Island Health is wrestling a ballooning deficit — driven in part by staff shortages and overtime hours — that as of June had climbed to $19.6 million.
Officials expect the deficit — called “concerning” by Island Health’s CEO Kathryn MacNeil and “significant” by B.C. Health Minister Adrian Dix — will be reined in by the fiscal year end.
“It may feel like a big deficit, or it may feel like a huge number,” MacNeil said, but “I’m confident in the team that we have, I’m very confident in the work that’s underway.”
At the same point last year, the health authority was running a deficit of $4.8 million. It was $4.7 million in June 2017 and $900,000 the year before that.
The health authority's annual budget is $2.5 billion. It says it has received “historic investments” from the province each year since 2017, allowing it to provide more MRI scans, hip- and knee-replacement surgeries, dental surgeries and colonoscopies.
Dix said that while he expects all health authorities will have balanced budgets at the end of the year, that “doesn’t mean it’s easy.”
“There are always going to be challenges,” he said. “If Island Health faces particular challenges, we’re going to ask them, of course, to control spending of public funds … but last year, it was balanced and the year before it was balanced … and that’s what I expect them to do this year.
“It’s pretty early in the fiscal year, and I feel very confident in the health authority and its ability to deal with these things.”
“It’s definitely a challenge,” MacNeil said, adding a number of initiatives to improve care and access; and defray costs are underway. “There’s not one magic way that’s going to solve it.”
An Island Health document, entitled Driving Operational Excellence to Reduce Cost Profile, obtained by the Times Colonist, shows that, as the fiscal year end for 2018-2019 approached, the health authority was trying to deflate a $30.1-million deficit.
Adjustments to avoid a deficit included $8 million in year-end Health Ministry funding, reallocation of $6 million in targeted funds and $2.3 million in non-restricted capital grants. There was also a ministry exemption granted to all health authorities for returns on Health Benefit Trust investment plans. In Island Health’s case, this was for a $13.8-million deficit.
“Without these year-end adjustments, Island Health’s deficit would have been $30.1 million,” says the Island Health document.
Dix said that working on the budget in the middle of the year is “exactly what they should be doing.”
One of the major costs for Island Health is overtime due to an increasing number of vacancies for registered nurses and, to a lesser degree, licensed practical nurses and health-care aides. There’s also shortage of lab technicians and community health workers.
“Overtime hours have increased at a much faster rate than worked hours,” the Island Health document says.
Base staffing levels are being outpaced by faster than typical growth in the past three years and a budget process that did not effectively factor that in, the document says.
“That kind of scheduling leads to inefficiencies and increased use of premium and overtime rates,” it says.
MacNeil said: “We haven’t got the workforce sized right. We have a magnitude of vacancies this year that we haven’t had in the past.”
She said staffing is based on a certain number of beds, but if more beds are being used on a regular basis, that baseline needs to be increased.
The document also notes that clinical daily overtime hours have almost doubled — increasing by 92.8 per cent — from about the same time last year.
As a result, MacNeil said, the health authority is revamping its approach to recruiting and hiring nurses. One initiative includes phoning back 400 nurses who weren’t hired in the past six months. In most cases, the applicants weren’t considered because they were not internal candidates — who are given preference because of seniority — or weren’t living in B.C.
Another factor is a practice of scheduling — called J-shifting — that, according to Island Health’s own documents, “is banned in other health authorities.”
J-shifting moves an employee scheduled for a future shift at straight time to a more immediate vacant shift. While it fills an immediate need, it creates the probability that the future shift will be paid out at a premium rate.
Island Health said it spent $2.5 million on J-shift associated premium rates in 2018-2019 and $500,000 in the first two periods of 2019-2020.
MacNeil said she is looking into the practice with an aim to move away from it.
Another major cost pressure is increases in acute care — in admissions and days stayed, patients in acute care beds waiting to return to the community, surgical cases, emergency visits, and the number of MRI and CT scans performed.
“At some of our hospital sites, we have almost 29 per cent of patients [in acute care beds] .… that could be care in their home, in a long-term care facility, assisted living,” MacNeil said.
Dix said it takes a while and costs a lot to turn around the under-capacity of home supports and long-term care in the community that have led to an overcapacity in hospitals, but the government is making record investments in solving such problems.
