By Katie Ryan
Contrary to his predictions at the end of March – that Prairie North Health Region would be faced with a $5 million shortfall – PNHR CEO David Fan was relieved to report otherwise.
During Wednesday’s Prairie North Regional Health Authority board meeting, members approved a balanced operating budget of over $223 million for the 2010-11 fiscal year. Board members also approved $4 million in capital equipment and information purchases, and $6.6 million in capital facility improvements.
“Presenting a balanced budget during a time of fiscal constraint in Saskatchewan’s health care system is a significant accomplishment,” said PNRHA chairperson Bonnie O’Grady.
Finance Minister Rod Gantefoer boosted health care funding by three per cent this year, or $127 million, to $4.2 billion, giving the regions $2.6 billion for the 2010-11 fiscal year. While PNHR is receiving about $163 million from Saskatchewan, Fan said the region couldn’t wait for Alberta’s numbers.
“It’s a risk to us not knowing what Alberta will give us, it’s not how I like to put a budget together, but last year was no different,” said Fan. “The Alberta funding for 2010-11 is still unknown to us, but we are making the projection based on a six per cent funding increase from Alberta.”
PNHR’s budget boasts a modest $6,500 surplus, but to achieve a balanced budget the health region had to make cuts, or rather “find efficiencies.”
“We have to close a $5 million gap,” said Fan, adding the budget is predicated on finding and reducing waste and inefficiency in the health care system. The region is reducing costs in three areas.
By reducing telephone costs (VOIP implementation), travel expenses and electrical consumption, finding print management savings, utility costs savings (energy efficiency upgrades) and supply cost restraints the region plans on saving $1.3 million. Through shared services initiatives including joint purchasing for supplies and insurance and sharing information technology with Prince Alberta Parkland Health Region, PNHR will save an estimated $300,000. The capital equipment and information technology budget was also reduced by $1 million and an additional $1 million is expected to be saved by reducing sick time, overtime and workplace injury costs.
“The equation is very simple, if I don’t save $1 million, it means 20 jobs. So, on the average it costs about $55,000 per full time job in our region, $1 million is about 20 jobs. Those are the hard numbers I have to work with. If I don’t manage to save that money, at the end of the day it will cost someone’s job. It’s as simple as that,” said Fan.
“If you look at our region last year it cost us about $5 million in sick time utilization, $4.5 million in overtime utilization – that is a very significant amount of money. Put in the context of our total budget, that is almost four per cent of our total operating budget. The ministry of health is compelling regional health authorities in Saskatchewan, including PN, to focus our energy in trying to reduce sick time utilization and overtime utilization.”
Prairie North’s major capital projects for 2010-11 are energy efficiency and fire safety upgrades at Battlefords Union Hospital ($2.4 million) and expansion and redevelopment of the Emergency Department and Admitting area at Lloydminster Hospital ($2.2 million). The Medical Imaging department at Lloydminster Hospital is also being redeveloped to accommodate introduction of mammography service.