Economic Downturn: Surviving Lay-offs and Cutbacks

Economic Downturn: Surviving Lay-offs and Cutbacks

COVID-19 has caused a very significant economic downturn resulting in a slower job market which could threaten your employment

The coronavirus pandemic has caused widespread business shutdowns that have wreaked havoc on the U.S. economic state, resulting in a massive downturn, and unemployment rose to record highs in nearly every state last month. The therapy industry has not been spared from the impact of Covid-19 in terms of job losses, lay-offs, and reductions in salary and benefits.

Prior to the issues in the therapy industry caused by Covid-19, we had seen increased lay-offs and cutbacks. 

In October of 2019 thousands of physical, occupational and speech therapists had been laid off as skilled-nursing facilities transitioned to a new payment model. Many saw their wages reduced or were let go as a result of a new patient-driven payment model, which is akin to bundled payments and based on patient assessments and acuity rather than the volume of therapy services. Industry observers expect more fallout as certain providers gamed the system to maximize therapy hours, which are now likely going to be a fraction of what they were under the resource-utilization group model.

At that time one national chain, Genesis HealthCare, said that 585 of approximately 10,000 rehabilitation employees were affected by the payment changes. Prior to October of 2019 the company had already experienced staff reductions. Their federal securities filings and its website showed that the approximate total number of rehabilitation employees dropped from 14,000 to 10,000 between Dec. 31, 2018 and Oct. 1, 2019. A Genesis spokesperson said that other than the 585 affected employees, the reduction was unrelated to the new PDPM model.

A poll conducted by Skilled Nursing News found that more than 40% of operators and therapy vendors had made some kind of staffing reduction after October 1st. Of those SNF operators that reported laying off therapy staff, a sizable portion said cuts accounted for between 21% to 40% of their workforce. Even if Medicare-reimbursed health care providers aren’t laying off therapists, they were reducing their pay or hours worked. More than half of the SNF respondents in the SNN poll — about 53% — said they had switched some therapy staff to PRN status, a term that refers to as-needed labor as opposed to steady hours.

Soon after, home health agencies were working through a new payment system as well. While PDPM is inherently different than the home health industry’s Patient-Driven Groupings Model (PDGM), the reimbursement models share many fundamental commonalities, especially when it comes to therapy. In June of 2019 nearly half of home health providers anticipated decreasing their therapy utilization in 2020 in response to the Patient-Driven Groupings Model.  

To better gauge PDGM’s impact on therapy, Home Health Care News recently surveyed more than 480 Medicare-certified home health professionals, asking them to weigh in on everything from direct layoffs and utilization cuts at their organizations, to salary reductions and conversions to part-time status. With support from Homecare Homebase, HHCN conducted the survey online throughout February and early March.

When it comes to direct layoffs, 24% of the home health professionals surveyed said their organizations had let therapy staff go because of PDGM. Among those who did report layoffs, the majority said their organizations made cuts of 20% or less. In addition to this, respondents said their organizations have reduced therapists’ salaries or converted full-time jobs to part-time positions.

Upcoming changes in the reimbursement may impact out-patient services as well as SNF and home health.  The Centers for Medicare & Medicaid Services’ Calendar Year 2020 Physician Fee Schedule (PFS) Payment System Final Rule is implementing an 8% Medicare cut to physical and occupational therapy services starting in 2021. The recent announced cuts follow a series of reimbursement reductions implemented by CMS over the past 8 years. In 2011, CMS implemented a multiple procedure payment reduction policy cut, which was deepened further in 2013. Just last year, several PT billing codes were reduced in CMS’ National Correct Coding Initiative, including codes that PTs use most frequently for therapeutic exercise and manual therapy. Further, under current policy, physical therapists and occupational therapist are set to experience another 15% Medicare cut for services provided by a physical therapist assistant or occupational therapist assistant in 2022.

Then came Covid-19. While we have seen some changes in the industry, such as the temporary addition of reimbursement for telehealth for therapy services by many insurances, the net impact has been negative on the job market. According to the Department of Labor, 1.4 million health care workers lost their jobs in April, a sharp increase from the 42,000 reported in March, nearly 135,000 of the April losses were in hospitals. Many therapists are reporting being unemployed or working at reduced hours/reduced compensation. New graduates are having trouble with landing interviews and jobs. There is an overall uncertainty as to how quickly clinics will rebound, and what the “new normal” will look like in terms of volume and delivery of services. 

Another impact to the therapy industry may be the loss of insurance for people who can not find employment, and increased patient responsibility for services. A new study indicates that, due to the high medical costs inherent in fighting the COVID-19 coronavirus pandemic, health insurance premiums could rise by as much as 40%-plus over current levels. The study was conducted by actuaries at Covered California (that state’s health insurance marketplace). It attempts to gauge the costs related to various aspects of the coronavirus pandemic and predict their effect on consumer premiums. Health carriers are in the process of setting rates for 2021,” the Covered California analysts wrote. “If carriers must recoup 2020 costs, price for the same level of costs next year, and protect their solvency, 2021 premium increases to individuals and employers from COVID-19 alone could range from 4% to more than 40%.” To offset increases in premiums, insurances generally increase patient responsibility for services by increasing deductibles, co-pays, etc. With increased patient responsibility the market usually experiences a reduction in utilization. 

