LHSC reports $78-million deficit in 2023-24 fiscal year
A report released by London Health Sciences Centre today revealed a $78.1 million deficit from March 31, 2023 until March 31, 2024.
LHSC is facing major budget pressures due to continued pandemic recovery, among other factors, which resulted in $2 million more than projected. Ernst & Young LLP have been enlisted to audit the organization in hopes of finding new areas to focus on saving.
“I’ve been in healthcare for close to 30 years, so this is not my first rodeo. It’s part of healthcare, no matter what the stripes of the government are,” says David Musyj, acting president and CEO of LHSC. “We’ll get through this together, we just have to deal with it, come up with a plan, address it and get through it.”
A management organizational structure review will examine LHSC’s leadership structure and identify best practices. The process was initiated last week, and it is expected to take approximately 90 days to complete. In addition, LHSC will be comparing every clinical and non-clinical program against other hospitals in Ontario. This analysis is estimated to take 90-120 days.
“We’ve got to create an organizational structure that’s based upon best practice and what other similarly situated and high performing hospitals in the province or Canada look like,” says Musyj. “The goal is, when I leave here, that structure is going to stay. Meaning, what we put into place will be evidence based, and based upon best practices.”
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Finally, LHSC has introduced a new recruitment process, where every new or vacant position requires approval from executive leadership teams. As for what this means in terms of services and potential impacts to the community, Musyj says nothing will change, and these reviews will not cost any additional money since they are done on various levels by LHSC staff.
“The services are not impacted whatsoever,” says Musyj. “We need to be making sure that as we’re making decisions, the patient’s at the heart of those decisions, and we’re making them in the patient’s best interest. So there’s a whole bunch of other things that are going on. But, again, that’s why I’m here.”
The operational budget for 2024-25 is $1.66 billion, up from about $1.5 billion the previous year. This brings the projected 2024-25 deficit up to around $150 million. In 2021, Ontario Health gave LHSC five fiscal years to balance their budget, which is common amongst the vast majority of hospitals province-wide.
“Other healthcare facilities are dealing with identical stress. The raw numbers because LHSC is one of the largest healthcare organizations in Ontario, let alone Canada, and the denominator is $1.6 billion,” says Musyj. “So when you hear $150-million operating deficit that’s clearly a big number, but compared with the denominator… that’s a big number too.”
The primary source of funding for LHSC is the Ministry of Health and Ontario Health, which contributed around $1.42 million. Inpatient services, salaries and wages are the highest expenses. This comes after turmoil with Jackie Schleifer Taylor after LHSC decided to part ways with the former CEO.
“I’m not going to spend time recreating history because that serves no purpose with what’s in front of us right now, other than to put into practice plans that don’t allow for history to be recreated,” says Musyj. “Meaning plans on paper, not on a napkin, that, again, when I leave this place, whoever becomes president, CEO, he or she can take it over…And that’s what we’re doing. Moving forward.”