Tag Archives: Plexxus

$30 million back on hospital books as part of new purchasing model

At yesterday’s Central East LHIN The Scarborough Hospital (TSH) was asked to treat $2 million it thought it had coming back from Plexxus as “bad debt.”

Plexxus is a not-for-profit owned by 11 GTA hospitals, including TSH. A group-purchasing company, it uses the size of the 11 hospitals to negotiate better pricing on goods and services used by these hospitals. Many of the people who do purchasing for Plexxus are still employed by the 11 hospitals, some of them members of OPSEU.

As one of the 11, the question is, how could TSH write off bad debt essentially owed to itself, especially when the decisions on how this money got stranded was made by the group of hospitals?

David Yundt, President and CEO of Plexxus says he prefers not to call it bad debt, which suggests Plexxus is not paying back what it owes to its member hospitals.

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$2 million in bad debt adds to woes of The Scarborough Hospital

Last week The Scarborough Hospital announced it was eliminating 98 positions as part of its efforts reduce a $17 million annual deficit. On top of that, the hospital has found itself saddled with $2 million in bad debt related to its participation in Plexxus, a joint-purchasing company it shares with 10 other GTA hospitals. The hospital is presently seeking to amortize that bad debt over a longer period of time.

Eliminating the deficit at a time of base funding freezes has been particularly painful. Last year The Scarborough Hospital was spurned as a potential suitor in a proposed merger with the Toronto East General Hospital. More recently the LHIN stepped in amid community uproar over a plan to move all maternal and newborn programs to the Birchmount campus of The Scarborough Hospital. The initial plan also called for Birchmount to become a centre for day surgery, leaving more complex procedures to the main campus.

While The Scarborough Hospital is still implementing 111 of 139 proposals to reduce costs – resulting in $8 million in annual savings – changes in service delivery require further community consultation and discussion between health service providers. To that end, the Central East LHIN told The Scarborough Hospital to work with the Rouge Valley Health System to look more broadly at service delivery in the eastern edge of the City of Toronto.

What these service changes will look like is anybody’s guess at this point.

The two hospitals are appointing representatives to a joint leadership committee that will look at how services are delivered in the Scarborough region. That committee will also include professional and community representation.

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