Funding Formula

A significant problem for hospitals in smaller centres is the provincial funding policy. A decade ago the provincial government believed that hospitals were not being careful enough about how money was spent. There may have been validity to that argument since generally the province simply paid hospitals what they requested on an annual basis. The new policy was simply to tell hospitals that they would get only what they received the previous year.

For several years the policy of flat-lining hospital budgets meant that hospitals budgeted more intelligently and real efficiencies were achieved. But then, particularly in smaller facilities, there were no further efficiencies to be achieved and the hospitals began to informally `budget for deficits’ – pretending to adopt a budget which broken even but in reality knowing that a deficit would occur. Once that strategy became public, hospitals had no choice but to reduce services in order 6to live within budget. Inflationary increases in electricity and other such staples has meant that funds had to be taken out of personnel and staffing. The funding formula has come to mean that smaller hospitals now make the difficult choices about what health care services they can provide their community, and what the community must do without.

The annual budget of the Collingwood Hospital is $55 million, which doesn’t allow much room for wiggling. Another three or four million dollars a year would go a long way to improving health care. That is true for many smaller hospitals in Ontario. Perhaps it is time to stop pretending that good health care can be delivered by big expensive new hospitals, and instead realize we need a better balance between what we spend on bricks and mortar and what we spend on the people who deliver health care services.