Ontario hospitals cutting costs amid losses, but say ‘there are no easy options left’
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Ontario hospitals have already begun to make some “low-risk” cuts in the face of rising losses, but the head of their association says those alone won’t ease hospitals’ financial strain, warning that there are no easy options left.
The Ontario Hospital Association told the provincial government in its submission ahead of the spring budget that the sector faces a $1 billion structural deficit and needs not only more money this year, but also a predictable, multi-year funding plan.
“Worryingly, our financial reserves — also called working capital — which are really meant for long-term, capital-related expenses like medical and diagnostic equipment or refurbishing and rebuilding hospitals … those working capital dollars are actually being used to pay for operating expenses, and that’s indicative of a sector under real, severe financial (pressure),” Anthony Dale, the association’s president and CEO, said in an interview.
If the province is to truly meet the full operational needs of the hospital sector, it will need to add about $2.7 billion, Dale said, but the hospital association realizes that due to other budgetary constraints caused by the trade war with the United States, the province is not in a position to offer that amount.
The Health Ministry last year asked hospitals to create a three-year plan to balance their budgets, with an expectation of a two percent increase in annual funding. This is half the increase they received last year.
Hospitals were told to immediately implement whatever low-risk cost-saving measures they could, and Dale said that was already happening. They cited examples such as refusing to fill vacant positions and transferring work between professions, including bringing in registered practical nurses to perform tasks previously performed by registered nurses.
A new report shows Ontario hospitals spent $9.2 billion on private, for-profit nursing and staffing agencies over the past decade, a figure that is expected to double between 2013 and 2023. Critics of private agencies urged Ontario to phase them out, calling them a ‘band-aid on a sore wound’.
“The last thing we want to do is start examining other areas where spending cuts might be considered and … there are really only a few areas left,” Dale said.
He said this includes cutting spending in core inpatient services, closing non-core inpatient services and consolidating programs.
“There’s no escaping the fact that there are no easy alternatives left,” Dale said.
Lee Fairclough, the Liberals’ hospitals critic and former hospital chairman, said the “low-risk” measures are likely already having some impact on patients.
“The example of holding vacancies and ultimately eliminating them is really hospitals operating without the full staffing complement that you ideally should have,” he said.
“It means it gives you a lot less flexibility if you have big surges. It means people will wait longer.”
A spokesperson for Health Minister Sylvia Jones said the government is working with hospitals to create long-term sustainability plans that ensure high-quality care, and that the cost-saving moves being made by hospitals are not being seen as cuts, but as “changes”.
“Clearly, the changes currently being made by hospitals address non-clinical, administrative functions to improve efficiency and connect more people to care when they need it — they do not impact patient care,” Emma Popovic wrote in a statement.
