Board Approval of Plans

Keith Dewar

President and CEO

Our Purpose

Why we are here

Slide 2

Strategic Hierarchy

Government of Saskatchewan

Ministry of Health

Regina Qu’Appelle Health Region

Provincial Health System Patient,

Staff and Physician

Input

Patients, Clients, Residents and Families

Patients, Clients, Residents and Families

Slide 3

Strategic Planning Inputs

• To inform the development of plans, internal

and external inputs were considered: – Provincial outcomes and targets

– Patient, staff and practitioner feedback

– Clinical best practices

– CIHI data

– Accreditation standards

– Budget (provincial and RQHR)

– Other e-scan data (internal and external)

– Risks, gaps and challenges

Slide 4

RQHR Strategic Areas of Focus

Quality and Safety - Everyone has a right to expect safe, quality health.

Access/Patient Flow - Access to the right care, in the right place, at the right time, by

the right provider is a cornerstone of high quality care.

System Sustainability - Using our people, infrastructure, and financial resources

responsibly to build a strong health care foundation now, and

into the future.

Slide 5

RQHR Strategic and Business Plan

The Strategic Plan directs the

Region’s effort and provides focus

as we work towards achieving our

Vision.

The Business Plan is the Region’s

one‐year operational work plan that

guides us towards achieving the

goals and targets that have been

approved by the Board in the

Strategic Plan.

Slide 6

Formal Approval

Recommendations:

• THAT the Board approve the RQHR Strategic

Plan (Appendix A)

• THAT the Board endorse the RQHR 2016-17

Business Plan (Appendix B)

Slide 7

2016-17 RQHR Operating Budget

Slide 8

Recap of April 6th

Board Meeting – 2016-17

Preliminary Budget

• Limited funding to support increasing costs due to substantial growth

in our population and demographics is challenging

• Budget process started with a $30M estimated deficit, assuming a 0%

base funding increase

• Submitting a deficit budget is not an option; our target is a balanced or

small surplus budget

• The operating and capital budgets are established to support achieving

our one-year Business Plan

• The budget process supports our daily operations and the outcomes

established for the provincial health system

Slide 9

Highlights of June 1st

Provincial Budget -

2016-17 Operating Funding Impact

• RQHR’s MoH funded base operating grant increased by 3.5 per

cent to $936 million this year

• Funding highlights:

• $17.8M compensation funding to address collective bargaining

increases

• $9.247M inflation funding

• $4.7M for amounts previously received as special payments now

included in our base operating grant

• Direction to reallocate $1.464M from Administration spending to front

line Long Term Care spending

• New targeted funding of $20M provincially to increase surgeries and

decrease wait times (RQHR portion unknown at this time)

• Commitment to maintain the targeted funding for reducing ED waits

• Other targeted funding for specific programs still to come

Slide 10

Update to 2016-17 Operating Deficit Estimate

Prior to Deficit Reduction Initiatives

Regina Qu'Appelle Health Region

2016-17 Operating Deficit Estimate Prior to Deficit Reduction Initiatives

In $000's

2015-16 Carry Forward Deficit 15,201$

Adjust for One-Time Items (WCB, $2M revenue, vacation liability, stat holidays) (2,650)$

Known Incremental Costs (physician services, laundry contract) 3,312$

Inflation Expense Estimate 3,854$

Population and Demographics Changes: Net Impact 3,830$

Inflation Funding (net of funding reductions) (9,247)$

Est. Operating Deficit Estimate Prior to Deficit Reduction Initiatives 14,300$

Slide 11

Population and Demographic Changes

Require Strategic Investments

Strategic Investments Required to Address Population/Demographic

and Other Service Pressures

Planned Immediate Investments:

• Quality and safety improvements supported by:

• Information technology investments

• Analytical resource investments

• Advancement of primary health care service delivery

• Accreditation and regulatory requirements

• Appropriateness

Pending Investments:

• Infrastructure sustainment

• Addressing inpatient bed number pressures

Slide 12

Update to 2016-17 Operating Budget

Regina Qu'Appelle Health Region

2016-17 Operating Budget

In $000's

2015-16

2016-17B

(July 20)

