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In part two in a series on moving from community to for-profit hospitals, Jeffrey Kaye of KCET asks whether profits come before quality care.

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JEFFREY KAYE: At Columbia San Jose Medical Center another patient through the emergency room door can mean a busier day upstairs in the intensive care unit, as it did recently when intensive care found out there'd be one more patient than expected.

HOSPITAL WORKER: Carla, this is Mark. I'm going to need another nurse. Sorry for letting yo know so late.

JEFFREY KAYE: Calls went out to bring an extra nurse into the Northern California hospital, where one more patient can tip the delicate staffing balance. That balance has been made all the more precarious by drastic staffing cutbacks. The hospital made deep cuts in 1996 when the corporate hospital chain, Columbia/HCA, bought the then-not-for-profit medical center, along with a sister hospital, Good Samaritan. The acquisition was part of a continuing national trend, one of about 200 corporate takeovers of non-profit hospitals that took place between 1990 and 1996. Often corporations buy out financially troubled non-profits and move quickly to cut costs. At the two San Jose hospitals Columbia laid off 68 registered nurses, about 12 percent of the nursing staff. According to this group of registered nurses, the cuts have jeopardized patient care.

MELINDA MARKOWITZ, Columbia Good Samaritan Hospital: We are required to have more patients than we can adequately and safely take care of.

JEFFREY KAYE: Melinda Markowitz has been at Columbia Good Samaritan Hospital for 19 years.

MELINDA MARKOWITZ: The potential is there for life-threatening situations, yes.

JEFFREY KAYE: Elaine Legg was so worried about staffing conditions in San Jose Medical Center's emergency room that she left her job.

ELAINE LEGG, Registered Nurse: The staffing was unsafe. It was an unsafe setting.

JEFFREY KAYE: Celeste Lange has worked in Columbia Good Samaritan's intensive care unit for 20 years.

CELESTE LANGE, Columbia Good Samaritan Hospital: You have that kind of living-on-the-edge feeling when you're in there, because, you know, you're kind of--you may or may not be able to manage what comes along. There's no guarantee.

JEFFREY KAYE: Dr. Kamal Modir echoed that feeling of living on the edge. He's been a surgeon at Good Samaritan for 25 years.

DR. KAMAL MODIR, Columbia Good Samaritan Hospital: Many times we've got close to disasters.

JEFFREY KAYE: Close to disasters?

DR. KAMAL MODIR: Right.

JEFFREY KAYE: Meaning what?

DR. KAMAL MODIR: Well, let's say if the patients don't get right treatment and they get sick.

JEFFREY KAYE: So have you seen patients postoperatively getting sick because of lack of care?

DR. KAMAL MODIR: Yes, I have.

JEFFREY KAYE: Conditions at one of the hospitals, Columbia San Jose Medical Center, led state of California officials to consider shutting down the institution unless the problems were corrected.

JEFFREY KAYE: Was this hospital unsafe?

CARLA FRAMIGLIO, California Health Services: The hospital created a situation that was really unsafe for patients, yes.

JEFFREY KAYE: Carla Framiglio, assistant deputy director of California's Health Services Department, headed an investigation into the hospital last year. The inquiry was prompted by an anonymous tip after an emergency room death in May. A critically ill patient, who needed intensive care, was instead kept in the ER because there weren't enough nurses to staff the intensive care unit.

CARLA FRAMIGLIO: What we found in the emergency room was a situation in which a number of patients were coming to the emergency room, being accepted for care, even though the hospital did not have intensive care beds available to place these individuals; nor did they have enough properly trained staff to care for these individuals.

JEFFREY KAYE: And did patients suffer as a result?

CARLA FRAMIGLIO: Patients certainly did not receive what we would consider the optimum benefit that they could have received from care.

JEFFREY KAYE: The state's report on the investigation said the man who died had not received necessary intravenous fluids and blood transfusions. State officials also determined the problems were not limited to one night, or to one hospital department. They found numerous medication errors on patient charts.

CARLA FRAMIGLIO: We found patients where the physician had ordered morphine or pain medication to be given at a certain time, and there was no documentation that that medication was given.

JEFFREY KAYE: San Jose Medical Center has remained open because the state found it had corrected the life-threatening conditions, but cuts still affect the hospital. Hours of both the cafeteria and pharmacy have been reduced. The cafeteria used to be open almost around the clock; it now shuts down at 7:30 in the evening.

ELAINE LEGG: You have a patient that's a diabetic, and you've got to get some food into them, I don't even have orange juice to give these patients without paging the house nursing supervisor and her having to get special keys from security to get into a kitchen to get me a glass of orange juice for a patient.

JEFFREY KAYE: The cuts made in San Jose are typical of cost-saving measures that take place after non-profits are taken over by for-profit chains, according to Brian Lapps, Sr., a health care consultant to non-profit hospitals.

BRIAN LAPPS, SR., Health Care Consultant: So, inevitably, you'll see a reduction in the nursing staff, in the labor staff, when a proprietary or corporate entity will take over a not-for-profit hospital. You will have a change from registered nurses, which are more expensive, to licensed practical nurses or nurses aides doing more of those chores, which reduces your labor cost, which may or may not compromise your quality of care.

