November 24, 1998

PUBLIC ACCOUNTS COMMITTEE

The Committee met at 9:30 a.m. in Room 5083.

CHAIR (J. Byrne): Order, please!

I would like to call the hearing back to order of

the Pubic Accounts Committee and the St. John's Health Care Corporation.

Yesterday we ended at about 12:05 p.m. and we will continue on this morning to

see how far we go today. Hopefully we will conclude today, but we cannot say for

sure.

Before we go on, can we have a motion to adopt the

minutes on the hearing yesterday, November 23, 1998?

On motion, minutes adopted as circulated.

CHAIR: What we can do now is get right back

into questioning again. I am sure you are all ready to go. We can go around the

table again. Mr. Lush, if you want to start off, (inaudible).

MR. LUSH: Yes. Let me see where I want to

start. I want to go back to page 21 and ask a rather convoluted question. I will

ask the Sister to comment on whether the implication in the question is logical.

The Auditor General expressed some concerns that

the savings of $20.5 million was insufficient in terms of amortizing the debt.

As a further

preamble to that, I wanted to make the point that I think Ms Young

maybe said it, or maybe the Sister, that this was the first instance or the only

example, I believe, in Canada whereby we were restructuring and erecting

buildings on the basis of savings. That is certainly a creative initiative.

The Auditor General expressed the concern that

particularly as the cost escalates there is more of a threat that we may not be

able to take care of amortizing the debt, particularly in the way that we

thought when in the beginning we were thinking of $10 million to amortize the

debt and $10 million back into the health care. You do not have to be a rocket

scientist to conclude that if the cost goes up then we have less to go back into

health care.

The question I am getting to is this. Since we are

doing this restructuring based on savings would the Province not be in a better

position, and would the people in the Province not be better served, even if we

spent the total $20 million on amortizing the debt? It is a saving we are

talking about. Granted, we would have no money left over to go into the health

care, but I do not think the government is in the position where they think they

are not going to have to put money into health care to improve health care. We

have improving technologies, improving medical methodologies, and if we are to

move I think it is reasonable to expect we are going to have to put more money

into health care.

The question - if you can see a question out of

that - is this. Because we are doing this out of savings, if it came to the

point, - and we hope that it doesn't - where we had to spend the total $21

million in amortizing the debt, would we not be in a better position now than we

were previously as a result of restructuring, were we to come to that

circumstance?

SR. DAVIS: I suppose the simple answer is yes.

I do not think the concern is about having enough money to amortize the debt,

because even at the amount we are looking at now, $130 to $135 million, as Mr.

Crocker pointed out yesterday the amortization of that would probably be between

$10 million and $12 million over the next twenty-five to thirty years.

The reality is that we have already taken $6

million of those savings and put them back into health care. Not to amortize the

debt, but actually put them back into health care. If I can dare to paraphrase

the Auditor General, I believe her concern is not that the $20 million does not

allow for the amortization of the debt; her concern is that our deficits are

going to grow and eat up even the $12 million that we would have set aside for

the amortization. That is legitimate.

Your point, Mr. Lush, is very valid. Let's say next

year our budget was $300 million. We will say the debt was starting to be paid

off and that was $12 million. In order to do $300 million worth of business next

year we would actually need $312 million, because the $12 million would have to

amortize the debt. If we hadn't closed the buildings we would need $320 million

to do the $300 million work because of the fact we would need that extra $20

million to keep the old buildings up.

The reality is that the $20 million has to be seen

against the base that is shifting. You are right, that we are in the tertiary

care business in our organization. It is the part of the health care system that

is most susceptible to change. It is the part of the health care system that has

the greatest intensity of technology and every day a new piece of equipment is

being invented that improves - marginally probably - but does improve the

quality of the health care we deliver. Because we have a national system it is

the people's expectation that we are going to have that piece of equipment.

Just to give you a simple example, we need two more

cardiologists in the Province. If we recruit to new young cardiologists they are

going to expect, naturally, that they are going to have the equipment that they

studied on in Vancouver or Toronto or wherever. Any new physician coming into

this Province recently trained is going to expect the kind of equipment they

were trained on. We have to keep at the forefront in terms of technology.

Tomorrow morning there could be a drug finally marketed. It happens. Every

couple of months a new drug is introduced into the system that we are expected

to have available. I believe genetics is going to explode across the health care

system in the next five to ten years in ways that we cannot even imagine. All of

this stuff costs a lot of money.

Ms Marshall's point is very well taken, that every

cent we could possible save with this indirect stuff we are going to have to put

into health care to keep it at the level that people expect, comparable to what

they would get in Toronto or Vancouver.

The $20 million is not the issue. The issue is the

base the $20 million is built on and whenever that can be sufficient to provide

the quality health care in the Province. We will save the $14 million in

addition to the $6 million we have already saved. The debt will come somewhere

between $10 million and $12 million, I think Cal. What happens to the deficits

we are incurring on the other side of the equation, because the face of health

care is changing, is a different question all together. Your question is very

spot on in terms of the complications here.

MR. LUSH: Mr. Chairman, just following on in

sequence, I wanted to come to page 22. The Auditor General has a description

there of talking with officials in the Department of Health and reviewing

policies and procedures as they relate to the Corporation. When I read what the

Auditor General says and then the department's response, I am reading two very

different descriptions, I think.

I realize this is not in the purview of the Board,

but I just wanted to highlight four of the comments that the Auditor General

made. She refers in the first bullet to audit coverage, and says: "Audit

coverage is not sufficient and a multi-year plan has not been developed based on

risk." In the second one she talks about:

"There are two analysts within the Department of

Health who are responsible for monitoring the operations of all health care

facilities in the Province; however, there are no standardized procedures to

provide guidance to the analysts in the monitoring of health care facilities.

Rather, reliance is placed on staff knowledge...," and so on and so forth.

In the third point it is noted that there are

"...inconsistencies in the data submitted by health care facilities..." The last

one says: "There is no formal manual in place which consolidates all

departmental policies and procedures..." and so on.

In the Corporation's response they did not think

that it was so inconsistent as maybe the report is suggesting. You talked about

the MIS. I just wonder if you could comment on that general criticism levelled

by the Auditor General, and to explain to the Committee the MIS, what that is,

and whether it addresses any of the concerns raised by the Auditor General.

SR. DAVIS: Certainly I cannot comment on other

organizations vis--vis the Department of Health. It would be just our

organization.

I can understand, from our perspective, why the

Department of Health would have trouble understanding us in our first year of

operation, because as you know we had no experience in this Province of a change

of that magnitude. As of one second on midnight March 31, 1995 we went from no

responsibility at all, but six boards running St. John's hospitals, to one board

running St. John's hospitals. Within that micro-second that switch happened, and

therefore the first two years we were trying to get all our system statements

consolidated. I can certainly understand why the department would not be getting

consistent data from us.

However, there is a big question here that is not

unique to Newfoundland, not even unique to Canada. Health care information

systems are very unsophisticated, given the sophistication of the business we

run. I would think, approximately next to the military, or probably even on par

with the military, we have more sophisticated technology, more sophisticated

procedures, more complex numbers of health care professionals, than any other

industry in the world, but we are an old industry just the same. We are still,

across this world, doing health care by traditional means. It is like our

business practices were second. We were seen as a service industry, serving the

needs of people, and we weren't so conscious of the fact that we were running

multi-million dollar businesses, billions of dollars in Canada for example.

Our regional board, for example, in this Province,

is the largest industry in this Province, next to government itself. There are

times during the year when we actually have more employees than government does.

We have never thought of ourselves in that light before. At Edmonton, for

example, is the largest industry in Alberta, next to the government and Canadian

Airlines. That is the magnitude of the businesses, but we never saw ourselves

run like a business.

In recent years - in the late seventies, early

eighties - we were starting to realize we could not keep running health care

facilities in Canada the way we had been doing all along, that we had to come

into the computerized information age. So the federal government commissioned a

group to begin to help us do that, and that group developed these guidelines

which they call Management Information Systems Guidelines. These are guidelines

that cover all the business that we do, everything from the way we pay staff to

how we count work done by staff, to how we count units of care, the cost of

units of care. So it was a massive undertaking, done in the mid-eighties. St.

Clare's Mercy Hospital, at the time, was one of the twelve test sites across

Canada. By 1990, there was a set of guidelines that had been validated that are

now used right across the country.

Early on in the process, most of the hospitals in

St. John's had agreed to comply by these guidelines in their financial systems.

However, it was not until the mid-nineties that all of the hospitals in the

Province agreed to do this, and by then we changed. While there were single

hospitals agreeing to comply with the guidelines, a single hospital is very

different than (inaudible) West, for example, that runs hospitals and nursing

homes, so we had to shift gears again in the mid-nineties when we became

regionalized.

Our Province is one of the provinces that has the

highest level of commitment to having all of us report by these MIS guidelines,

but it has taken us time to shift gears with the new regional structures.

One of the problems - theoretically the MIS

province does not have to be computerized, but it is really hard to do it if

they are not computerized, and computers cost a lot of money. As you know, we

were fortunate in the hospital side in Newfoundland that we all chose the same

software, Meditech software, but what we did with Meditech software was each

customize it. So even though our (inaudible) facilities all had Meditech

software, they were all using it in a totally different way. It took us our

first two years to consolidate our approaches for our finance and human

resources.

