The Health Sciences North board has approved a 2021-22 budget that will see an increase of nearly $50 million over the previous fiscal year.
At the same time, the hospital says it is in good financial shape and will not be carrying a deficit forward.
“Despite the many and continuous challenges COVID-19 has created for hospitals and the health-care sector in general, I’m happy to tell you that HSN expects to be in a balanced position from hospital operations in 2020-21,” said Dominic Giroux, CEO of HSN, in a message to staff, volunteers and board members.
“This includes receiving our share of the $1.2 billion in one-time compensation in 2020-21 to help cover historic working funds deficits for qualifying public hospitals, and losses of other forms of revenue, as announced by the province on March 22.”
While Giroux was not able to divulge the precise amounts HSN received from the province, as per ministry request, he described the funding as “good news” worthy of celebration.
On March 23, the board also approved a budget of $583.1 million for the 2021-22 fiscal year that began on April 1, up from a 2020-21 budget of $534.5 million pre-pandemic.
“The approved budget is not just forward-looking but extremely time-sensitive and includes important investments to maintain quality patient care during the pandemic,” said Giroux.
Details of the new budget include:
• $20.3 million to process 1,404 COVID-19 swabs per day in HSN’s laboratory for northeastern Ontario until March 31, avoiding the need for samples to be sent to Toronto, resulting in shorter turnaround times and accelerated contact tracing;
• $3.5 million to administer 250 COVID-19 tests per day at HSN’s assessment centre until March 31;
• $3 million in other one-time extraordinary costs until Dec. 31 due to the pandemic, for example the provincially required active point-of-entry screening;
• $7.3 million to operate 40 beds opened last month in semi-private rooms at the Daffodil Lodge. This has allowed HSN to close last month the two 12-bed overflow wards in the North and South Towers of the Ramsey Lake Health Centre where patients were sharing a single bathroom. The beds in the Daffodil Lodge provide 16 net new beds and serve as a bridge strategy to sustain and improve patient flow until the opening, by December 2022, of 52 conventional beds in the space currently occupied by the Children’s Treatment Centre.
Other highlights of the approved 2021-22 budget include:
• Full-time equivalent staff complement of 3,236, up by 142 FTE compared with the 2020-21 pre-pandemic budget, due to the opening of 40 beds at Daffodil Lodge (55 FTE) and one-time pandemic related activities (90 FTE);
• Opening this fall of the Labelle Innovation and Learning Centre, a project funded through a Ministry of Health grant of $22.8 million announced in February 2018, a $5-million gift from Marcel and Frances Labelle announced in January 2019, $500,000 from Crosstown Chevrolet, $400,000 from Bank of Montreal and $250,000 from TD Bank;
• Acquisition of a second MRI and upgrade to the current MRI, both to be operational by December 2021, at a capital cost of $7 million raised by the HSN Foundation, the NEO Kids Foundation and the Northern Cancer Foundation, including $500,000 from Carman and Sandy Fielding, $500,000 from Glencore, $500,000 from Technica Mining and $500,000 from an anonymous donor;
• Renovations of $3.7 million at Southridge Mall to relocate the Children’s Treatment Centre by September 2021. Ninety-two per cent of the capital costs are funded by the Ministry of Children, Community and Social Services through a grant secured in August 2020, with the balance of capital and increased operating costs to be covered by HSN;
• Renovations to begin in the space currently occupied by the Children’s Treatment Centre to create 52 new conventional bed spaces, expected to open by December 2022. Eight-six per cent of the capital costs are funded by the Ministry of Health through a grant secured in August 2020 and the balance of capital costs funded by the HSN Foundation. Details will be disclosed following completion of the tendering process.
HSN achieved annual surpluses from hospital operations for the last two years of $1,836,000 in 2018-19 and $338,000 in 2019-20, one year earlier than originally anticipated following the successful third-party validation of its approved 2018-19 budget. This followed annual deficits from hospital operations of $4,977,000 in 2016-2017 and $8,923,000 in 2017-2018.
“Ontario Health requires hospitals to balance their budget from hospital operations, excluding net building depreciation,” Giroux noted in his message.
Accountability agreements allow, however, for a waiver from this requirement — for example in situations of infectious disease outbreaks. “Ontario Health (North) foresees no concerns recommending to the Ministry of Health a waiver in 2021-22, as was approved (but was not required) in 2020-21,” said Giroux.
The approved HSN budget for 2021-22 forecasts a shortfall from hospital operations of $2.4 million or 0.4 per cent of total expenses, while including a $1.8-million contingency. This assumes no provincial compensation for the $5.6 million in HSN’s lost non-ministry revenues or reduced net revenue from marketed services projected in 2021-22 compared to 2019-20.
“Should provincial compensation be provided in 2021-22, as was the case for 2020-21, HSN’s budget will be balanced once again from hospital operations,” the CEO said.
The 2021 Ontario budget includes an increase in Ministry of Health expenses of 4.7 per cent or $2.8 billion over 2020-21, reaching $64 billion, with an additional $5.1 billion for the COVID-19 Health Response. This includes $778 million in additional hospital base funding, $760 million to support the ongoing operation of 3,100 hospital beds (such as the ones opened at Daffodil Lodge and the Clarion Hotel) and $300 million to support hospitals in reducing surgical wait lists.
“While it will take a few weeks to receive confirmation of our various annual ministry funding sources, we were pleased to learn last week of an $800,000 increase to our base funding for the Outpatient Geriatric Rehabilitation Program, formerly known as the Short Term Assessment and Treatment program,” said Giroux.
“We had been relying since 2018-19 on one-time funding to sustain this important service. We thank Ontario Health and the Ministry for this support.”
The CEO also thanked the HSN Foundation, NEO Kids Foundation, Northern Cancer Foundation and HSN Volunteer Association, along with their many donors and volunteers, for their support.
The budget was put together with input from administrative and medical directors, the Medical Advisory Committee, the Fiscal Advisory Committee and the Patient and Family Advisory Council.
“It allows us to continue to meet community needs, while implementing short-term creative solutions to address our bed capacity pressures since HSN was built too small,” said Giroux.
“Through this budget, we are improving access for patients of Northeastern Ontario to MRI services, advancing our academic mandate and implementing solutions to be digitally enabled.”
Giroux expressed gratitude to members of the internal budget and finance committees for their hard work and leadership on the financial plan.
“While often an under-appreciated process, it is paramount to the future success of HSN and its staff in providing the best possible care for the people we serve,” he said.
The HSNRI board is expected to approve a balanced budget at its next meeting on April 22.