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Sluggish Hospital Job Growth Linked to Sequestration

John Commins, for HealthLeaders Media, August 5, 2013

The larger healthcare sector, which includes hospitals, nursing homes, ambulatory surgery centers, clinics, and physicians offices, created a mere 2,500 jobs in July, well below the monthly average of 15,700 new jobs in the first seven months of 2013. The 2013 monthly average is well below the 24,300 new jobs that healthcare averaged in the first seven months of 2012. BLS figures for June and July are preliminary and can be subject to considerable revision.

Steinberg says most hospitals are trying to soften the blow of sequestration by first shedding administrative jobs to protect caregivers and patient services. "But when the rubber hits the road they start to cut programs and those programs that lose the most money are the first to go, things like psychiatric care, post-acute care, home health programs," she says. "You really do begin to see access suffering."

The across-the-board cleaver cuts mandated by the sequestration will lop $1.2 trillion off the federal budget over the next nine years, averaging more than $109 billion each year. This includes $11 billion in Medicare funding in 2013 in the form of the 2% reimbursement cuts.

Nicole Smith, a senior economist at the Georgetown University Center on Education and the Workforce, agreed that sequestration is playing a role in the slower job growth for healthcare, but she says it's too early to call it a trend.

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