Download Budget Facts - Hamilton Health Sciences

Budget Facts:
What is the shortfall in the 2010-11 budget year?
$17 million. This represents about 2 per cent of Hamilton Health Sciences’ operating
budget.
Why do we need to take $17 million out of the budget?
 We are required by law to balance the budget, and funding from the province will
not cover our operating costs next year.
 The Ontario government is experiencing its own budget woes with a $24.7 billion
deficit, representing nearly 30 per cent of its 2009-10 revenue. It has indicated it
will give an increase of 2 per cent or less to hospitals for the 2010-11 budget year.
 We know the cost of running HHS will rise by more than 4 per cent to cover
increasing operational expenses such as supplies and equipment costs, and to
honour negotiated wage increases.
Why do this now?
Our budget year is April 1 to March 31. If we are to realize cost savings in the next
budget year and balance our books, it is necessary to begin the process now. It will take a
number of months to put those cost savings in place, and we are obligated by union
contracts to provide appropriate notice time to staff.
Who did you consult on these decisions?
Physician leaders as well as administrative leaders have been involved in making tough
decisions about what services to reduce.
Will jobs be affected?
Regretfully, yes. But the impact will be mitigated by early retirements, voluntary exits
and the many vacancies within the organization. We will do everything we can to retain
as many staff as possible, and to support those who leave. We know from experience last
year that we were able to find positions for most of the staff originally affected. (Out of
the 300 staff affected, 30 left our organization involuntarily.)
The numbers of positions affected are:
Total: 130
Breakdown: 40 registered nursing positions; 64 front-line workers, including registered
practical nurses and business clerks represented by the Canadian Union of Public
Employees; 24 management and administrative support jobs; and two service positions
represented by the Ontario Public Service Employees Union.
In addition, some vacant positions will not be filled.
What areas are targeted to achieve the $17 million savings?
Four areas will be most affected:
 Non-clinical Cost Savings – These include a wide range of initiatives such as
consolidation of some support services and functions, additional supply contract
savings, additional revenue from preferred accommodation, reduction in the
maintenance and handling of paper charts as we move toward electronic health
records, containing costs by using less expensive but equally effective drugs, and
streamlining processes which allow us to work more efficiently through the use of
new equipment and technology ($7.7 million saving)

Alternate Level of Care (ALC) – Take advantage of system improvements and
enhanced community-based care and reduce the number of ALC beds across HHS
by 43 ($3.9 million saving)

Surgical Services – Reduce costs across all HHS surgical services through
standardization and consolidation of services, such as doing bookings at one site
instead of three. Unfortunately those cost savings were not enough, so we will
also have to reduce overall volume of elective surgical procedures by about 5 per
cent, which translates into about 1,200 cases out of about 26,000 annual surgical
procedures. ($3.3 million savings, split about 2/3 standardization and
consolidation, and 1/3 service cuts.)

Critical Care – Ensure vital and expensive critical care beds are only used for
patients who absolutely need them, thereby allowing HHS to reduce the overall
number of levels 2 and 3 critical care beds by 4 beds from 122 to 118. Two will
come from Hamilton General, one from the McMaster site and one from
Henderson Hospital. ($2.1 million saving)
When will these cuts take effect?
 Unions have already been notified of the impact on jobs, and individual staff will
be notified in the coming weeks to comply with union contracts.
 HHS will continue to work with community partners to find the best placement
for our ALC patients. The 43 beds now used for ALC patients will be closed
gradually as each patient leaves the hospital. The goal is to have all of the beds
closed before April 1, 2010.
 The reduction in surgical services will take effect April 1, 2010.
Why make the cuts to clinical services?
Last year HHS conducted an exhaustive benchmarking process that allowed us to identify
and implement a wide range of non-clinical cost-saving strategies.
We’re now operating at a very high level of efficiency. We again searched hard for
further cost-saving measures and found some, but not enough to cover the shortfall.
We have made the choices that will help us to continue to care for those who need urgent
care and treatment, or the specialized services only our hospital provides.
Why choose to eliminate ALC beds?
 Hospitals are intended for acute care patients. Alternate level of care (ALC)
patients no longer need acute care and are best served in other settings, such as
assisted living, home care, long-term care facilities and palliative care settings.


The provincial target for the percentage of acute care beds occupied by ALC
patients is 14 per cent. Last year, Hamilton Health Sciences’ rate of ALC patients
in acute beds was approximately 22 per cent. It has dropped in recent months to
15 per cent across HHS.
It is important for HHS to work with our community partners to maintain the
ALC rate at 14 per cent at all HHS sites.
Will surgical wait times grow?
Unfortunately, for some, yes.
There is a commitment to provide emergency and urgent care for patients. Some delays
may occur in less urgent surgeries.
Will there be any delays for those patients who need priority care?
We believe, and are hopeful, that this change will not affect those patients, but we will
continue to monitor the situation with vigilance.
How can we manage with four fewer critical care beds?
 We determined this is possible by looking at the data of how these beds are
utilized, the occupancy rates, the types of patients who are in those beds, and the
holdover days - days when a patient doesn’t need an ICU bed and could be moved
to a ward bed.
 Significant practice changes that make some surgeries less invasive have reduced
the need for some ICU beds.
 We can utilize our beds more effectively so that those patients who do not require
ventilation are not placed in ICU beds, but in monitored “step-down” beds.
How can redevelopment at hospitals continue when we’re reducing services?
Our redevelopment projects are funded separately from operational activities.
These projects are vital to the future of our hospital and local health care system.