While the MIS guidelines are there across Canada,

while our Province has a commitment to abide by them, we are learning how to do

that; and our learning is hampered by the fact that we do not have the resources

to buy the computers and software that we really need to implement this.

The good thing we have going for us, though - which

we also note in our response - is that the Province has put in place a

Newfoundland and Labrador Centre for Health Information. That new entity has, as

its mandate, to help all of us standardize our approaches to our systems. I

believe that if that centre is appropriately funded in the next five years, we

will be able to reach the ideal which the Auditor General has said: that we are

all reporting in the same way; that what we are counting as apples are truly

apples and what we are counting as oranges are truly oranges, that our clinical

systems are connected with our financial systems in a sensible way, a

businesslike way, but it is going to take us another five years to get to that

point.

Having said that, though, we know the Department of

Health in the past two years, for our organization, has reviewed us twice: once

through the Budget Review Committee, which Mr. Crocker spoke about yesterday,

and then more recently a team from the Department has come in to review what we

are doing.

We have been making major strides in the past two

years but I believe, realistically, it is going to be five more years before we

are truly consistent, compatible, across the Province. If we do that, we will be

the first province to have done it, by the way, because no other province has it

any better than we have it today.

I am sorry for that long answer but it is a

complicated issue.

MR. LUSH: That is okay.

On page 26 - my final question for now - more on

page 27, really, I was delighted to learn that the Corporation conducted a

survey of its board members and you had just about an 80 per cent response.

Thirteen out of seventeen board members responded to your two questionnaires.

From the survey it looks like the board members were fairly pleased with the way

things were going, the way the board was conducting its business.

The question I would like to address, though, is

the conclusion on page 27. It says, "Several Board members expressed concern

about the level of health care funding provided by Government to the Corporation

and the Corporation's ability to balance public expectations for quality health

care with the level of funding provided."

I am just wondering how that came about in the

questionnaire, whether there were specific questions asked to address that.

Because my feeling on this is, this is an important role of the Corporation to

determine what are the financial needs to meet servicing the public, giving them

good health care in the St. John's region, and to rationalize those expenditures

to government.

I get the impression here, almost, that we are

unhappy with the money that has been given us up front, kind of thing. I see it

the other way. I see the Corporation determining and rationalizing what indeed

are the expenditures, making that presentation to government in the hope that

they will give you what is needed.

MS YOUNG: I will begin a response to that.

Those two questionnaires were given to the board by the Auditor General's

office. We do our own yearly board review and (inaudible) and all that. The

response that we are referring to on page 26 was the two questionnaires.

Thirteen of the seventeen board members, as you noted - four people did not

respond. We spoke to the Auditor General about that because some people were not

happy with the questions, so rather than respond negative they said: Look, I am

too busy to do this.

The thirteen people who did respond, and in

discussion with the other four at the board meeting, the board has been very

pleased with the way management is running the Health Care Corporation. Yes -

not several - all members of the board believe there is not enough money to do

the business we are expected to do, especially by the public.

If government should decide that they want to

dismiss a service, we would go along with government's wishes. However, the

board has made a decision and said to management - and I, myself, to government

- that we will not take a service out of the Health Care Corporation. We will

not say tomorrow: We are not going to do any more dialysis; dialysis will go on

in Halifax.

If government wishes to save the money and take

that out of the system, that is their prerogative; but that is not in our

mandate. Our mandate, as you know, is to take the money that we have, do the

best we can with it to be responsible to the public and their expectations; and,

as hard as we work, there is not enough money.

Is that the answer you wanted?

MR. LUSH: Yes. The only thing I see here is,

again, I would have thought one of the tasks of the board would be to, as I

said, determine and rationalize what the costs were and present that to

government. Hopefully, with your expertise and knowledge, they would conceive

that yes, you need this money.

In this questionnaire, it comes out to me that we

were putting the cart before the horse; that we expected the money - government

gives us a pot full of money now and we will...

SR. DAVIS: Just to add maybe to the question as

Ms Young has expressed it, every year we present a detailed budget to government

which is done with the involvement of all of our programs and departments. They

are very much involved in that. Our budget documentation is extensive. We never

just present figures; we always present it in the context to what the needs are.

The Budget two years ago - if you remember, Mr.

Dicks, the President of Treasury Board and Minister of Finance, had a public

consultation that we were very much a part of, again outlining explicitly the

needs of the tertiary care and rehab centres that we run.

One thing we felt it was important that we would

do, though, is make sure that we had done everything possible to reduce

expenditures in non-direct patient care. As we said earlier, the reduced

positions we have had in our organization have been in management and support

services. We have consolidated all of our administrative and support functions.

What we have done, then, is made sure that all the

savings we are capable of making have been made. Then, with that, we have gone

to government saying: This is the situation that exists.

In fairness to the Department of Health, they have

come in with those two views to make sure there is nothing big that we have

overlooked. They said to us point blank: There is nothing that we can see in

your organization that you need to be doing differently in non-patient care

areas, so that is not a bone of contention between us.

It would be totally impossible to give us enough

money to satisfy the expectations of the public. That is not just us. We

recognize that across the country. I think the reality is, we cannot provide the

clinical services we are providing today without the deficit that we are

incurring this year.

Government still has not allocated $10 million for

this year so we really do not know what the final position has been. We have

said to government that we are going to incur a deficit of some of that $10

million that is not allocated to our organization because we cannot see anything

more that we can do over and above what we have done. That is on the operating

budget side.

The board has expressed concern to government, and

continues to do so, and also concern about our capital equipment budget, which

is a separate budget. The one thing about our business is that the technology is

getting increasing sophisticated. Every year, new equipment is being introduced

and we do not have nearly enough funding in this Province to support the capital

equipment that would be on par with most other provinces in Canada.

MS YOUNG: Excuse me. Just to finish up that, in

fact, the board asked a couple of months ago for management to bring forward the

request for capital equipment this year, and we put it on the wish list and the

needs list. We have two lists. What they wanted was gold and what they could

afford was the Volkswagen. I think the wish list was $25 million but the need

list was $12 million or $15 million, and we are going to be able to give them

how many hundred thousand?

SR. DAVIS: One million (inaudible).

MS YOUNG: One million. They would like $25

million to keep current with what is going on in Canada - not the U.S., Canada.

That is not for extraordinary things at all; that is to just update the services

we now provide. We said: That is very good. That is your wish list, now come

back and give us a definite need list.

In every program, in every department, the doctors

and the nurses came back and worked and worked and brought it down to $14.15

million. All we can give them this year is $1 million. That is frightening.

MR. CROCKER: The other thing on that is, we

just completed a five-year capital equipment projection for the Health Care

Corporation in terms of all of our program and corporate departments involved.

That comes out to about $60 million over the next five years as to what we would

require in capital equipment purchases just for the Health Care Corporation.

CHAIR: Thank you.

Mr. Lush just asked a question, the very next

question that I was going to ask, but I wanted to get a bit more into the

nitty-gritty of it. In the reports I read that - I have my numbers wrong here

now - with respect to downsizing of beds, oftentimes you will hear a response

that the beds are full. Yet, I have been over to the hospital on a number of

occasions, many times, walking through, and empty bed, empty bed, empty bed. On

one floor, one evening, I counted eighteen empty beds. Yet, I am told the

hospital beds are full. I have a concern with that.

I think the answer is, and sometimes we might be

playing with words, beds that are allocated to be open are full, not the

hospital beds. That is a bit of a misconception for the public.

Community health; I think there is a direction of

moving more towards community health, and oftentimes I have heard - we have gone

that route, but we have to put the money into it to do a proper job. That all

gets back again to the public expectation versus the funding.

Would you like to comment on that? Because I have

another question that is directly related to that as soon as you answer the

question.

SR. DAVIS: In the first three years of our

existence -

CHAIR: I am sorry for cutting you off. The

figure I saw, I believe, was that the number of beds were cut from 1,160-odd

down to 900-and-some odd, so it was over 200 beds.

SR. DAVIS: The first question on beds, you have

really answered yourself. We have more capacity for beds in the system at the

present time but they are not allocated to be open. We have reduced the number

of beds we actually use in the system. That is a trend across the country,

across North America, really.

CHAIR: Does that make it right?

SR. DAVIS: The reality is, we are trying to

stop measuring acute care, quality acute care, by the number of beds we have.

There was a time when all the acute care we did was through in-patient beds.

Today, one of the good news stories about technology is that lots of things we

used to do by in-hospital we can now do as out-patient, which is much better for

patients. Hospitals are not safe places to be. The chance of infection in a

hospital is obviously much higher than in your own home.

For example, we all know that our relatives who had

cataract surgery ten years ago would be in hospital for ten days. Today, if you

get cataract surgery, you do not come in hospital any day; you just have your

surgery done as an out-patient.

Gallbladders, for example, used to require seven

days hospitalization. For most gallbladders now they are done, at worst, for one

overnight. The technology has changed, how we provide health care, and we are

reducing beds to accommodate that.