So, what can you do to secure your future considering all of these changes? 

The first recommendation is to become valuable to your current employer. Those that are flexible, positive, and willing to go above and beyond tend to maintain their position in tougher times. A few things to consider:

Work Hard

While this may seem obvious, you would be surprised at how many employees give the impression that showing up is all that is required. To be seen as a “good employee”, it is vital that you work hard during times when the job market is abundant and when it is “down”.

From Heathfield’s blog on “good employees”: “They don’t work for a show like staying late when the boss does or coming in early so that they are seen as hard workers. They focus and dedicate themselves to working hard and accomplish a lot as a result. The attribute of a good employee is they always give 100% to any project the undertake.”

“Nothing can replace the benefits of hard work. There are some people who work hard for a few years and then lose pace. Also, people who are particular about working only from 9 to 5 even when urgent projects need to be completed, cannot be considered as hardworking as one who is willing to put in extra time and effort. The basis of an effective organization lies in how capable it is of hiring result-oriented and industrious workers who execute. Ideal employees keep reminding themselves of how essential it is to themselves and the company they work for to keep the hard work going.”

The point to be taken from this is that good employees do not just look like they are working hard, they actually produce value. While showing up early for work is a valued trait, you must use this time to be ready to work when your shift starts. For instance, if you show up 20 minutes early to your physical therapy clinic you should use this time to be ready for your patients that day. This time should not be spent just socializing, followed by being disorganized when your time to see your patients rolls around. In other words, good employees look like they are working hard and actually do work hard and produce value.

Know Your Job Well

Krishna Reddy writes in her blog “How To Be A Good Employee At Work”: “When the employee is allocated a job, then the manager expects him to work on his own without asking hundreds of questions at every step. The manager has his own work to handle, therefore, if the individual keeps on asking him the question, then it is of no use to delegate the job to him, instead the manager would have completed all the work by himself.”

The best way to be a great employee is to take an interest in your personal development. When you first start a job or get a promotion, you’re hungry to learn as much as possible. As you stay in a position longer, you get comfortable with the day to day consistency, and that drive and desire to learn tends to fade. Not only will learning help you advance in your career, it will make your days more interesting. Learning will help you stay up to date on today’s ever-changing workplace trends and advances in technology.”

It is vital to know your job as well as continue to learn how to do it better over time. You were hired in order to complete the job and allow your superiors to be freed up to do other work. The level as to which you do this makes you valuable to the organization and your manager.

Be Flexible

I cannot think of a more important time to be flexible at work than when there are lay-offs and cut-backs on the horizon. 

Alison Doyle states: “Flexibility is an important trait for employees. Flexibility on the job includes the willingness and ability to respond to changing circumstances and expectations readily. By definition, the term “flexibility” means the ability to bend or adapt to changing forces. Being flexible when it comes to work is worth a lot. Employees who approach their job with a flexible mindset are typically more highly valued by employers. ​”

Good employees never utter the words “that’s not my job”. They are willing to step-up and do what is needed to be done in order to get a project completed, improve services, and move the company forward. 

Get Your Work Done (On Time)

There is nothing more frustrating than managing people who do not complete their work. While employees may hit barriers, they should overcome these and complete their assignments. 

Good employees take responsibility for themselves and their actions and decisions. They do not finger point and blame others for less than stellar performance or results. They don’t make excuses or blame a lack of resources when projects or initiatives fail to work out.”

Stay Positive

Generally, people do not like being around those who are pessimistic, negative or just plain unhappy. Just like the co-workers, an employer would love to see someone who comes to work with a smile on his face and is always optimistic, whatever the situation. Positive and happy behavior is contagious. It practically lights up the workplace. However tedious or menial the task, a positive person goes about his work happily and efficiently. In addition, problems call for solutions and employers desire workers who can recognize problems and assist in suggesting, devising, and executing solutions. The more problems they help solve, the more precious they become to your organization. The ideal employee is willing to accept responsibility for all that he does. Optimistic people are a recipe for better teams and better culture. In short, it is really great to have a positive employee to realize your organization’s bigger goals.”

While we all have bad days or become frustrated, it is important to maintain a sense of positivity at work. 

In addition to maintaining the sense of being an employee that exhibits all the above traits, you may want to take this time to expand your skills. Employees that can fulfill many roles tend to be maintained longer in an organization. For therapists it may be critical to learn skills to treat all demographics. Those who are able to treat varied populations may be seen as more of an asset than those who are unwilling or unable to see a variety of patient populations. With access to so much education online this is the perfect time to expand your skill set. 

Beyond this you may want to take this opportunity to brain-storm on ways to increase business at your current job. Starting a new program to increase business, finding ways to more efficiently run the practice, or working on marketing skills will not only help you maintain your current position but will increase your career stability in the future.

About The Author