President and CEO Remarks- Town Hall Meeting October 23, 2008

President and CEO Remarks-
Townhall Meeting
Date: October 23, 2008
To:
Everyone
In March of this year I shared a Memo with the Hospital’s Board of Directors and with all of you outlining
the difficult financial situation we were facing as a hospital and how this was going to get even worse over
the next two years if we maintained the status quo.
I focused on the massive growth we have experienced in demand for services over the past ten years.
51% increase in emergency room visits
16% increase in acute care patient days
92% increase in complex continuing care days
300% increase in operating budget of WRH
Over this same period of time Windsor Regional Hospital internally funded a considerable amount of the
capital expansion.
Over the past ten years this has amounted to Windsor Regional Hospital funding approximately $60
million dollars. This has resulted in the hospital having a $60 million working capital deficit.
In addition, in my March report I focused on the increase in provincial spending on Healthcare increasing
by 210% over the same time period and accounting close to 50% of the amount spent by the province.
This is not sustainable.
We cannot and will not as Windsor Regional Hospital continues to extend our hands to the LHIN, the
Province and the taxpayer and ask for more monies without first getting our own house in order. We
know by benchmark data that we can find efficiencies in our own operations first.
In addition, during the last accreditation the accreditors questioned our mission of that day, back in 2005
our mission was “We exist to provide the best healthcare to all who need it.” The days hospitals thought
they should or can provide care to all who need them is selfish, out of touch, unreasonable and
impossible. A hospital alone cannot meet the current demands let alone the upcoming demands for
healthcare services; it required the mobilization of community services.
Earlier this year it was announced that we will receive a 2.25% funding increase and only a 1.95%
funding increase in 2009-2010. As we all know the cost of electricity, gas, water and insurance are
increasing at a greater rate per year than this, let alone wages and benefits.
Now moving from March of this year to October.
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As stated by Premier Dalton McGuinty yesterday “Ontario Hospitals were put on notice that funding
projections would have to be scaled back as hard economic times and looming deficit are likely to see the
province tighten its fiscal belt for the next two years.”
Mr. McGuinty went on further “The province will do what it can to protect existing services and programs
but hospitals won’t get the provincial money excepted – we won’t be able to live up to those original
projections based upon what’s happening.”
As stated by Ted Ball, a well respected healthcare analyst, Health system leaders who believe there will
be another bailout need a reality check. We have hit the brick wall on finances. He continues, if a hospital
wants to thrive and grow over the next several years it must find ways within that organization to
reallocate resources.
The leadership of Windsor Regional Hospital recognized these issues months ago and took action,
together.
Throughout this period of massive growth over the past ten years Windsor Regional Hospital budgeted
the way a lot of organizations budgeted, that is, incrementally. Each year we either added or subtracted
an amount from our budgets. In traditional incremental budgeting, departments justify only increases
over the previous year’s budget and what has been already spent is automatically sanctioned
Earlier this year the medical and administrative leadership of Windsor Regional Hospital, under the
stewardship of the board of directors, embarked on a novel, inclusive and rewarding zero based
budgeting process in zero-based budgeting, every department function is reviewed comprehensively and
all expenditures must be approved, rather than only increases. Zero-based budgeting requires the budget
request be justified in complete detail by each division manager starting from the zero-base. The zerobase
is indifferent to whether the total budget is increasing or decreasing.
It is bottom up budgeting rather than top down.
The focus of the ZBB process has been on rethinking approaches to providing and supporting care so as
to eliminate unnecessary activity, restructure inefficient processes, better balance workload and staffing,
improve quality of worklife, maintain or improve quality of care and reduce costs. The process has
involved both medical leadership and the managers of hospital departments along with the front line staff.
The work of the medical leaders, department managers and front line staff should be recognized and their
willingness to challenge the status quo should be commended. As a result of their efforts there are
innovative ideas being pursued throughout the organization in order to realize Windsor Regional
Hospital’s NEW vision of “Outstanding Care - No Exceptions”.
The work has resulted in over 250 improvement initiatives that will be implemented over the next 18
months and related directly to the strategic directions created by the hospital this year.
Nine of these initiatives, brought forward from the ground up not the top down, were brought before the
board of directors for direction and decisions.
In coming to its decisions the board factored all of the comments I made previously, plus spent a
considerable amount of time reviewing decision packages put together by the medical and administrative
leadership, reviewed a considerable amount of data, met with the physician and administrative
leadership, asked numerous questions and reviewed various alternatives.
It was a thorough and exhaustive due diligence process.
The board made it decisions on October 20, 2008. Over the last two days the administration has been
meeting with the physician and administrative leadership of these areas and started developing
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implementation plans. Out of our commitment to accountability and transparency we are announcing the
Board’s decisions.
The decisions were not easy to make, however. By maintaining the status quo other areas would have
been directly impacted.
For example, recently we purchased $2 million dollars of anesthesia machines; we had to purchase on a
line of credit. The operating rooms require towers at a cost of $500,000. If we do not make changes in
the areas then areas we do not want to reduce will be reduced by our inaction. For example, if we do not
replace the towers we could go from 11 operating rooms to approximately 6 operating rooms. At a time
when we need to reduce operating room wait times, that is not the answer.
In coming to its decisions the Board made it clear that they want implementation plans developed that
minimized permanent staff layoffs and minimized the impact on the delivery of patient care.
Summary of Karen Mccullough, Sharon Pillon, Cam Dickie and Claudia Den Boer Grima to go through
each of the Board’s decisions that impact acute care directly.
The next steps in this process are for the medical and administrative teams to develop implementation
plans that will be reviewed by the ABB Steering Committee.
The implementation plans will result in minimizing the impact on staff, patients and families as much as
possible, with a focus on patient safety and quality of care.
The goal is to have all of the 9 areas implemented by March 31, 2009 and the implementation of the other
250 initiatives over the next 18 months.
The fact that Windsor Regional Hospital’s Board of Directors and Leadership embarked on this ZBB
process even before the drastic international economic meltdown occurred puts Windsor Regional
Hospital and the community in a good position to address further issues that It may face in the future.
Estimates are that very few hospitals are even mobilizing their organizations to address the ever
changing funding levels.
I look forward to working with each of you to attain our vision of “Outstanding Care – No Exceptions.”
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