Retrenchment strategies and tactics for healthcare executives

Retrenchment is a problem confronting many public, private, and voluntary healthcare organizations. With budgetary restrictions in the public sector and the shift toward prospective payment systems and diagnosis-related reimbursement by third-party payors, healthcare executives must address several dilemmas and choices. Yet, retrenchment should not necessarily be viewed as a problem with limited alternatives. It may represent a time for capitalizing on opportunities and for creating innovation within healthcare institutions. Indeed, innovation may represent the only means for survival. This article evaluates the management strategies that transform retrenchment from a problem into an opportunity.