by Cara Gardner

Nancy Figy planned to work just a little longer, adding four or five more years to her 24-year career as an LPN (licensed practical nurse) at Sacred Heart Medical Center. She looked forward to spending her retirement traveling and being with her grandchildren. But retirement for Figy is farther off than she ever could have imagined. Figy is one of the 88 LPNs the hospital laid off last month.

In August, Sacred Heart, which is run by parent company Providence Services, announced the layoffs -- a total of 140 employees, though some employees have been rehired in a different capacity. Over the past several months, the nurses' union (UFCW Local 1001) has repeatedly requested bargaining with the hospital administration over the severance package, claiming that the hospital is not living up to the terms of its union contract. Today, Nov. 4, LPNs and the union will meet with the SHMC administration about the hospital's severance package, including its offer of $25,000 for retraining (which amounts to about $250 per nurse). While the union says it hopes to bargain with the administration, the hospital remains firm, saying it will not reopen the terms of the contract upon which the severance package was based.

All Figy knows is that instead of walking away with full retirement package, she's grappling with where and how to find another job at the age of 58. Last Friday, the remaining LPNs included in the layoff finished their shifts and left the hospital for good.

"We have been told for several years that [LPNs] were going to be phased out, but [hospital administration] promised us and promised us and promised us that it would be done by attrition," Figy says. "We negotiated our [union] contract two years ago. We asked if we had to worry about layoffs, and they said no. There's a real big feeling of betrayal because of their telling us all these years that everything was going to be fine, that we'd stay employed through thick and thin. It's that betrayal more than anything else."

Sacred Heart is a registered nonprofit and proudly operates according to its original Catholic mission, based on charitable works and quality patient care, as established in 1886 by the Sisters of Providence. It's also the largest private employer in Spokane County, providing about 4,000 jobs throughout the greater Inland Northwest. Like many medical facilities in the country, which face tight reimbursement rates from Medicare and private insurers and run losses to fund charitable care, especially in their emergency rooms, SHMC has been shifting its nursing model for the past decade.

"It's been after careful years of study we made the decision to change the nursing model to utilize certified nursing assistants instead of LPNs," explains Maureen Goins, SHMC spokeswoman. "We've introduced a new patient-care process and information technology, and it's just that in order to most effectively staff the units, we need to change the staffing model. While we're losing [88 LPNs], we're adding about 30 RNs and about 30 certified nursing assistants. It's really a decision the medical community has struggled with."

But LPNs at Sacred Heart say it still doesn't answer why they were laid off instead of being filtered out through attrition, as promised. They also bring up the nursing shortage that has rocked the medical industry in recent years, wondering how SHMC could justify the layoff during such a crisis. The hospital doesn't really explain, but Goins points out that SHMC has "very slowly over the last 10 years not hired any LPNs. There were over 200 LPNs in the early '90s and now there are fewer than 90."

Figy worries the shift in the nursing model may put patients at risk. "I think a lot of things are going to get missed. Patient loads are going to get bigger; instead of three or four [patients], they'll have five and six, and that's a lot when you factor in everything that has to get done in an eight-hour shift. The patients will suffer."

Figy also points out that certified nursing assistants, who are being trained to do procedures previously reserved for LPNs, don't have as much training as LPNs -- and they don't make as much money. She's convinced the changes have been made based on what's good for business, not what's best for the patient.

"The ones making the decision have been off the floor for 20 years, and they don't know. They might ... follow a nurse around on the floor once a year and think, 'Oh, I have a handle on this,' but they don't."

The Business of Health

Whenever an employer announces layoffs, it has a negative impact on the community and the local economy. It begs the question of whether cutting employees is absolutely necessary -- the last resort to solve a fiscal crisis. The SHMC layoff is hard to rationalize as multi-million dollar hospital expansions continue to rise on the South Hill skyline. SHMC recently opened the West Tower, a seven-story, $100 million capital expansion project. The West Tower includes a state-of-the-art Surgery Center and Women's Health Center. The hospital announced the grand opening just four days before it announced it would lay off almost 140 employees, an especially sore point for LPNs, who watch as new equipment and technologies help make their trade obsolete.

"It was a very cold way to find out," Figy says, recollecting when she first realized she was out of a job. "A lot of us had to take family or medical leave because the depression got so bad. There were panic attacks. [I would] cry a lot, and I just couldn't be there anymore."

But the administration says it agonized over its decision. "The whole process has been incredibly difficult and there's no good way to lay off people, but we acknowledge we have to change with the times," Goins says. "Our labor expenses far exceed the national average, so we're trying to realign staffing issues directly related to budget."

Mike Wilson, president and chief operation officer of Sacred Heart, says far from reaching for ever-higher profit margins, hospitals have had to lower their expectations.

"We actually budget less for a margin today than we did historically," Wilson explains. "Most [hospitals] had a profit margin of about 5 percent in the '80s and '90s, but the general [trends] in the overall payment system have been a driving force in having hospitals change their expectations."

To keep up with the true cost of health care, Wilson says, hospitals today aim for a profit margin of about 3 percent. Because SHMC is a nonprofit, that money must be used for capital improvement projects and equipment and cannot go to board members or executives.

"We're motivated to be healthy financially and that is the requirement of any organization that is in business," Wilson says. "Our goal is to make a [profit] margin... and to continue doing so without encountering the financial stress that many hospitals are experiencing."

That means, as Wilson points out, Sacred Heart's priorities are on expansions that will pay off in the long run. It also means investing capital in one area while cutting back in another, as evidenced by the biggest layoff in its history coming in the middle of the largest hospital expansion in more than a decade.

Still, LPNs like Figy say if hospital administrators had opened a dialogue with them, they could have shared multiple ways to cut costs, beginning with time-consuming bureaucratic procedures and poor purchasing decisions. Nurses claim some of the new technology actually separates them from the patients, reducing contact time and, ironically, creating more paperwork. In addition, union officials point out that Sacred Heart's expansions, including the new West Tower, center on "fluff" -- expensive art, fancy entrances and perks in maternity wards (including new wood floors and whirlpools). When compared to her lost retirement plan, Figy says those upgrades are the wrong priorities for her employer to have. The union claims Sacred Heart has fallen out of line with its original mission and that its administration is too top-heavy. Union literature claims that the hospital has over a dozen vice presidents; in fact, SHMC has three VPs, while its parent company, Providence Services, has two.

Both sides invoke the spirit of Sister Peter Claver, the woman who built the modern hospital. The union says the hospital's decisions reflect a competitive, profit-driven approach to health care. The Sisters of Providence, Figy says, wouldn't approve.

Wilson, at the helm of Sacred Heart, has the unenviable job of navigating the hospital through an increasingly complex, competitive industry -- something Sister Peter Claver also did.

"Every day," Wilson says, "we think about the [charitable] tradition and take difficult decisions and weigh them against the heritage of the hospital."

Publication date: 11/04/04

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