The right way to respond involves more than what to say to her. We're fortunate that we live during a time when pharmacologic advances are such that no one should
have to live with severe pain. Therefore it's critical that a physician with expertise in the treatment of pain evaluate the medication she's taking and work with her to make her as comfortable as possible.
Physicians, nurses, psychologists, and other healthcare providers can choose to develop expertise in treating pain. In order to find such a person locally, ask your own primary care physician to whom he or she goes with questions about how to manage pain. Several national organizations also promote effective pain management and have directories of healthcare professionals with expertise in treating pain. These include the American Pain Foundation and the American Academy of Pain Management.
It's also important to have a psychiatrist evaluate your mother. If her hopelessness is caused by a significant depression, which is likely the case, treatment of the depression will dramatically improve her quality of life. Unfortunately, healthcare professionals often fail to properly diagnose depression in older people. They may assume your mother has reason to be unhappy -- after all, she's had compression fractures and is in pain, and she has likely also lost some physical function. While that all may be true, the stress may have triggered a depression, and the hopelessness that can result can in fact be treated. This means her optimism can return, despite the compression fracture.
Ideally, treatment should include a combination of talk therapy, to help her gain perspective, and antidepressant medication. There's a feedback loop between pain and depression. Interestingly, antidepressants -- even in someone who is not depressed -- can decrease the perception of pain. In your mother's case, an antidepressant might help her with both the depression and the pain. It's also important that her physician evaluate whether she's taking any other medication that's contributing to her apparent depressed mood.
An experienced clinician -- probably a psychiatrist, given the combination of emotional and medical issues -- should also carefully evaluate your mother's safety. When someone is feeling so terrible that she expresses a desire to die, her words must be taken seriously. Even if she doesn't specifically say she has considered taking her own life, the hopelessness she has expressed means she needs a comprehensive assessment regarding her risk for a suicide attempt. It would be tragic if she made a permanent decision about a temporary problem that could be treated.
In the meantime, let her talk about how she's feeling and feel free to ask her if she's considering suicide. This won't put ideas in her head, as many people fear; rather, it will give her a chance to talk about her feelings and thereby feel less alone. The feeling of being alone and hopeless is a dangerous combination. When she's talking to you about how she's feeling, she's no longer alone, and her risk for suicide decreases.
But also know that while talking to you will likely help her, it doesn't diminish the critical need to have her evaluated by a mental health professional.