At their November 21 meeting, Meaford council was told that the Grey Bruce Health Services (GBHS) is facing the prospect of $17 million annual deficits by 2019/20 unless significant changes are made to its cost structure, and that could mean bad news for rural hospitals like Meaford's.
Lance Thurston, GBHS President and CEO, told council that the problems began with changes to the provincial funding formula that hit the GBHS particularly hard.
“We're planning for the worst, but we're hoping for the best,” Thurston told council. “We have been advocating, very quietly, very professionally, with the LHIN (Local Health Integration Network), with the Ministry of Health, with our other partners, to try and get the word out that we are particularly hard hit. The funding which changed back in 2014-15, was reset last year, and that reset hit us.”
Thurston told council that of the 32 hospital corporations negatively impacted by the funding changes, five were considered to have had a significant impact, with the GBHS topping that list.
In the six years prior to the changes to the provincial funding formula, the GBHS saw surpluses each year totalling $12.7 million, however this year a $4.5 million deficit is expected, and deficits of $7 million next year, $12 million in 2018/19, and $17 million in 2019/20 are being forecast by the GBHS.
“So we've gone back to the ministry and have said 'do you appreciate what you're doing to us?' They do, they've acknowledged it, the ministers have acknowledged it, deputy ministers have acknowledged it, all publicly. Ministry staff acknowledge it, and have said they are working on trying to figure out a solution,” Thurston told council.
While the GBHS will have a $4.5 million deficit at the end of this year, Thurston said that reserve funds will be used to balance the budget, noting that in spite of the financial crisis that has been created in the wake of provincial funding changes, the GBHS is one of just a few hospital corporations in the province with some money in the bank.
“That has an implication,” Thurston said of the plan to use reserve funds to balance this year's budget. “That money is there for future capital, so for this funding to help sustain operations, it's going to hurt our capital program down the road.”
Thurston said that in addition to lobbying government agencies, the GBHS board is working to find areas to cut costs in order to create a sustainable organization by 2020, which will require a reduction in annual expenditures of $17 million.
Among the cost-cutting measures being considered by the board are the consolidation of surgical services to the Owen Sound hospital, which would close operating rooms in rural hospitals including Meaford's, reviewing transportation costs, reviewing physician billing and cost recovery, and reviewing IT costs.
“Revenues have got to somehow match reasonable expenditures,” Thurston told council. “The way it is now is not sustainable, and this is for virtually every hospital in Ontario, not just us. If you're in an urban centre with a growth population, a single site, the funding formula is your friend. But for us, with a stagnant population, it's not working for us.”
Thurston noted that the GBHS believes that they could generate an additional $500,000 per year by reviewing physician billing and payments from OHIP.
“We recoup money from OHIP. When doctors submit bills, OHIP sends us money, and for years we haven't been checking up on OHIP (to ensure) they are sending us the right amount of money based on what was submitted,” Thurston told council. “So we've started doing that just this past three months, and the amount of money that we've been leaving on the table is extraordinary. We think we can get $500,000 in additional revenues just by challenging OHIP on its billing.”
Councillor Mike Poetker asked Thurston if the Meaford hospital is about to lose its operating rooms.
“The board is receiving that option on Wednesday (November 23), and they are going to consider it, but they won't be making a decision until December 14 as to what to consult the community on, and they will make a decision at the end of February,” Thurston told council.
Mayor Barb Clumpus noted that Meaford already has been experiencing difficulty in attracting new physicians to the municipality, and she wondered how much more difficult it would be to bring doctors to Meaford if the local hospital loses its operating rooms.
“We as a community have struggled, and are still struggling to attract physicians. My concern would be the impact of losing our operating rooms on our ability to attract physicians. It's a huge concern,” Clumpus said.
Thurston told the mayor that the GBHS shares Meaford's concerns.
“We share it, and it's not to be lightly dismissed. For sure, that would be an impact that the board will be fully apprised of,” Thurston assured the mayor.
The first set of potential cost-cutting measures was presented to the GBHS board on Wednesday of this week, and public consultation will take place in January and February before final recommendations are made to the board in late February, after which some decisions are expected to be announced.