The reality is that the beds in our system, for

example, are not occupied only by people who need to be there. We have, at any

one time, thirty to fifty beds in our organization that are occupied by people

who do not need to be in hospital but an appropriate place for them is not

available right now. We call them and assist those patients, medically

discharged patients, meaning they are patients who could go into a nursing home

or back to their own home but for some reason that cannot. They kind of stay in

our hospital waiting for that to happen. That is one of the issues we are

facing.

We have enough beds in the system to provide

quality health care if the beds were able to be used properly. We are still

bringing people in a day or two sometimes before surgery when actually they

could come in on the day of surgery. They do not do anything except wait that

day or two before. Our systems are improving to help us get better at that, but

even at that the length of stay of patients in our hospitals would still be

slightly higher than many places across the country.

From the bed point of view, we have enough beds but

we are not always using them appropriately. That is why you get the beds being

too full, as we rightly point out. The technology is going to help us change

that. Also, how we use nursing home beds has to change so we can do that.

The link with the community health board is a

really important link because if people are going to be getting service in their

own homes that has to be funded too. The first three years of our organization

we transferred $1 million a year to the community health services, but it did

not actually go into services that would reduce the stress on us. It went into

necessary services, but not areas that would reduce the stress on our beds.

Right now, for example, we in community health are looking at a home IV program.

Some people need IV treatment on a regular basis but they do not have to get it

in hospital if they could safely get it in their own homes. The problem with

that is if they get it in hospital the hospital covers the cost of the drugs. If

they get it in their own home they have to pay for the drugs themselves.

Most Newfoundlanders could never afford that kind

of expenditure. We are working with the Department of Health to try to come to a

way within the Canada Health Act - that is the problem on this one - where we

could fund the drugs from our budget even though they get the care in their own

home. We are doing that. The Department of Health, ourselves, and community

health are working on that together.

CHAIR: That is a good point you make, because I

remember a few years ago I was on a needle three times a day and it was costing

$1,500 a month just for that one drug.

SR. DAVIS: Any IV drug treatment is very

expensive.

CHAIR: You brought up a point there when you

talked about the length of stay in hospitals. I have heard on many occasion that

people have major surgery, are sent home, and are back within a few days with

major infections. What impact is that having?

SR. DAVIS: I do not think that happens

frequently. That will happen occasionally. We have special programs in our

hospital called infection control programs to monitor that to see if that is

happening too often, or is it kind of happening at a standard level, and is it

happening in a certain area more often than others. Compared to across the

country our patients stay longer, so we are certainly not on the small side of

that equation. We start and keep people longer than you would stay in hospital

in Toronto or Winnipeg.

CHAIR: Just one more question before I move on

and that has to do with salaries, which is the biggest expenditure. You have

pointed that out a number of times since yesterday. There has been down sizing.

You have already said people have left a number of positions. (Inaudible) come

up with a figure. I kind of touched on this yesterday. In my mind, from the

beginning of your restructuring to the end, you must have a number in mind of

jobs gone out the door but you haven't got that figure. In the meantime, there

has been a decrease in the number of positions.

SR. DAVIS: Very definitely.

CHAIR: Definitely. From what I can see there

has not really been a decrease in the expenditure for salaries. To me, there are

a lot of nurses being called back, that type of thing. I do not know if they get

paid overtime or whatever the case may be. Would you like to address that

concern?

SR. DAVIS: First, the first part of the

question. The decrease in positions has been on the support staff side. We had

increased positions on the direct care side. I think you always need to keep

that in perspective.

CHAIR: Okay.

SR. DAVIS: We have more nurses working in our

organization today, for example, than have ever worked in our facilities in St.

John's, but we have fewer finance people, fewer managers, and fewer housekeeping

people. The numbers are changing in balance, the total number is not changing

very much, but where the positions are decreased and where they are increasing

is the change.

The second question you asked me is related to the

call back of nurses. That is a very important issue for us, an issue that,

again, is not uncommon across the country, and that is the use of casual nurses

to be called back to fill positions. We will always need a significant number of

casual nurses to call back. Our sick days are very high. We have, on an average,

in our organization fifteen sick days per person, and it is a bit higher in

nursing. We will always need it because nurses have to be replaced. We would

have to replace for sick days. We have sensible, I think, rational annual leave

benefits, but many of our nurses have been with us a long time and so

(inaudible) get from five to six weeks holidays every year. They will need to be

covered for that period of time. We also have family leave days, as you know,

three days a year, and we have compassionate leave. As our staff get older,

obviously the number of compassionate days they are going to need increases. We

have a significant number of days that have to be replaced for every single

person in the organization.

Having said that, though, we still have too high a

number of casual nurses in our organization. Not as high as it would appear,

because we would have to keep casual nurses to replace these other positions. We

are working with the Nurses' Union - we were before the negotiations began and

now we are working through the negotiations - to try to find ways to convert

some of those casual positions into permanent positions. I think I indicated

yesterday that we could see that as high as seventy-five full-time positions in

our organization over the next couple of years.

We have also the support staff which feel they need

to take such sick days. We have just introduced an occupational health service

into the organization. We contracted with an occupational health physician and

he is working with the unions and with our managers to see if there are ways we

can support staff differently so that they will not feel it necessary to take so

many sick days. So we are looking at that as well.

CHAIR: I worked in government a number of years

ago before I got into politics, and there were fifteen days at the time or

whatever it was, sick leave days. The attitude was that they were holidays, they

took them. (Inaudible).

SR. DAVIS: We have twenty-four days a year

entitlement now which is a good entitlement. I think staff though do not

consciously abuse sick leave. I believe staff - first of all the work is hard,

so people get physical issues related to the hard work they are doing. Also,

there is a considerable stress in all our social systems, not just health care,

and people are affected by that stress.

The other reality is, 80 per cent of our workers in

the clinical side are women who have families and therefore they are caring for

children at home and they are also caring for elderly parents at home. So they

are often caught in situations that make life very difficult. There are lots of

stresses in our system and that is why we have introduced the support through

the occupational health system that we have brought in. We also have a very good

employee-family assistance program to help staff who are facing those kinds of

difficulties.

CHAIR: Ms Marshall, would you want to comment

on the salary situation?

MS MARSHALL: Sure. When I did my audit work at

the Corporation I was trying to get a handle on whether salaries had in fact

decreased because the Corporation had gone through some down sizing initiatives.

As you indicated earlier - and it is shown on page 43 - when we compare 1995 and

1996, what that analysis indicated was that the total salary dollars had in fact

not gone down, had not been reduced.

The other issue which arose during our work on

salaries is that some of the information - what I was trying to do was track

what was happening to salaries over a several year period. I wanted to look at,

for example, the budget, the revised budget and the actual salary figures for

several years so I could see how the salaries were increasing or decreasing.

Some of that information was not available at the time that we had done our

review, and as a result that part of our review was inconclusive.

CHAIR: Thank you.

SR. DAVIS: That was obviously a factor of the

fact that we went, as I said, at midnight on March 31, from six independent

organizations to one organization. Subsequent to the review, though, that work

has been completed.

CHAIR: The simple logistics of putting it

together caused the problem.

SR. DAVIS: For 6,000 staff.

CHAIR: Any other Committee members with

questions?

Mr. Smith.

MR. SMITH: Thank you, Mr. Chairman.

On page 48 of the briefing document there is a

reference to subsidies that were paid to palliative care unit positions, and

there is a figure of $50,000. The Auditor General's office in its review picked

this up. Could you just address that first of all? Then I have a couple of

follow up questions because that leads into a broader thing, from my

perspective. Could you speak to that first of all, that (inaudible)?

SR DAVIS: I know about this from my former life

as well as my present life. Palliative care is a unique service in the Province.

As you know, that is a service provided to persons in terminal illness. The only

palliative care unit, as a unit in the Province, is at St. Clare's Mercy

Hospital. That is staffed by family physicians who have regular work in the

community as well. Our MCP budget did not have a recognition of this group of

people, so they did not have a fee

schedule that was able to address this kind

of work because it was such a small amount of work compared to what is done in

the medical budget. St. Clare's, who had that unit, had made a separate

arrangement to pay a subsidy to the two physicians at the unit.

You can see it is not a large amount of money to

start with, and these physicians have to be available twenty-four hours a day

because these patients are dying. It is not like other kinds of illnesses. St.

Clare's had started that process and, under the Hospitals Act, we were bound to

abide by the agreements that were in place prior to our taking over.

What we have done, subsequent to this, is tried

again to get the palliative care matter addressed; but, as you know, there has

been considerable negotiation with the physicians in the last couple of years on

the bigger issues. The palliative care issue is not one they are going to spend

time at, at this point in our history, so we will be renegotiating with

physicians to slightly reduce the amount of the subsidy. We are still paying the

subsidy there and we will be paying it until we finally get the Memorandum of

Understanding between the Province and the physicians resolved, the allocations

done, and then get down to very small services like this one.

MR. SMITH: Are there subsidies being provided

in any other areas?

SR. DAVIS: No. In our organization we have had

contracts with a number of physicians, particularly psychiatrists, because we

had such a job during the 1980s recruiting psychiatrists to St. John's. We do

not pay any subsidies now for clinical work, to our physicians; however, we pay

subsidies for administrative work which is new work for a number of our

physicians (inaudible) our programs.

