Report on Resources

		Report on Resources

Resource Summary Variance Explanations

Regional Health Sector Funding

This area was under budget due to the transfer of certain capital spending from the operating budget to the capital budget and the deferral of a portion of the federal equipment funding to subsequent fiscal years.

Medical Services Plan

This area was under budget due to lower than anticipated expenditures in rural health recruitment and retention programs, physician benefits and supplementary benefits. The under expenditure was partially offset by increased costs for physician fee-for-service payments, emergency room contract payments and funding for out-of-province services.

PharmaCare

The surplus in PharmaCare is primarily due to lower than anticipated expenditures under the Fair PharmaCare Program introduced in May 2003. The savings were partially offset by an increase in expenditures under PharmaCare Plan C — the plan providing drug coverage for those on income assistance.

Debt Service Costs

The surplus in debt servicing is the result of lower than expected capital spending, the timing of borrowings and lower than expected interest rates.

Emergency Health Services

This area was over its planned budget due to wage increases, enhanced training for paramedics, the addition of new paramedic positions to support service delivery plans formulated by health authorities, and increased service volumes.

Health Benefits Operations

This area was over its planned budget due to enhancements to improve service levels, and an increased operational workload due to the implementation of Fair PharmaCare.

Program Management and Corporate Services

This variance is primarily due to unanticipated costs related to leave liability and other employee benefits.

2003 First Ministers' Accord on Health Care Renewal

In 2003, the Provinces, Territories and Federal Government reached a First Ministers' Accord on Health Care Renewal. Additional funding under the Accord is intended to provide investments in primary care, home care and catastrophic drug coverage, and also includes funding for specialized equipment and training to improve access to diagnostic services. The ministry and its health authority partners are using this funding to support our strategic priorities in these areas.

Capital Expenditures and Financing Transactions

Capital Planning

To support the province's long-term goal of a more sustainable and effective health care system, capital planning in the health sector is undergoing a number of major strategic shifts. In 2003/04, the ministry moved to a more outcome-based approach, and focused on promoting best practices in capital planning and management, giving health authorities an increased degree of autonomy with regard to planning and implementing projects. This allocation of authority and accountability reflects the ministry's stewardship role, and permits health authorities to respond more effectively to regional needs.

New provincial policy guidelines were implemented which support health authorities in developing a more flexible approach to meeting infrastructure needs through a variety of funding sources (public, non-profit, private) and methods of procurement.

In 2003/04, health authorities submitted multi-year Capital Asset Management Plans to the ministry for the first time. The development of a capital asset management plan is a cornerstone of good planning and management for provincial public sector agencies.

Health Sector Inventory and Assessment

In 2003/04, the ministry commenced a province-wide inventory and assessment of health authority-owned facilities, land, major equipment and leased premises. This is the first time that such a comprehensive inventory of public and not-for-profit health system assets has been conducted in British Columbia, and it is anticipated the results will significantly enhance decision-making for health authorities. A comprehensive database will allow health authorities to compare assets in a more meaningful way, prioritize projects, and assess the nature and cost of capital investment required to meet future service delivery needs.

Three-Year Capital Spending Plan

The ministry's three-year capital spending plan encompasses maintenance, renovation, replacement and expansion of health infrastructure that is consistent with regional priorities. For 2003/04 it included:

Restructuring Allocation

A $100 million restructuring allocation for health authorities was established in the 2002/03 fiscal year to convert existing health facilities to uses consistent with regional and provincial priorities, achieve building and operational efficiencies, and implement best practices. This work is to be completed by 2005/06. At March 31, 2004, $58.3 million has been approved from this allocation, including:

• Interior Health Authority — $7.8 million shared food services project.
• Fraser Health Authority — Burnaby Hospital's $2.6 million renovation to consolidate mental health services.
• Provincial Health Services Authority — B.C. Children's and Women's Health Centre's $1.6 million Labour Delivery Suite/Surgical Day Care Unit renovation.
• Northern Health Authority — Chetwynd General Hospital's $1 million renovation to incorporate community health services.
• Vancouver Coastal Health Authority — Vancouver General Hospital's $2.3 million Emergency Room renovation to accommodate expected increased patient volumes.
• Vancouver Island Health Authority — Victoria General Hospital's $2.1 million renovation to develop an inpatient rehabilitation unit.

Note: In some cases, costs are shared with funding partners such as regional hospital districts or foundations.

Mental Health Plan — Riverview Redevelopment

A $138 million capital allocation, commencing in 2002/03, is targeted for development of mental health beds for Riverview patients to be relocated to suitable facilities in their respective health authorities. At March 31, 2004, $28.4 million has been approved from this allocation.

The Provincial Health Services Authority is leading the redevelopment process with its health authority partners. Projects include:

• New seven bed mental health home — Vernon, $407,000. Completed in February 2004.
• Cottonwoods 11 bed Tertiary Rehab Facility — Kelowna, $1.7 million. Approved in March 2004. Expected completion in June 2005.
• Seven Sisters 20 bed Adult Residential Mental Health Facility — Terrace, $2.5 million. Approved in August 2003. Expected completion in October 2004.
• Bulkley Valley Lodge Renovation for 14 Psychogeriatric beds — Smithers, $1.7 million. Approved in November 2003. Expected completion in October 2004.
• North Peace Care Centre eight bed Psychogeriatric Renovation — Fort St. John, $1.5 million. Approved in January 2004. Expected completion in October 2004.

