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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

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.

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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.