Thursday, March 22, 2007
For the Attention of
Hospital Board Chairs, CEOs, CFOs,
OHA Board of Directors and CACN Members
Hilary Short
President and CEO
URGENT – OHA 2007 ONTARIO BUDGET REACTION
Today, Ontario’s Minister of Finance, the Honourable Greg Sorbara, presented the “2007-08 Ontario Budget: Investing in People & Expanding Opportunity.”
The OHA continues to recommend that the ALC issue be addressed from a health system perspective, and involve additional investments in the acute care, long-term care, home care, complex continuing care and rehabilitation sectors as well as supportive housing above and beyond what is currently planned.
Please find attached the OHA’s 2007 Ontario Budget summary, media release and key messages. Members may find these useful when responding to Budget-related media inquiries.
The OHA will provide a more in-depth Budget analysis based on these materials during a Members-only teleconference on Friday, March 23, 2007. The teleconference is scheduled to begin at 10:00a.m. (EST) If you have any questions regarding the teleconference, please contact Pam Springer, OHA Public Affairs, at 416-205-1345 (email: pspringer@oha.com).
If you have any questions regarding this Bulletin or the attached materials, please contact Lou Reidel, Director, OHA Health Finance and Research, at 416-205-1320 (email: lreidel@oha.com) or Chris McPherson, OHA Public Affairs, at 416-205-1305 (email: cmcpherson@oha.com).
OHA’s Preliminary Budget Analysis
General:
• Spending in the health sector will be $37.9 billion in 2007-08, rising to $39.8 billion in 2008-09 and $41.5 billion in 2009-10.
Hospital Operating Funding:
Please note: Due to the consolidation* of hospital financial statements on the province’s books, it is not longer possible to identify the actual hospital operating grants from the budget documents (Page 166, 2007 Ontario Budget).
• The 2007 Ontario Budget did not provide detailed information on planned multi-year operating expenditures for 2008-09 and 2009-10.
• Announced net expenditure increase in 2007-08 for the hospital sector:
• This funding includes:
o Funding for the Wait Times Strategy ($135 million).
o A confirmation that the funding announced through the October 2006 Emergency Department Action Plan (EDAP) has been added to hospitals’ base budgets ($108 million).
• Announced net expenditure increase in 2008-09 and 2009-10 for the hospital sector:
o A combined 8.9% or $1.565 billion over the two fiscal years.
o Beginning in 2008 and 2009 federal transfers for wait times are scheduled to reduce. The budget is not clear on what the province’s funding for wait times will be after that time.
Non-Hospital Funding for Health Initiatives:
• Announced funding increase for non-hospital funding:
o 5.1% increase in 2007-08
• These figures include funding for home care, long-term care, Community Care Access Centres, OHIP, pharmacy and general health promotion initiatives.
• This funding includes $35 million in more home care services to keep people healthy and at home announced as part of the EDAP.
• Announced 9.9% funding combined increases for 2008-09 and 2009-10.
• Non-hospital funding growth is expected to exceed hospital funding growth between 2007-08 and 2009-10.
e-Health:
• Announced funding includes $64 million in e-Health initiatives. This funding is for the health sector; the Budget is silent on what portion of this funding will be available to hospitals.
• This funding will be in addition to Ontario’s portion of the $400 million for e-health initiatives, through Canada Health Infoway, announced in the 2007 Federal Budget.
Hospital Negative Working Capital:
• The 2007-08 Ontario Budget is silent on this issue. However, the Budget did note that operating funding adjustments were provided to certain hospitals in 2006-07 in an effort to put them on more secure financial ground.
Research and Innovation:
• The government reiterated its investments in the Ontario Research Fund ($527 million) and the Ontario Institute for Cancer Research ($279 million) through 2009-10, and new investments in structural genomics.
• A broad-based innovation and research strategy is under development, and OHA and CAHO anticipate the release of the results of the Ontario Innovation Strategy this spring.
Other Budget Highlights:
• The Wait Times Information System is expected to expand and eventually capture all surgeries in hospitals currently receiving wait times funding.
• Paediatric surgeries have been added to Ontario’s Wait Times Strategy. The goal is to complete 10,000 additional paediatric surgeries over four years.
• $43 million to provide full-time employment opportunities for new Ontario nursing graduates and another $14 million for more nurses in long-term care homes, to bring the total number of nurses hired since 2003 to over 8,000 by the end of 2007-08.
• Initiatives to improve rehabilitation services to support patients who have received hip and knee replacements.
• $7 million to expand addiction treatment programs.
• An additional $8 million in annual funding for children’s mental health to address gaps in local service needs and to reduce wait times.
• Approximately $20 million, growing to approximately $40 million per year, to support a new colorectal cancer screening program for all Ontarians aged 50 and older.
• Proposed expansion of the Healthy Babies Healthy Children program with an ongoing investment of over $5 million to support the needs of at-risk families with children.
• Enhancement of WSIB benefits by 2.5 per cent in July 1, 2007, and on January 1 in each of 2008 and 2009.
• $10 million for hospices.
Key Quotes:
“Perpetual growth in health spending at a rate that exceeds growth in revenue may, over time, reduce funding available for other programs, services and investments, ultimately threatening the long-term economic growth potential of the province. This Budget provides additional targeted investments in the health sector, to support a strategy to lower the rate of growth in health spending over the medium term. In particular, the government is making investments to put the hospital sector on a sustainable financial footing, empowering Local Health Integration Networks, expanding the use of e-health technology and ensuring value for money in the drug system.” (Page 153, 2007 Ontario Budget)
*Consolidation of Hospitals on Provincial Books
• In August 2003, the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA) issued a new accounting standard that provided criteria for determining which public-sector organizations should be included in the government’s financial statements, beginning in 2005/06
• The 2006 Ontario Budget reflected this practice for the first time with hospitals, school boards, and colleges consolidated in the government’s financial statements but also presented the traditional basis of hospital operating grants
• The 2007 Ontario Budget only presents the new approach of reporting
net expenses of the three new sectors and
should not be confused with provincial operating grants
• Net expenses are calculated as:
o The sum of all operating costs as reported by hospitals,
plus depreciation of the hospitals’ assets,
minus any revenues they receive from sources other than the Province