Island Health has launched a series of cost-cutting measures in the face of a projected deficit of between $10 million and $12 million, according to a leaked memo from the president and chief executive officer.
In the document, Dr. Brendan Carr outlines plans to trim overtime, reduce workloads, minimize spending on supplies and office equipment, cut travel expenses, and impose a hiring freeze on non-contract staff and external consultants.
He blames the looming deficit on “unusual seasonal pressures,” start-up expenses at new hospitals in Campbell River and the Comox Valley, and increased long-term disability costs.
“As you are aware, we are not allowed by legislation to run a deficit,” Carr writes in the memo, dated Monday. “This puts us in a difficult situation and requires everyone pulling together in the last quarter to reduce expenditures where possible, while not jeopardizing the excellent care provided every day.”
The fiscal year ends March 31.
The health authority also faces a projected $20-million deficit next year that “requires early action to identify opportunities to bring this into balance.”
Carr said the authority, which has an annual operating budget of about $2 billion, will be asking “all portfolios to achieve a 1.5 per cent savings reduction target” in 2017-18.
“We are not planning any staff layoffs, but are asking all portfolios to explore opportunities to reduce costs through attrition or staff reassignment,” the memo states.
The B.C. NDP, which obtained a copy of the memo, blames the B.C. Liberal government for “underfunding” health care.
“I think it’s very, very worrisome,” said Opposition health critic Judy Darcy. “We are going to see cuts to services. It is inevitable, because … the vast majority of that budget is staffing.”
She said health authorities already struggle to manage wait-lists for surgeries, overcrowded emergency rooms and the impact of an ongoing epidemic of opioid overdoses.
“The idea that services are going to be reduced, that staff are going to be reduced, is shocking,” Darcy said.
“The government needs to intervene. The government needs to say that health authorities should not be cutting staff — end of story.”
Health Ministry spokeswoman Lori Cascaden said in a statement that the ministry is working with all health authorities to address budget pressures.
“I can assure you that any work to balance the health authority’s budgets will focus on administrative reductions and will not have an impact on patient care,” she said.
Cascaden noted that the ministry’s funding increased by $523 million in 2016-17 to nearly $18 billion.
“The budget process is a normal part of budget management, and it is not unusual for a health authority to experience budget fluctuations,” she said.
Island Health issued a similar statement, portraying the cost-cutting as a “normal part of budget management.”
“By taking steps now to address this shortfall, we are confident we will end the year with a balanced budget as we have in past years,” the statement said.
It noted that Carr’s memo made no reference to cutting services. “There has been no direction or expectation that services to patients will be impacted.”
The authority said overtime will be reduced “where it does not impact patient care” and workload hours will be trimmed “by asking staff to focus on clinical and patient-related activities and reduce activity related to things such as committee meetings, special projects, research, community events — etc.”
