Sault Area Hospital faces deficit at end of fiscal year

There are some financial challenges ahead for Sault Area Hospital.

Despite having a cash flow of $56 million at the end of the 2022-23 fiscal year on March 31, 2023 and having a surplus for most of the year, paying compensation to nurses since Ontario’s controversial Bill 124 was overturned has left SAH and many other Ontario hospitals feeling the pinch.

Bill 124, passed in 2019, capped salary increases for public sector workers - including nurses - to one per cent a year for three years. 

That legislation has since been ruled unconstitutional and nurses are now receiving compensation from hospitals.

“Despite our current performance, the impacts of inflation and compensation increases following the overturning of Bill 124 have created significant financial pressure for hospitals, including SAH. Like many hospitals in Ontario, we anticipate ending our current fiscal year in a deficit position on March 31, 2024,” wrote Brandy Sharp Young, SAH spokesperson in an email to SooToday.

SAH says the size of the anticipated deficit is unknown at this point and the hospital is awaiting additional information from Ontario Health.

While OHIP pays doctors, the Ministry of Health provides funding to hospitals to operate programs and services based on hospitals’ annual operating budgets. Hospital budgets include employee compensation costs for nurses and support services staff.

Compensation for employees accounts for approximately 60 per cent of SAH’s total costs each year; the overturning of Bill 124 has added significant pressure on this year’s budget said Armand Capisciolto, SAH Resources Committee chair speaking to the hospital’s board of directors at its most recent meeting held Monday.

SAH is already preparing its budget for the coming 2024-25 fiscal year that begins April 1, 2024.

“We, along with all hospitals, are working closely with the Ontario Hospitals Association, Ontario Health and the Ministry of Health to highlight and advocate for the needed funding to address the continuing impacts of significant cost increases such as inflation and compensation. We expect it will be several months before we have certainty about our funding for next year,” Sharp Young wrote.

However, the SAH board of directors was provided with some good news at its Monday meeting.

The board was told that SAH is committed to spend money for new equipment by the end of the current fiscal year.

The purchase of new equipment through the capital budget is determined by the fundraising efforts of the Sault Area Hospital Foundation (SAHF). 

“This year, we have been able to purchase new diagnostic imaging equipment, laboratory equipment, surgical equipment, as well as equipment for several of our departments, including the ED, ICU, Women and Children’s Health, Pharmacy, and Renal,” Sharp Young told SooToday.

The SAH capital budget for the 2023-24 fiscal year includes $7.3 million of equipment, of which $6.2 million will be purchased and installed in 2023-24 and $1.1 million to be installed in the 2024-25 fiscal year.

As reported earlier, thanks to seperate provincial government funding, construction on SAH’s second cardiac catheterization lab is scheduled to finish by the end of December and equipment delivery is expected for Jan. 4, 2024.

The second lab means that SAH will be able to complete up to 2,400 procedures each year, including coronary angiograms, angioplasty, cardiac stenting and pacemaker services.

The lab is anticipated to become operational and treat more patients beginning on Jan. 29, 2024.