Dealing with an unfair funding formula, SBGHC cuts at the top (how novel!)

Here’s a story we don’t see every day: South Bruce Grey Health Centre is cutting two of its four senior management positions as part of its efforts to deal with a budget deficit.

Contrast that with hospitals such as Ontario Shores Centre for Mental Health Sciences, which carved out a new advisory position for its departing CEO at a time when front line staff are bracing for tough times ahead.

The decision may have been slightly easier to make at SBGHC given two senior managers are retiring. However, as most front line workers already know, when you cut vacant positions, it still has an impact on the workload of those left behind.

SBGHC is one of the few hospitals to have weathered the last decade without consistently running into deficit. The fact that they are now forced to trim their sails owes a lot to a punitive new funding formula emerging from Queen’s Park. Small rural hospitals weren’t supposed to be part of that formula, but because SBGHC combines resources from four small hospitals together, they do.

The irony is that by consolidating their resources these four small hospitals are being penalized. For the Hanover hospital, which has somehow managed to stay out of SBGHC despite being located within the same geographic area, they must be breathing a sigh of relief.

SBGHC CEO Paul Rosebush says the application of the new formula on this group of hospitals is unfair. He has a point – SBGHC is unusual in that most small rural hospitals are usually affiliated with a larger regional hospital. This is not the case with SBGHC, something the Southwest LHIN has acknowledged. SW LHIN CEO Michael Barrett told the Owen Sound Sun Times “the important part for us is what they’re doing is the right thing by working together – four hospitals working together sharing resources, sharing administration and sharing all the things that they do, and we don’t want them to be negatively impacted by the funding formula because of it.”

SBGHC is expected to finish this year with a deficit of $125,000 on its $42.5 million budget. Cutting the two senior management positions will save $200,000 a year – money that will be needed given Rosebush is predicting the phase in of the funding formula will represent another $215,000 hit next year.

The province’s new funding formula was intended to provide logic to the way hospitals get funded. It was supposed to take into account a wide range of factors, including patterns of use and local demographics. So far it appears that well-funded hospitals in rich urban areas are benefiting, and hospitals located in parts of the province where the economy is struggling are facing significant and negative consequences. Is this really want the government had in mind?

Last spring we asked for the specific algorithm to figure out how the formula works. While we were promised it, we never got it.

Former Hamilton Niagara Haldimand Brant LHIN board member Stephen Birch has gone on record as questioning the formula, suggesting it relies too heavily on existing patterns of use and doesn’t take into account the actual health needs of communities. For example, if residents were travelling 50 km to another hospital to seek a certain procedure, that usage would count for the distant hospital, not the community to which the patient lived.

One response to “Dealing with an unfair funding formula, SBGHC cuts at the top (how novel!)

  1. I wish Bluewater Health in Sarnia would look at this novel idea. Instead recently they added a management position ( patient advocate) Nurses took responsibility to be patient advocates when I was a front-line nurse.

    Helen Havlik

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