Health Sciences North's new CEO, Dominic Giroux, is looking to get Sudbury's hospital back on track financially after the hospital reported the largest deficit of the 23 academic health science centres in the province last year.
Of those 23 academic health science centres, 18 incurred a surplus (with those surpluses totalling about $100 million). Four hospitals ran a small deficit and HSN had the largest deficit at $7.1 million, the largest both percentage wise and dollar wise.
In the 2016-2017 fiscal year, HSN reported a $7.13-million deficit and was on a path to exceed that number for the 2017-18 fiscal year by nearly $3 million — the hospital was staring at a shortfall of some $10 million.
Speaking at the Sudbury Chamber of Commerce President's Series Luncheon on Feb. 13, Giroux outlined the financial forecast, highlighting that the hospital is working towards a balanced budget in 2020-2021.
In a move to curb and contain that deficit, he said HSN altered its fiscal year to contain expenditures to the last six months of the fiscal, while receiving board approval to run a $5.9-million deficit for 2017-2018.
"My first day on the job was the October meeting of the finance committee and we reported then that for the first six months, the hospital was incurring a deficit of $4.9 million," said Giroux.
"If you do the math, we were on a path to essentially a $10-million deficit for 2017-18. As we re-introduced budgets based on the April to March fiscal year, we secured board approval for a $5.9-million deficit, which means really containing our expenditures for the last six months of the fiscal year."
Giroux added that "means on the ground is that we're being really efficient," but didn't really explain where those efficiencies are being found.
Revenues at the hospital were up just 1.1 per cent this year, while expenditures increased by 0.9 per cent.
The HSN board also gave approval for the hospital to run a deficit of up to one per cent of its operating budget in each of the next two years, which adds up to a budget shortfall of $4.8 million per year.
"However, the board expects us to show to the organization and the public that the cost containment will be greater in non-clinical areas as opposed to clinical areas," said Giroux. "So this is a challenge because our volumes go up. We have more patient visits, more surgeries, especially mental health and addictions, youth mental health and addictions our numbers are increasing by double-digit percentages this year ... despite this we'll need to eliminate this deficit in the next little while."
Giroux outlined the challenges faced by hospitals around the province, as provincial funding is at its lowest point in the last six years.
"Right now the provincial share of the budget allocated to the health sector is at 31.8 per cent," said Giroux.
"Over the last three years, the average annual increase in health spending in Ontario has been 2.4 per cent, while in non-health expenditures it's been 3.4 per cent, so that's why you're hearing more and more from hospitals across Ontario that the current trends are not sustainable."
Barely one month after news broke that Giroux had cut five senior management positions at the hospital, the CEO indicated that what he has gathered from his frontline staff is the organization is top heavy.
"(Frontline staff) felt we were increasingly top heavy as an organization," adding HSN staff feels the hospital needs to invest in more professional development and training for workers.
Giroux says that there are some tough choices to be made in the coming months and beyond, though he didn't elaborate in any great detail as to what the specifics of those choices were and whether or not there were more cuts and restructuring to come.
The CEO is hopeful that the province will make good on calling for a 4.6-per-cent increase in funding for the health care sector during last year's budget, though he hasn't received details as of yet as to what that funding will look like for HSN.
"Our hope is to avoid tough decisions at the hospital and that we'd be able to secure the funding that was contemplated in the provincial budget last year," said Giroux.
It would appear that Giroux isn't putting all of his eggs into that basket however, as he is acutely aware of where the hospital is over budget.
"We're able to benchmark our expenditures by program department with other similar sized Ontario hospitals. We're below the benchmarks in many areas, we're above in some, surgical areas for example, so that's what we'll need to focus on and see in areas where our costs are above the provincial benchmarks where we can bring these costs down," said Giroux.
Many of the areas where the hospital is over budget do centre around the surgery department at HSN, Giroux said after his talk. When asked if this meant cuts to surgical staff, Giroux's response was, "not necessarily."
"It's premature ... at this point we haven't developed a full budget scenario for 2018-19 and we're also waiting for funding approvals from the province," said Giroux.