Nov 24, 2008

Layoffs, hospitals and budgets

With rounds after rounds of layoffs expected in the coming months, this is a timely piece:

The Art of Laying People Off

I especially like Guy's #10: don't let people self-select themselves, because you will lose your best people.

In Quebec, the government did that a few years ago in the health sector. Nurses and doctors were offered early retirement and many of them jumped at the chance. On top of that, they limited the number of admissions in medical faculties. Net result? Today there is a severe shortage of medical staff, at a time where needs are constantly increasing. It will take another 7 years before things get back to normal.

The reasons for doing so were for budget-balancing purposes, which is highly laudable, but I think the government officials failed to look at the big picture. They failed to take into account that many in the health-care sector were fed up with the system and were only looking for a way out. They failed to see that needs for medical personnel would increase, not decrease over time. They failed to adequately project the effects of limiting the number of health-care professionals trained by the system.

How bad is it? There is a large shortfall of family doctors in Quebec, partly because of the decisions made in the '90s and partly because of the bad rap general practitioners (GPs) receive in medical schools. I was recently discussing this with a specialist, and as he explained it to me, most professors in medical universities are specialists. Hence, they will vow for their profession and will encourage students to follow in their footsteps. Few GPs teach in university, so there is no emotional appeal to incite students to become family doctors. In fact, according to an article in today's Journal de Montréal, in 2008 300 new GPs were added to the workforce, while there was a need for 346. The race is not lost, but it's going to be difficult to win.

The lesson, for any business, is that you should not let your best people go, just to save money. In the long run, the costs can greatly outweigh any savings you make on the balance sheet.

No comments:

Post a Comment