Minister raises concern over rising health care costs

Health and Community Services Minister Roger Grimes announced today that the province�s health care budget continues to grow at an alarming rate of five to six per cent per year.

The minister issued a cautionary note that the province will not be able to sustain such growth in the future.

Health boards have carried deficits of $15 million in each of the last two years despite having their operating budgets increased by just over 10 per cent. "Just to maintain the status quo would see deficits grow to almost $40 million this year, $50 million in 2001 and $65 million in 2002. At that time, the accumulated deficits would reach $200 million," stated Mr. Grimes.

"We are on an extremely dangerous course which, if not contained, could lead to financial disaster for Newfoundland and Labrador," said Mr. Grimes. "We have reached a crossroad, not only in this province but across Canada, with respect to health care and we must redefine the health care system of the future and ensure maximum use of every available dollar. It is becoming clear that we must begin to rearrange our services to recognize the major shifts taking place in the province, including a smaller proportion of children as compared with seniors."

Minister Grimes said it is not government�s intention to reduce health care funding. He said that only through a collective process involving the federal government, health boards, health professionals and the people of the province defining priorities will we be able to manage the anticipated growth in the system of the future.

Minister Grimes said the upcoming first ministers� meeting with the Prime Minister in Ottawa will hopefully result in a restoration of CHST funding to 1994 - 1995 levels. He cautioned that Newfoundland and Labrador�s share will not provide funding for new programs and will not even guarantee that the province can maintain current programs and services. Any new programs such as home care, pharmaceutical care, etc, will require new dollars from the federal government programs.

The minister said the classification review process unveiled today recognizes that nurses, social workers and other health care providers should receive higher levels of pay, but this does not come without additional cost to the system and will only add to ever increasing budgets.

"If we achieve full restoration of CHST, our provincial share would be an additional $50 million annually. This will not even cover the $30 million deficit and the $24 million for pay increases arising from reclassification," stated Mr. Grimes. He said there are some difficult decisions ahead for all Newfoundlanders and Labradorians as we work together to provide the best possible health care for our people.

We currently spend 42 cents of every program dollar on the health system and we have increased our spending by 25 per cent over the past five years even though the federal government has reduced its contribution significantly over the same period.

On top of this, some of our strategic investments in the past few years have included:

• a $32 million MOU for fee-for-service and salaried physicians which increased by another $1.9 million last year;

• an additional $2.1 million was provided in Budget 2000 to hire new salaried physicians in priority areas; and

• more than $16 million to convert casual nurses to permanent status; to introduce incentives for new nurse graduates and to allow nurses with advanced skills to practice as nurse practioners.

Mr. Grimes said we will continue to meet the challenge head-on through a number of initiatives.

• The Special Review Team established earlier this year will continue to work with the province�s health boards to achieve efficiencies wherever possible.

• We will develop three year action plans to manage growth in the health sector and redefine priorities.

• We will continue to pressure the federal government with co-operation from other provinces for restoration of funding to 1994 -1995 levels and provision of new funding for development of new programs.

Minister Grimes concluded, "Health care will continue to be this government�s number one priority. We are not reducing health care funding but we must control the growing demands of the future. Otherwise, the total fiscal position of the province could be in jeopardy."

Media contact: Carl Cooper (709) 729-1377.

2000 08 30    12:35 p.m.

CIHI Supply and Distribution of Canada�s Registered Nurses, 1999, reports:

• Newfoundland and Labrador has the second highest RN per population ratio at 97.2 per 10,000 and we are showing the second highest number of increases in RNs per population from 1994 to 1999.

• Approximately 30 per cent of the current registered nurse population are over 45 years old compared to 45 per cent of Canadian nurses in general, indicating this province has a younger workforce. The average age of a nurse in this province is currently 39 years old.

• The majority of registered nurses, 72 per cent, work in hospitals. The long term care sector accounts for a further 12 percent of nurses.

• Registered nurses are older in long term care with approximately 44 per cent over 45 years of age compared to 24 percent over 45 years of age in hospitals.

• The registered nursing workforce in Newfoundland and Labrador is comprised of over 5,000 individuals, and this number has remained relatively constant over the last 10 years.

• The workforce is predominately female at 97 per cent.

CIHI Health Personnel in Canada (1988-1997) reports:

• Newfoundland and Labrador has the lowest population per LPNs in Canada at 194 per LPN compared to a national average of 392 per LPN. This indicates that there are more LPNs in Newfoundland and Labrador per person than in any other province.

• Newfoundland and Labrador experienced a 13.7 per cent increase in the number of LPNs over the 10 year period of 1988-1997.

 Challenges

• Nursing shortages are still being experienced in some health boards.

• Lack of nursing relief staff, especially during the summer months and in speciality areas, added to difficulties experienced by some boards, particularly by the Health Care Corporation of St. John�s.

CIHI Supply, Distribution and Migration of Canadian Physicians, 1999, reports:

• The average age of our physicians is slightly below the Canadian average at 46.1 versus 47.2.

• Newfoundland and Labrador has 103 family physicians per 100,000 population versus a national average of 94 per 100,000.

• Newfoundland and Labrador has a national average of 171 specialists per 100,000 population versus a national average of 186 per 100,000.