Mr. Crocker, did you want to comment on that a bit

further?

MR. CROCKER: In terms of the actual subsidies,

the process in place in terms of program management, I guess there are two

leadership people involved. One is a program director, which is our staff

physician, and the other one is the clinical chief. That clinical chief is given

a subsidy for the administrative work that they do. That ranges anywhere from a

day a week, to two or two-and-a-half days a week. The subsidy is based on how

much time they actually spend in there.

With respect to the psychiatrist, I guess

particularly when the Waterford Hospital was independent, we did have some

contracts for psychiatrists because it was the only way that we could recruit

psychiatrists to the St. John's area. The Waterford was pretty successful in

terms of picking up three or four really good psychiatrists for the Waterford

Hospital.

At this point, I think there is still only one

contract in existence from that set-up that I can recall. Again, most of those

arrangements have gone by the wayside in terms of the people moving on or moving

to their own independent practice.

MR. SMITH: The subsidies in question here, that

are still in place, are they basic figures that are set by the Corporation or

something that is negotiated in terms of (inaudible)?

SR. DAVIS: For the administrative, we just took

set rates. They are only subsidies. It would be nowhere near the amount of money

they would make in their practice. That is for the administration work the

physicians do. The clinical work, we abide by the fees that are set by the

Province, which are now being negotiated through a Memorandum of Understanding.

We did, for one period, increase the payment to our

emergency room physicians pending a resolution of the emergency room fees

because we were losing our emergency room physicians and could not keep our

emergency rooms open. The board made a decision for a period of six months that

they would pay an extra fee to those emergency room physicians just to enable us

to continue to provide the service. We do not pay that now; that was just for

that six-month period because, as you know, the emergency room physician rate

has increased.

MR. SMITH: That brings me into another area. I

think we are all, in this Province, very much familiar with the difficulties we

are experiencing in the rural areas in terms of recruitment of doctors and

health care professionals.

I heard you mention one specific area earlier this

morning, that right now the Corporation is in need of two new cardiologists. I

guess that is certainly one field that gets an awful lot of attention in the

media on a regular basis. Certainly the Opposition are pursuing it regularly in

the House. I think it really captures the attention of the people of the

Province generally because obviously it is such a - especially in terms of

cardiac surgery. Just talking to the recruitment of doctors generally, first of

all, do you do your own recruitment? Are you involved directly in the

recruitment?

SR. DAVIS: Yes and no. The Province, through

our provincial health care association, has a physician recruiter. We would use

that person for some of our physicians; but you know that in our organization

most of the positions are high level specialists. They really recruit their own

people because they have - for example, orthopaedic surgeons; they have a

network of orthopaedic surgeons across the country. They have links with the

residents in orthopaedic surgery in medical schools. So the program of surgery

would really focus on recruitment in those speciality areas.

For our emergency room physicians, for example,

while we work with the physician recruiter at the provincial association, we

also do a lot of that through our vice-president of medical services because,

again, he is the physician who is familiar with the physicians who would be

available. We don't spend a lot of money on recruitment. We do it through the

networks that we have in place.

We also have responsibility, though, for

recruiting, for example, for Ferryland clinic. There are two salaried physicians

in that community health centre in Ferryland, the Shamrock Health Centre, so we

are responsible for recruiting in that area as well. Again, we would do that

kind of recruitment in conjunction with the physician recruiter at the

provincial association.

It is a combination of using the provincial

association for those areas where they are skilled, and using our own people for

the areas where they would have more contacts across the country.

MR. SMITH: In terms of recruitment generally,

would you say that the Corporation has difficulties? You mentioned that

cardiology is one area, but are there other areas where there are concerns?

SR. DAVIS: We are only 550,000 people in this

Province so we don't have large numbers of any single speciality. For example,

neurosurgery; we have three neurosurgeons. They would have seven in Halifax.

While we have three that's great, but if one of those goes then all of a sudden

we have a major issue;

whereas if one leaves Halifax, that is not a big issue

because they have six who can cover.

When you have high level specialities with few

physicians in them, there always is an unease. Now we have been very fortunate

in this Province that we have been able to keep core groups of specialists; and

that I would say, without any hesitation, is due to the fact that we have a

medical school here. So we are not in a crisis in terms of recruitment of

specialists at this point in time but because the numbers are so small - we have

three cardiac surgeons. With very small numbers like that you are never totally

comfortable, but we have been very fortunate in the Province.

We were concerned for awhile about our emergency

room coverage. That was our biggest crisis, rather than the speciality areas.

Again now, thanks to very aggressive recruitment on the part of our

vice-president of medicine we have good coverage there; but again, the wrong

move - through the Memorandum of Understanding that has now been allocated, we

might lose people there. So you are always unbalanced, you are always anxious,

but at the present time, as far as specialists go, we are not in crisis.

MR. SMITH: In the area of recruitment - and you

mentioned specifically cardiologists - the fact that we have two openings here

right now, is that primarily due to the fact that there are not a lot of

specialists available? Or is it a reflection of the remuneration which such

specialists can expect to receive in this Province?

SR. DAVIS: Well, I use the example of talking

about new people coming back and how they are going to want the kind of

up-to-date equipment that they trained on. We have a fair number of

cardiologists, so at any one time we could be recruiting one or two. That is not

a crisis; it is just an example I was using.

Remuneration is a question. We do not pay

comparable rates with Toronto, for example, or Vancouver, and not just for

physicians. We do not do it for other health care professionals either. That is

an issue. The small numbers mean they have more call. If there are only three

neurosurgeons they are on call one in three nights,

whereas if there are seven

of you, you are on call one in seven nights. They work harder, I believe.

On the other side of the balance sheet, it is a

good place to raise children, there is a strong community feel here, and lots of

Newfoundlanders want to come back home to do their practice. It is a give and

take. You lose on some sides, you gain on the other. We have to be constantly

aware of that balance in our system.

MR. SMITH: If I could, with regards to cardiac

surgery, the waiting list, what is happening there now? Are we making any

inroads? This comes up regularly. Are we gaining or are there moves underway to

try to address that whole situation?

SR. DAVIS: We are constantly trying to address

the situation. We are in a fortunate position in our organization in that we

have very low waiting lists except for cardiac surgery. We did major renovations

to accommodate more patients. We were successful in recruiting a third cardiac

surgeon. Once we had all those pieces lined up, two of our four profusionists

left the Province to go to jobs that were higher paying in Ontario. It is such a

complicated work, cardiac surgery. It seems that as fast as we get one piece

fixed then another piece is in trouble.

Profusionists are a good example of specialists.

Not physician specialists, but specialists on the other side of the equation who

are scarce across Canada. Therefore, they can pretty much go anywhere in Canada

they want. Government supported us in increasing the salary for profusionists,

but again there is not a number out there looking for work. What we have done is

gotten positions in the training program for two people who are going to do that

training program and have a commitment to come back to work here.

Again, in the interim we are working with what we

call local profusionists, people who come from outside and work a week or two

weeks every couple of months with us. That is not satisfactory, but it is

enabling us to stay, at least, to ten a week. We really need to be at twelve

(inaudible) to be doing the numbers that we would have to be planning to do.

Until we get up to the four profusionists again we are only going to be able to

do twelve (inaudible). Because of the kind of work they do, they have a limited

numbers of cases a week they are allowed to perform.

MR. SMITH: Right now, in terms of the wait for

this procedure in this Province, is there a significant difference in what is

happening in other jurisdictions in this country?

SR. DAVIS: Yes. Some jurisdictions would have

longer waiting lists or as long as ours, but most jurisdictions would have

shorter waiting times.

MR. SMITH: There is just one other area, Mr.

Chairman, that I would like to pursue just for a few minutes. You have

referenced the medical school, and the fact that we have a medical school here

is attractive in terms of some of the specialists who want to come in. One of

the things I had noted and I was just curious about is in terms of the

relationship between the Corporation and the medical school. Because obviously

there is a connection there. Do you want to speak to that as to how that

operates?

SR. DAVIS: Yes. The medical school, as I have

said, is an essential part of our doing our business. We would not be able to

recruit the kind of specialists we do without a medical school here, and I have

no fear of any contradiction on that. Our relationship is symbiotic, to say the

least about it. We share the same space. The medical school is part of the

building that the General Hospital is; as you know, the Health Sciences Centre.

All of our physicians have joint appointments. They

are appointed by us, they have privileges in our organization to provide

clinical care, but they also have teaching appointments from the university.

Some are full-time teachers, some are part-time teachers, but they all have

teaching appointments. Every physician in our organization comes in to work with

us with the expectation they will do teaching of medical students. We have

medical students, interns and residents who go through our facilities. They

provide service and we provide the educational setting for them.

At the governing board level we have a joint

liaison committee where the Chairperson of the Board of Regents, plus the

President of the University and the Dean of the Medical School, meet quarterly

with the Chairperson of our board, another board member and myself, and our

vice-president of medicine.

At the administration level, my senior team - there

are six of us - meet with the Dean of Medicine and his senior team every six

weeks. As well, each discipline in the medical school - there are nine

disciplines: medicine, surgery, obstetrics and so on, there are nine of those

groups - each one of them is lead by a chairperson, called a discipline chair.

