Advantages and Disadvantages of Different Methods of Hospitals' Downsizing: A Narrative Systematic Review

Health Promotion Perspectives, 2013, 3(2), 276-287 doi: 10.5681/hpp.2013.032 http://journals.tbzmed.ac.ir/HPP Advantages and Disadvantages of Different Methods of Hospitals' Downsizing: A Narrative Systematic Review Yalda Mousazadeh1, *Ali Jannati2, Hossein Jabbari Beiramy3, Mohammad AsghariJafarabadi4, Ali Ebadi5 1 Student Research Committee, Tabriz University of Medical Sciences, Tabriz, Iran 2 Tabriz Healthcare Management Research Center,Tabriz University of Medical Sciences, Tabriz, Iran 3 Tabriz Health Services Management Research Center, Tabriz University of medical sciences, Tabriz, Iran 4 Road Traffic Injury Research Centre, Tabriz University of Medical Sciences, Tabriz, Iran 5 Deputy of Health, Tabriz University of Medical Sciences, Tabriz, Iran ARTICLE INFO Article type: Review Article Article history: Received: Aug 18 2013 Accepted:Nov 05 2013 e-published: Dec 31 2013 Keywords: Hospital, Downsizing, Downsizing method, Review *Corresponding Author: Ali Jannati Tel: +98 914 419 5377; e-mail: ABSTRACT Background:Hospitals as key actors in health systems face growing pressures especially cost cutting and search for cost-effective ways to resources management. Downsizing is one of these ways. This study was conducted to identify advantages and disadvantages of different methods of hospital' downsizing. Methods: The search was conducted in databases of Medlib, SID, Pub Med, Science Direct and Google Scholar Meta search engine by keywords of Downsizing, Hospital Downsizing, Hospital Rightsizing, Hospital Restructuring, Staff Downsizing, Hospital Merging, Hospital Reorganization and the Persian equivalents. Resulted 815 articles were studied and refined step by step. Finally, 27 articles were selected for analysis. Results: Five hospital downsizing methods were identified during searching. These methods were reducing the number of employees and beds, outsourcing, integration of hospital units, and the combination of these methods. The most important benefits were cost reduction, increasing patient satisfaction, increasing home care and outpatient services. The most important disadvantage included reducing access, reducing the rate of hospital admissions and increasing employees’ workload and dissatisfaction. Conclusion: Each downsizing method has strengths and weaknesses. Using different methods of downsizing, according to circumstances and applying appropriate interventions after implementation, is necessary for promotion. Citation:Mousazadeh Y, Jannati A, Jabbari Beiramy H, AsghariJafarabadi M, Ebadi A. Advantages and Disadvantages of Different Methods of Hospitals' Downsizing: A Narrative Systematic Review. Health Promot Perspect 2013; 3(2):276287. Introduction Hospitals are key actors in national health systems, and consume a large share of spending1. For example in European regions, the hospital sector is consuming 35– 70 percent of national expenditures on health care2. Very large sums were spent on construction, maintenance and rehabilitation 276 hospitals around the world annually. Although, appropriate evidences about achieving expected benefits are little2. The World Health Organization has estimated in 1989, it wastes 40 percent of United States' health system resources3. It shows that resources Mousazadeh et al.: Advantages and Disadvantages of Different Methods… can be achieved through efficiency increasing is very significant3. Nowadays hospitals face particular challenges and problems in Iran, for example, in the issues of quality, relevancy, and effectiveness as consequences of severely economic disruption4. In the same time, this system allocates more than 50% of total health funds to hospital sector. Hospitals of Iran have more than 130 thousand employees (50% of health staffs) however the low occupancy of hospital beds (54%) in comparison with developed countries (80%-85% bed occupancy) 5. It shows the need for proper utilization of limited resources. Furthermore, only 82% of beds in Iran’s hospitals are active5, it means high resources spend on costs, staffing, salaries and maintenance. It might be cost-effective to cut or limit further expansion of hospital beds unless it has been warranted by increased demand5. It seems necessary to promote efficient management of hospitals by implementing various strategies6. Downsizing is one of strategies. Cameron expresses definition of downsizing: downsizing is a set of activities that reduce the number of employees and results higher efficiency and costs reduction7. Appelbaum and colleagues also argue that downsizing is a step to reduce production costs and staff permanent positions, privatization, or it refers to contracting services and activities8. Downsizing begins in US auto industry following oil crisis in 19739. Organizations has taken downsizing strategy to achieve an appropriate size, reconstruction, adapting to technological advances, specialization in their core activities, flexibility, costs reduction, stay competitive, speed in decision making and rapid implementation of ideas5 . The hospital sector has experienced considerable restructuring and downsizing throughout the industrialized world and the last of 20 years. The purpose of these changes was cost cutting, reducing excess capacity and increasing the appropriateness of care10,11. In other words, the process of bed, staff and resource reduction is known as a common part of the organizational life in hospitals of Canada, U.S.A and European countries12-14. Downsizing policies are pursued by different strategies in hospitals. for example, reducing the number of beds, reducing personnel and management positions, integration of hospital units, using the power of the private sector, merging hospitals, re-engineering, outsourcings, modifications to clinical staffing, skill combination and so on15-19. There are some relating evidences about downsizing strategies in literature: 47% bed reduction in Finland and at least 10% in other western European countries, reducing the number of hospitals from 305 to 65 and the number of beds from 14.4 to 6.5 per 1,000 people in Moldavia, cutting 52% of hospital beds in Kazakhstan14 merging over 900 hospitals during the period 1995–2002 in the United States19 merging fourteen Danish hospitals into five new regions hospitals18, merging sterilization service of regional hospital in Austria by establishing one equipped center instead of three inefficient centers20 and outsourcing different sections of hospitals in the range of 13.5 to 94.6 percent in Taiwan17. Excess capacity in the hospitals has become a serious problem in terms of technical, managerial and policy issues similar to all around the world and Iran15.In most of the developing countries including Iran, new hospitals are often constructed with no real assessment. Distributions of hospitals are in the geographical based instead of need based21. Therefore, international experts recommend to stopping hospital beds spreading5 and other in (...truncated)