Appendix B: Report on Resources

	Estimated1	Other Authori- zations2	Total Estimated	Actual	Variance    (Actual minus Total Estimated)3	% of Budget
Operating Expenses ($000)
Services Delivered by Partners
Regional Health Sector Funding	6,495,945	147,986	6,643,931	6,665,103	21,172
Medical Services Plan	2,568,158	0	2,568,158	2,545,815	(22,343)
Pharmacare	830,355	0	830,355	792,832	(37,523)
Debt Service Costs	173,500	0	173,500	148,299	(25,201)
Amortization of Prepaid Capital	136,677	0	136,677	137,285	608
Sub-Total	10,204,635	147,986	10,352,621	10,289,334	(63,287)
Services Delivered by Ministry
Emergency Health Services	220,602	0	220,602	231,291	10,689
Health Benefits Operations	18,328	0	18,328	29,775	11,447
Sub-Total	238,930	0	238,930	261,066	22,136
Executive and Support Services
Minister's Office	778	0	778	729	(49)
Stewardship and Corporate Management	107,167	0	107,167	108,497	1,330
Sub-Total	107,945	0	107,945	109,226	1,281
Recoveries — Health Special Account	(147,250)	0	(147,250)	(147,250)	0
Total Vote 25 — Ministry of Health Services	10,404,260	147,986	10,552,246	10,512,376	(39,870)
Health Special Account	147,250	0	147,250	147,250	0
Vote 26 — Vital Statistics	6,935	0	6,935	6,755	(180)
Sub-total — Operating Expenses	10,558,445	147,986	10,706,431	10,666,381	(40,050)	0.4%
Adjustment of Prior Year Accruals4				(59,943)	(59,943)
Total — Ministry of Health Services	10,558,445	147,986	10,706,431	10,606,438	(99,993)	1.0%

Operating Expense Variance Explanations

The Ministry of Health Services 2004/05 budget was $10.71 billion (includes Estimates and Supplementary Estimates). The actual spending for the fiscal year ended March 31, 2005 totaled $10.67 billion, resulting in an operating surplus of $40 million, which represents 0.4 per cent of the budget. In addition, an accounting adjustment to reverse prior year accruals of $60 million was credited to the ministry budget as a year-end adjustment. Accrual reversals are a normal part of accounting practices, however, in prior years these adjustments were applied to the Consolidated Revenue Fund and were unavailable to the ministry for spending. A change in accounting practice in 2004/05 resulted in these adjustments being credited to the ministry budget; however, once again they were not available to the ministry to spend. This adjustment results in a total ministry surplus of $100 million.

Regional Health Sector Funding: The deficit was primarily due to increased funding to the Michael Smith Foundation for Health Research.

Medical Services Plan: The surplus in 2004/05 was primarily due to lower spending for Alternative Payments and physician benefits payments to the Canadian Medical Protective Association.

PharmaCare: The surplus in PharmaCare is primarily related to lower than anticipated Fair PharmaCare price and utilization increases.

Health Benefits Operations: Health Benefit Operations deficit is primarily due to additional costs to maintain current service levels and one time transition costs to implement the ASD initiative.

Emergency Health Services: Emergency Health Services was overspent due to wage increases of 1.4 per cent and annualized costs of shift adjustments. An increase in fuel costs for ground and air service delivery and increases in contract rates for air carriers also contributed to the overage.

Debt Service Costs: Debt servicing surplus at year-end is due to lower debt balances, lower interest rates and less capital spending than originally planned.

	Estimated1	Other Authori- zations	Total Estimated	Actual	Variance (Actual minus Total Estimated)2
Full-time Equivalents (Direct FTEs)
Health Services — Ministry Operations
Emergency Health Services	1,895		1,895	1,884	(11)
Stewardship and Corporate Management	677		677	576	(101)
Health Benefits Operations	115		115	243	128
Minister's Office	9		9	8	(1)
Sub-Total — Ministry Operations	2,696	0	2,696	2,711	15
Vital Statistics	89		89	77	(12)
Total Ministry of Health Services	2,785	0	2,785	2,788	3

The FTE budget was 2,785 in 2004/05. Actual FTE utilization was 2,788 resulting in an over-utilization of three FTE's. Delays in implementing the ASD initiative in HBO resulted in an over-burn of approximately 128 FTE's, offset by recruitment lag elsewhere in the ministry.

