Printer Friendly

Health care in crisis: northern Ontario's hospitals operating in the red.

The following is the first installment of a three-part series which will put Ontario's health-care sector under the microscope. This month Northern Ontario Business staff writer Chris Krejlgaard reports on the sector's poor financial health. Next month Krejlgaard will examine the reasons for the funding shortfall, and in January he will take a look at some potential solutions to the crisis.

There are fears that Canada's health-care system is ready to be plugged into a life-support system.

Touted as being a cornerstone of Confederation or a major thread of Canadian unity, the system is in trouble.

Costs are up, but government funding is down. There are reportedly too many doctors in the province, but not enough in Northern Ontario. Meanwhile, patients with special needs are forced to travel great distances to receive treatment - sometimes as far away as the United States.

An aging population in the north is presenting new challenges for the health-care industry. Nursing homes and homes for the aged are faced with increased demands, while hospitals must expand or change their services to meet the needs of older patients.

The provincial Ministry of Community and Social Services recently announced $37.9 million in additional funding for the province's nursing homes and homes for the aged. However, it is unlikely that Ontario's hospitals will receive the same help in their struggle with a tide of red ink.


The four hospitals contacted by Northern Ontario Business all reported that they are operating in the red. Their administrators attribute the losses to the nurses' contract signed earlier this year, other labor agreements and legislated costs such as the Canada Pension Plan and unemployment insurance.

Some administrators are now concerned about the impact that pay equity will have on their budgets.

Dennis Timbrell, chairman of the Ontario Hospital Association, predicts that the program will add $500 million to the total operating deficit of Ontario's hospitals.

North Bay Civic Hospital is already heading towards an operating budget shortfall of $1 million for this fiscal year. Sault Ste. Marie General Hospital has budgeted a $500,000 shortfall, while McKellar General Hospital in Thunder Bay expects be $2.4-million short.

However, such financial problems are not restricted to larger hospitals.

For example, West Nipissing General Hospital in Sturgeon Falls is laboring under a $483,000 deficit. Hospital officials are contemplating closing as many as eight beds - a move which could result in the layoff of four full- and four part-time nurses.

While most of the costs are fixed because they relate to staffing, each hospital is doing what it can to trim its budget.

Mike Barkwell, a spokesman for North Bay Civic Hospital, says the hospital has reduced spending on staff travel and professional development, and it is limiting the use of outside contractors for building maintenance and repair.

Barkwell indicates that most hospitals are reviewing their procurement methods and are attempting to strike better deals with suppliers.

"They (suppliers) are cutting their profit margins, and we are trying to get them to pass the savings along to us," he says.

Barkwell reports that the North Bay hospital has also raised its fees for private- and semi-private rooms.

However, Roland Saddington, executive director of McKellar General Hospital in Thunder Bay, points out that revenue from the fees charged for rooms, technical services, out-patient services and parking only account for between 13 and 16 per cent of a hospital's total funding. The remainder comes from the province.

Saddington rules out the possibility of cutting services as a cost-saving measure.

"The problem is that in northwestern Ontario the health-care system is pretty lean to begin with, so if we alter our services it has an impact on other hospitals," he says.


In June a group of seven medical and consumer associations calling itself HEAL (Health Action Committee) released a report which pointed to the federal government's shrinking contributions to the health-care system following the passing of Bill C-69 and the 1991/92 federal budget.

According to the report, the federal government's cash transfers to the provinces for health care decreased by about $3.3 billion this year. A further cut of double that amount is expected by 1995.

According to Dennis Timbrell, chairman of the Ontario Hospital Association, the province is now considering putting a cap on the amount of funding it provides to hospitals. Some hospital officials say that such a move would force them to make serious decisions regarding the services they offer.

"We'd have to make some cutbacks, and since about 75 per cent of our budget is related to salaries, most of the cuts would be people," says Jerry Betik, executive director of Sault Ste. Marie General Hospital.

However, a spokesman for the provincial Health Ministry says Timbrell's warning was merely speculation.

"There has been no announcement of any cuts," states Paul Howard, a communications adviser with the minister's office in Toronto. "But you have to be concerned about the escalating costs, especially when you consider that one-third of all provincial expenditures is spent on health care.

"It's clear that that kind of growth can't continue."
COPYRIGHT 1991 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:part 1; health-care system in financial trouble
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Nov 1, 1991
Previous Article:Downtown Timmins enjoying plenty of construction activity.
Next Article:Employment barriers will be removed, says minister.

Related Articles
Health care a major contributor to local economies.
Hospital funding falls short: legislation, demands of an aging population drive up costs.
Consultant predicts downsizing will occur over next two years.
Hospitals sharing services in order to trim their costs.
Hospital officials concerned restructuring lacks planning.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters