Hospital faces $6M shortfall next year

Thanks to provincially negotiated wage increases for some of its workers, Health Sciences North will have to find $6 million in savings to balance its budget in the 2013/2014 financial year.

Hospital workers belonging to the Ontario Public Sector Employees' Union (OPSEU) and the Ontario Nurses' Association will receive a 2.75-per-cent wage increase effective April 1.

Members of the Canadian Union of Public Employees (CUPE) will receive two-per-cent increases, Health Sciences North CEO Dr. Denis Roy told those gathered at the hospital's monthly board of directors' meeting Nov. 13.

The hospital is also looking at increasing electricity and heating costs, which will bring its overall expense increase for 2013/2014 to about three per cent.
At the same time, the hospital is planning on a zero-per-cent provincial funding increase for that financial year.

Roy said it's going to take lot of “imagination and innovation” to balance the 2013/2014 budget.

Senior vice-president Joe Pilon said this innovation will involve asking the hospital's various departments how things might be done differently.

He said the hospital is shifting its focus to ambulatory care, as it's cheaper to provide this type of care as opposed to inpatient care. Pilon said the hospital is also providing programs to keep people out of hospital in the first place.

“It's trying to get that culture out there to say ... what can you do differently with the resources available to you to provide as much or more care?”

As for how the hospital is doing with its 2012/2013 budget, Pilon said it submitted a balanced budget projection to the North East Local Health Integration Network (LHIN) earlier this fall — at least for the Ramsey Lake Health Centre.

When it comes to the 30 alternate level of care (ALC) beds at the Sudbury Outpatient Centre, the hospital is still facing a deficit, Pilon said. That's because of a funding shortfall for those beds, he said.

Roy previously told Northern Life the beds are in a standalone unit which requires its own infrastructure, and incurs costs that don't exist in the main hospital building.

The hospital was able to trim costs at the Sudbury Outpatient Centre ALC unit, but hasn't completely wiped out the deficit there, Pilon said. The hospital won't know what that shortfall will be until the audited financial statements are completed.

As for how it managed to submit a balanced budget projection for the rest of the hospital's operations, he said savings have been found in both the organization's food services and surgical programs.

Pilon said the hospital somehow ended up doing five per cent more surgeries than it had budgeted for in the first three months of the financial year.

“So we cut back some of our OR blocks,” he said. “We're getting ourselves back on target. We'll hit the volumes we were supposed to.”

The hospital has already implemented about $500,000 in food services savings, Pilon said, and it's working with a consultant to find another $500,000.

He said the hospital is looking at reducing expenses such as food costs without impacting quality.