Chatham-Kent Health Alliance Takes another Step on the Road to Fiscal Recovery

Chatham-Kent: May 18, 2017 – Today, Chatham-Kent Health Alliance (CKHA) took a significant step on its journey to fiscal recovery with a significant reduction to the organization’s line of credit. Through ongoing efforts to reduce costs, including the reduction of over $1.9M in primarily management costs over the last few months, coupled with recent funding announcements from the Ministry of Health, the hospital has begun the long journey to restore its fiscal health. Collectively, these strategies are allowing CKHA to reduce the line of credit by $2M from $10M to $8M. 
“Today is a key step in the right direction as we continue our organizational transformation and path to fiscal recovery as we climb out of the serious fiscal hole the organization found itself in last year. While I am very pleased that we have been able to take this step it has been the easy part. We now need to really focus on best practices in other peer hospitals to identify ways to further show value for taxpayer money,” said Rob Devitt, Hospital Supervisor.
 From left to right: Jerome Quenneville, Vice President and Chief Financial Officer, Rob Devitt, Hospital Supervisor, Don Fuoco, Manager, Canadian Imperial Bank of Commerce (CIBC) and Lori Marshall, President and CEO pictured at CIBC, 99 King St. W, Chatham, Ontario on May 17, 2017.
As has been highlighted over the last number of months, due to recurring operating deficits in 6 of the last 7 years and capital expenditures, CKHA had depleted its cash leaving no money for needed equipment replacement and building improvements. The organization increased its bank line of credit from $4M to $8M in 2015, and then again to $10M in March 2016 simply in order to meet ongoing financial obligations such as payroll. This previous approach of using debt to finance the operation of the hospital was simply not sustainable.
Beginning in early February, CKHA implemented an organized and systematic process informed by benchmarking results to develop a financial recovery plan. This was a key aspect of the process; benchmarking results prepared by external experts compared CKHA’s performance against other Ontario hospitals of similar size. This process demonstrated that other organizations have achieved same or better quality and volume of patient care at significantly lower cost. A 3-year recovery plan is being formulated to; ensure best practices are followed at CKHA, reinvestments are made for high priority areas and the organization is placed back on a stable financial footing. Already, the benchmarking process and strengthened financial management practices have led $1.9M in reductions in management costs. 
“I am proud of the collective effort our team has put forth in creating a responsible recovery plan,” said Lori Marshall, President and CEO. “We understand this is a time of uncertainty and want to ensure that we have worked towards a recovery plan that will be respectful of our employees. We are optimistic we can achieve our goals while still providing high quality, safe care to patients and their families following best practices and hospital sector standards.”
The public is encouraged to visit for all the latest updates and to submit questions/comments directly to CKHA leadership.
Media Inquiries:
Rob Devitt, Hospital Supervisor and Lori Marshall, President and CEO will be available Thursday,
May 18, 2017 from 12:15 p.m. – 12:45 p.m. via teleconference at: 
Phone: 1-866-613-5223 / Access Code: 2473230 
For those planning to dial-in, please RSVP to:
Emily Field, Communications Specialist
519.352.6401 x 5326 
efield [at] ckha [dot] on [dot] ca

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