Many hospitals are making tough financial decisions on layoffs and furloughs.1 Ethical considerations may be overlooked in the process.

“What may seem to be purely a business decision made by administrators in medical centers ultimately impacts patients,” says James L. Bernat, MD, an emeritus professor of neurology at Dartmouth’s Geisel School of Medicine. Ideally, institutions should maintain an organizational ethics committees for exactly this reason. The vast majority do not. “Most hospitals have an ethics or bioethics committee, which is expected to address both clinical and organizational ethics issues,” says Paul Hofmann, DrPH, LFACHE, an ethics consultant and former hospital CEO.

Ethics still needs to be consulted. “All plans requiring furloughs and layoffs should be examined to assure that they have been designed to respect relevant ethical principles,” says Bernat, former director of the program in clinical ethics at Dartmouth-Hitchcock Medical Center.

The concept of organizational ethics states that the same ethical principles that clinicians and researchers should follow also should apply to administrative leaders in medical centers. These include fairness and impartiality, transparency and public knowledge, honesty, trustworthiness, respect for persons and human dignity, and equity and proportionality.

To what extent any of this is considered, if at all, is unclear. “Many administrative leaders intuit those principles and practice them without the assistance of a committee. Others do not, and may need advice to do so,” Bernat says.

At Dartmouth-Hitchcock Medical Center, top administrative leaders sit on the organizational ethics committee and discuss the effects of business decisions with other members.

For instance, ethicists might discuss whether it is acceptable to limit the number of Medicaid patients seen because of how much money is lost by hospitals caring for them in states that markedly under-reimburse for Medicaid. A nurse or physician may believe an organization is handling layoffs unethically, but there is no ethics committee to turn to.

If so, says Bernat, “they have the responsibility to ask their administrative representative — a department chair, for example — to try to exert influence to be sure the principles are followed.”

Many employees anticipated widespread hospital layoffs after elective procedures were canceled suddenly. “Morale inevitably fell due to uncertainty about the number and type of personnel who were at risk of losing their income,” Hofmann says.

The threat of layoffs came at a time when hospital employees already were experiencing anxiety, both at home and at work. Hofmann says ethical principles mandate that:

  • there is effective communication and support for remaining and departing personnel;
  • there is provision of reasonable severance packages (including, when feasible, continuation of benefits);
  • people are encouraged to use employee assistance programs;
  • employees are treated with fairness and integrity.

If an ethicist believes the organization is not taking these actions, this concern could be expressed during an ethics committee meeting or directly with a hospital leader.

“It would be quite appropriate for an ethicist and a clinical leader to collaborate in urging a senior executive to address an organizational ethics issue when necessary,” Hofmann says.


  1. Fadel L, Stone W, Anderson M, Benincasa R. As hospitals lose revenue, more than a million health care workers lose jobs. National Public Radio, May 8, 2020.