Retrenchment In Health Care

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Retrenchment could be defined as efficiency-oriented, temporary actions, that may include one or a combination of a turnaround, divestment, and liquidation (Tangpong, Abebe, & Li, 2015; Parnell, 2014). Retrenchment is designed to “replenish and revitalize the organizational resources and capabilities so that the organization can regain its competitiveness. Retrenchment may be thought as a minor surgery to correct a problem (Sadhu, 2013, para. 1). Retrenchment is a terrible situation that can affect many lives. When employees are retrenched, their sense of job security disappears, self-worth falters, causes uncertainty in their career and finances. Additionally, “the stress brought about by one’s loss of a job can cause high-risk diseases …show more content…

With budgetary restrictions, shifts towards value-based payment system, and the implementation of the Affordable Care Act, CEOs must be proactive in their decisions and strategies to avoid any form of retrenchment (Muller & Smith, 1985). Muller & Smith states, “retrenchment should not necessarily be viewed as a problem limited alternatives. It may represent a time for capitalizing on opportunities and for creating innovation within healthcare institutions (1985, p. 31). Therefore, retrenchment can be considered a necessary evil, if used to improve the situation. In healthcare, retrenchment “typically involves reducing operational costs and capacity through downsizing personnel and products, divesting underperforming business units and markets and outsourcing critical business functions, such as patient billing or phlebotomy services” (Miller, n.d., para. 5). Back to my facility, after utilizing outsourcing, innovative scheduling, and changes in physician recruitment, the services were relaunched, and many of the employees were rehired. Although during the retrenchment period, the organizational atmosphere was gloomy, it has since returned. Associates are regaining trust in the hospital. However, many in the healthcare industry know and believe nothing is guaranteed, so you must be prepared for

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