Re-investing in our hospital

By John Aldis, vice-president, corporate and post-acute services, chief financial officer, Rouge Valley Health System

As reported in the treasurer’s report at the Rouge Valley Health System (RVHS) 13th Annual General Meeting of Members, held on June 28, it has been another very successful year for us. Fiscal 2010–2011, the third and final year of the hospital’s deficit elimination plan has been our best yet. RVHS achieved an operating surplus of $8.9 million, which was $3.7 million better than planned.

Overall hospital revenues increased by 4.1%, while our operating costs climbed 2.6% compared to the previous year.

Driving our success this past year has been exceptional revenue performance and our continued focus on operating efficiencies and cost containment through our Lean management philosophy. As part of our operating plan, RVHS put a major focus on revenue enhancement this past year.

In addition to securing additional post-construction operating funds for new space and expanded programs as part of our Rouge Valley Ajax and Pickering (RVAP) redevelopment, the hospital received bonus funding for achieving wait time improvement targets in our emergency departments at both sites. And we attracted additional funding during the year for performing more CT and MRI scans, more surgical procedures targeted by the government for reduced wait times, and more priority program cardiac procedures than we had planned. Finally, the hospital also secured new funding from the Central East Local Health Integration Network to open a 20-bed transitional restorative care program at RVAP.

We have already re-invested some of our financial surplus directly into patient care. Approximately $1.3 million was spent on various quality of care improvement initiatives, staff education and training, as well as new furniture, equipment, and mattresses that will help reduce the risk and spread of hospital infections. In addition, RVHS will use part of last year’s surplus in the current year to accelerate investment in major capital equipment and renew our aging facilities’ infrastructure.

While our capital needs far exceed available funding, the hospital was able to invest close to $74 million in capital this year—most of which was related to completion of the RVAP redevelopment.

Fundraising is critical to our hospital’s financial well-being, and 2010–11 was no exception. The RVHS Foundation donated and transferred $687,000 to the hospital this year in support of much-needed capital purchases. Thank you to all donors, volunteers and Foundation staff. 

We continue to make the most of every dollar raised by aligning the Foundation’s fundraising goals and efforts with the strategic priorities of the hospital.

Rouge Valley’s working capital deficit continued to improve and ended the year at $31 million. Improved cash flow and prudent cash management has enabled RVHS to build up cash reserves through the year, reducing short-term borrowing needs and reliance on debt to fund minor capital expenditures.  

Rouge Valley continues to be a very busy place. This year, the hospital treated approximately 29,000 inpatients, provided 52,000 mental health, rehab and complex continuing care patient days, and registered 109,000 patient visits across our two emergency departments. On the outpatient side, we had 190,000 clinic visits and performed 16,500 day surgery cases.

Thank you to our staff, who have done such a tremendous job in meeting the health care needs of the growing and aging populations of our east Toronto and west Durham communities.