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Niagara Health System identifies $12.3 million in cost savings

Posted Jan 23rd, 2008

Niagara, ON - The Niagara Health System (NHS) has identified $12.3 million in cost savings over the next two years as part of its ongoing efforts to make the best use of its resources while at the same time work towards balancing its budget.

"It is important that the community understand that this process identifies cost savings that do not impact patient quality, access to care or service levels. This means there will be no bed closures or service reductions," says NHS Chief Financial Officer Angela Zangari. "The targeted savings come from more than 100 different individual initiatives which span across all programs, services and sites within the NHS. This has been a very complex and time-intensive process, with some of these initiatives under development for more than two years."

More than half of the savings are related to changing suppliers and service contracts as well as product standardization. At this time, the NHS is working with its unions and staff planning committee members to begin to identify and assess those savings initiatives that could affect jobs and the impact of the initiatives. The NHS's continued commitment is to avoid any potential job loss by ensuring employees are redeployed wherever possible.

"As part of our annual budget process, every year we examine ways to do things differently and provide quality care to our patients while making the best use of all our resources," says Zangari.

Early last year, the NHS moved forward on a plan to commission an independent comprehensive benchmarking process to identify efficiency and productivity improvements. This process was conducted under the guidance of Health Care Management Group (HCM), a leading Canadian specialist in hospital performance, benchmarking and an advisor to the Ministry of Health and Long-Term Care (MOHLTC).

The savings of $12.3 million include savings initiatives that were already identified by NHS along with additional savings identified by HCM. After implementing the $12.3 million in savings, HCM says the NHS will be one of the most efficient hospitals in its peer group.

Like all Ontario hospitals, the NHS is required to balance its yearly budget as part of its funding agreement with its Local Health Integration Network (LHIN). The $12.3-million cost savings will in turn help the NHS in balancing its budget. 
However, even with the $12.3 million in savings, NHS projections show it will continue to have a gap. At this time, based on the current $360 million annual budget, the NHS is forecasting a deficit for 2008/09 of $16.1 million and a deficit for 2009/10 of $14.9 million.

"We continue to work collaboratively with our LHIN on next steps in working towards balancing our budget," says Betty-Lou Souter, Chair of the NHS Board of Trustees.

Niagara Health System