Ross Memorial Hospital’s initial 2004/05 budget included a deficit of $3.3M. In July 2004, the Ministry of Health & Long Term Care (MOHLTC) allocated $1.2M in additional operating funding. This reduced the projected 2004/05 deficit to $2.1M. This week, the Ministry announced additional one time funding of $733,500. This leaves RMH with a projected $1.4M deficit for 2004/05.

The Minister of Health has also directed hospitals to be in a blanced operating position by March 31, 2006. Based on current projections, it is estmiated that the 2005/06 operating deficit would amount to $3.3 million, if measures designed to balance the budget were not implemented.

On October 29th, RMH submitted their BBP to MOHLTC indicating how they would achieve a balanced operating position.

“The Balanced Budget Plan identified some increased revenue opportunities and the reduction of expenses through a variety of cost saving measures,” said Anthony Vines, President & CEO. “The Hospital reviewed all areas of its operation to ensure that any impact on clinical programs and services would only occur after all other options were exhausted.”

The BBP process involved a number of steps to review for the recovery our operating deficit. The steps were:

1. Revenue generation 
2. Administration and support efficiencies 
3. DI, Pharmacy, Labs and Ancillary efficiencies 
4. Program Efficiencies 
5. Bed Utilization efficiencies 
6. Program Consolidation 
7. Reduction in Clinical Programs

“At this time, the Ministry has directed that we proceed with the iniatives outlined for the first 5 steps,” added Vines. “The MOHLTC have advised that no clinical service changes that adversely affect patients are to be implemented at this time.”

Step 1 includes revenue measures such as an increase in:

• Preferred accommodation rates
• Rate for Pay and Display parking (to $1.50 per hour) 
• Cafeteria revenue
• Rates charged to patients from outside the country

There will also be new charges to our patients for medication dispensed in ER (for patients to take home) and Lab tests that are not covered under OHIP. The Annualized revenue increases are estimated at $143,000.

Administration and support efficiencies (Step 2) include various regional initiatives to help achieve the necessary cost reductions such as staff scheduling, payroll, and purchasing as well as:

• Reducing services in non-patient care and non-public areas including housekeeping and internal catering
• Reducing current non-union positions
• Implementing staff generated savings reductions
• Implementing a variety of measures to reduce supplies and other expenses
• Implementing a non-selective menu for short-term patients

The Annualized savings are estimated at $892,000.

Step 3 includes miscellaneous supply and expense budget reductions in departments such as Diagnostic Imaging, Pharmacy, and the Laboratory. The Annualized savings are estimated at $107,500.

Step 4 regarding Program Efficiencies reducing overtime costs, and having the prenatal clinic and lactation consultant be provided through the Health Unit. The Annualized savings are estimated at $90,100.

Bed Utilization Improvements (Step 5) include working with our community partners, such as the Community Care Access Centre, to help reduce hospital reduce costs, as well as implementing various strategies to reduce average length of stay. The Annualized savings are estimated at $46,300.

“Steps 1-5 of our BBP represent $1.2M in savings and despite our best efforts to limit the impact on our staff, there will be some job losses as a result of these initiatives,” added Vines. “Steps 6-7 will achieve an additional $2M in savings but will have a significant and negative impact on patient care as they involve the closure of patient care beds and subsequently, a number of job losses in our patient care teams.”

“We are currently awaiting a decision from MOHLTC regarding step 6-7 which will determine if or whether, they will direct us to implement these initiatives,” said Vines. “As you may recall, we had submitted two plans to the Ministry regarding these steps. They had outlined the option of phasing in our new patient care beds related to the expansion project, rather than opening them and having to close some of them later, to balance the budget.”

RMH enjoys a well deserved reputation for financial responsibility. The most recent data available (2002/2003) indicates that the Hospital’s Cost per Weighted Case of $3,034, is $152, or 4.7%, better than expected. Also, RMH is one of only four hospitals in the province to be reocgnized as a “top performing hospital” by the province-wide Hopsital Report Card study.