How one rural hospital is dealing with its funding crunch

In Ontario, the province funds operating costs but not equipment. So when Perth and Smiths Falls District Hospital came up against a funding shortage, they started asking neighbouring towns for help
By David Rockne Corrigan - Published on November 5, 2018
a doctor in a hospital room
Orthopedic surgeon Mark Roberts with the Perth and Smiths Falls District Hospital’s new Hana Bed, which cost $150,000. (David Rockne Corrigan)

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SMITHS FALLS — On a typically busy day, orthopedic surgeon Mark Roberts takes a moment between patients to demonstrate the capabilities of the Perth and Smiths Falls District Hospital’s new operating-room table.

“It helps with the positioning and controlling of limbs during hip surgery,” says Roberts of the Hana Bed, which the hospital acquired earlier this year.

As a result, surgeries can be less invasive, which cuts down on recovery time and reduces the average hospital stay from three days to a single overnight stay or less. “The ability for someone to be mobile and out the same day is a big thing for people,” Roberts says. “And that’s just not possible without this piece of equipment.”

There are 60,000 people in the Perth and Smiths Falls District Hospital’s catchment area, making it the largest hospital between Kingston and Ottawa. (It consists of two sites about 20 kilometres apart.) The Hana Bed, Roberts says, is exactly the kind of equipment his facility needs if it’s to continue offering effective and modern services to its patients.

The problem: it costs $150,000, an enormous amount for a rural hospital. But if there were no Hana Bed, Roberts says, patients would have to drive to Ottawa or Kingston for comparable treatment. Now local officials are warning that unless the municipalities of Perth and Smiths Falls increase revenues, the hospital may not have the funding to purchase and maintain the equipment it needs.

In Ontario, the province funds operating costs, but hospital boards are responsible for raising money to cover annual equipment costs. Hospitals are able to generate some money through operating surpluses and other revenue, such as parking, but the majority of their capital funds come from donors.

In major population centres, such as Toronto — where it’s not unheard of for a hospital foundation to raise $100 million in a year — that may not present an obstacle. But in Perth and Smiths Falls, with their considerably smaller populations and economic bases, fundraising enough to purchase equipment can be difficult, if not impossible. (The hospital is projecting a $1.6 million capital-funding shortfall every year for the next decade.)

“That’s one of the things that leads to have- and have-not hospitals,” says David Klein, a professor of medicine and public health at the University of Toronto.

Perth and Smiths Falls District is determined to avoid becoming a have-not hospital. “We want the best and brightest physicians working in our hospital. And what the physicians want is up-to-date equipment, because they’re trained to work at a high level. So they need the equipment that allows them to do that,” says chief of staff Kate Stolee.

Some argue that the province should take on more responsibility. During the recent municipal elections in Smiths Falls, mayoral candidate Joe Gallipeau (who later lost to incumbent Shawn Pankow) argued that Queen’s Park should “step up to the plate” to improve the situation at the hospital.

TVO.org asked the Ministry of Health and Long-Term Care whether the government would consider stepping in to help bridge the projected funding gap. Spokesperson David Jensen stated in an email that the ministry "covers 90 per cent of eligible construction costs for hospital capital projects such as renovations, expansions or redevelopments while hospitals are responsible for the costs of equipment," and that it's up to hospital boards and administrators to purchase "clinical and other equipment that will best serve their communities."

The majority of recently elected councillors in both Perth and Smiths Falls are looking at a local solution. The hospital board, in consultation with local leaders, has devised a formula to calculate how much money it believes each community should contribute via municipal levy. (It’s asking Smiths Falls, population 9,000, to chip in $174,341 per year, or $20 per resident; it’s asking Perth, population 6,000, to contribute $136,666, or $23 per resident.) The hospital is also requesting help from neighbouring municipalities, such as Beckwith, Rideau Lakes, and Wesport, whose residents also fall within its catchment area.

The approach is not unprecedented, even in Ontario. The United Counties of Leeds and Grenville — from which the Perth and Smiths Falls District Hospital is asking for $3 million over the next 10 years — has already committed to providing funds to Brockville General, Kingston University, and Kemptville District hospitals.

In a boardroom at the Perth campus, Pankow and Perth mayor John Fenik — who are de facto members of the hospital board — discuss the presentation they have been delivering to local communities. “Overall, there’s been a really positive response,” Fenik says. “I don’t think any municipality said, ‘Forget it.’”

This is one in a series of stories about issues affecting eastern Ontario. It's brought to you with the assistance of Queen’s University.

Ontario Hubs are made possible by the Barry and Laurie Green Family Charitable Trust & Goldie Feldman.

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