Budget Facts:
What is the shortfall in the 2010-11 budget year?
$17 million. This represents about 2 per cent of Hamilton Health Sciences’ operating budget.
Why do we need to take $17 million out of the budget?
· We are required by law to balance the budget, and funding from the province will not cover our operating costs next year.
· The Ontario government is experiencing its own budget woes with a $24.7 billion deficit, representing nearly 30 per cent of its 2009-10 revenue. It has indicated it will give an increase of 2 per cent or less to hospitals for the 2010-11 budget year.
· We know the cost of running HHS will rise by more than 4 per cent to cover increasing operational expenses such as supplies and equipment costs, and to honour negotiated wage increases.
Why do this now?
Our budget year is April 1 to March 31. If we are to realize cost savings in the next budget year and balance our books, it is necessary to begin the process now. It will take a number of months to put those cost savings in place, and we are obligated by union contracts to provide appropriate notice time to staff.
Who did you consult on these decisions?
Physician leaders as well as administrative leaders have been involved in making tough decisions about what services to reduce.
Will jobs be affected?
Regretfully, yes. But the impact will be mitigated by early retirements, voluntary exits and the many vacancies within the organization. We will do everything we can to retain as many staff as possible, and to support those who leave. We know from experience last year that we were able to find positions for most of the staff originally affected. (Out of the 300 staff affected, 30 left our organization involuntarily.)
The numbers of positions affected are:
Total: 130
Breakdown: 40 registered nursing positions; 64 front-line workers, including registered practical nurses and business clerks represented by the Canadian Union of Public Employees; 24 management and administrative support jobs; and two service positions represented by the Ontario Public Service Employees Union.
In addition, some vacant positions will not be filled.
What areas are targeted to achieve the $17 million savings?
Four areas will be most affected:
· Non-clinical Cost Savings – These include a wide range of initiatives such as consolidation of some support services and functions, additional supply contract savings, additional revenue from preferred accommodation, reduction in the maintenance and handling of paper charts as we move toward electronic health records, containing costs by using less expensive but equally effective drugs, and streamlining processes which allow us to work more efficiently through the use of new equipment and technology ($7.7 million saving)
· Alternate Level of Care (ALC) – Take advantage of system improvements and enhanced community-based care and reduce the number of ALC beds across HHS by 43 ($3.9 million saving)
· Surgical Services – Reduce costs across all HHS surgical services through standardization and consolidation of services, such as doing bookings at one site instead of three. Unfortunately those cost savings were not enough, so we will also have to reduce overall volume of elective surgical procedures by about 5 per cent, which translates into about 1,200 cases out of about 26,000 annual surgical procedures. ($3.3 million savings, split about 2/3 standardization and consolidation, and 1/3 service cuts.)
· Critical Care – Ensure vital and expensive critical care beds are only used for patients who absolutely need them, thereby allowing HHS to reduce the overall number of levels 2 and 3 critical care beds by 4 beds from 122 to 118. Two will come from Hamilton General, one from the McMaster site and one from Henderson Hospital. ($2.1 million saving)
When will these cuts take effect?
· Unions have already been notified of the impact on jobs, and individual staff will be notified in the coming weeks to comply with union contracts.
· HHS will continue to work with community partners to find the best placement for our ALC patients. The 43 beds now used for ALC patients will be closed gradually as each patient leaves the hospital. The goal is to have all of the beds closed before April 1, 2010.
· The reduction in surgical services will take effect April 1, 2010.
Why make the cuts to clinical services?
Last year HHS conducted an exhaustive benchmarking process that allowed us to identify and implement a wide range of non-clinical cost-saving strategies.
We’re now operating at a very high level of efficiency. We again searched hard for further cost-saving measures and found some, but not enough to cover the shortfall.
We have made the choices that will help us to continue to care for those who need urgent care and treatment, or the specialized services only our hospital provides.
Why choose to eliminate ALC beds?
· Hospitals are intended for acute care patients. Alternate level of care (ALC) patients no longer need acute care and are best served in other settings, such as assisted living, home care, long-term care facilities and palliative care settings.
· The provincial target for the percentage of acute care beds occupied by ALC patients is 14 per cent. Last year, Hamilton Health Sciences’ rate of ALC patients in acute beds was approximately 22 per cent. It has dropped in recent months to 15 per cent across HHS.
· It is important for HHS to work with our community partners to maintain the ALC rate at 14 per cent at all HHS sites.
Will surgical wait times grow?
Unfortunately, for some, yes.
There is a commitment to provide emergency and urgent care for patients. Some delays may occur in less urgent surgeries.
Will there be any delays for those patients who need priority care?
We believe, and are hopeful, that this change will not affect those patients, but we will continue to monitor the situation with vigilance.
How can we manage with four fewer critical care beds?
· We determined this is possible by looking at the data of how these beds are utilized, the occupancy rates, the types of patients who are in those beds, and the holdover days - days when a patient doesn’t need an ICU bed and could be moved to a ward bed.
· Significant practice changes that make some surgeries less invasive have reduced the need for some ICU beds.
· We can utilize our beds more effectively so that those patients who do not require ventilation are not placed in ICU beds, but in monitored “step-down” beds.
How can redevelopment at hospitals continue when we’re reducing services?
Our redevelopment projects are funded separately from operational activities.
These projects are vital to the future of our hospital and local health care system.