	Estimated1	Other Authori- zations	Total Estimated	Actual	Variance (Actual minus Total Estimated)2
Ministry Capital Expenditures (Consolidated Revenue Fund) ($000's)
Health Services — Ministry Operations
Stewardship and Corporate Management	8,050		8,050	7,658	(392)
Emergency Health Services	11,006		11,006	9,086	(1,920)
Sub-Total — Ministry Operations	19,056	0	19,056	16,744	(2,312)
Vital Statistics	550		550	253	(297)
Total Ministry of Health Services	19,606	0	19,606	16,997	(2,609)

The Consolidated Revenue Fund Ministry Capital budget was $19.61M in 2004/05. The surplus was mainly due to under-spending on information systems in Emergency Health Services.

	Estimated1	Other Authori- zations	Total Estimated	Actual	Variance (Actual minus Total Estimated)2
Consolidated Capital Plan ($000's)
Prepaid Capital Advances	379,700	0	379,700	291,209	(88,491)

The budget for prepaid capital advances was under spent by $88.5 million in 2004/05, due to a $15.25 million reduction in the value of the land transfer from the Province to the Provincial Health Services Authority for the Children's and Women's Health Centre, reductions of $9.0 million with the Vancouver General Hospital Redevelopment Project, and longer than expected project planning processes resulting in delayed project starts and completions.

	Estimated1	Other Authori- zations	Total Estimated	Actual	Variance (Actual minus Total Estimated)2
Financing Transactions (000's)
Health Innovative Incentive Program	2,034		2,034	769	(1,265)

Financing transaction recovery totaling $0.769M was received in 2004/05 from the Vancouver Island Health Authority as the second, in a series of three repayments for reimbursement of funds provided to them in prior years for the Picture Archiving and Communication (PAC) System.

Health Authorities' Budget

As required under the Budget Transparency and Accountability Act, British Columbia's six health authorities are included in the government reporting entity. The health authorities have been primary service delivery organizations for the public health sector for several years and many of the performance measures and targets included in the ministry's service plan are related to services delivered by the health authorities. The majority of the health authorities' revenues and a substantial portion of the funding for capital acquisitions are provided by the province in the form of grants from ministry budgets.

Capital Investment

Capital investment in the health sector funds a wide range of assets from facilities (such as hospitals and residential care facilities) to equipment (from MRI and CT scanners through to hospital beds) and, increasingly, information technology tools and systems that support patient care and health system management (such as the Electronic Health Record and Telehealth technologies). This infrastructure is the foundation that allows health professionals to provide quality health care and services to British Columbians.

The province has initiated major changes over the past four years that encourage more strategic investment of capital and more innovative approaches to meeting infrastructure needs. The ministry has introduced a longer planning cycle for capital projects and has gathered better data on current capital assets to assist improved decision-making. The ministry is now working to extend the planning horizon to ten years, particularly for major projects such as hospitals with life cycles that typically encompass several decades. A longer planning horizon better reflects the long-term nature of capital planning and the life-cycle approach to the management of capital assets that considers both capital and operating costs in the decision-making process.

In 2004/05, the ministry made significant capital investments to improve B.C.'s health system. The following pages of this appendix provide an overview of those investments.

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 2004/05, health authorities used ministry funding (in some cases, in collaboration with other sources such as the federal government, Regional Hospital Districts, foundations, auxiliaries or the private sector) for purposes such as purchasing equipment, building new and replacement facilities and converting existing facilities to uses more consistent with current and future needs. For example:

Fraser Health

• Peace Arch Hospital in White Rock; $1.9 million renovation to the Berkeley Pavilion to support the relocation and consolidation of various community services (Home Health Care, Mental Health Centre, Public Health, Screening Mammography and the Wellness Centre) to the hospital site.
• Royal Columbian Hospital in New Westminster; a new $5 million angiography interventional unit featuring leading-edge imaging equipment that will provide safer, less invasive care for patients.

