FOR IMMEDIATE RELEASE December 7, 2023
WHITEHORSE – After thorough review, the Yukon Party Official Opposition is responding to the Ernst & Young report regarding governance and financial management of the Yukon Hospital Corporation. (YHC)
The report confirms what the Yukon Party has been saying for years: the Liberal government has been chronically underfunding the Yukon’s hospitals. This in turn, has strained the territory’s health care system to the point where doctors are saying the system is ‘on the downslide and crashing.’
Key takeaways from the report include:
- Ernst & Young reviewed four years of financial statements and found Yukon Hospital Corporation suffered from a “chronic cash flow and operating shortfall.”
- Ernst & Young found the Liberal government was repeatedly informed of “financial pressures to meeting operational needs” and “the deficit was clearly communicated”.
- Despite government being clearly informed of the hospital deficit, “no one asked where the money was going to come from.” This means the Minister of Health, the Minister of Finance, and the Premier all failed to even ask where millions of dollars would come from to meet the needs of our hospitals.
- Despite being informed of financial shortfalls, the Liberal government failed to provide necessary funds, leaving Yukon Hospital Corporation “under financial strain, which has caused the use of unusual measures to stay financially viable.” This included a practice of delaying paying some of its ‘accounts payable’ until the next fiscal year.
- In 2022/23, Yukon Hospital Corporation’s financial shortfall was so serious that “YHC was facing a deficit and was at risk of not meeting payroll and operations obligations” had it not diverted $7.3 million in capital funding.
- It is clear the Liberal government was repeatedly informed during the last four years of what the report called a “chronic cash flow and operating shortfall,” but ignored the pleas from Yukon Hospitals for more money.
- The report compared Yukon hospitals with similar hospitals and found that YHC was under more financial strain, with less ability to pay their bills.
“While we welcome Ernst & Young’s agreement that Yukon Hospitals have been suffering from a ‘chronic cash flow and operating shortfall’ for at least four fiscal years, we have repeatedly warned the Liberal government of this problem,” said Health and Social Services Critic Brad Cathers. “The report confirms the Yukon Hospital Corporation also repeatedly informed government of their operational deficits over those four years, yet for some reason, pleas for more funding were ignored.”
Disturbingly, the Minister of Health bizarrely continues to deny there is a financial shortfall, despite receiving the Ernst and Young report proving that YHC has struggled with a ‘chronic cash flow and operating shortfall’ and hearing the CEO tell the Legislative Assembly that the YHC is trending toward an operational deficit as high as $6 million for the current fiscal year, even with recent cuts to services including medical imaging and surgeries.
“If the Minister of Health, Minister of Finance, or the Premier had actually been doing their jobs, the pleas from our hospitals for increased funding would have been recognized and the current health care crisis would have been avoided,” emphasized Cathers. “Premier Pillai’s focus has been on travel, and it is notable that he considers spending hundreds of thousands of dollars on his trips to India, Japan, Germany, the United Kingdom, and multiple destinations in North America more important than ensuring our hospitals have adequate funding to meet the needs of Yukoners.”
The report by Ernst and Young includes these findings:
“It is clear from the analysis that steps need to be taken collaboratively to address the YHC’s chronic cash flow and operating shortfall.” (Page 13)
“To assess the severity of financial strain, we reviewed the past four years of financial statements, calculated key liquidity ratios, and compared the ratios to other comparable hospital organizations in Canada.” (Page 12)
“Similarly, interviews with key stakeholders revealed that HSS was notified of financial pressures to meeting operational needs” (Page 11)
“Third, while the deficit was clearly communicated there was a lack of clear communication on its implications, or put another way, no one asked where the money was going to come from.” (Page 17)
“We note that the YHC has been under financial strain, which has caused the use of unusual measures to stay financially viable. To pay all creditors, the YHC has traditionally grown their accounts payable (AP) balance toward year-end and settled the accrued payables in the following fiscal year with the next year’s funding.” (Page 12)
“Recently, the YHC utilized $7.3M in capital funding received to establish a Mental Wellness Unit for operational purposes, despite being outlined in the funding agreement that it was exclusively for the purpose of undertaking and completing the MWU. In discussions with stakeholders from both the YHC and HSS, it was noted that these capital funds were used for operations as the YHC was facing a deficit and was at risk of not meeting payroll and operations obligations.” (Page 7)
The CEO of the Yukon Hospital Corporation said this in the Legislative Assembly:
“Mr. Bilsky: To summarize, our financial results for the six months ending September 30, 2023 is a deficit of $2.9 million. We are trending at this point — and it depends on how successful we are — toward somewhere between $4.5 million and $6 million by year-end. As we said, we can categorize in those five themes the pressures that we are facing after six months: pressure on employee costs; volumes and pressure increases on surgical services; increased volume complexity of testing; and escalating costs and inflationary costs in chemotherapy.”
(Hansard, page 4544, November 21, 2023)