Sheer joy! That was my experience as I recently celebrated my granddaughter’s first birthday. I especially enjoyed seeing, through Brooklyn’s young eyes, her joy in so many firsts – first swing, first wagon ride, and above all, first cupcake!

For all of us in Saskatoon Health Region, it is important to view our 2013/14 financial situation through fresh eyes. We need to see, from a different perspective, the challenges and opportunities as we commit to meeting the needs of our communities while living within our means.

Accumulated Deficit Exceeds $67 Million

For the last three years, Saskatoon Health Region has ended the year with a deficit. Added to deficits from previous years, our accumulated deficit now exceeds $67 million. Traditionally we have managed cash flow by relying on funds held in reserve to cover staff vacations. Now our deficit is larger than our vacation reserve. This is not a good situation, nor is it sustainable. We simply cannot continue to spend at a rate that exceeds our funding. Government, the public, and our Authority expect us to do better, to end the 2013/14 fiscal year with a balanced budget.

The easiest way to do this would be to cut jobs (400+) and to cut services. This “slash and burn” approach might balance the budget but would negatively impact the public who rely on our services. It would also negatively impact our dedicated staff. It would involve short term gain, but long term pain. That is not the choice we are making.

Instead, we need to look at our financial situation with fresh eyes. That is the approach the Senior Leadership Team has taken this year. In analyzing spending patterns, we have considered that the majority of our operational costs relate to straight time salaries. If we are to reduce operating costs, we need to reduce labour costs. It is as simple as that. Year over year, we have increased the number of staff positions and hours worked. This cannot continue.

This is Not Business as Usual

Therefore, we have largely built our budget this year around two very aggressive strategies: position optimization and staff scheduling. What does this mean? This means it is not business as usual. It means that every vacant position and every vacant shift will be carefully scrutinized and will require several levels of approval before it is filled. This review will examine if the vacant position or shift needs to be filled, how and when. In some cases we will avoid or delay filling vacant positions unless doing so will seriously compromise the quality of care or staff safety. When shifts become vacant due to staff absences, we will expect managers to consider if service needs can be met without backfilling. If the shift must be filled, whenever possible it will be filled by casual staff rather than incurring overtime. In some instances, where operationally feasible, only part of the shift will be filled.

Our second major budget strategy relates to staff scheduling. We will develop new master rotations that will reflect service volumes and variations by time of day, day of week and other cyclical patterns. This may result in different staffing mixes and schedules, which meet patient needs rather than traditional staffing patterns. We will also examine the need for management coverage beyond traditional hours of coverage, recognizing that we are a 24/7 operation.

Our Target is Reduced Labour Costs

We need to put these two budget strategies in perspective. Our target is a five per cent reduction in labour costs. Health care usually schedules shifts with the assumption that workload during every hour is the same. We all know that is not the case. We will better align workload and staffing during the day and adjust for seasonal differences throughout the year. This will help us meet our budget challenge without compromising the quality and safety of patient care. Small things add up – five percent represents 24 minutes of an eight-hour shift or 36 minutes of a 12-hour shift.

After careful analysis of planned service volumes, unavoidable inflation and other factors, we have now confirmed that our budget gap is $35 million. Our two labour cost strategies are targeted to reduce costs by $27.4 million. Our budget strategy also includes joint purchasing with other health regions and the Saskatchewan Cancer Agency, which we estimate will save us in excess of $2.5 million annually. The remainder of the estimated $35 million we need will be achieved by tightening our belts, reducing waste, optimizing many small efficiencies and cost savings. We will also review all our services to consider other ways to reduce operating costs.

“Failure is Not an Option”

We very much appreciate the cost savings suggestions we have already received from more than 200 staff. Many of these are being incorporated into our plans and we continue to welcome your suggestions. Balancing our budget will require the efforts of every single person throughout the Health Region. We will continue to work closely with unions in efforts to minimize negative impacts on staff and services.

Let me be perfectly clear. We must balance our budget this year. In the words from Apollo 13, “failure is not an option.” This will not be easy. At times it will be very uncomfortable. For staff that rely on a significant portion of their income from overtime, it will represent a significant change. For managers who have tended to automatically fill vacant positions and shifts, it will require consideration of other options and written justification of why additional staffing costs are required. For all of us, it will require fresh eyes, to see how we can work together to meet service needs while spending less.

I believe we can do this. I am counting on it. As always, I welcome your thoughts and suggestions at Maura.Davies@ saskatoonhealthregion.ca.

Maura Davies
President and CEO
Saskatoon Health Region

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