Saskatoon – Saskatoon Regional Health Authority has approved the Region's 2016-17 operating budget and capital plan.
"As a not-for-profit, publicly funded organization, our target is a balanced operating budget," says Saskatoon Health Region's President and CEO Dan Florizone. "But we know that it will be extremely challenging to achieve this by the end of March as we continue to experience volume and demographic pressures. We have tough decisions to make in the weeks ahead as we continue to work to close the gap between revenues and expenses. We have a number of actions underway in support of this year's operating budget and are taking our responsibility of balancing seriously."
After a steady decline in the gap between expenses and revenues following the introduction of a number of cost-saving initiatives, the Health Region posted a deficit of $35.7 million as of March 31, 2016, lower than what was originally projected.
In July, the Region announced additional work expected to result in over $34 million in annual savings after the initiatives are all fully implemented. These included a two-month temporary in-scope hiring freeze and a voluntary separation package for out-of-scope staff. The voluntary separation program has had nearly 40 applicants and those applications are now being reviewed.
"With over 70 per cent of the Region's expenses related to salaries and benefits, we need to try and minimize the impact on jobs, programs and services. We need to continue to work to close the gap between revenues and expenses in order to avoid a potential $30.8 million deficit for 2016-17," says Nilesh Kavia, vice president of Finance and Corporate Services and co-lead of the Region's financial sustainability strategic direction. "This also means continuing to work with our union partners and employees to see where we can redeploy staff to better match staffing with forecasted patient demand. The Region continues to see a five per cent increase in inpatient volumes."
In addition to the sustainability initiatives, the Region's $1.2 billion operating budget includes the following allocations from the Ministry of Health:
- $12.4 million in incremental funding to cover wage increases agreed to through provincial collective bargaining and the Saskatchewan Medical Association
- $11.8 million in incremental inflation funding
"It's the most challenging financial situation I have ever faced working in healthcare" says Florizone. "Over the coming weeks you'll be hearing more about some of the difficult decisions we've made and will continue to make. We must adhere to a set path ahead to ensure patients, residents and clients have access to the health care services they need, and to ensure we are investing in the right areas."
Saskatoon Regional Health Authority also approved the Region's capital plan including allocation of the Ministry of Health's $23.9 million in capital funding to the following needed areas:
- $8 million for Royal University Hospital's heating and cooling systems in support of Children's Hospital of Saskatchewan infrastructure needs
- $3.65 million for capital equipment
- $12.3 million in infrastructure improvements to be directed towards items such as nurse call system replacements in long term care, elevator replacements and roof repairs.
"The Region in its entirety - staff, physicians and leaders – will be required to pull together to see these efforts through," says Dr. George Pylypchuk, vice president of Practitioner Staff Affairs, senior medical officer and co-lead of the financial sustainability strategic direction. "It will be on all of us to ensure these changes result in the continued well-being of healthcare delivery in Saskatoon and area."
The Region will continue working with staff, physicians and union partners, adjusting where necessary to provide the right care in the right areas with the right people. The Region will also continue to work on opportunities for larger system-wide change internally as well as provincially.
"None of this is optional. We have to do this," says Florizone. "It's not only for the health of the system and our patients and families, but for the health of our care teams and for generations of those who will need this system to be there for them in years to come."