‘Not wonderful news’: Hospital faces possible $20M deficit

Uncertainty surrounding healthcare funding continues to grow.

The Sault Area Hospital (SAH) board of directors was told at its most recent meeting Monday that the hospital is forecasting an operating deficit exceeding $20 million based on funding received from Ontario Health.

“This isn’t quite the greatest news,” Ila Watson, SAH president and CEO, told the board.

SAH is not alone and is facing funding issues similar to other hospitals in the province.

SAH finished its 2023-24 fiscal year April 30 with a $2.1 million surplus. That was an unexpected outcome due mainly to late-in-the-year provincial government funding to cover Bill 124 compensation. Without that funding, SAH would have faced a 2023-24 deficit of approximately $7.5 million, Watson told the board.

However, the 2024-25 fiscal year will be a challenge.

“Our operating plan for 2024-2025, approved by the board of directors ensures that we will maintain all existing services even as we experience heightened demand, especially in our emergency department. However, the uncertainty surrounding healthcare funding continues to grow, and we are now forecasting an operating deficit exceeding $20 million based on the funding received from Ontario Health. Our operating plan includes anticipated additional demand due to the community’s primary care situation, increases in salary costs and overall inflation,” Watson wrote in an email to SooToday.

“For fiscal 2024-2025, we are moving forward with our current plan, continuing to prioritize patient care and operational stability despite these concerns,” Watson wrote.

Watson told the board that Ontario Health has begun gathering financial forecasts from hospitals and that there is a possibility SAH will be required to develop a formal recovery plan in the future.

The SAH president and CEO said the hospital, along with other hospitals in northeastern Ontario, will seek financial relief from the provincial government. 

“Last year, the majority of hospitals across northeastern Ontario had operating deficits, and most face significant ongoing financial challenges. Without financial relief, hospitals will continue to face difficult choices. The situation highlights the urgent need for support and intervention to ensure healthcare facilities can continue to serve their communities effectively. Our Board and Leadership Team continue to advocate for our hospital. Together with our northeastern hospital partners, we raised our concerns to our government leaders. The urgent need for support and intervention to ensure healthcare facilities can continue to serve their communities effectively continues to be highlighted,” Watson wrote.

The $20 million figure “could shift with realized hospital activity and further funding adjustments,” Watson said.

“It is not wonderful news but it is the reality of our situation and we’ll work closely with the ministry and keep you informed,” Watson told the board at Monday’s meeting.