Board Approves 2018-19 Operating Budget

Muskoka Algonquin Healthcare (MAHC) has realized a modest operating surplus for the 2017-2018 budget year, achieving its sixth balanced budget in the last seven years.

“The Board of Directors and Administration have worked very hard to reduce and eliminate operating shortfalls despite unique challenges we face under the funding formula,” says incoming Board Chair Phil Matthews. “To balance and post an operating surplus, MAHC had to overcome a $4.6-million budgeted operating deficit by reducing costs where possible and by advocating for additional funding. A balanced position is truly an outstanding accomplishment.”

The positive year-end position is thanks to over $3 million in additional funding from the province, $740,000 in increased patient-related revenues, and approximately $735,000 in cost savings.

“We are grateful to the North Simcoe Muskoka LHIN and the Ministry of Health and Long-Term Care for recognizing how the formula disadvantages MAHC and for providing additional financial support. I would also like to thank our area politicians for their advocacy,” says Matthews. “We will continue to look at everything we do to ensure we are being responsible financial stewards while ensuring safe, high-quality care.”

On the heels of receiving the 2017-2018 audited financial statements, the Board of Directors approved a $79.5 million operating budget for 2018-2019, which because of the current funding formula and without additional funding equates to a budgeted operating shortfall of $2.5 million at this time.

“The operating budget approved by the Board is really a status-quo budget,” says Matthews. “The 2018-19 operating plan maintains our existing programs and services and staffing despite growing financial pressures.”

The budget reflects contractual wage and benefit increases including the impacts of Bill 148, which mandates changes in workplaces across Ontario, explains Natalie Bubela, Chief Executive Officer.

“The budget also addresses rising costs of energy, drugs and supplies, new quality care requirements and safety regulations, and maintenance costs to support two aging buildings,” says Bubela. “We have also accounted for additional staffing costs associated with anticipated higher patient occupancy and volumes.”

In response to advocacy, the Ministry through the LHIN has pledged further funding support to MAHC for 2018-2019. Beyond the initial $750,000 announced in the 2018 Ontario budget, MAHC is receiving a further $1 million in base funding and about $700,000 in surge bed funding to help address cost pressures and reduce the budgeted 2018-2019 operating gap.

“The Board remains committed to continued advocacy for a long-term solution to MAHC’s funding challenges,” says Matthews. “Together with local politicians, we will be sending a joint letter to the Ministry to request a joint meeting to advocate and discuss much-needed changes to the funding formula that recognize the unique challenges of medium-size multi-site community hospitals.”