Vancouver Coastal Health

• Powell River General Hospital's $2.5 million renovations for a Primary Health Care Access Centre to co-locate various community programs to the hospital site.
• Vancouver General Hospital; $2.2 million conversion provided additional Intensive Care Unit beds.

Interior Health

• Emergency and medical imaging departments at the Royal Inland Hospital, the first phase of the $27.5 million second floor redevelopment.
• Construction began on the 44-bed tertiary mental health facility at the Royal Inland Hospital ($16.4 million).
• Renovations to upgrade the maternity units in Kelowna, Vernon and Nelson ($2.1 million).

Northern Health

• Construction began on the replacement of Omineca Lodge in Vanderhoof, scheduled for completion in the summer of 2005 ($7.5 million).
• Renovation to incorporate community health services into Chetwynd General Hospital ($1.14 million).
• Seven Sisters 20 bed Adult Residential Mental Health Facility in Terrace ($2.5 million).

Vancouver Island Health

• Construction is underway for Nanaimo Regional General Hospital's $35.8 million acute care redevelopment, which includes a $23 million surgical expansion to be completed in 2005. The new $12 million perinatal services component is planned for completion in Spring 2006.
• Lady Minto Hospital in Ganges; $3 million surgical expansion and creation of a palliative care suite.

Provincial Health Services Authority

• B.C. Children's and Women's Health Centre's $2.7 million Neonatal Nursery Redesign project consolidated nursery functions and enlarged the Special Care Nursery area.
• B.C. Children's and Women's Health Centre's $4.4 million Nursing Unit renovations will combine two nursing units into a new 32-bed unit, including nine isolation rooms. The project is under construction and scheduled for completion in the summer of 2005.

Across the Province

Medical School Expansion:

In 2004/05, the Province committed $27.6 million for expansion and upgrading of academic space in teaching hospitals around B.C. to support the increasing number of undergraduate and postgraduate medical students. The University of British Columbia's Faculty of Medicine is working with the University of Northern B.C., the University of Victoria and the health authorities to provide medical student education province-wide.

Funding will be invested between 2004/05 and 2008/09 as follows:

• Fraser Health Authority $4.1 million.
• Interior Health Authority $.7 million.
• Northern Health Authority $6.7 million.
• Vancouver Island Health Authority $6.2 million.
• Vancouver Coastal Health Authority/Provincial Health Services Authority $10 million.

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 B.C. for the three-year period ending in 2005/06.

The following outlines cumulative spending to March 31, 2005 by category.

• Comfort/Safety for Patients and Staff $9.3 million.
• Diagnostic and Therapeutic Equipment $54.4 million.
• Medical Surgical Equipment $20 million.

In 2004/05, the funding contributed to the purchase of a wide variety of equipment such as:

Fraser Health

• Replacement Catheter Laboratory at Royal Columbian Hospital ($2 million).
• Two new computed radiography systems at Langley Memorial Hospital ($.5 million).

Interior Health

• Picture Archiving Communication Systems in various sites throughout the Interior Health region costing over $12 million.

Northern Health

• Chemistry Analyzers for Burns Lake and Terrace ($.2 million).
• Interventional unit for Prince George Regional Hospital ($.7 million).
• Dawson Creek Hospital — Digital Radiographic/Fluoroscopic Unit ($.7 million).

Vancouver Coastal Health

• Upgraded nuclear medicine camera at Vancouver General Hospital ($1 million).
• 64 Slice CT Scanner at Lion's Gate Hospital ($1.8 million).

Vancouver Island Health

• Two Digital Fluoroscopy units for Nanaimo Regional General Hospital ($2.2 million).
• Radiographic/Fluoroscopic unit for St. Joseph's General Hospital in Comox ($.56 million).
• Campbell River District Hospital — General Ultrasound unit ($.3 million).

Provincial Health Services Authority

• MRI at Children's and Women's Health Centre ($4.1 million).
• X-ray and Radiography Imaging System at BC Cancer Agency in Vancouver ($.7 million).

The September 2004 First Ministers' Agreement committed an additional $66 million in Medical Equipment funding for British Columbia. Health authorities have already begun planning for the use of this funding to best meet the needs of British Columbians in coming years.

