After showing record losses of $13 million in 1996, the writing was on the wall for the University of Michigan Medical Center (UMMC), based in Ann Arbor, to tighten its spending by cutting $200 million over the next three years to become financially sound. When the ax had to fall on it's staff - ultimately cutting 1,200 full-time equivalents (FTEs) in 1996 with projections of 1,000 more in 1997 - the communications department had to use every tool in its arsenal to set the record straight on why such drastic downsizing was necessary.
Although UMMC's employees knew that layoffs were imminent, they didn't know how deep they would be or what departments would be hit the hardest. But, thanks to an Ann Arbor News reporter secretly sitting in on a highly confidential and sensitive management meeting last spring, UMMC staffers would soon find out not only the magnitude of the cuts but the key department targets as well.
The newspaper blasted the hospital with a front page story that revealed "UMMC Poised to Make Cuts" and then followed up with negative ink like "Cuts Worry Hospital Workers." As the No. 1 employer in the Ann Arbor market, UMMC's deep cuts were big news, calling into question how it would maintain its top-notch reputation as a state-of-the-art medical center.
The Action Plan
"When the stories came out, we didn't even have a full plan, we just had possible targets based on benchmarking studies that had been done with other academic hospitals. The press was uninformed," recalled Ken Treister, UMMC's director of planning/marketing of PR fiasco.
From that point forward, UMMC's internal communications action plan kicked into high gear relying heavily on top-down cascade meetings and up-to-the-minute electronic employee interaction. "We weren't trying to make employees feel better about the downsizing, we were trying to make them understand why," said Treister.
The cascade approach, which used a common meeting format of video/slide presentations and discussion/feedback sessions for UMMC's 50-65 department heads to educate employees about the reorganization strategy, turned middle management into advocates rather than spectators during this difficult process.
The aim was to have every employee receive the same message regardless of department, according to Michael Harrison, UMMC's PR director. These meetings also served as employee attitude barometers, before, during and after UMMC's bad press. They address sensitive questions regarding employee benefits, the timing of the layoffs and the medical center's overall direction in the wake of significant cutbacks.
These issues were also addressed electronically through E-mail updates, Web site question-response mechanisms, and a CEO call-in forum that allowed employees to express their concerns with the CEO for an hour a week (five minutes per call).
Employee feedback from these communications efforts showed that both the cascade meetings and the electronic channels worked. Employee communications surveys during UMMC's sensitive reorganization from January to August 1996 revealed that:
85 percent of employees found the information regarding UMMC's reorganization easy to understand;
80 percent found the cascade meetings necessary;
70 percent felt more informed about the impending changes at UMMC; but
35 to 40 percent had concerns about UMMC's ability to maintain quality of care and access to medical services.
The last point continues to haunt UMMC, especially with the nursing staff. But when UMMC finally downsized in July, employees were fully informed and prepared. And, when the ax finally fell only 200 people were let go (contrary to the Ann Arbor News' characterization of the cuts). These cuts affected all of UMMC's 50 to 75 departments, and went as deep as 30 percent in departments like radiology and oncology as well as planning and marketing. "When something like this happens, you lose some of your best people," said Treister of the talent that was lost in his department.
Eventually, the local media - including the Ann Arbor News - wrote positively about UMMC's reorganization and some employees rallied around the medical center and its new lean and mean direction. "We had to perform within the top 25th percentile in each department (as compared to other academic institutions) to survive managed care," said Treister. "Eventually the media and our employees understood why."
No Easy Answers
Dealing with Killer Employee Questions
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Now in its second year of layoffs (300 FTEs were cut in 1997), the communications issues are more about why the cuts are necessary when the medical center is showing a profit. "Now we have to communicate that the cuts are more volume-related than profit driven," said Treister.
Physicians and nurses are tough sells on this initiative because not only are their jobs on the line but they continue to challenge how UMMC will be able to deliver its standard of care. Although there is no easy answer to these concerns, UMMC communicators have had to emphasize its stance on medical services. "We are taking the position that if any of these [reorganization] initiatives have resulted in reduced quality, we would remedy the situation immediately," said Treister. (UMMC, 313/764-8468)