Funding Reform and Budget Planning

*Updated January 2016

Ontario hospitals are required by legislation to balance their budgets on an annual basis. Muskoka Algonquin Healthcare is committed to operating in a fiscally responsible manner and is also committed to financial sustainability through process improvement and redesign, revenue generation and utilization management.

Each year, MAHC prepares an operating budget for the upcoming fiscal year, and each year since 2012 that budget is prepared knowing that there will be no increase in Ministry of Health funding to hospitals. The hospital sector has been sharing the same pot of money for the last four years, and is expected to absorb all cost increases and produce a balanced budget. For an organization the size of MAHC, this means that upwards of $1 million in cost increases (labour, utilities, supplies, etc.) must be absorbed, or cost-saving initiatives must be found to allow MAHC to balance the budget each year.

That does not mean that there was not room for improvement in the Ontario hospital sector. Over the previous three years hospitals have become leaner, out of necessity. As a custodian of public money, it is incumbent upon MAHC to look for efficiencies, and to match the performance of our peer hospitals. MAHC was able to adjust operations to eliminate redundancy and to match services to demand, however a point is reached when there are no longer any cost-saving initiatives, and no longer any ability to absorb cost increases. MAHC has reached the point where service consolidation may be considered if the budget is to be balanced.

What do we mean by service consolidation? Service consolidations may be small or large, but the goal is the same; to create one combined unit that is efficient and cost effective to retain that service in Muskoka. Service consolidation is not about eliminating services, it is about retaining services. While a service may no longer be provided at both hospital sites, the service is still available at one site, ensuring the service is still available to all of Muskoka.

Annual budgeting is about continuing to provide the services the population of Muskoka and East Parry Sound require, but as efficiently as possible, or at least as efficiently as the other Ontario hospitals.

As we continue to seek new opportunities for improving efficiency, safety, quality of care, access to care and fiscal accountability, we welcome your feedback, and encourage you to share your ideas.