STATEMENT OF THE PROBLEM

The St. Marys Hospital has declined its occupancy rate to 57% as a result of
changing reimbursement policies, emphasis on outpatient services, increasing
competition and the financial meltdown. The declining occupancy rate has affected the
hospitals revenue to such extent that it ran deficit.
The Boards recommendation, based on the immediate crisis and the need to
generate short-term savings, was to lay off employees. However, the hospital had no
previous experience with employee layoffs.
Thus, the case study aims to provide answers to the following queries:
1. What are some alternatives for dealing with these problems?
2. Is it possible to avoid layoffs through the use of attrition?
3. What might be the effects of a layoff plan on survivors in terms of morale, job
security, organizational commitment, productivity, and career planning?
4. What long-term solutions for St. Marys Hospital once it gets its cash flow
problems under control and eliminates its deficit?
5. What should be the criterion for layoffs?
SWOT ANALYSIS
Strength
The layoff plan can provide an immediate short-term solutions that can generate
short-term savings. Thus, it will give the institution an opportunity an allowance of time
to think of a better alternative while not risking the revenue of the hospital.
Weakness
The layoff plan may not be effective and risky at the same time if there will be no
definite and certain criterion for employee layoffs.
Opportunities
The said layoff plan will provide a space for new and fresh employees with new
experiences and updated knowledge and skills who will be replacing those who been
laid off.

Threats
The layoff plan may cause higher turnover costs, lost efficiency, potential lawsuits
and lower morale.
ALTERNATIVE COURSE OF ACTION
The following are the possible course of action that may somehow augment the
dilemma on layoff plan.
1. Emphasis on inpatient services
2. Closer study on competitors
3. Innovate new packages and strategies
ANALYSIS OF ALTERNATIVES
1. Emphasis on inpatient services Inpatient can potentially provide more
financial opportunities like tying up with health care providers. In this way, you
can maximize the utilization of the different amenities and services of the hospital
that an outpatient services failed to provide.
2. Closer Study on Competitors The best way to assault enemy is to study its
weakness. However, in business, it is important that you should study your
competitors so you will know their best practices and innovate them and apply
that to your business. Aside from that, you will also know which aspects of
business you should improve and develop.
3. Innovate New Packages and Strategies Even though hospital is not a typical
type of business and it is still a business per se. That is, they should improve the
marketing process by offering packages that can at least invite patients to stay in
the hospital.

RECOMMENDATION
Though, layoff may be considered as an immediate action for declining revenue
however, it would be as fair as possible to all employees, to provide a guarantee of

reemployment for those laid off and find additional revenue sources so that layoffs
would not anymore be necessary in the future.