Health care in crisis: northern Ontario's hospitals operating in the red.

• Author: Krejlgaard, Chris
• Position: Health-care system in financial trouble - Part 1

The following is the first installment of a three-part series which will put Ontario's health-care sector under the microscope. This month Northern Ontario Business staff writer Chris Krejlgaard reports on the sector's poor financial health. Next month Krejlgaard will examine the reasons for the funding shortfall, and in January he will take a look at some potential solutions to the crisis.

There are fears that Canada's health-care system is ready to be plugged into a life-support system.

Touted as being a cornerstone of Confederation or a major thread of Canadian unity, the system is in trouble.

Costs are up, but government funding is down. There are reportedly too many doctors in the province, but not enough in Northern Ontario. Meanwhile, patients with special needs are forced to travel great distances to receive treatment - sometimes as far away as the United States.

An aging population in the north is presenting new challenges for the health-care industry. Nursing homes and homes for the aged are faced with increased demands, while hospitals must expand or change their services to meet the needs of older patients.

The provincial Ministry of Community and Social Services recently announced $37.9 million in additional funding for the province's nursing homes and homes for the aged. However, it is unlikely that Ontario's hospitals will receive the same help in their struggle with a tide of red ink.

FIXED COSTS

The four hospitals contacted by Northern Ontario Business all reported that they are operating in the red. Their administrators attribute the losses to the nurses' contract signed earlier this year, other labor agreements and legislated costs such as the Canada Pension Plan and unemployment insurance.

Some administrators are now concerned about the impact that pay equity will have on their budgets.

Dennis Timbrell, chairman of the Ontario Hospital Association, predicts that the program will add $500 million to the total operating deficit of Ontario's hospitals.

North Bay Civic Hospital is already heading towards an operating budget shortfall of $1 million for this fiscal year. Sault Ste. Marie General Hospital has budgeted a $500,000 shortfall, while McKellar General Hospital in Thunder Bay expects be $2.4-million short.

However, such financial problems are not restricted to larger hospitals.

For example, West Nipissing General Hospital in Sturgeon Falls is laboring under a $483,000 deficit. Hospital officials are contemplating...