Saskatoon Health Region approves 2016-17 budget plan

The Saskatoon Regional Health Authority rubber-stamped its 2016-2017 budget and capital plan on Wednesday.

On March 31, 2016, the health region posted a deficit of $35.7 million, lower than originally planned, and president and CEO Dan Florizone said they're waiting on the fruits of a number of cost-cutting initiatives to bring the deficit down closer to a balanced budget.

• Saskatoon Health Region to implement a hiring freeze
• Saskatoon hospitals have capacity for patients again

"As a not-for-profit, publicly funded organization, our target is a balanced operating budget," Florizone said. "But we know that it will be extremely challenging to achieve this by the end of March as we continue to experience volume and demographic pressures."

We need to continue to work to close the gap between revenues and expenses in order to avoid a potential $30.8 million deficit for 2016-17.- Nilesh Kavia, vice president of finance and corporate services

In July, the region announced additional work expected to bring $34 million in annual savings once all the programs are implemented. These programs include a two-month temporary in-scope hiring freeze and a voluntary separation package for out-of-scope staff. The voluntary separation program has had nearly 40 applicants and those applications are now being reviewed.

"We need to continue to work to close the gap between revenues and expenses in order to avoid a potential $30.8 million deficit for 2016-17," said Nilesh Kavia, vice president of finance and corporate services. "With over 70 per cent of the region's expenses related to salaries and benefits, we need to try and minimize the impact on jobs, programs and services."

But a steady five per cent increase in inpatient volumes, which is putting the health authority behind the eight ball.

In addition to cost-cutting programs, the region's $1.2 billion operating budget includes about $24 million from the ministry of health for incremental funding to cover wages and inflation.

"It's the most challenging financial situation I have ever faced working in healthcare," Florizone said. "We must adhere to a set path ahead to ensure patients, residents and clients have access to the health care services they need, and to ensure we are investing in the right areas."

As part of the health region's capital budget, which the ministry of health is kicking in $23.9 million,  $8 million is earmarked for Royal University Hospital's heating and cooling systems in support of the Children's Hospital of Saskatchewan infrastructure needs, $3.65 million for equipment and $12.3 million in infrastructure improvement slated for a nurse call system replacement in long term care, elevator replacements and roof repairs.