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The bond between Mercy Hospital and predominantly Irish South Buffalo existed ever since the Sisters of Mercy, an order founded in Dublin, opened the hospital in 1904.

Kate Carr grew up in the neighborhood, which expanded with the steel industry, and like many other residents stayed to work in the hospital.

Ms. Carr is a registered nurse who started more than 20 years ago as a gift shop volunteer. She knows her patients, or they know her family. You can find her at Mass every Saturday in the hospital chapel.

"It's like a little Ireland," she says.

But these days, the bond no longer seems quite so comforting or strong.

An agonizing financial predicament, with the threat of many layoffs, divides the hospital administration and staff. Nurses find themselves in the center of a controversy that reflects the turmoil in the health-care industry.

Faced with reduced payments and fewer patients, hospitals are laying off nurses and replacing them with less-trained staff.

"The patients we take care of today are sicker, and there are fewer nurses to do the job," Ms. Carr said last week, as she and co-workers at Mercy Hospital prepared for a holiday season not knowing if they would have jobs in the new year.

A changing business

Every hospital in the area is grappling with fundamental change driven by a race to cut costs. Mercy is only the latest.

Patients have moved from traditional insurance to managed-care plans that require members to choose from lists of doctors or hospitals. Meanwhile, hospitals are transforming themselves into networks of health-care providers that share in the financial risk of patient care once shouldered by insurance companies.

The emerging health systems include nursing homes, outpatient offices, same-day surgery centers, home-care agencies and physician groups.

Other powerful forces are at work:

Health-maintenance organizations and other managed-care plans are limiting access to hospitals and discharging patients earlier.

Advances in medicine have contributed to fewer and shorter hospitalizations, and to greater use of outpatient services.

Insurance companies and Medicare, the government health program for the elderly, have slashed or frozen payments.

New York State stopped setting hospital rates, leading HMOs to negotiate contracts in which HMOs pay a fixed amount for patients regardless of services used. Hospitals that misjudged revenues or costs lost money.

There are fewer than 4,000 hospital beds in use in this region, a decline from about 7,000 in the mid-1980s. And the current number may decrease further in the next few years, perhaps by more than a third, experts say.

"If you go to hospitals, the parking lots are full," said William Pike, president of Western New York Healthcare Association. "But only the sickest patients are admitted. People are getting care and going home the same day."

Health-care jobs, including those for nurses, are moving with the patients.

Shift to new duties

Ten years ago, nurses were in great demand. Hospitals offered bonuses and other perks to attract employees.

But hundreds of hospital employees in the Buffalo area have lost their jobs recently in what has become a flat market. With empty beds and tighter budgets, hospitals are shifting nurses -- who earn about $35,000 a year -- to new duties, relying more on part-timers and experimenting with different ways of deploying them.

To make life more uncertain, nurses don't know what will happen as the major hospitals here form giant health systems that promise to consolidate duplicative services.

One system temporarily named CGF consists of Buffalo General, Millard Fillmore and Children's hospitals. The other consists of the seven Catholic hospitals.

"Almost everyone fears losing their job or being bumped into another job by someone with more seniority," says Lynda Appleton, a nurse for the past 25 years.

In the last two years alone, she lost a full-time nursing job at a Children's Hospital unit for high-risk pregnant women and went part-time instead. That job was then eliminated, and she "floated" part-time in different departments. Several months ago, she landed part-time night-shift duty in a unit for new mothers.

Layoffs and restructurings have occurred at just about every local hospital.

The last few months saw DeGraff Memorial Hospital in North Tonawanda cut 69 employees, some of them nurses, and reduce the working hours of 110 others.

Buffalo General, the region's largest medical center, recently laid off 34 registered nurses and three licensed practical nurses, the first nurses to lose jobs there in recent memory. Several hundred other employees were touched in some way by the action.

Laurie Domzalski, a 16-year veteran, was given a choice of unemployment or 15 hours a week with no benefits on a different floor.

She had spent the last 11 years working 24 hours every weekend, a job for which she received 30 hours of pay and pro-rated benefits. It was a great shift, she said, that arose during the nursing shortage when it was difficult to find workers for weekends.

"My gut reaction was to take the job they offered and hang on until something better came along," Mrs. Domzalski said.

Redefining role of nurse

The drive to downsize and cut costs has led hospitals to redesign their nursing systems with a team concept.

They are using fewer registered nurses and asking them to take on supervisory roles over groups of lesser-trained nursing assistants.

The idea is to free professional nurses from tasks and assignments that can be completed by others at lower cost, such as nurse aides.

Hospital administrators say the change is an inevitable result of the transformation of their industry. They argue that it doesn't make sense to have highly educated, well-paid professionals perform routine tasks.

"We have to redefine the role of the nurse. It's a function of available dollars," said Cathleen R. Wright, vice president of corporate nursing for CGF Health System. "The hospital census is down. Length of stay is shorter. Budgets are tighter. Services are shifting to outside the building."

The definition of a professional nurse remains a work in progress. In addition, the makeup of teams -- they are called "partners in practice" at Buffalo General -- and the roles of nurses vary, depending on the condition of the patients.

"In a critical-care unit, registered nurses do tasks they might not do in other areas," Ms. Wright said. "In that setting, you need to be constantly assessing patients and ready to intervene."

At Buffalo General Hospital, she and her colleagues have tried to prepare nurses for upheaval by identifying skills they will need and offering continuing education courses.

Even nurses unhappy about losing old jobs acknowledge that the hospital has done a good job.

"To their credit, they've tried to make us comfortable with the changes," Mrs. Domzalski said. "Still, it's hard not to feel concerned about the future."

Changes for the worse

Ms. Wright and other hospital officials insist staff restructurings have not lowered the quality of patient care. Many nurses disagree.

They complain of being overworked. They argue that the team concept may succeed but not when there are too few members of the team or when team members are not adequately trained.

"Can a nurse's aide pick up a change in pulse or blood pressure as quickly as a registered nurse might?" asked Barbara Bauch, president of Local 1133, Communication Workers of America, which represents 1,700 of Mercy Hospital's 2,137 workers.

The question remains unanswered by research and overshadowed by bottom-line concerns.

Indeed, Mercy Hospital could lose $4.5 million this year, which is why its leaders recently asked workers to make an uncomfortable choice: accept deep concessions or hundreds of people would lose their jobs.

It's not clear yet what will happen. But Ms. Bauch and others took off for the holidays with frayed nerves and bad feelings.

"Managed care has changed the industry," she said. "It's frightening. We've settled for health care to the lowest bidder."

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