HEALTH CARE DEFICIT
Hospitals on the mend
October 13, 2009
Jennifer Yang
Katie Daubs
While one in three Ontario hospitals saw red in the last fiscal year, Toronto hospitals – hit by the recession and restructuring – say they're already recovering from their million-dollar injuries.
The health ministry reported that 61 of Ontario's 159 public hospitals had deficits in the fiscal year ending in March, for a total shortfall of $154 million. The hardest hit were the Niagara Health System ($18.8 million), Kingston General Hospital ($14 million) and Toronto's Hospital for Sick Children ($12.8 million).
Added to losses by Baycrest and Bridgepoint hospitals, the three Toronto institutions were down a collective $19.9 million.
Mary Jo Haddad, president and chief executive of the Hospital for Sick Children, said the deficit was not operational, but in the hospital's investment account.
The hospital "depends significantly" on investments that were hurt by the global recession, Haddad said. "I think it would matter in the long term, if it had continued to go down and had not recovered," she said, adding the investments have almost bounced back.
Jeff Mainland, vice-president of corporate strategy and performance at Sick Kids, said accounting practices recently changed, and organizations now have to recognize investment portfolio losses in their budgets.
Baycrest president and chief executive William Reichman said Monday his hospital is on track for a balanced budget after its investments suffered during the recession.
"The economic turnaround has helped a lot," he said.
Baycrest didn't cut any programs, instead renegotiating contracts and scaling back on extra expenses such as travel, he said.
Bridgepoint Health chief executive Marian Walsh said the hospital posted a deficit of $2.5 million to $3 million last year, but it was actually due to an accounting quirk.
Last year, Bridgepoint decided to replace all unregulated care providers with registered nurses. A total of 259 employees were affected, either shuffled to other positions, laid off or given retirement packages.
The restructuring would cost Bridgepoint about $2.5 million and occur over three years, Walsh said. But in accordance with accounting laws, Bridgepoint had to charge the cost of the three-year restructuring to its 2008-2009 financial year.
Bridgepoint should see a surplus this year and the next that will offset last year's shortfall, Walsh said.
Ontario hospitals receive most of their money from the province, through 14 local health integration networks (LHINs). The province does not allow them to run deficits.
But there are agreements between hospitals and networks requiring balanced budgets over a two-year period, Walsh said. If a hospital is over its budget, "the ministry can put a supervisor into the hospital or initiate a review," she said.
The Central West LHIN, which includes Bolton and Brampton, was the only region where all hospitals had balanced budgets last year.
Financing has always been a tough issue for Ontario hospitals. Since the Liberals introduced a health premium in 2004, the health care sector's woes have been eased. But with a growing population, a recession and service needed in remote areas, finances remain strained, said Anthony Dale, vice-president of policy and public affairs at the Ontario Hospital Association.
Natalie Mehra, executive director of the Ontario Health Coalition, said financial increases in the last two years haven't kept pace with inflation, and if that trend continues, "the cuts that we're going to see (will be) much deeper."
Ontario is behind every other province except British Columbia and Quebec when it comes to hospital funding, according the Canadian Institute for Health Information. In 2008, hospital funding was $1,209 per person, below the national average of $1,290.
With files from The Canadian Press
Toronto Star