The Chatham-Kent Health Alliance (CKHA) took a significant step on its journey to fiscal recovery with a significant reduction to the organization’s line of credit.
CKHA officials say through ongoing efforts to reduce costs, including the reduction of over $1.9M in primarily management costs over the last few months, coupled with recent funding announcements from the Ministry of Health, the hospital has begun the long journey to restore its fiscal health.
Collectively, these strategies are allowing CKHA to reduce the line of credit by $2M from $10M to $8M.
“Today is a key step in the right direction as we continue our organizational transformation and path to fiscal recovery as we climb out of the serious fiscal hole the organization found itself in last year,” stated Rob Devitt, hospital supervisor.
“While I am very pleased that we have been able to take this step it has been the easy part. We now need to really focus on best practices in other peer hospitals to identify ways to further show value for taxpayer money.”
As has been highlighted over the last number of months, due to recurring operating deficits in six of the last seven years and capital expenditures, CKHA had depleted its cash leaving no money for needed equipment replacement and building improvements, CKHA officials say.
The organization increased its bank line of credit from $4M to $8M in 2015, and then again to $10M in March 2016 simply in order to meet ongoing financial obligations such as payroll.
This previous approach of using debt to finance the operation of the hospital was simply not sustainable,” CKHA officials stated.
Beginning in early February, CKHA implemented an organized and systematic process informed by benchmarking results to develop a financial recovery plan.
This was a key aspect of the process; benchmarking results prepared by external experts compared CKHA’s performance against other Ontario hospitals of similar size.
This process demonstrated that other organizations have achieved same or better quality and volume of patient care at significantly lower cost.
A 3-year recovery plan is being formulated to; ensure best practices are followed at CKHA, reinvestments are made for high priority areas and the organization is placed back on a stable financial footing.
Already, the benchmarking process and strengthened financial management practices have led $1.9M in reductions in management costs.
“I am proud of the collective effort our team has put forth in creating a responsible recovery plan,” stated Lori Marshall, president and CEO.
“We understand this is a time of uncertainty and want to ensure that we have worked towards a recovery plan that will be respectful of our employees. We are optimistic we can achieve our goals while still providing high quality, safe care to patients and their families following best practices and hospital sector standards.”
The public is encouraged to visit www.askckha.com for all the latest updates and to submit questions/comments directly to CKHA leadership.
– Submitted photo
