What do Enron and nursing have in common?☆
Article Outline
Both suffered severe losses while under the guidance of accounting consultation firms. This is a history lesson. And like all history lessons, hopefully it will serve to prevent us from repeating it.
As a history nut, I was fascinated to learn how contextual changes in practice settings have influenced nursing. The move from nursing in the home (1870s to late-1930s) to nursing in the hospital (after World War II) was not a choice made by the profession. Powerful factors in society, the Depression, and World War II resulted in this phenomenal change in the practice place of nursing. They changed nursing from a fee-for-service, 1-client-at-a-time practice to performance of a service (as part of the board and room charge) in a complex bureaucracy in which care is governed by rules and regulations. They changed nursing from a client/professional relationship to a task-based service where getting tasks done translates to “good patient care”. But completing tasks is not enough. We know it is entirely possible for all tasks to be done without the patient receiving any real personalized care.
While this setting change was happening, the nursing profession made a major decision to move education out of the hospitals, where students provided most of the care, and into institutions of higher learning. This major change of replacement of student nurses with registered nurses (RNs) occurred with little fanfare, almost imperceptibly to persons within the system and in the public. Professionally educated RNs stepped into the shoes filled by students without much change in the day-to-day operations of the nursing department.
Indeed, I have concluded that it has taken “the system” about 30 years to begin treating RN staff nurses like the professionals they really are. Even today, some hospitals continue to micromanage patient care, conveying a lack of trust in the judgment capabilities of the RNs they hire who just happen to have the highest license society awards for the nursing care of its sick.
The introduction of RNs into hospitals linked nursing resources to hospital beds for the first time. By 1980, 85% of the employed nurses in the United States were working in hospitals. Recent changes in the health care system have begun unlinking RN resources to hospital beds; now only 60% of employed nurses are in hospital work.
Anyone who has been around the health care system for any length of time is aware of nursing shortage cycles. They used to be further apart, and they used to take longer to arrive. Now they come more frequently and quickly. We are always able to point to societal factors contributing to the rise and fall of nursing resources. A favorite one is that, when recessions occur, more women go to work, increasing the nursing workforce. Another familiar explanation is salary levels. When nursing falls below comparable fields, recruitment into schools of nursing goes down, schools close, etc. When salaries are a little higher than comparable professions, recruitment rises. Many more cycle-triggers are commonly identified as major factors in the rise and fall of nursing resources.
The current shortage, however, has a causative factor different than any we've seen in the past. This one can be directly attributed to the impact of accounting company consultants on RN to other “caregiver” ratios throughout the 1990s. I call that period the Decade of the Accounting Firms.
Throughout the 1990s, the major accounting consulting firms (the Big 6 or 8 or whatever) were paid millions to tell hospital administrators and boards of directors how to reduce hospital costs—by laying off RNs and replacing them with licensed practical nurses or nursing assistants. The resulting havoc drove RNs into other places of employment and created operating practices that defy common sense and reason. To make matters worse, shortened lengths of stay in the hospital meant the clinical requirements of care were greater. Patients often were sent home before they were ready for discharge. All convalescence now is done either at home or in a nursing home. Hospitalized patients are receiving very active treatments. All patients require a lot of care, and many beds on each unit have very critically ill patients. These changes have 34 Nurse Leader January/February 2003 Anyone who has been around the health care system for any length of time is aware of nursing shortage cycles. created jobs so highly stressful that most nurses can work in them only part time.
Very similar are the stories of what happened when expenses were reduced by cutting RNs. One of my favorites is a major firm that was consulting with a large health care system on the East Coast. This system had 4 hospitals, of which 2 were major academic centers and 2 were community hospitals. The consultants recommended a multimillion-dollar salary budget cut in nursing by implementing an across-the-board skill mix ratio (RNs and other caregivers) and a staffing ratio based on the 70th percentile of California data. When asked why that percentile of that data, the only answer was that a figure was needed to achieve the planned dollar cut and the California data were the only benchmarks this company had in its database. It had nothing to do with the care needs of patients in those hospitals. The central idea in health care is that staffing levels should be based on patient care needs. This fundamental idea never entered the consultants' equation.
In this case, the nurse executives, at considerable risk to their jobs, successfully warded off the accounting firm's recommendations. Interestingly, a short while later, the powers that be decided it wasn't important to have all 4 hospitals operate with the same staffing patterns. What a concept! Someone finally realized that each hospital had a different function in health care and in the communities they served. If those nurse executives hadn't been successful in foiling the accountant mentality, I have no doubt there would have been major collective bargaining actions and patient care would have suffered throughout that system.
Large-scale staffing cutbacks of these types carry repercussions that last for decades. Patients in those hospitals can thank the courageous nurse executives for successfully thwarting an illogical, irresponsible and dangerous recommendation. Incidentally, the system paid millions of dollars for that recommendation, which basically never left the administrative offices.
