Hospital Rightsizing: In Line with Long-Term Strategies and Economic Realities

Abstract

After two years of difficult financial times, the Kitchener-Waterloo Hospital was faced with another upcoming year of tight fiscal constraint. In February 1991, the hospital implemented a program review process to align its services with the hospital's long-term strategy and economic realities. The authors present a thorough review of the literature pertaining to downsizing decisions. From a practical perspective they demonstrate a downsizing process, its implications and lessons to be learned so that a “rightsizing” exercise can be implemented to minimize the effects of the program and staff reductions while focusing on the positive long-term benefits of strategic planning. Although downsizing is a difficult process, the Kitchener-Waterloo Hospital was able to develop and implement a plan that minimized the impact on the hospital services and its staff. A reduction in expenses of over $2 million was achieved without having to lay off any permanent hospital staff. This was achieved by streamlining programs, reducing management supervisory positions and eliminating 50 full-time equivalent positions through attrition. Ultimately, the hospital's board, senior management, medical staff and employees felt that a rightsizing decision had been made, one which minimized the negative impact of restructuring on service delivery, hospital employees and the community served.