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.
