Saskatoon Health Region is moving forward with a series of cost saving initiatives - key elements of the Region's plan to balance its budget.
Saskatoon Health Region ended its 2015-16 fiscal year (March 31, 2016) with a deficit of $35.7 million. The Region continues to experience volume and demographic pressures that result in overcapacity and financial challenges that put additional pressure on the health system. But Saskatoon Regional Health Authority Board and Region administration remain committed to a balanced budget.
"Our target is always a balanced budget but the path before us is not an easy one. The challenges are significant," says Dan Florizone, President and CEO of Saskatoon Health Region. "It will take some time to implement this plan, and tough decisions will need to be made. But we take our responsibility of balancing the budget very seriously. We operate with taxpayer dollars and must be good stewards of those funds."
The Region introduced a number of initiatives to deal with its deficit position in December 2015 and the gap between expenses and revenues has steadily declined.
"The measures we have taken since December have helped, but we continue to be challenged to eliminate the deficit while minimizing, as much as possible, the effects on our people, including patients, residents and clients as well as staff and physicians," says Nilesh Kavia, Saskatoon Health Region's Vice President of Finance. "However, we know much more needs to be done. This month, our Board provided their support for the immediate implementation of the action items needed to build savings initiatives into our operational budget.
"We have been working closely with both the Saskatoon Regional Health Authority and the Ministry of Health to outline how we can balance our budget to avoid a significant negative impact on patient care, quality and safety." explains Kavia, who is leading the development and implementation of the Region's sustainability plan. "We believe we can do that through some very targeted and specific actions."
The initiatives are grouped into the following areas:
- Administrative Savings
- Efficiency Savings
- Enhanced Management Practices
- Revenue Generation
- Service Delivery Model
- Appropriateness Savings
More detail on these initiatives can be found in the Sustainability Plan Initiatives backgrounder (PDF).
A range of proposals were reviewed and approved as part of this plan which is expected to result in over $34 million in savings. Provincially, health regions have been directed to reduce administration expenses by $7.5 million, and reallocate those funds to front-line care in long term care facilities. Saskatoon Health Region's share of that reallocation is $1.9 million. The Region is committed to a patient first approach to re-investing its costs savings, working closely with its patients, residents, and community partners to improve care and building a sustainable system.
"We are attempting to minimize the number of layoffs through these initiatives," says Florizone. "We are focusing on natural attrition by promoting voluntary separation and by redeploying staff to critical functions. We will work with our union partners on all potential initiatives. "
Two initiatives being implemented July 28 to minimize layoffs include a
temporary two-month external hiring freeze along with a
voluntary separation program. The hiring freeze applies to the Region's in-scope employees (a process to restrict out-of-scope hires is already in place), with the exception being for hard-to-recruit positions. Currently, the voluntary separation program is limited to the Region's out-of-scope employees.
With about 78 per cent of the Region's expenses related to salaries and benefits, it is anticipated these two actions will reduce the impact on future employment loss.
"This is a challenging time for Saskatoon Health Region," says Dr. George Pylypchuk, Saskatoon Health Region's Vice President of Practitioner Staff Affairs who will be co-leading the sustainability plan's implementation. "But we also have opportunities to improve and invest in our healthcare system for our patients, clients, residents and their families. So, we will also be looking at larger system-wide changes such as redesigning of our ambulatory or outpatient care model to make health care better and sustainable for the long-term."
Saskatoon Health Region budget information will continue to be posted at:
www.saskatoonhealthregion.ca/budget/
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