Cutting healthcare costs through work force reductions. Studies find what works and what doesn't.

Restructuring to cut costs often involves work force reductions. Two recent studies of restructuring in healthcare organizations have found that how an organization reduces its work force is just as important as whether it does. Organizations that implemented across-the-board staff cuts achieved limited cost savings. They also experienced decreased clinical quality, reduced patient satisfaction, and increased staff turnover. However, organizations that reduced their work forces only after a thorough assessment of work processes and job roles achieved greater cost savings, improved clinical quality, higher patient satisfaction, and less staff turnover.