Health Sciences North (HSN) has reported a deficit of more than $384,000 for the 2023-2024 fiscal year. That's not necessarily a bad thing, said hospital president and CEO David McNeil in his report to the hospital's annual general meeting held on June 12.
"HSN remains in good financial shape," said McNeil.
"Inclusive of ongoing Bill 124 expenses, inflationary expenses, ongoing investments in digital initiatives, and depreciation for buildings, HSN recorded a bottom-line deficit of $348,000, representing an improvement from the previous fiscal year where HSN recorded a deficit of $14.1 million inclusive of unfunded Bill 124 expenses, said McNeil.
Bill 124 was enacted by the Doug Ford Conservatives in November 2019 to put a one-per-cent wage cap per-year for all public sector union settlements. The act was challenged by the unions and overturned in the courts, forcing numerous payback agreements in all public sectors, including hospital wage settlements. Unions throughout Ontario have been seeking retroactive paybacks estimated at more than $6 billion.
Part of the annual meeting included an independent auditor's report filed by the financial accounting firm KPMG LLP to the hospital board, for the year ended March 31.
The report said HSN had $665.2 million in revenue compared with $572.2 million for the previous year.
The report said HSN reported $678.2 million in expenses compared with $616.6 million in spending for the previous year.
The 20-page KPMG document said the initial deficiency of $13 million was offset by Ministry of Health pandemic funding, deferred capital amortization, Bill 124 retro funding and other accounting notes to bring the deficiency down to $348,000.
In terms of expenses, other KPMG accounting notes revealed that hospital salaries and wages were $282.7 million and employee benefits cost $83.4 million.
Remuneration for medical staff was $39 million, cost of supplies was $97 million and drugs cost $59.3 million, said the report.
In terms of revenue, KPMG said the biggest contributor was Ontario Health North East and the Ontario Ministry of Health, which provided $410.6 million for operating the hospital. Cancer Care Ontario provided an additional $90.9 million. specifically funded programs provided $57.3 million and patient services provided $42.9 million.
HSN Board treasurer Kati McCartney also presented a report that highlighted many of the details from the auditors, in many cases showing various increases and decreases in income and spending and explanations for some of the major changes.
One significant change said McCartney was that pandemic funding decreased by $45.9 million, as bedded capacity and health human resources supports transitioned to regular base and one-time operational funding. This also reflected the discontinuation of pandemic incremental funding and decreased pandemic lab activities in the current year, she said.
As nearly all hospitals in Ontario have reflected an overall deficiency of revenue over expenses in the prior year due to Bill 124 liabilities recognized at that time, many hospitals are reporting an improved overall operating result in the current year, inclusive of these timing differences from Bill 124 retroactive impacts, said McCartney.
The cash balance increased by $63.9 million, reflecting a cash-adjusted operating surplus (excluding amortization and deferred capital contribution revenue) of $12.9 million, positive working capital changes of $47.0 million, capital additions of $41.4 million, funded in part by capital donations and grants of $14.8 million, and a net increase in long-term debt of $30.5 million, she said.
Accounts receivable decreased by $10.3 million, reflecting Healthcare of Ontario Pension Plan overpayments recoverable of $6.6 million in the prior year but not in the current year, and a lower receivable from ONE Health Information Technology Services for Meditech Expanse infrastructure and implementation services of $4.1 million, said McCartney.
Also speaking on financial matters was the report from the Board Chair Stéphan Plante who commented on the success of the HSN Foundation, the HSN Volunteer Association, the NEO Kids Foundation and the Northern Cancer Foundation which raised a record amount of donations in the past year.
Plante congratulated the respective members and staff for their work.
"In the past fiscal year, the three foundations generated a record-breaking $21 million in gross revenues," said Plante.
The HSN 50/50 Cash Lottery for the North generated more than $51 million in sales since its inception in June 2020, with more than half returning directly to ticket holders, he said. Plante thanked the community for supporting the HSN 50/50 draw.
"Funds raised make a meaningful difference in patient care," said Plante.
"Thanks to our generous donors and supporters, the Foundations at HSN were able to support the purchase of equipment including but not limited to $2.3 million for the Acute and Reactivation Care Centre, $170,000 for the Pediatric Critical Care Unit and $76,000 for Dialysis Chairs," he said.
"The Foundations have earmarked over $30 million for the local share of our future capital redevelopment to bolster pediatric care, mental health services, and acute patient care," he added.
Len Gillis covers health care as well as the mining industry for Sudbury.com.
