Hospitals Received Hundreds Of Millions In Stimulus – So Why All The Layoffs?

By Consumers For Quality Care, on August 5, 2020

Hospitals Received Hundreds Of Millions In Stimulus – So Why All The Layoffs?

ABC Cincinnati investigated how much money from the $2 trillion CARES Act made its way into local hospital systems.

The study showed that six major hospitals in the Cincinnati area received $689 million – enough to give each of the 63,000 hospital employees $10,000. However, hospitals aren’t required to spend the money to save jobs. In fact, the Kaiser Family Foundation estimated that hospitals nationwide got rid of 122,000 jobs between February and April.

Data from the Ohio Department of Job and Family Services shows that hospitals and related industries in Southwest Ohio were responsible for more unemployment claims than any other employment segment.

“The money that went to healthcare providers really didn’t have a lot of strings attached,” said Karyn Schwartz, a health policy expert with the Kaiser Family Foundation, a San Francisco nonprofit that publishes research and analysis on the health care industry. “Hospitals were free to make decisions around layoffs even if they accepted the money.”

Nicole Jones, a certified athletic trainer, talked about her experience working with Saint Elizabeth Healthcare. While she initially thought she’d get laid off as a result of the pandemic, the hospital instead offered to pay her full salary if she took on other roles in the hospital system.

“It was a huge relief,” said Jones, a 2011 graduate of Xavier University. It was a “weight off of our shoulders just knowing that the hospital had a plan for us.”

Saint Elizabeth’s CEO says the hospital system will lose about $125 million, but that they had the financial stability to get through the pandemic – in large part due to the $150 million in federal stimulus awards it received.

Saint Elizabeth, however, was rare among local hospitals in that it avoided layoffs, pay cuts, and furloughs. ABC Cincinnati’s investigation found that most hospitals didn’t receive enough federal stimulus to cover more than 15% of annual expenses and/or patient revenue. The stimulus awards likely did not lower the pressure on hospitals to aggressively cut costs either.

Looking ahead, ABC Cincinnati reports that hospitals are likely to ask for more stimulus as coronavirus cases across the country continue to flare up.