Those discipline chairpersons sit on our medical advisory committee.

We have a very tight relationship with the medical

school. Our own accreditation process commended the relationship, and the

university's accreditation process has also commended the quality of that

relationship. Neither one of us could exist without the other.

MR. SMITH: In terms of the actual operation

costs of the facility itself, this is borne completely by the Corporation, or

does the university contribute towards it as well?

SR. DAVIS: No. We have a shared services

agreement with the university. We provide some things for the university and the

university provides some things for us. For example, we provide housekeeping for

medical school but the university provides security services for us, so it is

(inaudible). I talked yesterday about the boiler plant. We share the same boiler

plant and we each pay our share of that cost. The university owns its own part

of the building, we own our part of the building, and then we share some rooms

jointly. We have teaching spaces in all our hospitals for the interns and

residents. The medical school pays for its own existence, we pay for ours, but

then we have some joint shared payments as well.

MR. SMITH: Thank you. Thank you, Mr. Chairman.

MR. LUSH: Ms Thistle, MHA for Grand

Falls-Buchans.

MS THISTLE: Thank you, Mr. Vice-Chair.

I would like to ask the Committee to go to Volume

II, actually. It would be page 136. I am wondering what preparation has the

Health Care Corporation made for the year 2000 with regard to your computer

systems.

SR. DAVIS: I will start to answer that now and

let Cal answer it in more detail because it falls within his purview.

MS YOUNG: The board (inaudible).

SR. DAVIS: Do they?

The year 2000 affects us wherever we have computer

systems that have microchips that are date and time sensitive. Some of our

computers are not time sensitive, but any computers we have where the time is

important - for example, we might have a piece of equipment in one of our

Intensive Care units that needs preventive maintenance, and if it is not done by

a certain date then the machine just stops, it won't keep going. What is going

to happen on January 1, 2000, is the computer is going to think it is 1900 and

we have not done preventive maintenance for one hundred years, so the machine is

going to shut down.

There is an easy and hard part to the challenge of

the year 2000 for us. The easy

part is where we know for sure those kinds of

things are built in. For example, our information systems. I mentioned earlier

that one of the things we had done in the Province is we had all agreed to go

with Meditech Software. Meditech was one of the few software groups that had a

capacity to deal with the year 2000 with an upgrade. We have upgraded to that.

On the computer system side, the information side, we should be okay.

The problem with our equipment is that we are not

sure which pieces of equipment are sensitive to the time date and which are not.

That is not unique to us, obviously. We are working internally and we are

working with suppliers to make those corrections where we can. Identify them

first, and then make the corrections where we can.

Provinces like Alberta have put, now, $300 million

into solving the Y2K problem for health care alone. So has Ontario. One of the

sad benefits we have here is a lot of our equipment is so old it is pre-computer

chip, which means it does not chips in it, which is on one side of it, but a lot

of our equipment does. That is the second piece.

The third piece is the people who supply us. For

example, the electrical company, hydro, the water supplies, and so on, they are

also working out of computerized systems. We cannot tell Newfoundland Power what

to do, but we obviously have to have links with Newfoundland Power to make sure

we are not going to go totally black at midnight in the year 2000.

The further complication, as I understand from Cal

and his people, is that most of us thought the year 2000 was not a leap year,

and now we find that somebody forgot the calculation, that it was divisible by

400 not just four. Because 1900 was not a leap year, 1800 was not a leap year,

1700 was not, but 1600 was. Most of us did not know the rules about leap years,

including the brilliant scientists who built the computers. That is another

problem. Now we are wondering - Cal told me recently -, we do not know if

September 9, 1999, might be a problem.

Another problem we are encountering is that as we

start to test some of the equipment for the year 2000, once you test it

sometimes you cannot get it back to 1998. There are a number of those issues.

The Board has commissioned our planning committee to be the committee that

oversees what we are doing. Now, I will ask Cal just to tell you the process we

have in place to deal with all of that complexity. Cal?

MR. CROCKER: We do have a Y2K committee in

place at the Corporation that we set up last year, and it reports through to a

corporate team and to the planning committee of the board. We are concentrating

on three main areas. One is the IS area, which is a big area for us in terms of

our systems. As Sister said - I do not know if we are lucky or if we are good -

we have the Meditech system. We are currently going through an upgrade from

version 4.4 to 4.6 which we will have done by June 1999, and that makes us year

2000 compatible.

That Meditech system represents about 90 per cent

of our computerization. We are fine on the IS side,

whereas most provinces in

Canada have a major problem with IS. We will not have it. Most things outside of

Meditech are just something desktop on PC. If a date came out wrong it is not a

significant problem for us. We feel pretty comfortable on the IS side.

Facilities management is another big area for us,

because everything like elevators and fire alarm systems, and the auto-systems

that are installed on your boiler plants and everything else, are certainly

controlled by computers. We are now going through a process to ensure that that

is year 2000 compatible. Our newer systems we know they are, in terms of the

ESCo we are doing through Honeywell now in terms of our new boiler plants, our

new lighting, and things like that.

There are some issues with the old fire alarm

systems and the old elevator systems that we have, and we are just working

through that process. So far we have incurred some problems. They have not been

expensive problems to fix. The fixes are after costing us about $50,000 to date.

It is not a big issue.

The big concern for us is the medical side of it.

We did an inventory through bio-medical engineering. We have about 5,600 pieces

of equipment that we will consider over on the medical side, of which there are

about 1,300 different components. It is a big area. We have our bio-medical

engineering department now going through a process of tagging every piece of

equipment that we have and putting it in categories, as opposed to: Is it high

risk, low risk, medium risk, in terms of if something does happen.

Our process will be anything that is a high to

medium risk will certainly be tested and fixed before the year 2000. The low

areas we may or may not get done. Our plan is to get it done, but we are

certainly going to concentrate on the areas that we have. So far it has not been

a big expense. In terms of the Department of Health looking for some

information, we had estimated that Y2K issues would cost us about $500,000 this

year. It will probably cost us that in terms of fixes, plus the staff time we

are having to put in on this.

CHAIR: Excuse me. It is now 10:45 a.m. Could we

probably take a ten to fifteen minute break and then we can continue at that

time?

Recess

CHAIR: Ms Thistle (inaudible). Lose her turn.

Okay, let's move on. Mr. Whelan, do you have questions?

MR. WHELAN: Just one, Mr. Chairman. I was just

wondering if you could probably walk us through, not in any great detail, the

move of the children's hospital at Pleasantville, the Janeway Hospital, to the

Health Sciences Centre. I was just wondering how you plan to integrate it, to

what extent it should be integrated, and things along those lines. Could you

just give a general overview of how you plan to operate that facility?

SR. DAVIS: When the decision was made to close the

current Children's Rehabilitation Centre and the Janeway Child Health Centre the

first decision we made was we would integrate the rehab services and the acute

services because the children in rehabilitation use acute services as well. That

was our first decision.

The second decision we made was that we would not

integrate the children's services into the adult services. There was a sensible

expectation of the public that children have different kinds of health needs

than adults and therefore they should be treated separately from adults by staff

who are used to working with children. That was the second decision.

The third decision related to that then was this. Even

though we would not integrate the services, we have fewer and fewer children as

you know in this Province, which is sad, but we do have fewer and fewer sick

children, which is good. The high level of service that we have for these

children, we really need to link that with the high level of service for the

adults. There are certain kinds of equipment, for example, like the MRI, that we

could never afford just for children but children need access to it.

We said that what we need to do is create a new

building that links the high level of service for children and adults but allows

us to provide service separately for children. With that as kind of the mind-set

then we set about designing the building. The building will be separate

architecturally. In other words, when you drive around that complex you will be

able to say: This is the children's part. You cannot do that today, for example

for the medical school or the School of Pharmacy. They are all like one lump

there. The Janeway itself will be separate, it will be identifiable as a

separate kind of architecture. When a child needs to come to the Emergency at

the Janeway they will come to a separate emergency department than the adult

emergency department. They are far enough separated for that.

Now to the children's rehabilitation service. There

are about 1,000 children at any one time in this Province who have chronic

disability and would need to use that service. The lower levels of the facility

will be used for that. That is one of the reasons we have the underground

parking, so that the parents don't have to wheel wheelchairs during snow or rain

across the parking lot.

The main levels of the new centre will link with the

adult hospital for the obstetrical area. One of the strong reasons for putting

the two facilities together is that when a baby is born sick - and very few,

thank God - but the ones who are born sick, if they are really sick, they need

to use the Janeway site. So what will happen at the new site is that the place

where the mothers would give birth is in the new building; the intensive care

unit is in the new building, if the baby needs intensive care. If the mother

needs to stay in longer, or come in earlier, then the beds for that service for

the mother would be in the main part of the General Hospital building. That link

is there and you will be able to go right across. If the mother is in hospital

she will be able to go right across to see her sick baby. That is that

situation.

The in-patient and out-patient areas are all separate

for children, and their staff will be staffed with children services. Things

like housekeeping - the housekeeping staff will be shared, obviously, with the

General Hospital and so on. Some equipment will not be shared; it will be

dedicated just for children. Some equipment, like the MRI, there will be certain

days the children will use it and certain days when it is used for adults. When

it is used for children it will be staffed by people who work with the children.

