Hamilton Health Sciences cutting $20M
St. Joseph’s also reducing costs by $7M
Hamilton Health Sciences is cutting $20 million in costs to balance the budget starting with the immediate departure of three senior executives.
An ongoing operational review will determine how to cope with severe overcrowding and inflation driving the annual funding shortfall.
A human resources expert is being brought in to make recommendations.
“The changes are not easy, but they are proportionate to the serious financial challenges faced by our hospital and sector,” said CEO Rob MacIsaac in a memo to all staff dated July 18.
St. Joseph’s Healthcare is also reducing costs, cutting $7 million from its roughly $550-million budget to balance the books by the end of the fiscal year March 31.
It said in a statement Wednesday it is working with the province and the Local Health Integration Network (LHIN) “to find means of ensuring adequate funding and closing that gap.”
Ontario Health Minister Dr. Eric Hoskins says he expects “service to patients will not be impacted by any budget decisions.”
“I expect LHINs and hospitals to continue to work together and balance budgets in a manner that sustains quality health services for the future,” he said in a statement.
However, HHS has already cut costs by $120 million since 2011 due to four years of provincial budget freezes followed by two years of funding increases that haven’t kept pace with inflation.
The latest round of cutbacks targets the HHS executive council, which had about 19 members in 2016 paid about $5.6 million in salaries and taxable benefits.
HHS is eliminating the role of executive vice-president, strategy and innovation held by Renato Discenza, who earned $400,321.
Also departing is Andrew Doppler, who was vice-president of human resources and made $236,291.
In addition, Frank Naus is leaving after his $273,108-a-year position as vice-president of research was combined with the chief innovation officer’s job.
“On behalf of HHS, I would like to express gratitude and thanks to each of these colleagues for their contributions to our hospital and for the achievements they have helped enable during their time with our organization,” said MacIsaac in the letter provided to The Spectator by HHS.
The HHS executive team is also losing chief operational officer and vice-president of clinical operations Brenda Flaherty, who announced in January she would retire this summer from her $438,841a-year job.
HHS already spends below the provincial average on administrative expenses, reports the Canadian Institute for Health Information. HHS spent 4.9 per cent on administration in the 2015/2016 fiscal year, which was above the national average of 4.3 per cent but below Ontario’s 5.6 per cent.
MacIsaac was unavailable for comment Wednesday.
But information provided by HHS blames the shortfall on hospital overcrowding, which is forcing it to operate 80 to 100 unfunded beds a day at Hamilton General and Juravinski hospitals.
HHS was at nearly 110 per cent occupancy on Tuesday and has averaged 105 per cent since October.
The situation is similar at St. Joseph’s, which operates 25 unfunded beds a day on average.
“Staff have been heroic in working harder and longer through these continuing pressures, always putting patient care and safety first,” St. Joseph’s said in a statement.
The province did provide some relief in the 2017 budget, giving each hospital an increase of at least 2 per cent. For HHS, it added $17.1 million to its roughly $1.2-billion budget.
Hoskins says the increase is cutting wait times in Hamilton. But HHS and St. Joseph’s say the funding boost doesn’t cover inflation.
“To meet this challenge, we are conducting a review of our operations to ensure that our structure and teams are functioning at the highest possible level, and seeking the most practical and ethical ways to address the short-and long-term sustainability of our organization,” MacIsaac said in the letter.
Mark Haley will spend six months assessing the HHS human resource department.
The former chief human resource officer at McMaster University has done reviews for the Ontario Institute for Cancer Research and Alberta Health Services.
The changes are not easy: CEO Rob MacIsaac
CUPE union members rallied at Hamilton General Hospital in February demanding health care cuts be stopped.