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Government Announces a One-Time $200 Million Transition Fund for Ontario
Hospitals
TORONTO, Jan. 17 /CNW/ - As the McGuinty government continues to work co-
operatively with Ontario's hospitals on an 18-month plan to balance their
budgets, Minister of Health and Long-Term Care George Smitherman today
announced that 73 hospitals will be in balance by March 31st, 2006 and
introduced a $200 million one-time transitional fund to assist hospitals to
become more efficient and improve their operations.
"We asked our hospitals to do a lot of hard work and make tough
decisions," said Minister of Health and Long-Term Care George Smitherman.
"Hospitals have stepped up to the plate. We're going to reward that, and help
them with the changes they are making. And we're going to continue to work
intensively with the hospitals that still face challenges, to ensure they find
all available savings and efficiencies they need to balance their budgets."
The ministry and hospitals have just completed the first phase of a
process begun in October 2004 to balance hospital budgets by the end of March
2006. Hospitals have identified $174 million in savings in 2004/2005 and there
will be hundreds of millions in additional savings on top of this in
2005/2006. Hospitals found savings in areas including:
- Consolidating non-clinical services
- Reducing administrative, nursing and non-nursing clinical Full Time
Equivalent (FTE) jobs through a combination of reducing overtime, sick
time, casual employment, as well as early retirement, attrition and
direct layoffs
- Sharing services including payroll and laundry across different
hospital sites
- Curbing spending on management and administration
- Moving some non-acute services into the community
- Increasing revenue, e.g., cafeteria and parking
"Our government has asked hospitals to change the way they operate, to
reduce their spending on administration and focus more spending on direct
patient care," said Smitherman. "We are going to help them with the up front
costs of making these important changes."
The $200 million one-time transition fund includes:
- $91 million that all hospitals can apply for to cover severance costs
- $65 million to reward hospitals who have financial difficulties but
are working to become more efficient
- $5 million to reward balanced hospitals, including the most efficient
"pacesetter" hospitals
- $20 million bridge funding to assist hospitals that need significant
assistance to bring their budgets under control
- $19 million for small rural hospitals that have small operating bases
and difficulty integrating services with other providers because of
their isolation
"Ontario's hospitals are already the most efficient in Canada and have
done an incredible amount of work to achieve additional savings in non-
clinical areas as they move to balance their budgets at the end of 2005/2006,"
said Hilary Short, President and CEO of the Ontario Hospital Association.
"Today's transitional funding announcement is a welcome first step. Hospitals
and the government have much work to do in the time ahead to protect patient
care and we are looking forward to working together on the shared challenge."
The hospital BBP process is part of the McGuinty government's
comprehensive plan to improve Ontario's health care system that includes a
commitment to hiring 8,000 new nurses across the health system, and an
unprecedented investment in community-based health care to ease funding
pressures on hospitals.
"This truly is a collaborative process," said St. Joseph's Hospital CEO
Ken Deane. "For the first time we engaged in a process that involved
hospitals, ministry staff, and peers in hospitals and community agencies. The
goal was to find ways to address operating pressures and result in better
decisions that will benefit patients now and for years to come."
"The government's efforts to manage costs in the acute care sector are
key to health care reform," said Kathleen MacMillan, Dean, School of Health
Sciences, Humber Institute of Technology & Advanced Learning. "This will allow
government to invest in areas like primary care and public health, and in
post-secondary education to produce the health providers of tomorrow."
This news release, along with other media materials, such as matte
stories and audio clips, on other subjects, are available on our website at:
http://www.health.gov.on.ca under the News Media section.
For more information on achievements in health care, visit:
www.resultsontario.gov.on.ca.
Version française disponible
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For further information: Members of the media: Eva Lannon, Minister's Office, (416) 327-4320; Dan Strasbourg, Ministry of Health and Long-Term Care, (416) 314-6197; Members of the general public: (416) 327-4327 or (800) 268-1154
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