That is, kind of, the concept.

The building will be finished - it looks realistic now

- by December of 1999, because of the good weather last winter and because the

same contractor got the second contract, which meant we did not have that

in-between learning curb again. The work is going well there at the site and it

is coming in on budget so it is realistic, I think, to say we think it will be

finished by December of 1999, barring something very unfortunate. Then you

commission that when you decommission the old one.

Then, depending on the winter, that winter we will

begin the moving process. The moving process will require us to have, for a

short period of time, two buildings operational. We will have to keep the

Janeway open as we open the other building and then do the gradual movement,

with probably the easier moves first, outpatients and those things.

At the same time we will be moving the women's health

service, the obstetrics and gynaecology service, from the Grace to the adult

site. That process is going to take several months. It sounds like we should be

able to do it more quickly but realistically taking care of the sick -

(inaudible) sick mothers - is going to take that period of time.

Inside the General Hospital itself, now and into 1999,

we are doing renovations as well so that the obstetrical beds, where the mother

has to stay a longer period of time, will be ready as well for that service.

Mr. Whelan, does that answer your question?

MR. WHELAN: Yes. I just have one other question

pertaining to that, with regard to layoffs. You mentioned that there would be

some layoffs as a result of combining the several buildings. Relating to the

Janeway, to what extent do you see it pertaining to it?

SR. DAVIS: The first survey we did back in

1995-1996, when we knew that we were going to be closing buildings - we have all

known that in St. John's for awhile, I think, realistically - we worked with the

unions immediately to create transition agreements with the unions. I am pleased

to say we were the first region in Canada to get those transition agreements

negotiated. The layoffs will not necessarily be just staff at the Janeway; it

will be the junior people in the support staff areas, so that everybody is

treated fairly and people at the Janeway and the Grace are not penalized because

they are at those two sites. It will depend on where you are in the seniority

lists. That is one thing we have already done and had in place now for two

years.

The second thing is, we filled any permanent vacancies

with temporary staff who know that they have short-term work. The third thing we

are doing now, and we are in the final stages with each of the departments, is

identifying which areas will see the reductions and beginning to move towards

early retirements to make some of those positions vacant. We are not waiting

till the year 2000 to do that. We are doing a lot of that work. We started it in

1995 and we are still continuing to do that. Our hope by doing it that way is

that people will know earlier than the actual closures where they are going to

end up eventually. People who could see potential for early retirement will be

starting to think that way, and the human resources staff will be working with

staff who are affected, to help them through that. We are working with the

unions as well to reduce the amount of bumping that will result from that. We

are actively doing that right now, today.

CHAIR: Can I just interject? I think we pretty

well covered that yesterday, really.

SR. DAVIS: Yes.

MR. WHELAN: Yes, thank you.

CHAIR: Anna, do you want to finish up your

questioning? Then we will get to Sheila.

MS THISTLE: Sure.

We talked about the year 2000, and you indicated that

$500,000 might be an average type figure to accommodate those changes, but you

are responsible for quite a lot of health care facilities. I am wondering, are

you looking at how that might impact your budget next year? Are you making

allowances for that?

MR. CROCKER: The $500,000 that we mentioned will

be approximately what we will spend in this fiscal year in terms of salaries

plus (inaudible) that we will be putting in.

We think there will be more costs next year, because

by the end of December we will have a good fix on our medical equipment side in

terms of knowing exactly what we have and knowing which areas we are going to

have problems in. We do not have a figure as to what next year will cover or

cost us in terms of the calendar year 1999.

The $500,000 this year was basically budgeted for in

our departmental budgets for this year, so that is already in our budget system

in terms of (inaudible).

SR. DAVIS: I might add to Mr. Crocker's comments

that the Department of Health has also now named the year 2000 coordinator for

the Province. That person will be working closely with our group as well,

identifying what the provincial costs will be in terms of making (inaudible).

MS THISTLE: I guess the general public out there

are not so much concerned about information systems; they are concerned about

being in the middle of an operation and something going wrong. Would you have a

backup contingency plan, or a trial run before the year 2000? I am sure you

would.

SR. DAVIS: The reality is, we do not have any

unique equipment in our organization. This same issue is faced by every health

care facility across the country. Actually, next week or the week after, we are

bringing in the leader of that initiative in Ontario to talk to us about what

Ontario is doing. We are working with suppliers in that instance, in a common

approach across the country, of course, with areas like that. But yes, we will

be doing a minimal amount of work on January 1, 2000, to make sure that in every

system we have, we have caught all the bugs.

MS THISTLE: You are probably looking at postponing

or delaying, if they can be, surgeries until you are certain.

SR. DAVIS: For one thing, it happens at a good

time of year when we are down anyway in terms of numbers, which will be a

benefit.

MS THISTLE: No doubt it is a concern that people

will feel comfort with by the year 2000.

I would like to switch gears a little bit. Sister

Elizabeth, you alluded to the fact that the nursing staff are aging; some of

them are, or a fair number of them. What would be the average age of nurses in

the system for the St. John's Health Care Corporation?

SR. DAVIS: I am not sure. I think we had a figure

the other day of thirty-seven. Ms Thistle, I am not sure about that.

What we are doing, though, is we have - because of the

nursing shortage we are expecting across the country - put a special working

group in place in our organization to begin to develop strategies with the

provincial union about ways to address that impending shortage that we are

expecting around the year 2003. It is a serious issue for us.

MS THISTLE: There are two reasons why I ask that

question. I looked at the employee assistance plan. I know it has gone up

$10,000 in 1998. You mentioned the fact that, of course, as people get older

they would be using up more compassionate leave and so on. Would that account

for some of the increases in your employee assistance budget?

SR. DAVIS: There are two reasons our employees

assistance program monies are increasing. One is, our program is getting better

and therefore we are reaching more people. The second is, we know that more

employees are facing greater stress, not just in their work life but also in

their home life, because of the stresses in the Province. Employees are more

ready to come forward asking for help now that they are more confident in the

program.

It is hard to tell if it is because of the greater

stress level or the better program we have, but it is probably a combination of

both. I don't think it is any secret to anybody that the stress level in health

care across the country has increased considerably because of all the changes.

Health care is a very conservative industry and we have not had a major change,

other than growth, since medicare was introduced in the late 1950s and early

1960s. Then all of a sudden we introduced, in one year, buildings closing, new

ways of providing programs, and consolidation of functions. That level of change

is unprecedented. We have never had an experience in the health care system with

that kind of change before, and all of us have different ways of coping with

that kind of change. For some people they need - well, we all need support; some

need it in different ways than others.

MS THISTLE: The fact that our nurses in the future

now will be graduating with a degree, no doubt that will have an impact on

keeping nurses in this Province; because a lot of them, as we all know, head to

different parts of Canada and the U.S. They come back with specialities and then

we are only too anxious to take them back, once they have a speciality. The fact

that they will now be graduating with degrees, will that be a standardization

throughout Canada? No matter where they go, they are then accepted into any

system? Will that encourage us to hold on to them longer, our system?

SR. DAVIS: That is a very good question that I

cannot answer, Ms Thistle, really. Not all provinces will require a degree by

the year 2000. I think there are about six provinces that will.

We find that our graduates from our Schools of Nursing

here are very highly regarded across Canada and in the States. I have, on a

number of occasions, been talking to people even from the States, who did not

very much know who I was, saying to me: If you are connected with the health

care system in Canada, I have to tell you, the Newfoundland nurses are the best

that we have ever recruited.

They already have a very good reputation throughout

the States. What the degree will enable nurses to do, though, is to be more

prepared for the increasing complexity in health care. It will certainly benefit

us here, and I think anywhere they go they will be certainly more marketable,

definitely.

That will not mean, though, that every nurse in our

organization in the year 2000 will have a degree. Nurses who presently do not

have degrees will not lose their jobs because of that. The new nurses coming in

will be expected to have the degrees.

MS THISTLE: I am thinking, because our health care

is changing so rapidly and you are requiring so many specialities, that it would

almost make sense that the degree nurses would certainly be in an advantage

situation wouldn't they?

SR. DAVIS: Yes, definitely. They will be able to

go anywhere in the world, with a degree, and be able to get into a health care

system.

MS THISTLE: Definitely a positive move, yes.

CHAIR: Can we conclude it and move on?

MS THISTLE: Thank you, Mr. Chairman.

CHAIR: Thank you. Sheila Osborne.

MS S. OSBORNE: On page 30, the second paragraph,

"The Department of Health has informed the Corporation that within the three

years ending 31 March 1999, they are not permitted to be in an overall deficit

position for that three year period. The Department subsequently extended this

for an additional year....", bringing it up to the end of March, 2000.

The information that I have here from the Auditor

General, the operational deficit for the year ending March 31, 1996, was

$211,000; ending March 31, 1997, it was $4,800,000; for the year ending March

31, 1998, there was a slight profit of $9,000, and that is an accumulative debt

of approximately $5 million with a projection of $10 million for the current

year.

What has the Corporation done to address this problem?

What measures have been put in place to try and come in with a balanced budget

in the future?

