Updated – Levy proposed to make up local hospitals’ equipment funding shortfall

June 19, 2018 by
Hospital Funding

Residents across the region could be looking at a new municipal tax levy in the coming years, as Rural hospitals are facing a serious funding challenge. As a result they are looking for ways to achieve sustainable funding for their capital equipment needs.

“We’re always trying to catch up with equipment that must be replaced,” Shawn Pankow, Smiths Falls mayor and Hospital Board representative, told Smiths Falls Council.

The province only funds the bricks and mortar and hospital operations.  But equipment - everything from x-ray machines to heart monitors has to be funded by the communities hospitals serve.

Currently the Hospital’s operating budget is approximately $54 million, of which about $50 million is provincial funding, the rest is patient revenue, grant amortization and other revenue streams such as cafeteria, parking, rent etc.  It does not include any funding for capital equipment.

“There is a need for 3.1 million of investment in capital equipment – every one of the services the hospital provides, relies on us having the equipment our doctors and nurses need to provide those services,” Pankow said.

So in an effort to secure predictable funding for that essential diagnostic and life saving equipment Perth and Smiths Falls District Hospital made a presentation to Smiths Falls council asking the municipality to consider building a health care levy into its municipal taxes.

“We’re asking for a dedicated line on municipal taxes to got to the hospital,” said Pankow adding that the hospital has come up with a plan to seek support from all the municipalities that fall within the hospital’s catchment area.

The calculation the liaison committee is proposing would see Perth residents paying an additional $73 on a $300,000 assessment while Smiths Falls residents would be paying an additional $95 on the same assessment or $50 on a $150,000 assessment, annually.

Pankow told Lake 88 News, "The hospital looked at its long term capital needs and really came to the realization that if it’s going to ensure it can meet those needs on a long term basis – we’re looking at the next decade or beyond – it had to find a solution to ensure that the funding it was able to attract for capital investment was going to be sustainable."

As it stands the hospital relies on its Community Foundations, Auxiliaries and hospital revenue streams to fund equipment needs. Together these entities raise approximately $1.5 million a year, but that leaves a gap of about $1.6 million between the amounts raised and what the hospital needs in order to continue providing the care patients expect.

“Every year there is a significant gap between what we need and our ability to pay,” said Pankow.

The hospital board’s liaison committee will be approaching every council within the region it serves to ask municipalities to help the hospital close the funding gap, using a weighted formula that spreads the burden evenly based on hospital visits, population and assessments.