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LHIN review of HSN budget to ensure funds used in 'most optimum way'

Review will enable the hospital and the health system to get together and look at the plan and determine if it’s the right plan - Northeast LHIN vice president
hsn
A third-party validation review of the $505.8-million budget Health Sciences North’s board of directors approved last week is the next phase of the planning cycle, says a vice-president with the North East Local Health Integration Network. (File)

A third-party validation review of the $505.8-million budget Health Sciences North’s board of directors approved last week is the next phase of the planning cycle, says a vice-president with the North East Local Health Integration Network.

HSN’s board passed a budget containing a $4.9-million deficit, that trims 113 jobs from the payroll, reduces $6.9 million in program expenses outside clinical departments and cuts HSN’s capital budget for renovations, equipment and information technology by 23 per cent.

The budget process, led by HSN president and chief executive officer Dominic Giroux, was an exhaustive one as the former Laurentian University president held weeks of discussions with top administrators and front-line staff.

Giroux warned earlier that the deficit for 2018-2019 could be as high as $10 million if measures weren’t taken to contain it.

Kate Fyfe, the LHIN’s vice-president of performance and accountability, said it is her agency’s job to examine the details of HSN’s budget, drill down and determine the impact it will have on patients throughout the entire Northeast.

The LHIN’s mandate requires it to ensure providers such as HSN take the broader health care system into consideration when devising their own budgets, regardless of individual constraints.

The LHIN wants to ensure that patients in the Northeast continue to have access to services and access to those services as close to home as possible, said Fyfe.

“The validation review … will enable the hospital and the health system to get together and really look at the plan and determine if it’s the right plan,” she said.

The LHIN is well aware of the financial pressures on hospitals to balance their budgets. Last week, board chairs of the four hub hospitals in the Northeast – HSN, Timmins and District Hospital, North Bay Regional Health Centre and Sault Area Hospital – wrote the LHIN expressing concerns patient care could be compromised at their institutions because of inadequate funding.

As well as validating HSN’s budget, the third-party validation review will do a systemic review of the pressures the North East’s health system is experiencing. Giroux sees it as a positive response from the LHIN to the letter from the four hospitals.

Only HSN will be undergoing the third-party validation review process.

Fyfe said the LHIN will be looking, among other things, at whether there is another “partner” that could provide service to patients “and we can close the gap that way.”

She called HSN’s budget “quite an extensive plan.” The review is meant to bring the health system together around the right plan, she said.

The LHIN has ordered HSN not to implement any of the changes in its new budget until the validation review is completed by June 30. In the past, reviews of organizations that report to the LHIN have been conducted by CEOs from larger hospitals or consulting firms. Fyfe said the LHIN hasn’t decided which way to proceed yet.

“Our commitment to the hospital is that we want to move through this process in a thoughtful way so that are able to validate the plan,” said Fyfe, and do it as quickly as possible to provide stability to individuals and the health system.

HSN has calculated it is missing out on the opportunity to cut $250,000 a week from its approved operating budget while the LHIN proceeds with the third-party validation. Giroux said the LHIN is committed to reimbursing the hospital for those lost savings.

Fyfe would not speculate on the cost of a review, saying it will depend on the scope of it.

Giroux has said the budget just approved by HSN’s board of directors will allow the hospital to balance its books a year earlier than planned, by the next fiscal year.

The hospital has already cut 33 of the 113 positions it identified as needing to be trimmed and said it is hoping to manage any reductions through attrition.

Fyfe said the validation review will look at areas where funding could be reduced but also at areas where the LHIN needs to continue to invest in services.

“We know we have challenges that we will be faced with an aging population,” said Fyfe. The LHIN is looking to ensure it has the capacity to properly care for patients.

HSN is asking for what it calls a financial relief package of $5.9 million and it has discussed that request with the LHIN. Fyfe said the ministry has increased investments to HSN by an extra $7.3 million in base funding for the fiscal year 2018-2019. It has also made investments in the community sector, and to mental health and addictions programs.

She said it’s vital to ensure the funds that are in the system are used “in the most optimum way.” That will be part of the validation review.
 
“Can we get there from here?” Fyfe asked in reply to a question. “I think by working as one health system, and looking at directing resources to those areas of highest need, (we) will be able to support northerners.”

Giroux said he was not surprised that the LHIN called for the validation review of his hospital. LHIN staff were briefed about the consultations he was undertaking at the hospital in mid-March and it was clear the HIN had concerns about the cuts proposed at HSN, especially to clinical programs.

“That makes sense because their role is to provide oversight for health system planning in the North East,” said Giroux of the LHIN.

The hospital board presented its budget to the LHIN board last week and received positive reaction, said Giroux. The LHIN board told HSN it didn’t want to “delay the unavoidable” at the hospital, “but they didn’t want to be a barrier either.”

He called the systemic review of the health system in the Northeast long overdue.

Giroux believes the review can be completed in the next 10 weeks because of the “tons of data” that has already been collected by HSN and other hospitals.

They show the seven hospitals in the Northeast as being in worse financial straits than those in the rest of the province. Northeast hospitals all have deficits equivalent to or worse proportionally than HSN’s. 

Carol Mulligan is an award-winning reporter and one of Greater Sudbury’s most experienced journalists.


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