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Related Experiment Videos

Hospital layoffs. One facility's experience with a work force reduction.

J D Rudnick1

  • 1Saint Francis Hospital and Nursing Facilities, Memphis, TN, USA.

Health Progress (Saint Louis, Mo.)
|August 6, 1995
PubMed
Summary
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Tennessee's Medicaid managed care transition led to hospital layoffs. St. Joseph Hospital reduced staff by 162 positions to balance its budget, offering career placement services to affected employees.

Area of Science:

  • Healthcare Management
  • Hospital Administration
  • Public Health Policy

Background:

  • Tennessee's Medicaid program conversion to managed care in 1994 significantly impacted hospital patient census.
  • St. Joseph Hospital and Health Care Centers faced substantial financial pressure requiring immediate expenditure reductions.

Purpose of the Study:

  • To detail the strategic response of St. Joseph Hospital's Operations Leadership Group (OLG) to a mandated budget deficit.
  • To outline the process and outcomes of a significant workforce reduction initiative.

Main Methods:

  • The OLG identified a need to cut $8 million, with $6 million from wages and salaries, to achieve a balanced budget.
  • A consulting firm assisted in determining that layoffs were necessary to meet financial targets.

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  • 162 employees (22 managers, 140 hourly) were laid off following criteria approved by labor relations counsel.

    • Main Results:

    • Layoffs were executed in an organized manner over nine days.
    • A career placement center was established, utilized by 105 of the 162 laid-off employees.
    • Within 45 days, 35 individuals (21%) secured new employment through the placement services.

    Conclusions:

    • The hospital successfully navigated a challenging financial period through strategic workforce reduction.
    • Proactive communication with media and remaining staff helped manage anxieties and gather feedback.
    • The implementation of a career placement center demonstrated a commitment to supporting displaced workers.