Revenue

Ministry of Health Funding - Base 899,121 934,665

Ministry of Health Funding - Other 52,829 28,763

Other Gov't & Agency Revenue 27,076 23,908

Patient & Service Fees 24,889 24,447

Other Revenue 35,575 30,275

Total Revenue $1,039,490 $1,042,058

Expenses

Salaries & Benefits 688,175 668,796

Medical Remuneration 90,380 92,459

Operating Grants 70,160 71,447

Medical Supplies 88,795 91,472

Infrastructure 49,114 47,487

Clinical & Operational Supports 55,821 56,757

Admin & Other 12,246 13,640

Total Expenses $1,054,691 $1,042,058

Surplus (Deficit) ($15,201) $0

B - Budget

Slide 13

2016-17 Operating Deficit Reduction

Initiatives

Regina Qu'Appelle Health Region

2016-17 Operating Deficit Reduction Initiatives

In $000's

2016-17 Preliminary Operating Deficit Estimate 14,300$

Deficit Reduction Target Areas

Annual Productivity Improvement Target (roughly 1% of operating budget) 10,700$

One time PST Rebate Revenue 1,900$

One time GST Rebate Revenue 1,200$

Real Estate Revenue Opportunities 500$

Total Deficit Reduction Target 14,300$

-$

Slide 14

Productivity Improvement Target

Initiatives

Regina Qu'Appelle Health Region

2016-17 Operating Deficit Reduction Initiatives

In $000's

Productivity Improvement Target Initiatives 10,700$

The Region expects that it will achieve efficiencies and reductions to its cost structure each

year from engaging in quality improvement activities, participating in shared service opportunities

and focusing on diligent daily management.

The Improvement Target is allocated to initiatives that the Region is currently working on as follows:

Compensation Related Initiatives: 7,750$

Reduce Sick Time 500$

Reduce Orientation: 1,000$

Reduce Turnover

Create Consistent Orientation Programs

Reduce Overtime 1,000$

Optimizing Use of Our People Resources: 5,250$

Match Capacity (Resources) with Demand

-Correct staffing models, models of care, benchmarking and standards, reduce variations in service

Effective Management of Work Units

Consistent Work Standards for Leaders

Supply Savings Initiatives: 2,950$

Appropriateness - reduce and standardize tests, Antimicrobial Stewardship 500$

Inventory and Procurement Management 1,000$

Product Standarization 750$

3sHealth Procurement Savings 700$ Slide 15

Risks to Achieving a Balanced Budget

• Did not achieve targets for compensation reductions in 2015-16; risk of not

achieving results in 2016-17 is high

• Complex environment limits timely ability to reduce paid hours

• Diligent daily management requires organizational focus; reduction in

Administrative spending may reduce resources required to achieve savings

• Due to continued population growth and changing demographics, acute care

bed needs are projected to increase in 2016-17

• Anticipated savings from 3sHealth business cases have not been verified, and

in some cases is resulting in increased costs

• Unknown impacts from provincial transformation discussions

Slide 16

Formal Approval

Recommendation:

• THAT the Board approve the RQHR Operating

Budget (Slide #13 )

Slide 17

2016-17 RQHR Capital Budget

Slide 18

Risks and Challenges

Chronic Capital Funding Shortfalls

IT Capital Projects and Infrastructure

• Information Technology Plan recommends $10M+ annual project budget plus

increased operational budget, based on % of total region spend

Capital Equipment (Clinical and Non-Clinical)

• Equipment depreciation recorded in 2015-16 was $15.2M; annual planned replacement

should be at least this amount

Facilities Projects and Infrastructure

• Benchmarked annual maintenance & repair should be $50M based on 3rd party facility

assessments; shortfall of $32M

• Benchmarked annual capital asset renewal should be $24M based on our current asset

value; shortfall of $18M

• No allowance for capital expenditure required to address renovations for additional

medicine beds; funding request pending with MoH

Slide 19

2016-17 Capital Budget

Capital Cash Flows

2014-15

Audited Actual

2015-16

Audited Actual

2016-17

Budget

SUMMARY OF CASH INFLOWS

Provincial Funding:

Clinical Capital Equipment 3,368,840 3,716,598 2,780,000

Tertiary Capital Grant 1,000,000 1,000,000 1,000,000

Designated Capital Funding 500,000 500,000 500,000

Life Safety/Emergency & Infrastructure Funding 6,016,182 5,415,095 7,890,000

Facilities:

Project_ Regina Hospital Electrical Renewal 6,100,000

Project_Master Service Plan 1,500,000

Project _ RGH Heliport 830,021 - -

Project _Regina LTC Replacement Strategy 1,000,000 - -

Project _Regina Dementia Assessment Unit - 1,100,000 -

Project _RGH - 5B On Call Room Renovation 1,250,000 - -

Foundations/Donations 8,015,651 5,242,652 2,259,000

Transfer from Operating Fund 471,843 514,175 449,895

Transfer from Restricted Fund (81,100) 328,000

Mortgage Subsidies 346,358 314,853 356,199

Other (specify) _Other/Trust 2,949,218 310,162 165,000

Other (specify) _Endoscopy Project 130,000

Total Capital Cash Inflows 25,667,013$ 18,441,535$ 23,130,094$

SUMMARY OF CASH OUTFLOWS

Capital Equipment 13,933,131 9,654,154 5,194,000

IT Equipment and Capital Projects 4,688,000

Facilities:

