Hospitals laying off doctors en masse

It is sometimes said that economics is the study of the scarce allocation of resources. Here’s an allocation problem for you!

We are currently in the early stages of a pandemic the likes of which this country has not seen for a hundred years. Certain areas of the country such as New York City are seeing an incredible surge of Covid-19 patients as hospitals and ICU rapidly fill up.

Other areas of the country have less Covid-19 patients and hospitals are emptying. In addition, due to the cancellation of elective surgery and patients delaying outpatient visits, other areas of the health care system have fewer patients.

The result: across the country, hospitals are laying off employees en masse. This is coming from UI statistics as well as anecdotal reports. Other than workers in accommodation and food service, the sector with the most layoffs is health care. It accounts for 10% of the UI claims in Oregon, and 13% of the UI claims in Michigan. This was actually noted in the national UI report.

To see a smattering of stories:

  1. Kentucky hospital chain lays off 500 employees as coronavirus saps business
  2. Furloughs, retirement cuts, and less pay hit Mass doctors
  3. Pennsylvania hospital furloughs employees
  4. Cleveland Hospital furloughs 70 staffers
  5. Maine hospital furloughs portion of staff
  6. Pennsylvania medical center furloughs hundreds of workers

There are many more. Just google news search for “hospital furlough”.

Well, it doesn’t take a Ph.D. in economics to have the obvious idea that we can redistribute resources from areas that are hit less hard by COVID to areas that are hit harder. This can help increase patient capacity when the virus as at its apex.

Andrew Cuomo has asked local health departments to share resources, but has not organized anything formally. But resources can be shared across the health departments as well within state boundaries, and across states as well.

As far as I know there is no preparation for the widespread of medical distribution of medical resources, both within and across states. If you know of anything like that, leave a comment or send an email.

Jacob Robbins

Author: Jacob Robbins

Jacob Robbins is an assistant professor of economics at the University of Illinois at Chicago.

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