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Hospitals struggle with provincial mandate to balance books

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From the Toronto Star

Sick Kids hospital faces $45M cut
Red ink means longer waiting lists for children’s services

Canada continues to struggle with Health Care Costs and Provincial Level Deficits

Sick Kids hospital faces $45M cut
Red ink means longer waiting lists for children’s services

Hospitals struggle with provincial mandate to balance books


Longer waits and reduced patient care loom at the Hospital For Sick Children as it faces a budget trim of $45 million.

“Quite frankly, there is no way we can find enough in administration reductions to offset $45 million,” said Cyndy DeGiusti, vice-president of child advocacy for the hospital, which received $324,684,000 in funding this year from the Ontario government.

“Inevitably, it’ll impact patient care and at this point, we are assuming quite a significant impact,” DeGiusti said.

Ontario’s health ministry has asked all of the province’s hospitals to balance their books by next year. If they project a deficit, they are being asked to submit an accountability plan detailing the cuts they would need to break even.

But inflation, rising drug prices and higher health care labour costs means tough choices are going to have to be made, senior hospital officials throughout Toronto say.

For the last few months, Ontario’s hospitals have been in a war of words with the ministry of health concerning funding.

In the past, the provincial government has bailed out some hospitals unable to balance their books. The Ontario Hospital Association says the province’s hospitals are facing a $600 million funding gap this year, a number that could be as high as $1 billion next year.

The OHA’s Steve Orsini says the difficulty for hospitals is that they have to take steps this year to balance budgets for next year. That means they’ve got to begin looking at making program reductions this year to be able to balance their budgets next year. “That is the challenge,” he said.

Hospitals want to collaborate, not fight, with the government, he said.

“The OHA is working with its members to speak out and protect patient care,” he said. “We believe the government and the hospitals want to work together to protect patient care.”

Health ministry spokesperson Dan Strasbourg said a three-step process is in place to help hospitals resolve their financial issues.

The first step is asking the hospitals to provide a plan to balance budgets by the end of 2005/2006.

“If hospitals experience difficulties, we’ll set up special turnaround teams made up of ministry officials, hospital executives and outside experts and together they’ll work on a plan to address the challenges specific to that hospital,” Strasbourg said.

If there are still problems, the third step will be a peer review process involving executives from well-performing hospitals. “They’ll be available to share their knowledge and expertise in balancing hospital budgets without impacting patient care.

“Let’s not forget all the investments we are doing in other areas to help relieve the pressures that in many cases has caused financial hardships for the hospitals,” Strasbourg said.

“We are investing more in homecare, in community care, in priority areas so people don’t have to wait so long for treatment. We want the entire health-care system to work better together.”

Bloorview MacMillan Children’s Centre, the largest rehabilitation hospital for children in Canada, is looking at a projected deficit of $750,000 on a total budget of $58 million for this fiscal year and growing to about $1.2 million for 2005/2006.

Budgetary cuts at both Sick Kids and Bloorview will mean longer waits for children’s services, senior staff at both hospitals say.

“I can’t imagine how we’ll reduce patient care areas without having an impact on waiting lists,” said DeGiusti.

Sick Kids, one of the largest pediatric academic health centres around the globe, is known for its cardiac care, brain tumour and genetics research, and numerous clinics dealing with everything from diabetes, ear nose and throat problems to fractures.

Sick Kids’ board of directors will be meeting to discuss their plan on Oct. 21. They have asked for and been given an extension until Oct. 29 to submit their report to the province.

“Everybody is working away at this,” DeGiusti said.

“When the board meeting is over next week, we’ll have a better sense of details.”

For the 2004-2005 year, Sick Kids’ deficit forecast is $30 million, which climbs to $45 million the following year.

The hospital had a third party come in to look at operations and they found the hospital’s costs rise 9 per cent a year largely due to inflation, medical supplies and salary costs.

“Because we are in a children’s hospital we have more staff than in adult hospitals,” DeGiusti said.

Earlier this week, the board of directors at Bloorview met to go over the report they’d be submitting to the government. Bloorview, operating out of sites at Bayview and Eglinton Aves., and at Leslie St. and SheppardAve., is the largest children’s rehabilitation hospital in Canada.

The centre is already operating as efficiently as it can, says president Sheila Jarvis. Besides reducing costs in food services and housekeeping, the centre is forced to look elsewhere to trim. To do this, they are bringing in consultants to help do things like consolidate patient scheduling.

“The tough part is service consolidation,” she said.

One of the hardest calls may be reducing respite services for families. Currently, families caring for children with chronic conditions can send them to Bloorview for temporary care so they can have a break at home.

Reducing outpatient services will also be hard. For example, cuts here will mean children with cerebral palsy will have to wait longer for assessment and treatment.

“We see only the most complex care patients,” she said. “Increasing wait times will be difficult.”

Construction is currently taking place to consolidate Bloorview into one state-of-the-art hospital site at Bayview and Eglinton

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