Hospitals face bleak financial future

As Rhode Island Hospital nurses and management continue to dispute salaries and mandatory overtime, the financial picture for hospitals across Rhode Island is not expected to improve any time soon. Labor battles among nurses are just another “flash point” or breakdown in a health care system where hospitals aren’t fully compensated for their costs, said Edward J. Quinlan, president of the Hospital Association of Rhode Island.

The biggest cost of all for hospitals is labor. Ten years ago hospitals could afford 30 to 40 percent pay increases for nurses, but that’s virtually impossible now, while they’re still reeling from $100 million in losses over the last two years and even bigger losses expected in the future.

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According to the national Bureau of Labor Statistics, the median hourly wage for registered nurses is $19.56, or $40,690 per year based on a 40-hour-week.

Rick Wade, spokesman for the 4,800-member American Hospital Association, said last week that 40 percent of the nation’s hospitals are in “serious financial trouble” – Massachusetts among the hardest hit, with every one of its hospitals now “operating in the red.”

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Couple these bleak finances with a national and local nurses shortage, Quinlan said – two weeks ago Rhode Island Hospital had 75 nursing vacancies – and there’s no way hospital management can operate without the flexibility to require overtime, to keep just enough staff for occupied beds and still deal with emergencies.

Mandatory overtime is an issue at some hospitals nationwide, “it’s seldom worth the anxiety it creates in the workforce,” the resultant problems with retention and morale, Wade said.. “On the other hand, you have a situation [where managers have to ensure] there’s an adequate number of people.”

Debra L. Colvin, president of the Rhode Island State Nurses Association, said that while a shortage of RNs is “a real issue in some areas of the country,” the number of RN licenses in Rhode Island has actually grown 17 percent since 1992.

Current labor problems at hospitals is less a nursing shortage than “a shortage of nurses willing to work in unacceptable work environments,” Colvin said. “Mandating overtime is a calculated business practice aimed at saving hospitals money,” she said. “Why else would a small number of sick calls or a slight increase in the acuity of patients cripple a hospital into emergency staffing procedures so frequently?”

Quinlan said mandatory overtime is used as “a last, not a first, resort” and claimed it’s all done “in the best interest of patients.” If 15 minutes before a shift ends, “two or three nurses call in sick,” what’s a manager supposed to do? He said. “It may be necessary.”

According to Scott Molloy, associate professor of labor and industrial relations at the University of Rhode Island, the current dire state of hospital finances has reduced working conditions and morale so badly that even the most altruistic of would-be nurses are choosing other professions. “Hospitals have become the 21st century version of the factory,” Molloy said, adding that management has “in a way dug their own grave” since it’s their responsibility to anticipate these types of problems.

Molloy, a former RIPTA bus driver and head of its union, said one solution could be to schedule some flexibility minded nurses each day whose job would be to fill in “where there’s a bottleneck” or when people are out sick. “That’s what we used to do in the bus company,” Molly said, adding that the worst that could happen would be that the workers might operate at perhaps 85 percent of their capacity, “and sometimes they might sit down an hour or two.”

There has been “a little bit of a surge” in labor problems at hospitals nationally, Wade said, and while six months ago he might have called the nursing shortage “spotty,” it’s now more widespread, and “we believe it’s going to get worse before it gets worse.”

Not only are hospitals “the most difficult place to work” in a system that’s grown to include dot com options, but technology-related jobs are steering young folk across the country away from nursing in general, Wade said.

URI’s College of Nursing had a 50 percent drop off in applicants for the 1998-99 school year, Quinlan said, the implications of which are profound – especially these days, when hospital in-patients are sicker than ever, “requiring a higher intensity of nursing.”

Hospitals with nursing shortages are closing certain units or services rather than running them understaffed, Wade said, and with drastic Medicare cuts the last few years and insurers’ increasing reluctance to pay full costs, when it comes to giving nurses raises it’s almost a moot point. “You can raise their salaries but no one will pay them.”

”It’s not [just] a local problem, it’s a national problem,” said Howard Dulude, HARI’s senior vice president, adding that in a few years the national nursing shortage is projected to reach the half million mark.

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