OHA expresses strong support for creation of committee to address hospital working capital deficits

Announcement of Initiative to Address Hospital Working Capital a Major Step Forward

Today, the Ontario Hospital Association (OHA) expressed disappointment that the 2010 Ontario Budget did not provide the hospital sector with the 2% increase to base operating funding recommended for 2010/11, but also expressed its strong support for the creation of a committee to address hospital working capital deficits and the Budget's reiteration of the government's intent to proceed with a review of the Public Hospitals Act.

The OHA committed to immediately work with the Government of Ontario and LHINs to understand all the funding sources available for the upcoming fiscal year so that hospitals can make informed decisions about the planning and delivery of hospital services in 2010/11 and beyond.

"The government will increase base operating funding for the hospital sector by 1.5% in 2010-11," said OHA President and CEO Tom Closson. "However, many critical details about hospital funding in 2010-11 remain unknown. The Budget does not provide information about funding sources other than the base operating increase and as a result, it is premature to assess potential impacts on services and staff."

Hospitals' funding is drawn from a number of different Ministry of Health and Long-Term Care funding envelopes. These envelopes include: base operating funding; Post-Construction Operating Funding; wait times funding; and other specialized funding allocations. For 2010/11 the Ontario Budget reports an "annual growth" of 4.9% for the hospital sector's "expense" and a 6% increase in annual growth for the health care sector overall.

Ontario's hospitals are among the most efficient in Canada, and had requested a 2% increase in base operating funding in 2010-11 - an increase that is significantly below the rate of inflation. This request was possible because hospitals are forecasting approximately 1% in new savings for 2010/11.

The 2010 Ontario Budget also did not provide sufficient information about investments in community health care to allow the OHA to determine whether they will relieve pressure on hospital capacity caused by the current high numbers of Alternate Level of Care (ALC) patients. ALC patients are individuals who are currently in hospital and could be cared for in another more appropriate setting.

The OHA was very pleased that the Government of Ontario has committed to creating a working committee to addressing hospitals' long-standing working capital challenges.

"This is excellent news for those hospitals that are struggling with high levels of inherited debt," said Closson. "Organizations with healthy working capital are better able to plan for the future and make needed investments in medical and diagnostic equipment and other patient care priorities. We applaud the government for moving forward with this very important initiative."

Source: ONTARIO HOSPITAL ASSOCIATION