SR. DAVIS: Ms Osborne, in terms of what you just

said, you crossed over what is here plus what has happened since this document

was written. The numbers here are no longer accurate because the Department of

Health put (inaudible) money into health care for the two past years. You

rightly summarized that by saying that in the first year, depending on which

statement you look at, our new modified approach shows a slight surplus in the

first year. The second year we had a $4.8 million deficit. The past year we had

a $9,000 surplus. This year we are projecting a $5 million deficit, which would

mean at the end of this year our debt would be $10 million: the $5 million from

the previous year and the $5 million this year.

The first unknown is that government has identified a

$10 million amount they are going to put in health care before the end of March

1999. We do not know at this stage what our share of that $10 million will be.

The second fact is that the department's own review

that was done in detail over the four month period showed that they saw that we

should add at least $3.6 million to our budget to do current operations.

The third thing we have done ourselves is this. We

have done quite a number of things to try to bring our budget in line. The

obvious things we talked about yesterday: the integration of all our

administrative and support departments; we have out-sourced housekeeping,

central laundry and food services. We will be going early in 1999 to a central

kitchen to save money from that source.

We have done, at this stage, everything we think is

possible on the support services side. We had an accreditation in May from a

team from outside Newfoundland and they told us we could not cut our support

services any more.

We have been meeting with government on quite a number

of occasions talking about this situation, and since April have told government

we are anticipating a $5 million deficit and that there is nothing we can do

more than we are already doing on the support side. Government has told us at

this point in time that we are not to reduce clinical services. Government is

aware that we are anticipating this deficit. Our monthly statements to date are

very much on target for that size of a deficit.

The review team from the Department of Health came in

in July and went through our financial systems, as they have done for every

board in the Province. Where we are right now, there is no question that we will

have a $5 million deficit at the end of March, depending though on how much of

the $10 million government allocates to us. If we get $5 million of that then we

will not have a deficit; if we get $3 million we will have a $2 million deficit.

The minister is aware of that.

We do have to get approval from the minister to incur

a deficit. In the most recent correspondence - and our chairperson wrote the

minister in August to express concern - the minister said she is aware of our

financial situation. These reviews had to be completed before a final

determination is made. There is no way now we can save that money. Because of

our collective agreements, even if we were to close some service we could not

lay staff off fast enough to not incur the deficit this year because of our

system. The size of the deficit will be $5 million minus whatever we get from

government.

That begs the question of what happens next year and

the year after. We don't know what decisions government will make. Because they

have had that major review underway and I would imagine by now it is close to

going to government, to the political level. We don't know what will come out of

that. We know ourselves, on the support side, there is nothing further we can

do.

On the clinical side there are changes we need to make

but these changes, as Mr. Byrne has pointed out a number of times, like length

of stay, bed utilization and so on, take a long time to change because they are

on the patient care side. We are working to change these but they are not going

to be quick fixes here.

MS S. OSBORNE: When you were trimming, and you are

constantly being asked by government to cut, you said you did not reduce any

expenditures, or the expenditures were reduced in non-direct patient care. I am

concerned about emergency rooms. You said that situation had been addressed.

What is the situation now with lineups for people?

I know that I came upon a situation in an emergency

room about six or seven months ago and it was pretty horrific, and it had to do

with not enough beds to admit a person. Actually, what happened was this. There

was a woman who came in, I guess she was in her late 60s, and she had had a

stroke and they were going to admit her. I was there watching all of this. Then

another woman came in with chest pains and there were just no other stretchers.

They had to take the woman who had had the stroke off the bed in the emergency

room and prop her up in a wheelchair to utilize her stretcher to do a EKG on the

person with the chest pains. That is pretty horrendous. I guess it goes back to

the fact of the non-utilization of the empty beds, I suppose.

SR. DAVIS: That is part of it. We have peaks and

valleys in that situation though, and fortunately in the last year the peaks are

fewer than we had in the previous year. I think as we are getting to understand

better our organization we will find other ways to deal with those issues.

You will always have times though where your emergency

departments will have an unusually high level of activity. We had a lot of black

ice this month, for example. My immediate thought was that the orthopaedic

surgeons are going to be very busy. There are peaks we can expect. After

Christmas we always have peaks. I do not know what it is. People delay things

during the holidays, people are together so much that, I do not know, but there

are always peaks then. There are some peaks we know are going to happen and we

prepare for. There are others we cannot predict, and we could never operate the

emergency (inaudible) to keep it at peak level all of the time. We could never

afford to do that.

We have, as you know, extended now the hours the Grace

emergency is open, so we have been able to improve that because we have enough

physicians to cover. That is good news. We are working on the bed number

situation to make sure the beds are appropriately utilized. That is the real

issue there. We are working with the nursing homes in terms of making sure

people who need nursing home care can get out into the nursing homes. We are

working on that home IV project I was mentioning earlier. That means people will

not have to be using beds when they could get their care at home.

We are also opening a medical daycare at the General

Hospital which never had a medical daycare, so that they can, again, prevent

people from actually having to come into hospital to get care as an out-patient.

There are quite a number of initiatives throughout the organization. One of the

good things our program approach is helping us do is find out different ways of

(inaudible) each program where we can do exactly what you are talking about.

Now, will we be ever be able to say without any fear of being contradicted that

we will never have peaks again in the emergency department? No. (Inaudible)

peaks will come (inaudible).

MS S. OSBORNE: They are getting fewer, are they?

SR. DAVIS: They are getting fewer and more spaced.

We are getting better connected with community health and people who do not need

to be admitted to hospital at all to get (inaudible) for those patients. Our

systems are getting better. They are still not as good as they need to be, but

they are certainly getting better.

MS S. OSBORNE: Page 51 is totally unrelated to

patients. It has to do with tenders. The Auditor General found 170 tender

exceptions that were identified as being available from only one supplier. This

seems a little high, especially since the Auditor General found that one of the

exceptions was for a photocopier, and it was noted that GPA questioned the

support for the purchase at the time. Can you comment?

SR. DAVIS: I will let Cal speak to that. I think

we have something like 40,000 purchase orders a year. I would say before I ask

Cal to talk about it that I will say without any fear of being proven wrong that

we have the best public tender record of any government funded organization in

this Province. We have an incredibly high number of purchase orders. We have a

very efficient staff running that department. We identify almost all our

exceptions. One or two may go through the cracks in terms of sole source. It

would not be unexpected that most of our exceptions would be because of the

unique kind of equipment we have. That would not be unusual. We infrequently,

but often enough, have emergency purchases that we cannot wait to go to a tender

process. We are very conscientious in recording those Form Bs, as they tell me,

that we submit to the minister.

Cal, do you want to speak in more detail?

MR. CROCKER: In terms of our material financial

department, we do about 40,000 purchase orders a year, so we are a very large

operation. We do tend to have a fair number of exceptions, although the number

is not big, in terms of the volume we put through the system. The fact that we

have so many specialized services in terms of the (inaudible) and the different

types of medical procedures and equipment that we have, there are exceptions and

they are legitimate exceptions. If you are going to go out and buy a piece of

equipment, while there may be different vendors out there in some cases, the

fact is that we have already got ten of one piece of equipment and we are buying

the eleventh;, so because of standardization, maintenance and people

understanding your equipment (inaudible), it makes sense to go with that vendor

again in terms of the system that we are running.

In terms of what I have seen in the system, we are

probably more efficient at filling out Form Bs than tends to be the practice.

Our department tends to fill out a Form B on everything that it considers

exceptions and how they interpret the act. I think you even see more from us in

those areas because we fill out the Form Bs and send it up through the system. I

guess the documentation is provided.

There was one issue there with the photocopier. Again,

my understanding was that there was a feature that someone wanted. It was when

we were just starting out as an organization and we were just bringing together

our departments. Even in the areas where the Auditor General mentioned there was

insufficient information, that was during the same time period of trying to

bring together a materials management department. Did you have all of your

systems up and running in terms of a centralized system? Since then, as Sister

said, we are awfully comfortable with the people we have up in materials

management. I guess they are following the process of the Public Tender Act.

CHAIR: Further to that, I had some questions I

wanted to ask on sole sourcing, seeing that we are on it, if Sheila doesn't

mind.

I am just wondering what policy the health board has

with respect to employees selling to the health board itself? I had a call a

month or so ago where a person in ambulatory has a business set up where he sold

some equipment to the Health Care Corporation. I have nothing to back this up,

but the individual told me that the specs were almost written so that person

could get the contract. I am just curious. Do you have a policy in place to

address that?

SR. DAVIS: We have. In terms of first the bigger

question, conflict of interest, we have been working in the past three years at

the provincial level as well as looking in our own organization about developing

a specific conflict of interest policy. Actually, at our last board meeting the

board approved conflict of interest bylaws for the board itself and conflict of

interest principles that we are to build the other policies around. We do not

have written policies on conflict of interest at this point in time, other than

those guidelines that are there from the board, and the conflict of interest

surrounding the board itself.

In terms of the purchase of equipment, the

specifications are developed by the people using the equipment in conjunction

with the support staff from materials management, and then the equipment goes to

tender. Most of our supplies are tendered through group purchasing which is a

provincial group purchasing plan, not just for our organization. It is only on

isolated pieces of equipment that we would go on our own.

