Cuts to Hospital Spending

There is nothing more frustrating than picking up the newspaper and reading that the government has slashed funding to the hospitals and, consequently, hospital administration has to “find” savings.  Recently, our local paper ran an article that stated that our hospital receives 93 per cent of its funding from the government and, that in order to balance it’s books, the hospital would be cutting jobs.  “In a release issued late Wednesday afternoon, the hospital said it would “minimize the impact on staff by taking advantage of existing vacancies, early retirements and reassignments where possible,” with some of the full-time-equivalent reductions accomplished through a reduction in hours” and that “by ensuring a balanced budget, the hospital can invest in infrastructure such as “making a big step forward” by moving to an electronic medical-record system that “will go live later this year.” (Source:

So here’s my problem with this.  Whether the hospital achieves the job loss through attrition or reducing the number of part time contracts it still means that positions are lost.  The reality is that now 90 people will be expected to do the job of 100 and it will almost always be front line workers who lose their jobs.  And when the next reduction comes in, it will be these poor folks who will be scrutinized and reduced again.  In the quote above it strikes me as odd that the CEO would state that they would minimize the impact on staff – and doesn’t address the impact on the client –  you and me, the general public.

The other thing I find quite amusing is the salary disclosure for Ontario’s Hospital Administrators.  In the last couple of years, hospital administrators have been chastised for not correctly publishing their salaries.  Recommendations have been made that a proper disclosure should be given to the public, but it does not appear judging by the numbers published that these recommendations have been fully implemented.  In a report from 2011 (the “Manley Report”) prepared for the Ontario government, the following recommendation was made:

“Full Public Disclosure of Hospital Compensation and Performance

The public has a right to information about hospital executive compensation and performance. The information that is currently available under Ontario’s Public Sector Salary Act (the so-called “Sunshine List”) has limitations, including:

  • The list reports T4 taxable income earned in a specific calendar year, rather than the current annual salary;
  • T4 income amounts may include onetime payments such as bonuses, retroactive or severance pay;
  • The reported data may understate the annual salary of someone who is hired or leaves within the calendar year;
  • Only taxable benefits on the employee’s T4 slips are reported; other components of the benefits package (such as SERPs and deferred income) are excluded.

In the Panel’s opinion, all hospitals should provide information on their hospital executives’ compensation using a standard format that includes, but is not limited to, the following:

  • Disclosure of compensation earned (base salary, pay-for-performance, pension contributions, perquisites and other compensation);
  • Pay-for-performance targets and achievement;
  • Linkage of performance to annual compensation changes;
  • Employment contract terms and provisions; and
  • Severance arrangements.”

The report is available at this link and is an interesting read.

In 2012 the Commission on the Reform of Ontario’s Public Services released its report, and there were strong recommendations to healthcare, including re-examining Administration’s salaries.  The report is available on the Ministry of Finance at  It piggybacked off of the Manley Report above when it stated: “A recent report … for the Ontario Hospital Association recommends that the compensation of hospital CEOs and senior executives should be tied to performance on strategic hospital priorities. Further, performance pay should be linked to achieving strategic health outcomes for each region across all types of health service providers in CCACs, LTC facilities, FHTs, Community Health Centres and public health units. The Manley report’s recommendation about transparency of CEO and senior executive compensation should also be extended beyond hospitals and include LHINs, CCACs and LTC  facilities.” 

A couple of factors that come into play for me, after all is said and done, is that if to balance the books you have to cut jobs, then don’t balance the books.  By balancing the books at any cost the message Administration sends to government is that there was surplus, when there wasn’t.  When you cut to achieve an arbitrary budgetary figure determined by a disembodied government agency that has likely based its funding envelope on numbers provided by an Administration with its own agenda, you devalue the service you provide to the patient/client because the cuts almost invariably come at the cost of the front line worker – the expendables.  The reality is that millions of dollars of machinery are already underutilized (I went off about this in an earlier post “The Endowment Fund”). When hospital administration doesn’t press for a budgetary increase from government to add that extra shift, create those extra jobs, serve those extra patients, use the existing technology more, what Administration, and by proxy government, is effectively doing is increasing the level of inefficiency in patient service and care within the hospital setting.

Argh, is only me that sees this stuff – am I off kilter here?  I see an enormous disconnect, unfortunately it has significant implications for me, “Joe Public,” in my health care experience.  At least I can take comfort that the books are balanced.


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