First Ministers' Accord on Health Care Renewal — Diagnostic and Medical Equipment Fund

The 2003 First Ministers' Accord on Health Care Renewal established a $1.5 billion national diagnostic and medical equipment fund. Of that total, $200.1 million was allocated to BC for the three-year period ending in 2005/06. The ministry had originally intended to spend $60 million in 2003/04; however, due to the length of time required to order and receive specialized medical equipment, $21.7 million has been spent to March 31, 2004. The unspent portion will be applied to future years. The following table outlines spending to date by category.

Specific examples include:

• Lion's Gate and Richmond Hospitals — Replacement of two CT Scanners ($1.4 million each).
• Equipment related to radiographic fluoroscopy in Squamish and Chilliwack ($1.2 million).
• Royal Columbian Hospital — Cardiac Catheterization Lab Replacement ($2.4 million).
• Royal Columbian Hospital — three Gamma Cameras ($1.1 million).
• Royal Jubilee Hospital in Victoria — Angiographic System ($2 million).
• Screening Mammography Program of BC (White Rock) Mammography Unit ($83,000).
• Radiotrophic Tomographic Units for Hazelton, Chetwynd, Burns Lake, and Vanderhoof ($300,000 – $375,000).
• Anaesthetic Machines for Smithers and Vanderhoof ($150,000 each).
• Across the Interior Health Region — patient beds and lifting devices to improve patient and staff comfort and safety ($3.1 million).

Major Capital Projects

Under the Budget Transparency and Accountability Act, a summary of the business case for major capital projects must be made public. A major project is defined as any capital commitment or anticipated commitment that exceeds $50 million. In 2003/04, commitments were made to the following major capital projects:

Vancouver General Hospital Redevelopment (VGH) — Vancouver Coastal Health Authority

Objective: Hospital redevelopment is to consolidate patient services and clinical expertise, research and teaching resources to assist in meeting patient care needs over the next 20 years or more.

Cost: Total capital cost is $156 million.

Benefits: Anticipated benefits are new patient areas and consolidation of hospital services within the Centennial Pavilion and the Jim Pattison Pavilion. Relocation of services to the new buildings is a vital part of creating a modern and efficient hospital environment for enhanced patient care and accessibility.

Risks: The project could potentially be affected by factors such as delays, changes in economic and market conditions (including potential for labour and material cost escalation and shortages), and scope, design, technology and/or building code changes.

The project is due for completion in 2007.

Prince George Regional Hospital Redevelopment (PGRH) — Northern Health Authority

Objective: To provide high quality health care services that meet patients' needs.

Cost: Capital cost of the project is $50 million.

Benefits: The modernized facility will provide improved diagnosis and treatment for northern residents. As a major regional referral and training centre, it will also support the recruitment of health professionals to the community.

Risks: With completion scheduled for 2004, the risk profile at this stage in the project is small.

Public-Private Partnerships

The ministry and health authorities are committed to ensuring maximum value for health care dollars and are exploring new approaches for capital projects. In accordance with that approach, the ministry and health authorities have pursued public-private partnerships (P3s) to leverage private sector innovation and capital.

Abbotsford Hospital and Cancer Centre (AHCC) — Fraser Health Authority and Provincial Health Services Authority

Objective: AHCC is a state-of-the-art regional referral health campus to replace the aging Matsqui-Sumas-Abbotsford (MSA) Hospital.

Cost: The capital cost of the project is estimated to be approximately $300 million.

Benefits: The new hospital will provide enhanced programs and services to meet the needs of Fraser Valley residents for the next 30 years, and will also help to recruit and retain health professionals. AHCC includes integration of a new cancer treatment centre that will be part of the provincial network operated by the BC Cancer Agency.

Risks: This is the province's first P3 project for a major acute care facility. To mitigate the first-time-through risks, the AHCC team is building upon the experience, documentation and advice of other jurisdictions that have completed similar projects.

Risks will be allocated between the parties as part of the P3 contractual agreement. For example, it is expected that the private sector partner will manage the design and construction risk.

As of March 31, 2004, the project was in the procurement phase and completion is anticipated for 2008.

Academic Ambulatory Care Centre (AACC) — Vancouver Coastal Health Authority

Objective: The objective of the AACC project is to replace outdated facilities and coordinate outpatient care services at the VCHA Vancouver General Hospital, including specialty clinics, medical education, physician practice offices, research and related commercial/retail activities.

Cost: The capital cost of the facility is estimated at $91 million.

Benefits: By centralizing medical disciplines, this modern facility will enhance patient access, scheduling and care by allowing the coordination of specialist visits, clinic visits and diagnostic testing in one location. In addition, medical students will benefit from increased interaction between academics, researchers and practicing clinicians.

Risks: Risks will be allocated between the parties as part of the P3 contractual agreement. For example, it is expected that the private sector partner will manage the design and construction risk.

As of March 31, 2004, AACC was in the procurement phase and completion is anticipated for 2006.