Former OHA President Tom Closson speaking at Longwood’s Breakfast With The Chiefs June 10.
The relentless pursuit of efficiency may be coming to an end for Ontario hospitals.
As former OHA chief Tom Closson said today at Longwood’s Breakfast With The Chiefs forum, year after year it gets more difficult for hospital CEOs to balance their budgets — “you can’t cut the same thing as you cut last year.”
This hardly means that hospitals are about to enter a new era of sustainable funding, especially in Ontario where public health care spending is already the lowest per capita of any Canadian province. Closson says Ontario hospitals also have the lowest worked hours per weighted case, the shortest length of stay in acute care, and the fewest beds per capita.
Have we found bottom yet?
Closson says we still have to reduce costs “because we have to.” Instead of seeking more efficiency, a new approach is needed.
Closson was joined by the Hay Group’s Mark Hundert and Chris Helyar to preach the new orthodoxy of appropriateness and to suggest that the HBAM (Hospital Based Allocation Model) of funding needs fixing.
If there has been one good news story this summer it’s this: CEO Paul Rosebush sent a memo to all physicians and staff at his South Bruce Grey Health Centre in July telling them that the hospital’s fiscal shortfall for this coming year has shrunk from $700,000 to $300,000.
This may not sound like a big deal, but SBGHC operates on a modest budget of about $42 million.
Small rural hospitals weren’t supposed to be affected by the introduction of the new hospital funding formula last year, but the four small hospitals that make up SBGHC were big enough as a single corporate entity to qualify. That meant a drop in base funding — an especially tough pill to swallow while hospitals are under a base funding freeze for the second year in a row.
Rosebush had appealed to the South West Local Health Integration Network (SW LHIN) that this was unfair. By virtue of working together the four hospitals were being penalized under the formula.
The SW LHIN listened and has partially mitigated the hospital’s circumstances for now. There is a promise to revisit SGBHC’s funding for future years.
When the province introduced its new hospital funding formula, it specifically highlighted its intention not to subject small rural hospitals to it.
Evidently when the Minister meant small, she meant very small.
South Bruce Grey Health Centre is reporting that the new hospital funding formula means they will be facing a $622,000 shortfall next year.
SBGHC is made up of four very small hospital sites in Walkerton, Durham, Kincardine and Chesley. With four hospitals, it’s total budget is about $41.7 million, of which $29.5 million comes directly from the Ministry of Health (another $6.3 million comes in MOH physician funding).
The community makes the argument that had these four hospitals not been amalgamated, they would not be subject to this punitive funding formula.
In March Deb Matthews told the media that 36 hospitals will have their budgets cut by as much as three per cent when this year’s new hospital funding formula rolls out.
This week the Ministry held a technical briefing and remarkably told its labour stakeholders that in year one about 10 per cent of hospitals will see increases in funding no greater than 1.8 per cent and decreases no greater than 1.5 per cent.
They also state that 90 per cent of hospitals will see less than a one per cent difference in their budget allocation, plus or minus.
Back in March 91 hospitals were expected to “benefit” from the new formula. Now the Ministry says only 90 hospitals will participate – small rural and northern hospitals being excluded from the Health Based Activity Model (HBAM).
That’s a big difference.
The McGuinty government says they are committed to implementing about half of the recommendations from the Drummond Commission on the Reform of Public Services.
The other half will be subject to study (read: likely to drift away into the ether).
In health care most of that should be relatively easy given a significant number of Drummond’s 105 recommendations are already in the McGuinty government’s plan, from the implementation of a new funding formula for hospitals (Health-Based Allocation Model) to his endorsement of the government’s sketchy mental health strategy.
Given the recommendations are intended to be implemented over the next four years, it may take some time to ultimately figure out what is really in and out.