In December 2004, the province announced the investment of $35 million in leading edge medical technology to improve access to better treatment and care for British Columbians. These purchases were made possible through funds from the province and the 2003 First Ministers' Diagnostic and Medical Equipment fund. Highlights of the new equipment include:

• the first publicly funded PET unit for the province, to be located at Vancouver Cancer Centre;
• three new 64 slice CT scanners at Royal Columbian Hospital, Royal Jubilee Hospital and Vancouver General Hospital;
• mobile MRI scanner for the Kootenays and south Okanagan, and a new 32 slice CT scanner at Kelowna General Hospital (with support from local foundations);
• MRI scanner upgrade at UBC Hospital;
• advanced radiology and pharmaceutical systems for the Northern Health Authority;
• laboratory centre of excellence for genomics in Vancouver; and a
• radiopharmaceutical lab and cyclotron at Vancouver Cancer Centre.

Most of the new equipment will be in operation in 2005, and the remainder in 2006.

Major Capital Projects

In compliance with the provincial Budget Transparency and Accountability Act, major capital project plans are made public. A major capital project is defined as any capital commitment or anticipated commitment that exceeds $50 million.

Projects may be publicly funded or structured as public private partnerships, designed to leverage private sector innovation and capital, where such an approach ensures better value for health care dollars.

In 2004/05, commitments were made to:

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

Objective: The hospital redevelopment is to consolidate patient services and clinical expertise 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 to create a modern and efficient hospital environment for enhanced patient care and accessibility.

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

As of the end of March 2005, approximately $93 million had been expended on the project, which is due for completion in early 2007.

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

Objective: The AACC is a state-of-the-art, 11-storey, 365,000-square-foot facility planned for the Vancouver General Hospital (VGH) site. The project will be completed through an agreement with Access Health Vancouver (AHV), a team of companies selected through an open competitive process.

Benefits: The AACC will provide single-site access to a range of outpatient (ambulatory) services along with undergraduate and post-graduate medical education facilities, teaching physician/specialist practice offices, and related commercial/retail activities. The facility is expected to support several hundred medical students, approximately 580 medical and allied professionals, and an estimated 600,000 patient visits annually.

Cost: The capital cost for the project is estimated at $95 million.

Risks: Under the terms of the partnership agreement finalized in September 2004, each party has agreed to assume the risks it can manage best at the least cost. During the construction phase, the health authority assumes only those risks related to matters under its control, such as decisions on space allocation. To mitigate these risks, VCHA is working to ensure its planning processes meet specific milestones in the agreed-upon construction schedule. Project construction commenced in October 2004 and is scheduled for completion in 2006.

For more information on the Academic Ambulatory Care Centre project, please see the ministry's website at http://www.healthservices.gov.bc.ca/cpa/publications/index.html*.

Abbotsford Regional Hospital and Cancer Centre — Fraser Health Authority and Provincial Health Services Authority

Objective: The Abbotsford Regional Hospital and Cancer Centre (AHCC) will be a new 300-bed facility that replaces the current 202-bed Matsqui-Sumas-Abbotsford (MSA) hospital, which is aging, physically obsolete, and not suitable for expansion.

Benefits: The new hospital and cancer centre will provide enhanced programs and services to meet the needs of Fraser Valley residents, 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.

Cost: The capital cost of the project is estimated to be $355 million. The Fraser Valley Regional Hospital District is contributing $71.3 million towards the project.

Risks: This is the province's first public private partnership project for a major acute health care facility. To mitigate risks, the AHCC team is building on the experience, documentation and advice of other jurisdictions that have completed similar projects. Risks have been allocated between the parties as part of the public private partnership contractual agreement. For example, the private sector partner will manage the design and construction risk.

Construction, which commenced in December 2004, is expected to end in Spring 2008, with the facility opening for patients in Summer 2008.

For more information on the Abbotsford Regional Hospital and Cancer Centre project, please see the ministry's website at: http://www.healthservices.gov.bc.ca/cpa/publications/index.html. To see Partnerships British Columbia's value for money report on the project, go to: http://www.healthservices.gov.bc.ca/cpa/publications/PBCAbbotsford.pdf.