The provincial government announced on March 20, 2013 that Saskatchewan’s 2013-14 health budget will increase by $162 million (3.5 per cent), the majority of which will go to health regions and the Saskatchewan Cancer Agency to provide care and service to the people of Saskatchewan. This funding level reflects a continued commitment by government to “bend the cost curve” and reduce the rate of growth of the provincial health budget.

Our region’s funding this year increased by $40.9 million, most of which is already committed to cover collective agreements, existing programs (e.g. last year’s surgical volumes) and some new programs. Although it will take more time to complete a full analysis, we estimate that compared to last year’s base funding plus mid-year adjustments, and excluding $29.1 million in committed funding, the 2013/14 funding for Saskatoon Health Region will increase by $11.8 million, which is 1.28 per cent. Even with this increase, in order to meet the needs of a growing population and absorb the deficit incurred in 2012/13, the Region will need to close an estimated funding gap of $25 million.

How the Cost and Funding Numbers Work

  • Most of the increased funding will cover employee and physician compensation increases which have been negotiated through collective agreements. Approximately 75 percent of our operating costs are compensation;
  • $2.2 million for program enhancements. This includes operational funding for the new PET/CT, increased volumes for CT and colonoscopies, and enhancement to the Fetal Alcohol Syndrome Disorder (FASD) program;
  • Some one time funding from last year has now been added to our base funding, including $12.5 million for additional surgical capacity to meet provincial wait time targets, funding to support our HIV program, infection control, and primary health care redesign;
  • $11.3 million for recent population growth;
  • Inflation funding of $15.6 million to cover increased cost of drugs, medical and surgical supplies and other operating costs.

This year’s budget is net of targets to achieve efficiencies totalling $15.1 million. This requires us to:

  • reduce sick time, workplace injuries, and overtime costs by $1.3 million
  • achieve $13.8 million in additional savings through operational efficiencies.

Several factors make our financial situation particularly challenging this year. We anticipate that our year end deficit for 2012/13 will be in the range of $24 million. This is mainly due to the extremely high demands on our services, reflecting the increased population of Saskatoon and our neighbouring communities. This growth has contributed to 6,424 more urban inpatient days (primarily in pediatrics and medicine), 3,415 more Emergency Department visits, 18,000 more home care nursing hours, 270 more births, and a doubling of patient days in our Pediatric Intensive Care Unit. We expect that this population growth will continue, placing even more demands on our services.

How will we close the $25 million gap in 2013-14?

We will build on the savings initiatives started in 2012/13 that are starting to pay off, including staff scheduling, attendance management and discharge planning to reduce lengths of hospital stays. Our new electronic bed management system will help us better manage patient flow. We will focus on improving the quality and safety of care, including infection control. We will optimize our application of lean to eliminate waste and related costs. We will review all our clinical services to see what changes, if any, should be made to make them more patient-centred, efficient and effective. We will consult with staff to get your good ideas, including the more that 140 suggestions that have already been submitted.

Spending more money than we have is not an option. Our government and our Authority have made it very clear that we must balance the budget in 2013/14. This will require some tough decisions. We will need to do many things differently. In some cases we will change how we deliver our services. We will change the way we do our work. This may result in different models of care delivery and staffing mix.

It will take the focused effort of every single member of Saskatoon Health Region to help us be more efficient and live within our means, while continuing to enhance services to our patients, residents, clients, families and communities. Additional budget details will be provided when they are available. I look forward to hearing from you about how we can best optimize the resources provided to us by the people of Saskatchewan.