Department Responds to Business Plans

HEALTH Department Responds to Business Plans

The Department of Health formally responded today to the business plans submitted by various health care organizations around the province.

The department's response to the regional health boards, IWK Grace, QEII, Nova Scotia Hospital and the Cape Breton Healthcare Complex clears the way for facilities to inform staff and carry out details of the business plans.

"First and foremost, all hospitals and emergency rooms will remain open," said Health Minister Jamie Muir. "There will be some changes as a result of the business plans, but I assure you that core services will continue to be delivered to Nova Scotians. Fundamental change is necessary and will continue to be necessary if we are to achieve a health care system that is sustainable, responsive and affordable."

For the first time, the department took an integrated and collaborative approach to business planning.

"The new approach this year will help to ensure direct patient care is protected and greater accountability for health spending," said the minister.

"I appreciate the commitment of the department to work through this process collaboratively with the health care organizations. By working together, I believe we can reach innovative solutions that not only help address fiscal challenges but also have a positive impact on the health care system," said John Malcom, CEO of the Cape Breton Healthcare Complex.

The business plans outline how each of the eight organizations plan to meet their 2000-01 budget target. The new process started about eight months ago when facilities were told to look for cost savings in administrative and non-clinical areas first. Many factors were considered as decisions were made including the accessibility of services based on geographic location, bed- occupancy rates and standards of care.

The department's response outlined initiatives it accepted, those it refused and initiatives requiring further discussion. In some cases, the department is waiting for facilities to offer alternatives to initiatives the department did not accept.

"Business planning is much more than looking at the bottom line," said the minister. "We worked closely with the facilities and business plans were adjusted in response to concerns raised by the department."

The minister said that the facilities and the regions also brought forward some legitimate concerns about the potential impact on patient care. In response, the department said last month that it would reallocate $12 million from within its $1.68- billion budget. Since then, the facilities have been identifying how the extra funding can be used to ensure patient care is protected. The transitional funding will help hospitals to maintain core services until administrative and other savings can be realized.

"We have said all along to the CEOs that business planning would require a give and take approach both ways to protect patient care," the minister said. "That required the department to bring what limited financial flexibility we do have to the table."

Department of Health staff will continue to work closely together with the facilities and regions as part of the ongoing business planning process and as the plans are implemented throughout the year.

NOTE: Health Business Plan, 2000-01, Fact Sheet

Fiscal Context

• Government is committed to a balanced budget. Health is a part of that commitment.

• Health spending has increased by 38 per cent since 1996-97. Such increases are not sustainable. The provincial debt has grown to almost $11 billion, with almost $900 million of tax dollars needed this year just to pay the interest on provincial debt.

• Funding from the federal government is critical. Federal dollars for health are steadily declining in Nova Scotia (cost- share down from 50-50 to 15-85).

• Government must manage the health system better to ensure that it is sustainable and secure. Waste and duplication within the health care system must be addressed to redirect limited health dollars to direct patient care.

A New Approach to Business Planning

• For the first time, a collaborative, integrated approach has been taken to business planning. This involved a series of meetings, ongoing discussions, and an exchange of detail and information that support the protection of core programs, while reducing budgets.

• The deputy minister and senior staff first met in November with the CEOs from the regional health boards and the hospitals to officially ask them to be part of the business planning process. CEOs were asked to identify as much savings as possible in administration and non-clinical areas first. Every effort was made to protect patient care. Overall, facilities met this objective, finding the bulk of savings in administrative and non- clinical areas.

• Department staff have frequently met and spoken with CEOs and CFOs since November to discuss how facilities will meet the following budget targets.

• As part of the new process, the ministers of health and finance met with CEOs on May 23 to discuss submitted business plans. Legitimate concerns were brought forward. For example, it was recognized that savings from administration and shared services could not be fully realized in this fiscal year. In response, the department will reallocate $12 million in funding from within its $1.68-billion budget.

The Results:

• The reallocation of funding will ensure operating rooms and hospitals stay open, and surgeries continue at appropriate capacity.

• There will still be changes as a result of the business plan. For example, Nova Scotia currently uses 900 acute care days per 1,000 persons. The national standard is 600 days per 1,000. This supports the need for some reduction in acute care hospital beds in Nova Scotia. Moving to a single-entry model for long-term care and home care will also help to ensure more efficient use of hospital beds.

• Restructuring and consolidation of some services will lead to a reduction in staff while protecting core programs.

• As announced in the provincial budget, there will be 600 fewer FTEs, primarily from administration and support in the health care sector. Any staff impacted will be treated fairly.

• Obviously, nursing recruitment is an area of continuing focus. However, in the interim, existing vacancies will help ensure that any reduction in nursing positions does not translate into a reduction of nurses working in Nova Scotia.

• Many factors were considered as part of the decision-making process, including the demonstrated need for services, accessibility of services based on their geographic location, bed occupancy rates and standards of care.

• As some initiatives in the business plan affect staff, facilities are expected to share details with their employees prior to a public release.

Ongoing Process

• Facilities have been advised to start implementing their business plan no later than July 1. However, business planning is an ongoing process.

• The IWK Grace health Centre, QEII Health Sciences Centre, Nova Scotia Hospital, and the Cape Breton Healthcare Complex CEOs will continue to meet to discuss opportunities to share services in non-clinical areas across the four organizations. Cost savings will be realized as a result of this initiative.

• 2000-01 is considered a transition year. Time is needed to realize the savings from administrative and other changes, including shared services. Facilities' proposals to carry a deficit was approved with the understanding that every effort will be made to minimize the amount. Legislation also requires that they be in a break-even position in the next year.

• The department will continue to work with the regions and hospitals as business plans are implemented.