Bill 124, cyberattack contributes to Bluewater Health deficit

It was a complicated fiscal year for Bluewater Health.

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Before the corporation, along with hospitals in Sarnia and Petrolia, was hit by a cyber attack in October, Bluewater Health already was budgeting a $14.8-million deficit for it’s April-to-March fiscal year, said chief financial officer Marlene Kerwin.

That was largely, she said, because of costs owed to Ontario public sector workers, whose wages were capped under Bill 124 for three years.

Bill 124 was repealed after the Ontario Court of Appeal found the legislation to be unconstitutional, and the province is on the hook for more than $6 billion in retroactive pay increases.

“We included all the known salary cost increases,” when setting Bluewater Health’s 2023-24 budget, Kerwin said about budget-setting in 2023.

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“But we didn’t know what (provincial funding) was going to be coming forward for those, which is why we had a deficit budgeted,” she said.

Bluewater Health ended up getting about 85 per cent of the funding for which it applied, falling under Bill 124, she said, leaving a funding gap of little more than $2 million.

“Which is a contributing factor to our deficit,” Kerwin

That $6.7 million deficit was reported to board officials recentlyin the first update about hospital corporation financials since last September, before the cyberattack crippled systems for months.

In terms of the $228-million budget’s actuals, things like OHIP funding and revenue from booking different types of rooms were down, because of the disruptions from the cyberattack, Kerwin said.

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Meanwhile, staff overtime was up considerably, she said.

“Some of that negative variance in salaries and wages will be covered off through our insurance, because a lot of it is related to pressures from the (cyberattack),” she said.

“But even going before the cyberattack in October, we were seeing increased acuity” putting more demands on staff, she said.

Overtime expenses were 450 per cent of what was budgeted in 2023-24, she said, noting that’s actually an improvement compared to 2022-23, when overages in salaries and benefits, compared to budget, equated to an extra 55 full-time-equivalent positions.

In 2023-24, the $7.6-million-over-budget expense — about $120.3-million total — was the same as 45 FTE positions, she said.

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The budget financials still need to be audited, she said, noting Bluewater Health has a waiver from the province for the year, allowing the hospital group to not have a balanced budget—normally required under hospital service accountability agreements.

That’s because of complications in the fallout of Bill 124, she said.

When Bluewater Health has to get back to balanced hasn’t been specified by the Ministry of Health, she said, but noted other hospitals are in similar straits.

“Unprecedented times,” she said.

The cyberattack, and Bluewater Health’s lack of access to financial information until recently, also has delayed setting this year’s budget, she said, noting hopes are to have something for board approval in the fall.

Staff have “been phenomenal” in the interim, she said, doing what needed to be done to ensure care for patients.

“It’s been a very challenging time,” she said.

-with files from The Canadian Press

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