden’s healthcare proposals?
Broadly, healthcare executives can expect an administration with an expansionary agenda, looking to patch gaps in coverage for Americans, scrutinize proposed healthcare mergers and acquisitions more aggressively and use more of the government’s power to address the pandemic. Executives also can expect, in the event the ACA is struck down, moves by the Biden administration and Democratic lawmakers to develop a replacement. Healthcare executives should scenario plan for this unlikely yet potentially highly disruptive event, and plan for an administration marked by more certainty and continuity with the Obama years.
All healthcare organizations should prepare for the possibility that millions more Americans could gain insurance under Biden. His proposals, if enacted, would mean coverage for 97% of Americans, according to his campaign website. This could mean millions of new ACA customers for payers selling plans on the exchanges, millions of new Medicaid beneficiaries for managed care organizations, millions of newly insured patients for providers, and millions of covered customers for pharmaceutical and life sciences companies. The surge in insured consumers could mirror the swift uptake in the years following the passage of the ACA.
Biden’s plan to address the COVID-19 pandemic
Biden is expected to draw on his experience from H1N1 and the Ebola outbreaks to address the COVID-19 pandemic with a more active role for the federal government, which many Americans support. These actions could shore up the nation’s response in which the federal government largely served in a support role to local, state and private efforts.
Three notable exceptions have been the substantial federal funding for development of vaccines against the SARS-CoV-2 virus, Congress’ aid packages and the rapid deregulatory actions taken by the FDA and CMS to clear a path for medical products to be enlisted for the pandemic and for providers, in particular, to be able to respond to it.
Implications of Biden’s 2020 health agenda on healthcare payers, providers and pharmaceutical and life sciences companies
The US health system has been slowly transforming for years into a New Health Economy that is more consumer-oriented, digital, virtual, open to new players from outside the industry and focused on wellness and prevention. The COVID-19 pandemic has accelerated some of those trends. Once the dust from the election settles, companies that have invested in capabilities for growth and are moving forcefully toward the New Health Economy stand to gain disproportionately.
Shortages of clinicians and foreign medical students may continue to be an issue for a while
The Trump administration made limiting the flow of immigrants to the US a priority. The associated policy changes have the potential to exacerbate shortages of physicians, nurses and other healthcare workers, including medical students. These consequences have been aggravated by the pandemic, which dramatically curtailed travel into the US.
Healthcare organizations, especially rural ones heavily dependent on foreign-born employees, may find themselves competing fiercely for workers, paying higher salaries and having to rethink the structure of their workforces.
Providers should consider reengineering primary care teams to reflect the patients’ health status and preferences, along with the realities of the workforce on the ground and new opportunities in remote care.
Focus on modernizing the supply chain
Biden and lawmakers from both parties have been raising questions about life sciences’ supply chains. This focus has only intensified because of the pandemic and resulting shortages of personal protective equipment (PPE), pharmaceuticals, diagnostic tests and other medical products.
Investment in advanced analytics and cybersecurity could allow manufacturers to avoid disruptive stockouts and shortages, and deliver on the promise of the right treatment to the right patient at the right time in the right place.
Drug pricing needs a long-term strategy
Presidents and lawmakers have been talking about drug prices for decades; few truly meaningful actions have been implemented. Biden has made drug pricing reform a priority.
Drug manufacturers may need to start looking past the next quarter to create a new pricing strategy that maximizes access in local markets through the use of data and analytics to engage in more value-based pricing arrangements.
New financing models may help patients get access to drugs, such as subscription models that provide unlimited access to a therapy at a flat rate.
Companies that prepare now to establish performance metrics and data analytics tools to track patient outcomes will be well prepared to offer payers more sustainable payment models, such as mortgage or payment over time contracts, avoiding the sticker shock that comes with these treatments and improving uptake at launch.
Pharmaceutical and life sciences companies will likely have to continue to offer tools for consumers like co-pay calculators and use the contracting process where possible to minimize out-of-pocket costs, which can improve adherence rates and health outcomes.
View interoperability as an opportunity to embrace, not a threat to avoid or ignore
While the pandemic delayed many of the federal interoperability rule deadlines, payers and providers should use the extra time to plan strategically for an interoperable future.
Payers should review business partnerships in this new regulatory environment.
Digital health companies and new entrants may help organizations take advantage of the opportunities that achieving interoperability may present.
Companies should consider the legal risks and take steps to protect their reputations and relationships with customers by thinking through issues of consent and data privacy.
Health organizations should review their policies and consider whether they offer protections for customers under the new processes and what data security risks may emerge. They should also consider whether business associate agreements are due in more situations.
Plan for revitalized ACA exchanges and a booming Medicare Advantage market
The pandemic has thrown millions out of work, generating many new customers for ACA plans just as the incoming Biden administration plans to enrich subsidies, making more generous plans within reach of more Americans.
Payers in this market should consider how and where to expand their membership and appeal to those newly eligible for Medicare. Payers not in this market should consider partnerships or acquisitions as a quick way to enter the market, with the creation of a new Medicare Advantage plan as a slower but possibly less capital-intensive entry into this market.
Payers and health systems should use this opportunity to design more tailored plan options and consumer experiences to enhance margins and improve health outcomes.
Payers with cash from deferred care and low utilization due to the pandemic could turn to vertical integration with providers as a means of investing that cash in a manner that helps struggling providers in the short term while positioning payers to improve care and reduce its cost in the long term.
Under the Trump administration, the FDA has approved historic numbers of generic drugs, with the aim of making more affordable pharmaceuticals available to consumers. Despite increased FDA generics approvals, generics dispensed remain high but flat, according to HRI analysis of FDA data.
Pharmaceutical company stocks, on average, have climbed under the Trump administration, with a few notable dips due to presidential speeches criticizing the industry and the pandemic.
Providers have faced some revenue cuts, particularly in the 340B program, and many entered the pandemic in a relatively weak liquidity position. The pandemic has led to layoffs, pay cuts and even closures. HRI expects consolidation as the pandemic continues to curb the flow of patients seeking care in emergency departments, orthopedic surgeons’ offices, dermatology suites and more.
Lawmakers and politicians often use bold language, and propose bold solutions to problems, but the government and the industry itself resists sudden, dramatic change, even in the face of sudden, dramatic events such as a global pandemic. One notable exception to this would be a decision by the US Supreme Court to strike down the ACA, an event that would generate a great deal of uncertainty and disruption for Americans, the US health industry and employers.
HENRY KOTULA 