NLIS 4
September 18, 2001
(Health and Community Services)
 

Government, health boards and unions working together to deal with budget deficits

Julie Bettney, Minister of Health and Community Services, advised today that government, the 10 institutional and integrated health boards and the four unions representing workers in the health system have agreed to work together to attempt to address significant deficits being projected by the health boards for this fiscal year.

"The information we have received from the health boards indicates that if operations continue for the second half of budget year 2001-2002 as they have progressed during the first six months, we will be dealing with an operating deficit of $18 million," said Minister Bettney. "This is not sustainable."

In Budget 2001-2002, government announced that it was adding $50 million to the base budgets of the institutional and integrated health boards which was intended to ensure they have adequate funds to maintain quality services within balanced budgets. These boards operate the province�s hospitals, clinics, and long-term care homes.

"This $50 million increase in base funding was in addition to substantial investments in salary increases for health workers," said Minister Bettney. "We believed the increase would stabilize board funding and would allow them to operate within balanced budgets. However, it became clear that adjustments are needed to avoid budget deficits by the end of this fiscal year." What is contributing to the deficit this year are growth in the volume of certain services in such areas as dialysis and drug therapies, and the reopening of certain services that had been temporarily closed.

At the end of the first quarter (June 30, 2001)*, the deficit forecast for the boards was as follows:

• Health Care Corporation St. John�s - $8.6 M (2.5% of $335.6 M budget)
• St. John�s Nursing Home Board - $0 ($49.8 M budget)
• Newfoundland Cancer Treatment and Research Foundation - $1.8 M (18% of $10.1 M budget)
• Avalon Health Care Institutions Board - $800,000 (2% of $43 M budget)
• Peninsulas Health Care Corporation - $0 ($48.4 M budget)
• Central East Health Care Institutions Board - $200,000 (0.4% of $49.2 M budget)
• Central West Health Corporation - $1.7 million (2.7% of $63.2 M budget)
• Western Health Care Corporation - $3.6 million (3.4% of $105.8 M budget)
• Grenfell Regional Health Services - $700,000 (2.7% of $25.7 M budget)
• Health Labrador Corporation - $700,000 (2.5% of $27.3 M budget)

*Note: Deficit figures change constantly, and boards are regularly seeking efficiencies to reduce the deficit level. Budget figures are net of other non-government revenues.

Minister Bettney stated that the budget of the Department of Health and Community Services is $1.4 billion, representing 44 cents of every dollar government spends on programs and services.

"We do not have any more money to put into the system," Minister Bettney said. "Since 1997 government has added over $100 million into the base budgets of these boards. We cannot allow accumulated deficits to grow any larger than they are now."

Following meetings with the board chairs and CEOs, and representatives of CUPE, NAPE, NLNU and AAHP, Minister Bettney said an open discussion process will now proceed with each partner contributing their input into reaching solutions to this fiscal challenge.

"There will be meaningful discussions on how we can achieve savings," said Minister Bettney. "The plan is to have an open dialogue with the people who work within the health system to see how efficiencies can be realized."

Minister Bettney said it was critical that the public sector unions - the people who work on the front-line in the health system - be engaged in this process. She congratulated the leadership of these unions and the management of the health boards for participating in this process.

"We know we have to move forward with a plan to address this situation," the minister said. "We are working through this together with the people who work within our health system and with those who have the responsibility to manage it."

Due to the tight time frames, Minister Bettney has asked the health boards to report back to her no later than mid-October with their plan on how to address board deficits.

Minister Bettney noted that: "I continue to be optimistic that as a result of the Health Forums which I launched recently we will be able to find long-term solutions to the challenges we face in our health system."

Media contact: Carmel Turpin, Communications, (709) 729-1377.

NOTE TO EDITORS: Minister Bettney will be available to the media at 2:30 p.m. in the Media Centre, Main Floor, East Block, Confederation Building.

2001 09 18               2:00 p.m.