Each year, MAHC prepares an operating budget for the upcoming fiscal year, and each year since 2012 that budget is prepared knowing that there will be no increase in funding to hospitals despite inflationary pressures we experience with salaries and wages, the cost of drugs and other supplies, and even heat and hydro. This is something that I refer to as deficit funding. We are expected to absorb all cost increases and produce a balanced budget. This means that for an organization the size of MAHC we have to absorb upwards of $1 million in cost increases annually or find cost-saving initiatives to allow us to balance the budget each year.
With great difficulty, MAHC has balanced the annual budget for the past five consecutive years by implementing unpopular changes. We have adjusted operations to eliminate redundancy and to match services to demand. We have reduced beds in both acute and complex continuing care. However a point is reached when there are no longer any cost-saving initiatives, and no longer any ability to absorb cost increases. It appears we have hit that wall, as many other hospitals throughout Ontario are also experiencing.
As custodians of public money, it is incumbent on us to always look for efficiencies, and to match the performance of our peer hospitals. We need to look carefully at our operations to understand what services we can continue to provide and how those services may be reconfigured so that we can live within the province’s funding formula.
So as we faced yet another budgeted deficit in the 2015-16 fiscal year, MAHC brought in an outside consultant with expertise in health care operations to take a fresh look at the efficiency of two of our care areas and recommend ways we can operate more efficiently.
The Hay Group’s operational assessment reviewed our Surgical Services and Emergency Departments at both sites because we recognized the costs of running these two departments was higher than the funding we receive from the province to operate these services. The report includes various recommendations – some that pertain to staffing models, and others that suggest restructuring services. I want to assure you that no decisions have been made regarding the recommendations in the Hay report.
The report is directional in that it points us to areas that we can further investigate the feasibility and appropriateness of implementing the Hay recommendations to achieve cost savings. Our frontline staff and physicians in the Surgical Services and Emergency Departments are reviewing and evaluating the recommendations and investigating other strategies that may generate efficiencies. I recognize that some recommendations may be concerning. These are highly complex and difficult issues that can potentially affect our services and thus impact our patients, communities, physicians and staff. It is not our intention to create alarm in the community, but this is the harsh reality of where we are. MAHC has reached the point where service consolidation may be considered if the budget is to be balanced. Please keep in mind that consolidating services at one site or the other to concentrate volumes and maximize our efficiency is not new at MAHC. There are a number of services that for years have been available at only one of MAHC’s sites, such as urology and dialysis. There are also certain diagnostic tests that are performed at only one site because it is simply not practical to have two of every piece of equipment. Service consolidations may be small or large, but the goal is the same; to create one combined unit that is efficient and cost effective and that provides quality care. Service consolidation is not about eliminating services; it is about retaining services in Muskoka and delivering them in a different way.