Similar stories with less happy outcomes were repeated throughout the 1990s. A common gimmick was for a major accounting firm to be brought in as consultants whose redesign techniques were supposed to streamline work activities before reducing staff. However, because the consultants knew little about hospital work and were not inclined to learn, little was done to end duplication and streamline functions. They understood so little about the requirements of patient care or hospital functions that it was impossible for them to use their streamlining techniques and computer modeling on the clinical processes of care.
Instead, they played with the numbers (imposed benchmarks), changed skill mixes, hired unskilled workers for positions converted from RN to aide, and placated the board and administrators with some level of expense reduction. For this they were paid millions. I know of one hospital that paid a major accounting firm $11 million to cut the nursing budget. Another paid $4 million, another $15 million, and so on and so on, all at the expense of patient care and the institutions who cut the checks.
In many cases, nurse executives found themselves unemployed when they tried to stand up to the craziness of cutting RN staff by accountants who were ignorant of basic patient needs. The turnover rate of top nurse executives throughout the 1990s was scandalous. We lost some of the finest leaders a profession could have. It was not uncommon to hear within 1 week of 3 or 4 top-rated executives either leaving under excruciating pressure or being fired. These executives understood patient care, nursing department operations, and financing. They were well trained and had master's degrees and often PhDs. They had the ability to build strong professional practice departments where patients received exquisitely humane and clinically competent care. Many nurse executives had everything they needed in terms of intellect, experience, financial moxie, leadership skills, and passion to do an extraordinary job, but were unwilling to accept the unrealistic recommendations of consultants who would use esoteric formulas and computer models created by unknown persons using irrelevant or nonsensical data. These talented, experienced nurse executives are no longer in leadership positions making the difference in patient care in major health care institutions and hospitals.
I recently spoke to a former nurse executive who was recruited (after being laid off) to work as a consultant by a firm specializing in that newfangled euphemism “patientfocused care”. This was the idea that services are brought to the patient at the bedside in ways such as admitting with a laptop or having an x-ray machine on the orthopedic floor. Not bad ideas, but they were so expensive that very few places were willing to try them.
The rest of the scheme boggled the mind. First, the misnomer was interesting. In this program, the patient per se was never considered as an individual person with specific patient care needs. A more correct name would be “bedcentered care” because it was all about delivering hospital services to a bed, not to a person. The patient was a nonentity in this program. Second, to achieve efficiencies in direct care, professional roles boundaries were blurred and a generalist role title was used. Again, not necessarily a bad idea until it was operationalized by giving everyone on the nursing unit the same title, patient caregiver. That title appeared on everyone's name tag! The idea was that patients and their families did not need to know the level of preparation and expertise their caregivers had. All nursing personnel were to be viewed as caregivers whether they administered critical medication or performed routine tasks.
This former executive said she knew that these changes were unwise and unsafe, and she left the firm as soon as she could. The point is that millions and millions of dollars were spent on this idea. There was a time in the early 1990s when you couldn't pick up a professional journal without reading another testimonial to this ill-conceived concept.
It seemed to me as though the accounting firms specifically targeted the RN role, either by cutting their numbers or obliterating their visibility within the system. Recently published research shows conclusively that it is precisely the presence of adequate numbers of RNs that reduces postop complications and hospital death rates. A competent professional RN staff also reduces malpractice litigation. All of these data add to the financial viability of a good hospital and must be quantified.
Before the destructive cutbacks of the previous decade, the profession believed that, if a nurse was able to do a good job, she would have a job. When the accounting consultant recommendations took effect, competent nurses were laid off. The whole profession was stunned when it realized this practice actually was happening. Eventually, it became apparent that hospitals had no loyalty to the nurses. Therefore, we shouldn't be surprised today that nurses are more than willing to work for agencies and travel companies and in nonhospital settings.
What was especially galling to the profession was that nurses were laid off while new administrative buildings were being erected to house corporate headquarters for newly merged or created systems. Some of these edifices are being abandoned as it becomes became clear, once again, that effective managers have to be in offices somewhat proximal to the processes they are managing. Expensive furnishings in corporate headquarters paved the way for the executive bonuses that were reported in the public press (but never in the house organ). These bonuses often were based on “successful” yet ill-advised budget cuts. So while RNs were being reduced, millions were being spent on accounting consultants, corporate headquarters, and executive salaries and bonuses. The capitalization of health care has almost taken the tender loving care out of it.
It is to nursing's credit—and no one else's—that a recent Gallup poll showed that the public trusts nurses almost as much as firefighters and more than any other health professionals. Despite this era of “slash and burn” consultation (or maybe because of it), nursing is repositioning itself to strengthen its covenant with society. It is doing so by rethinking its mission, recognizing that the primary relationship of a nurse must always be with the patient, no matter what the setting or system. Nursing further recognizes that working collaboratively with physicians and other health care providers is essential. We are redefining our relationship with physicians as a partnership, understanding it is our right and responsibility to manage patient care within the framework of that partnership and that of an everchanging health care system. But our primary relationship has been and must always be with the patient.
☆ She can be reached at mmanthey@chcm.com or (952) 854-9015.
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