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Tuesday, January 06, 2009

When HR Should Act To Save Money

Phillis Dewitt was fired from her job as a nurse. The hospital maintains it was due to insubordination. Dewitt claims it was because her husband was dying of prostate cancer and costing the hospital a boatload in insurance claims.

Obviously, I wasn't involved in any termination discussions, but I imagine HR was. And perhaps they were overridden in any objections, but this is a situation where HR needs to be assertive and lay out the problems with a termination in this situation.

1. Employment in most situations (and no union was mentioned in the article) is at-will. This means that you can quit or be fired whenever. No warning. No severance. No notice. In practice, this hardly ever happens. The hospital had a practice following a formal disciplinary protocol. This was ignored in Dewitt's case. HR should say, "We understand that she was insubordinate, but we have to treat everyone the same."

2. Managers, even ones with medical knowledge, should not be suggesting that someone's spouse enter hospice care. Hospice is end of life care. It is deciding that it is time to let go and not attempt to prolong life. The manager claims she was trying to be compassionate. I would buy this if she didn't turn around and fire Dewitt for not coming in for a meeting while she was on a scheduled vacation. HR should say, "We understand that you believe they are making the wrong choices and that those choices are costing the company money, but this is not an area which you should be involved. If her performance suffers, then we'll talk about how to handle this. But, you are not to attempt to influence medical decisions."

3. Except in extreme circumstances, employees can opt for COBRA to continue their health coverage. Which Dewitt did. Therefore, the company only saved the $900 a month that Dewitt paid in, to keep coverage that was costing over $100,000 a year. HR should say, "You realize that this termination is highly suspect and will not save the company any money due to COBRA anyway."

4. For the reasons above, this termination is a law suit waiting to happen. The reality is, whether the hospital was legally justified in terminating this employee, HR should have brought the following information to the attention of the decision makers:
  • The termination did not follow policy.
  • The employee is highly likely to sue.
  • Lawsuits, whether successful or not, are very expensive. Expect to spend several hundred thousand dollars defending a lawsuit of this nature.
  • The employee is highly likely to opt for COBRA, therefore the savings you hope to achieve by termination will not happen.
  • This termination is a knee-jerk reaction to a financial problem. Any proposed solution will end up costing more than allowing the employee to continue working.
  • This is a public affairs nightmare. This is the type of story the media will pick up on. This will go public.

  • Any HR person worth her paycheck should have been able to present the above. Sure, she could be overridden (and I hope HR did the above, because otherwise they don't deserve to be respected).

    This is a situation where keeping the employee working is actually cheaper than the "cost-saving firing." This is true even if Dewitt deserved to be fired. I certainly can't speak to that, but there are costs to terminating people that HR should understand.

    (Via The Happy Hospitalist.)


    Infamous HR Guy said...

    key words: "Consistent Practice"

    I like the article, and it's really sad.

    On a lighter note (humor):

    "Any HR person worth her paycheck" .... so you're saying females in HR are more likely to make this mistake? (sarcasm from a male ;-P)

    Evil HR Lady said...

    Because all know the males in HR never make bad choices. :>)

    Infamous HR Guy said...

    HA!!! I just had a meeting where I wasn't the popular person this morning... my managers hate the words "consistent practice" as it comes out every time they want to give different discipline for the same mistakes.

    Sometimes I think they do it just to get me riled up! haha

    Anonymous said...

    Your post sparked a memory that, in turn triggered what I hope are relevant thoughts. One of my first clients was a trucking company. There was one woman in the office that I noticed hardly did anything. I mentioned it to the owner.

    He told me that she was going through a nasty divorce and he didn't expect her to return to real contribution for a year or more. But she had been with his company for several years and was a good worker and he felt he owed her.

    It seems to me that it's easy for companies to break out the "people are our most important asset" and "we value our people" rhetoric when times are good. But when times for the company or the person get bad, that rhetoric gets thrown overboard, often with the person.

    Whatever happens in the case you describe, everyone in and around and connected with the hospital will remember it and tell the story of it for a long time.

    JT said...

    Pls tell me this wasn't a true story....

    Anonymous said...

    This is a really horrible thought and I would hope it is not the case. But maybe the hospital, which the article said has self funded insurance, decided a lawsuit was cheaper. Maybe they crunched the numbers -the healthcare cost against the deductible and expected increase to their professional liability insurance and decided the termination was cheaper. Hope not, and if that could be proven they would be in a lot worse trouble….

    Anonymous said...

    Of course that doesn't account for the COBRA liability but who knows what was going on in their heads…

    Unknown said...

    I find this hard to believe that someone was fired from a hospital to save money on insurance for her dead/dying spouse.

    This is obviously the employee's side of the story. I'd be interested in what the insubordination actually involved. I work in Employee Relations at a Hospital and I can think of many times where insubordination can lead to immediate dismissal. Here are a few that I can recall:

    1. Refusal to performance critical patient care responsibilities, therefore compromising or potentially compromising patient care (e.g., refusing to get an oxygen tank when a patient is in respiratory distress)

    2. Walking off the job without a safety related reason, compromising patient care and safety.

    3. Failure to follow appropriate protocols for removing drugs from the unit dispensing system after being told the practice on several occasions.

    It could have been virtually anything. If she wants to tie in a conversation with her manager (and let me tell you, Hospital managers always make the mistake of getting into conversations with employees about their own or family's medical condition. I work feverishly to stop this practice, but since most, if not all are healthcare professionals, much of it is what I consider a risky occupational hazard).

    I don't think she has a slam dunk case here, but of course all the facts aren't presented here. Its true, that even if they did decide to terminate her for her spouse's condition, they were still on the hook for an additional 18 months paying a hefty sum for his insurance coverage.

    I have to call BS on this one.

    perrik said...

    My former employer is a hospital. Their policy on disciplinary actions states that discipline can include immediate termination in certain situations. As MEG31 points out, anything that jeopardizes patient care can lead to immediate termination.

    However, immediate termination of an experienced nurse manager with an exemplary record, for an action that did not endanger a patient or interfere with patient care, seems damned suspicious. Missing an unscheduled meeting due to scheduled and approved vacation time isn't even worth a write-up. Good grief, it's difficult enough to attract and retain RNs - just imagine the competition for RNs with strong supervisory experience. No bleeping way we would have fired her for something so minor.

    Anonymous said...

    I'm with perrik on that. Good record, recent outstanding performance appraisal, EE called while on approved vacation to come in for an unscheduled meeting also during approved vacation. Since it was telephonic, and no mention of the corroborating witness on the call to support the charge of insubordination - Fail!

    Evil HR Dictator said...

    Speaking of COBRA:

    "COBRA Too Costly for Many Unemployed, Report Finds"