Nursing Homes Shed 264K Jobs During COVID-19 Pandemic Even as Health Care Employment Recovered

Alex Spanko

In the midst of a devastating pandemic, the nation’s nursing homes lost 264,000 jobs over the course of 2020, even as the health care sector at large bounced back to nearly pre-COVID levels.

That figure represents a 7.8% drop for nursing facilities and other residential care settings between February and December 2020, according to an analysis from non-profit health care research firm Altarum.

The precipitous decline comes at a time when the workforce crisis in nursing homes has never been more acute: Even before the pandemic, facilities across the country were understaffed, and the effects of COVID-19 exacerbated an already troubling trend.

The billions in CARES Act funds sent to nursing homes were meant, in part, to help operators defer elevated staffing costs related to the increased use of third-party agency employees while also providing hazard pay and bonuses for in-house workers. But a December 2020 survey conducted by the American Health Care Association, a major industry lobbying and trade group, still identified staffing as a top operational and financial stressor.

“Staffing has been the top cost in response to COVID with nine out of 10 nursing homes hiring additional staff and/or paying staff overtime,” the group observed in the survey results. “Fifty-eight percent of nursing homes said additional staff pay and hiring new staff were their top cost incurred due to COVID. Seventy percent of nursing homes have hired additional staff, and nine out of 10 have asked current staff to work overtime and provided hero pay.”

Nearly 95% of respondents to the survey reported asking workers to put in overtime or double shifts.

Research has indicated that well-staffed facilities can contain COVID-19 outbreaks more efficiently than their understaffed peers, while the sharing of workers across multiple nursing homes has been identified as a major spreader of the novel coronavirus.

The figures for nursing homes stand in stark contrast with the rest of the health care landscape. While the sector suffered the same massive shedding of jobs at the start of the pandemic in March and April 2020, health care employers by December restored 68% of the jobs that had been lost, according to Altarum, compared to 56% of positions in the economy as a whole.

That leaves the entire health care services industry — which, Altarum noted, now employs one out of every nine American workers — down about 3% since COVID-19 made its initial impact last spring. Hospital employment sits down just 1.3% from February, while ambulatory care operators have a 2.2% smaller workforce over that span.

“We have emphasized in many of our writings how unusual it is for the health sector to lose jobs and revenue even during economic downturns, and that health care has not provided the backstop to job loss that it has in past recessions,” Altarum observed. “However, health care has still performed better than the overall economy.”

For nursing homes, the trend showed no signs of slowing at the end of the year, with the Bureau of Labor Statistics (BLS) finding an employment drop of 6,100 jobs between November and December 2020 in its most recent set of statistics. Hospitals, by comparison, logged a gain of 31,500 at the end of last year, as health care employment in general spiked 38,800; home health providers added a modest 1,500 positions.

Alex Spanko


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