JEFFREY KAYE: Neither Columbia HCA officials nor San Jose hospital administrators would be interviewed for this story, but Tom Scully, who represents for-profit hospitals, says corporate chains are making needed reforms. Scully is president of the Federation of American Health Systems.

TOM SCULLY, Federation of American Health Systems: In most of these cases you've got facilities that will lose the money, that were overstaffed, the tough decisions hadn't been made, the companies come in, put capital into them, and they do reduce staff. But the clear, the facts show you that what they do is they reduce staff to very close to the community need.

JEFFREY KAYE: In San Jose some doctors said the cuts Columbia made were not out of the ordinary. Surgeon Dr. James Wyatt III works in the emergency room of Columbia San Jose Medical Center.

DR. JAMES WYATT III, Columbia San Jose Medical Center: You go into any emergency room in this state or in this country, you will find similar problems. It's an overall money shortage problem in health care. We can look at the hospital institutions and say, well, they're cutting staff to sort of make a profit, but they're also trying to just keep their doors open.

JEFFREY KAYE: Dr. Paul Beaupre, chief of the medical staff at Columbia Good Samaritan, says staff cuts would have happened regardless of the Columbia takeover. He says the corporate giant kept the hospital in business.

DR. PAUL BEAUPRE, Columbia Good Samaritan Hospital: For the most part we've seen an improvement since Columbia has taken over. We were facing, as a non-for-profit hospital two years ago default on our bonds. And we were on the verge of having to close our doors. Since Columbia's arrival, they have spent a substantial amount of money improving the appearance of the campus. We are now seeing money for badly needed clinical improvements, such as new intensive care units, a new cath lab.

JEFFREY KAYE: In addition to the face-lift, Good Sam now has a new $28,000 oscillator used especially for premature babies weighing less than a pound and neurologist, Dr. Harmeet Sachdev says after the Columbia takeover, he was able to start a new stroke team.

DR. HARMEET SACHDEV, Columbia Good Samaritan Hospital: Before Columbia took over, I never really new myself who was in charge; there were so many layers of administration. I have had no difficulty in speaking to the CEO's or approaching the administration. In fact, it has been very easy for me because I knew who was in charge and whom to talk to.

JEFFREY KAYE: Since the state investigation, both hospitals have added to the nursing staff. At the end of 1997, San Jose Medical Center created 35 positions and Good Samaritan 42.

DR. PAUL BEAUPRE: Columbia came in with some national staffing modules, and we said we'll take a look at these and see if they work. On many of the floors we've looked at ‘em and say, no, they don't work, and we are now actively looking at a better system for us that will work for our system, and we are actively recruiting to get more nurses here.

JEFFREY KAYE: Beaupre says filling those new positions hasn't been easy due to a nursing shortage, but some nurses say besides the shortage, the hospital isn't filling positions because nurses don't want to work for Columbia. The hospital has added personnel, but some doctors and nurses complain there are still staffing problems. In the Good Samaritan nursery, which with its new equipment handles more complicated cases, Nurse Elise McClain says the staff is spread too thin.

ELISE McCLAIN, Columbia Good Samaritan Hospital: We're told that our staffing is adequate based on everybody else around us in other labor and deliveries, but it's not really adequate for our volume and the type of sick person that we're seeing.

JEFFREY KAYE: Nurses also say problems remain at Columbia San Jose Medical Center. The emergency room has met the state's demand for transfer of patients more quickly to the intensive care unit, but according to nurses, to adjust for the load, intensive care patients are sometimes moved to a medical floor, where they don't get the care they need.

TRISH BARCLAY, Columbia San Jose Medical Center: There's a sort of a domino effect. People who were ICU patients half an hour ago are suddenly okay to be transferred because there's a patient in the ER that has to come up right now. We're not even sure that they should be transferred, but we have to get them out. I just see it as moving the problem elsewhere, the patients being put at a lower level of care where those nurses don't have the help.

JEFFREY KAYE: Dr. Beaupre says that Columbia is correcting the staffing deficiencies.

DR. PAUL BEAUPRE: We realized early on--it was in the first six months--that some of what was occurring did not work at this hospital. And it's taken us a year to begin to redesign the way we want to do things. And what I'm telling you is Columbia is listening; they're helping us with it. They're not blocking the door all the time and saying, no, you can't do it. They're saying yes, if it makes sense, let's do it.

JEFFREY KAYE: But nurses and doctors still complain about what they see as Columbia's bottom line mentality.

TRACEY LEDBETTER, Columbia Good Samaritan Hospital: We do not see more money being funneled into patient care. We see the CEO's getting pay increases and more stock options. We don't see more nurses at the bedside.

JEFFREY KAYE: Similar sentiments have been raised on hearings on conversions across the country. Called to testify, Columbia executives say patients choose their hospitals because of their high quality of patient care.

DAVID MANNING, Columbia/HCA Corporation: We at a time when the health care industry is virtually flat in terms of in-patient enrollment--in-patient admissions are seeing a 5 percent gain. In fact, we saw more than a 5 percent gain in the last quarter of last year. People are choosing Columbia not because they have to, but because they want the kind of quality care that's provided.

JEFFREY KAYE: The for-profit industry adamantly maintains its goal is to combine efficiency with high standards of patient care. But as an increasing number of hospitals have been converted nationally, critics have repeatedly questioned whether profits come before quality care.

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