Ailing hospitals attempt tough cures


November 30, 1993|By Patricia Meisol | Patricia Meisol,Staff Writer

Hospitals are pruning their staffs following what for some has been a dramatic drop in business since the spring. By and large, only small numbers of workers have been affected, as hospitals attempt to be as low-key as possible.

But what's happening is a big deal.

As one hospital executive explained, he could accept a shortfall for one year if he knew things would return to normal next year. But everybody knows the lower patient loads are permanent. Behind the scenes, then, hospital executives are taking dramatic actions to stay afloat.

In the process, the hospital industry in Maryland is taking a hard look at itself.

"Hospitals are rethinking the way they do business completely," said Paul B. Sniffin, executive vice president and general manager of New Options Group Inc., a Hunt Valley human resource management and consulting firm.

In the hospital industry a decade ago, seniority and tenure counted most. Today it's smarts, people skills and management style. And yes, the bottom line.One indication that hospitals are acting more like a business is that they are willing to set aside relationships with loyal employees when those employees are unwilling to adapt or otherwise handle increasing competition.

Although the number of people being laid off is often small, the number of vacant positions that hospitals are permanently cutting is large.

For the first time, hospitals are considering streamlining by cutting out whole departments that are not earning their keep. The Greater Baltimore Medical Center recently singled out employees in radiation oncology for pruning because the department couldn't compete with similar businesses outside the hospital.

Mr. Sniffin estimates that 60 percent of the state's hospitals will go through some type of restructuring or downsizing over the next 12 months. It's almost inevitable, given that 65 percent of a hospital's budget is labor.

"I don't think you'll see massive layoffs," Mr. Sniffin said. "I think you'll see more selective pruning."

For some, contingency plans that include layoffs kicked in this fall when the patient census did not pick up as anticipated.

At Sinai Hospital in Baltimore, for instance, 13 people lost their jobs in a recent downsizing that actually resulted in a 2 percent reduction in the hospital's work force. (About 50 other vacant positions were cut. Sinai typically hires 300 people a year because of turnover.) At the same time, Sinai is engaged in a work redesign that already has resulted in nurses' assistants administering EKGs.

In another change, hospitals are considering hiring companies to take over such services as housekeeping and security. This reduces the cost of health insurance and other benefits the hospital pays for its own employees. It also allows the hospital to adjust its work force to daily changes in the patient population.

Also, hospitals are overcoming their reluctance to fire longtime employees. Increasingly, veterans of 20 years and more, some of them senior managers, are being escorted off the property.

According to Mr. Sniffin, middle-management ranks are being hardest hit in the restructuring. "What's happening is, demands on people are increasing and changing. Some of the people are being left in the dust because they cannot keep up with change," he said.

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