Impact of cost-cutting strategies on working conditions in hospitals

For years, health systems all over Europe – and hospitals in particular – have been facing new challenges in adapting their strategies to cost-reduction requirements. A new Austrian study from Vienna’s Working Life Research Centre, FORBA, shows cost efficiency and economic considerations have become dominant aspects within these new strategies. The study suggests that this has had a significant negative impact on hospital employees’ working conditions.


A recent study called Restructuring in hospitals and its impact on working conditions (in German, 368Kb PDF) has been carried out by the Working Life Research Centre (FORBA). It focuses on the impact of new management strategies in hospitals on the working conditions of employees.

The qualitative document was based on case-study research, and its aim was to review different types of hospitals according to their ownership structure. The research covers a public hospital (social security institution), a ‘confessional’ hospital (with public status), a private, profit-oriented hospital and a private non-profit hospital.

The context of the study is the emergence of new cost-driven funding systems for health services all over Europe, which force hospitals to adapt their strategies in terms of private management and efficiency criteria. The study’s hypothesis is that the introduction of more rigorous economic considerations by hospital management teams is likely to be the cause of some friction. The study’s researchers also suggest that this is likely to have an impact on the availability and quality of public health care provision as well as on the working conditions of hospital workers.

Regardless of their ownership structure, all hospitals are faced with increasing cost pressures. As a consequence, cost-cutting is the main strategy used to deal with these new challenges.

Overview of management strategies

The study outlines three key elements of such cost-cutting strategies:

  • outsourcing;
  • reduction of labour costs;
  • specialisation in specific medical services.

The first two measures are especially likely to have an impact on working conditions.

In all four case-study hospitals, outsourcing of so-called secondary hospital services, such as cleaning, cooking and utility management, had taken place. In all cases, this was accompanied by a substantial decrease in wages due to changes in collective agreements and a general deterioration of working conditions for the affected employees.

The study identified two different trends in working time. One is the extension of working time among specific groups of employees, especially in directly ‘profitable’ fields such as surgery, with a resultant extension of operating times. The other is the reduction and limiting of overtime work, which, in combination with staff cuts, means an intensification of work for the remaining employees.

Impact on employees

Work intensification and high levels of work pressure are the chief strains on hospital employees, on both care workers and medical staff as a result of three major developments.

Firstly, the switch towards a diagnosis-related financing system forces hospitals to shorten the duration of patients’ stay in hospital. In some cases, combined with staff cuts, this produces higher workloads – with an increase in entry and discharge procedures – and subsequently an intensification of work.

Secondly, rising documentation tasks generate extra work, although staff are not given extra time to complete the paperwork. This not only leads to heavy workloads but also means that doctors and care workers have less and less time for their core task, direct contact with patients. In some cases, the demand for increased documentation is being used as a way of controlling employees’ use of their working time, and therefore has a significant impact on working conditions

The third source of mounting work pressure comes from the many changes in work organisation. One example of this is the economically-driven aim to increase the numbers of financially lucrative surgical procedures and this can affect the entire surgical regime. Patients are now anaesthetised outside operating theatres to maximise their use. Standardised procedures have been implemented, an example of which is the introduction of time-tracking for specific tasks such as the transfer of the patient from trolley to operating table. This has led to shorter breaks and an intensification of work.

Mitigating the impact

Even though rising work pressures and an intensification of work is an overall trend among hospital workers, the study reveals differences with respect to the level of impact of these developments.

The confessional hospital implemented a Taylorist rationalisation of the workflow of the care workers, the basis of Taylorism being that maximum efficiency produces the best results. The idea brings with it a major impact on work intensification.

One of the two private hospitals has an attending-doctors system. It opted for a so-called ‘high-road’ approach focusing on human-resources development, and the optimum use of care workers’ professional skills, with mitigating effects on work intensification.


The study shows that overall trends towards changes in hospital financing generate more economically-minded and market-driven management strategies, with negative impacts on the working conditions of employees. However, the impact differs between occupational groups, and there is still room for a variety of management strategies which can fuel or limit the overall effects on working conditions.

Manfred Krenn, FORBA

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