Project _VFA, Life Safety and various Reno/Construction 4,406,161 7,089,564 11,719,409

Projects_Other funding sources 946,000

Project _Master Service Plan - - 1,500,000

Project _LTC Replacement Strategy - - 808,387

Project _Regina Hospital Electrical Renewal - - 6,100,000

Minor Renovations 502,338 455,316 2,714,685

Mortgage Principal and Interest Payments 1,184,875 827,761 762,887

Other Capital Cash Outflow (specify) Capital Expenses 1,188,823 450,023 294,922

Total Capital Cash Outflows 21,215,328 18,476,817 34,728,290

CASH INFLOWS MINUS OUTFLOWS 4,451,685$ (35,282)$ (11,598,197)$

Capital Expenditures Funded with Carry-Forward Funds 12,141,403$

Surplus/(Deficit) 543,206$

Slide 20

Capital Equipment Outflows

Capital Equipment Outflows and Funding Sources Detail

Outflows:

Fluoroscopy Unit 1,200,000$

Equipment Purchases from Prior Year's Funding 1,200,000$

Rural Trust Equipment Purchases 165,000$

HRF Committed Purchases 1,612,000$

Equipment Contingency 1,017,000$

Total 5,194,000$

Funded From:

HRF 2,259,000$

MoH Dedicated Equipment Funding 553,000$

MoH Clinical Capital/Tertiary Grant Funding 1,017,000$

Rural Trust Funds 165,000$

Carry Forward Funds from Prior Years 1,200,000$

Total 5,194,000$

Capital equipment recommendations, prioritizations and approvals are made per the

Clinical Equipment Committee and/or Rural Trust Committees

Slide 21

IT Equipment and Capital Project

Outflows

IT Capital Expenditures are prioritized and recommended by the IT/IM Steering Committee

and approved by the Senior Leadership Team

IT Equipment and Project Outflows and Funding Sources Detail

Outflows:

Hardware and Network Infrastructure 1,050,000$

Computerized Provider Order Entry 1,472,000$

Lab System Module 12,000$

Completion of Registration Replacement 850,000$

Carryforward and SunRise Clinical Manager projects 401,000$

Endoscopy System 903,000$

Total 4,688,000$

Funded From:

Deferred Revenue 130,000$

MoH Clinical Capital Equipment Funding 2,143,000$

Carry Forward Funds from Prior Years 2,415,000$

Total 4,688,000$

Slide 22

Facilities Projects Outflows

Facilities Projects are prioritized and recommended by the Facility Infrastructure

Committee and approved by the Senior Leadership Team

Facilities Projects Outflows and Funding Sources Detail

Outflows:

Regina Hospitals Electrical Upgrade 6,100,000$

Master Service Plan 1,500,000$

LTC Replacement Strategy Planning 808,387$

5B On Call Renovation 217,000$

Dementia Unit Renovation 365,000$

Other miscellaneous funded renovations 399,000$

Endoscopy Renovation 328,000$

Capital Renovation Contingency 350,000$

Nurse Call Systems 400,000$

HVAC Systems 2,950,000$

Elevator Upgrages 1,490,000$

Roof Replacements (Capital Expense) 995,000$

RPV & Grenfell Renovations 1,972,500$

VFA Projects In Progress 4,400,000$

Transfer to Affiliates 126,016$

Other Projects 1,682,500$

Total 24,083,403$

Funded From:

MoH Dedicated Funding 7,600,000$

Life Safety & Emergency Infrastructure Funding 7,890,000$

MoH Tertiary Capital Grant 350,000$

Carry Forward Funds from Prior Years 8,243,403$

Total 24,083,403$ Slide 23

Alignment with Strategic Priorities - Expected

Outcomes of Capital Expenditure Decisions

Quality and Safety • Addressing critical facility needs to ensure stabilized, continued operations of RQHR

facilities

• Priority safety investment in failing and obsolete patient care systems e.g. nurse calls

• Building code upgrades for elevators and fire safety systems

• Electronic ordering for clinicians will result in safer patient centred care

• Priority IT projects are consistent with the plan to implement an electronic patient record

Access/Patient Flow • Facilities projects designed to mitigate interruptions to service and infrastructure damage

due to failures e.g. plumbing and sewers

• Critical replacement of aging information technology and communications systems to

avoid service disruption e.g. Registration, Endoscopy, servers, phones

System Sustainability • Planned equipment replacements to avoid higher cost of emergency replacements

• Planned upgrades to avoid failures and increased mitigation cost for highest value

infrastructure obsolesce ( HVAC, Roof repair, electrical systems)

• IT projects will result in savings and cost avoidance due to fewer duplicate tests and

shorter lengths of stay Slide 24

Formal Approval

Recommendation:

• THAT the Board approve the RQHR Capital

Budget (Slide #20 )

Slide 25