Progress Report Hospital Improvement Plan June 9/10, 2016 Linda Davis, President & CEO Jack Russell, Chair, Board of Directors Staff

Context – Recap from February Forums NHH has faced shortfalls in its operating budgets for a number of years Many pressures: –increased patient activity & acuity (sicker patients) –Alternative Level of Care (ALC) patient days due to lack of community resources –increased patient transportation costs –inflationary pressures ($1 M annually) –new hospital funding model (competition for fixed $$) Not alone, many hospitals facing challenges Slide 2

The “performance factor” All hospitals in Ontario are required—by law—to balance their operating budgets In August, 2014 we alerted our funder—Central East LHIN—to heightened concerns regarding our financial position for 2014/15 and beyond Hospitals with a “performance factor” must follow a set process with their LHIN to resolve it - Guidelines for Hospital Audits and Reviews –NHH-led Coaching Review conducted in early winter 2014/15 –LHIN-led Operational Review conducted in summer/fall of 2015/16 Slide 3

External reviews Purpose of the reviews was to provide the NHH/LHIN with the necessary evidence for a Hospital Improvement Plan (HIP) –a roadmap to address NHH’s “performance factor” NHH’s Operational Review, conducted by Hay Group, provided the most extensive examination of our situation Research and consultation with stakeholders key part of Hay Group’s work Slide 4

What did the External Operational Review (Hay Report) find? Positive review The Hay Report affirmed the following: –NHH is an efficient hospital –NHH is well governed, well managed –No service reductions, no reductions in service volumes recommended Recommendations with regard to the way NHH delivers services today were made Slide 5

External Operational Review (Hay Report) recommendations 54 recommendations involving: –Board & management –Utilization of services –Clinical efficiencies –Operating efficiencies –Integration Internal clinical and operating efficiency opportunities = $3.1 M Opportunities to further reduce costs through integration = $2.2 M Total opportunities identified by Hay: $5.3 M Hay Group recognized this would help NHH address a portion of financial pressures – still not enough to resolve financial challenge, ensure sustainability – LHIN/Ministry assistance required Slide 6

NHH / Central East LHIN Board response to Operational Review NHH Board received the Hay Group report in October 2015 –Agreed to actively pursue all of the 54 recommendations Central East LHIN Board received the Hay Group report October 28, 2015 –Directed NHH to return with a full, implementable Hospital Improvement Plan (HIP) in December 2015 Final HIP was approved by Central East LHIN Board in January 2016 Slide 7

NHH’s Hospital Improvement Plan (HIP) NHH HIP is a multi-year plan, 53 initiatives in total Upwards of $5 M in efficiencies identified –Approx. 60% ($2.8 M) from clinical and operational efficiencies –Approx. 40% ($2 M+) from “integrations” HIP aligns closely with recommendations made by the Hay Group in their External Operational Review Biggest achievement - All services will continue at NHH, no changes in service volume required Changes to the way NHH delivers services are required Some initiatives span two years Others may take three/four years to implement Slide 8

NHH HIP – Progress to date Great deal of work on 2016/17 priorities has been completed in just 5 months All hands on deck – physicians, front-line staff, management, health system partners –Multidisciplinary teams collaborated to tackle specific priorities, developed sustainable action plans First quarterly update delivered to Central East Board of directors last month – see LHIN website for details On track to meet or exceed all 2016/17 initiatives Slide 9

Teamwork Slide 10

Teamwork Slide 11

Teamwork Slide 12

NHH HIP – Progress to date NHH implemented the following almost immediately: Most of the changes related to Board Governance & Management Reporting –Policy reviews, adjustments to management reporting, clarification of roles/responsibilities of department chiefs, etc. Many of the operating efficiencies –Reduced support services management –Increased front-line manager, decrease director role (1/1) –Modified housekeeping/cleaning frequency in non-clinical areas –Reduced non-labour costs in Diagnostic Imaging Selected investments –Increased hours for staffing in ICU Slide 13

NHH HIP – Progress to date In the Emergency Department (ED), NHH will have implemented the following by July: Enhance productivity performance in the NHH ED –NHH ED benchmarked high in comparison to its peers –Median productivity performance recommended –Partial completion by July 2016, remainder in 2017/18 –LEAN principles/processes guiding our team’s progress –Staff & physicians involved in mapping the patient flow and developing action plans to accommodate reduced staffing –Identified key barrier to success – ED team requested ability to fully implement one area of change in second year –Board and senior management agreed Slide 14

NHH HIP – Progress to date On the NHH inpatient units, with no bed reductions, NHH will have implemented the following by July: Consolidated Medical/Surgical units (2A/2B) on 2 nd floor into one 36- bed unit on 2B side Combined staffing of Restorative and Palliative care units on 1 st floor Relocated 4 acute care beds to 1 st floor from 2A (2 to be incorporated into Inpatient Rehab (20-bed unit) – 2 to be incorporated into Restorative Care LEAN processes conducted with staff in all areas produced action plans to support/sustain these changes Education/training occurring to support staff working in new areas Revised approach to providing relief staffing (float pool) Slide 15

NHH HIP – Progress to date In Ambulatory Care, NHH will have also implemented the following by July: Combined Ambulatory Care and Pre-Op Assessment Clinics Introduced new processes to enhance surgical services program, patient outcomes Slide 16

NHH HIP – Progress to date In the NHH Laboratory, also by July, NHH will have achieved improved productivity performance: NHH’s Lab benchmarked high compared to peers To address we are: –Reducing staffing on night shift As well, a feasibility study to introduce Point of Care (POC) testing on nights (as recommended by the External Review) was completed Feasibility study did not support implementation of POC testing for night shift –Implementation would INCREASE current NHH costs –Significant clinical concern regarding impact to quality of patient care Total annualized savings for Laboratory adjusted accordingly, LHIN advised Slide 17

Voluntary Integration - Microbiology Recall, of the $5 M in efficiencies identified in our HIP, approx. 40 % ($2+ M) are expected to come from integrations One of these, targeted for 2017/2018, has been moved forward to this fiscal year Laboratory – microbiology Voluntarily integrating microbiology services with PRHC effective October 2016 – LHIN approval rec’d May 2016 Builds upon current relationship with PRHC, which already performs NHH’s Pathology/Cytology services Facilitated by sharing of common IT system No impact to local patients This will move some savings forward into 2016/2017. Slide 18

Financial Sustainability Time of great system change – Bill Patients First Act introduced this month Required to do as much as we can to find the efficiencies that are doable and sustainable NHH is doing that – No service reductions nor reductions in service volumes –Changes regarding to the way NHH delivers services are realizing considerable efficiencies –Good, but still not enough Slide 20

Financial Sustainability Projecting significant deficit for 2016/17 despite reducing costs as per HIP and preliminary funding increase Even with targeted efficiencies and potential integration savings, Operational Review confirmed NHH is not financially sustainable with current funding NHH is in close communication with our LHIN and MPP NHH has requested further discussion with Ministry of Health - need to correct historical structural deficit Slide 21

NHH advantage Dedicated team of staff and managers Committed, expanding medical team (new midwives, new internist, new GPs choosing to have hospital privileges) Strong linkages with area health-care partners (CCAC, CCN, Northumberland FHT, PH CHC) Generous community actively interested in its hospital Exceptional NHH Foundation, NHH Auxiliary and other volunteer supporters Growing demand for the services NHH provides Slide 22

Questions Slide 23