Is it possible that a employee would own a company

that got a supply contract through group purchasing? That is certainly possible.

CHAIR: I think it may have gone to tender but the

complaint was that the specs were written specifically. Maybe it is something

you should investigate and probably come back to us about.

MR. CROCKER: In terms of our policies - I will

just skim through some materials management policies - we have a policy on sole

source and low-cost purchasing in terms of the process we follow. We also have a

tendering policy, so there is a process. We also have a policy on vendor

relations. We do not have one dealing directly dealing with employees, but any

employee who would happen to have a company, and things we do not know about,

the policies apply to everyone. Once we go to the market or develop specs, it is

certainly open to anyone.

I am certainly not aware that we would have ever done

up any spec to suit a person. If we did up a spec to suit a particular product,

it was because of a standardization issue or specialty issue.

CHAIR: Thank you.

With respect to the kitchen facility that is being

worked on presently, I do believe, has there been an extension or change order

to the cost of that facility in the amount of approximately $200,000? And that

it was just a change order and not tendered?

MR. CROCKER: There is some work that we are doing

on the central kitchen in terms of, we purchased the central kitchen and left it

in a condition with no floor because we -

CHAIR: This is the one in Pippy Place, is it?

MR. CROCKER: This is the one in Pippy Place.

We did not do the floor on the new extension we put in

when we did it because we were not sure of where the piping would go in the

floor, because we did not have the specs done for the equipment. When we let the

building go, we said that once we figured out where the piping and everything

goes we would then get that work done.

What the engineering firm who was looking after that

project did, was negotiate the price with the company we bought the building

from - Marco - that they would do that work once we figured out where the piping

would go. Ideally you would do it when you were buying the building, but the

fact that we were the ones who did not know, that was the arrangement that was

made, and that was done through our engineering firm.

CHAIR: The building itself - government purchased

the building, correct?

MR. CROCKER: Yes.

CHAIR: Then they awarded the contract for

renovations or whatever work -

MR. CROCKER: There is a tender out now for

renovations.

CHAIR: - work to be done. Has Marco been doing

work on this building?

MR. CROCKER: Marco is doing the floor as part of

the original purchase. We did not let him do it when we purchased the building

because we were hung up on: Where does the piping go in the floor for the

(inaudible)?

CHAIR: You did not have a handle on what that cost

would be at that time?

MR. CROCKER: Not at the time. Our engineers

recommended that we do it this way, so we followed the advice of the engineers.

CHAIR: But normally it would be tendered.

MR. CROCKER: Normally it would have been tendered

as part of when we bought the building, because we should have bought the

building with the floors completely done.

CHAIR: With respect to that building itself, how

much money did government pay for that building - do you know that - or the

board?

MR. CROCKER: We paid $1.8 million.

CHAIR: One point eight million. I won't get into

it. I will leave it alone.

MR. CROCKER: The other thing, though, in terms of

buying that building, that was a public tender. We had price quotes in from six

different individuals but there were eight different combinations in terms of

either leasing a building or buying a building. We moved away from the leasing

because the purchase price of the building was so much more of an advantage to

us, and the purchase price of that building was the low cost building in terms

of what the tenders came in. So the $1.8 million was certainly the best price we

had on a building, plus the fact that, that was a relatively new building and in

an ideal location for us in terms of running a central kitchen, which is just up

from the General Hospital.

CHAIR: The history of the building itself, do you

know how much the people that you bought the building from paid for the

building?

MR. CROCKER: We don't know officially. We heard

rumours, but what people forget in terms of when that discussion went on was:

that building was 12,000 square feet, so what the vendor did was bought a 12,000

square foot building. What we tendered for was a 30,000 square foot building, so

basically there had to be an extension put on that building of 20,000 square

feet. So the purchase price and what that building would have actually cost the

vendor are certainly not the same. He did not sell us the exact same building;

it was a 20,000 square foot one.

CHAIR: Just off on a different tangent now, the

liabilities of the board - the board was sued some time ago by a nursing

supervisor with respect to redundancy and severance being paid jointly. Is that

correct?

SR. DAVIS: That was the Waterford (inaudible).

CHAIR: Yes, that's right. Are there are any more

suits pending? Has the board been sued by anyone else? How many? Is there a

class action possibility here for the same reasons?

SR. DAVIS: First of all, the board is often sued.

CHAIR: Yes, I know that.

SR. DAVIS: We are sued for medical reasons; we are

sued for performance reasons.

CHAIR: But for these purposes, former employees?

SR. DAVIS: The management employees - Ms

Fitzgerald was the case that was made public first, and that was before our

Corporation came into being. That situation (inaudible). There have been

subsequent suits by - well, there have been eight that have actually been issued

against us and there are a number of others pending, I would think, depending on

the outcome of those.

This is really an issue that has broader implications

than our organization, but it has implications for other boards across the

Province because it relates to an

interpretation of Treasury Board policy.

At the present time we are talking with other regional

boards in the Province to see if there is a joint approach we should be taking

here. As well, we are in conversation with officials of Treasury Board in terms

of even broader implications of this. We have not made any final decisions on

how the matters are going to be treated. I expect, though, that we will be going

to court soon on one or two of those cases.

CHAIR: So you really do not have a handle on what

the end result would be with the amount of dollars and what impact it is going

to have on your budget, do you?

SR. DAVIS: We do know, in all the cases settled

against us, there was a $2 million to $3 million bill. We do know that. We do

know as well, though, that all the redundancies are not the same and most of our

employees who went through redundancies signed releases that have legal weight.

The worst-case scenario is $2 million to $3 million.

CHAIR: I do not want to hog the show here. Does

anyone else have any questions? Because I have a number I can continue on with.

WITNESS: (Inaudible).

CHAIR: Okay. I will try not to cover anything that

we already covered yesterday and today.

On page 41, the third bullet down, it says, "The

Corporation has not reconciled its bank accounts in a timely manner. Instances

were found where such reconciliations were several months behind."

Has that been addressed? I don't think we covered

that, did we?

SR. DAVIS: Yes, we did.

WITNESS: (Inaudible).

SR. DAVIS: We didn't? I thought we did.

MR. CROCKER: Again, that was when we just went

through our consolidation of services and funded a new finance department up and

running. Certainly since that time all of our bank accounts are reconciled on a

monthly basis; plus, there is a signature from the manager of general ledgers

signifying (inaudible) as was recommended by the Auditor General.

CHAIR: Okay.

I just had some pages highlighted here so we will have

to skip to the pages as we go through this.

On page 55, under the Capital Equipment Policies,

second sentence in the first paragraph, it says, "Our discussions with other

officials indicated that they were unclear as to what the Corporation's policies

were with regard to certain capital equipment issues. In addition, there are no

documented policies with regard to physical security over capital assets to

prevent the unauthorized or unrecorded movement of assets."

I have a note here; I was going to ask the Auditor

General to make a comment on that.

MS MARSHALL: Basically what I was hoping for there

was a broad policy on capital assets: how they were acquiring them; how they

were recording them; how they were checking on their existence after they had

purchased them; what they were doing with regard to dispositions; how they were

disposing of surplus matters; whether they were tagging the physical assets,

things of that nature.

CHAIR: Mr. Crocker, would you want to answer that?

MR. CROCKER: Yes. In terms of the capital

equipment area, and again this is certainly a combination - and certainly the

health care I am familiar with is -, we do not do a good job in terms of having

fixed asset ledgers which is really how you control your fixed assets. We did

not do it as individual sites. Since the Health Care Corporation and since this

report we have done a full physical count of all of our fixed assets and tagged

all of our fixed assets.

We are now going though a process through our

materials management of inputting all that data into a fixed asset module. We

will have a full fixed asset ledger. We do have a policy in our materials

management department on assets - I am trying to remember what the title was, if

it was asset disposal and removal; it was asset relocation storage and

disposition, and that was dated January 1997 - in terms of how we allocate our

fixed assets.

We have come a long way since the Auditor General's

report. We do know there were initiatives. We did not have any fixed asset

ledger, and without the fixed asset ledge that control is difficult. I guess in

three months' time when all the input is done we will have a full fixed asset

ledger with every piece of our fixed assets tagged.

MS MARSHALL: The one issue that we are

particularly concerned with was the movable assets. We had some problems with

locating some of the recent computers that had been purchased by the

Corporation. That was (inaudible) special (inaudible).

MR. CROCKER: Again, the issue there was the fact

that we did not have the full fixed asset ledger in terms of the tracking and

did we tag everything that came in. We lost a couple of PCs that year. We

certainly know we lost three. I think it was two PCs and a laptop, but outside

of that the rest of the equipment was around. It was a matter of taking a PO and

actually finding where it went. Because again, with all of our staff changes and

department moves, the equipment might have went to the General Hospital, but is

now down to St. Clare's. Because again, when we move staff around we are so

short of PCs that people tend to take their PC with them, because we do not have

any (inaudible). So it is trying to track it through the system.

CHAIR: That is being addressed?

MR. CROCKER: (Inaudible).

CHAIR: In Volume II, page 138, look at the

Employee Family Assistance Plan at the bottom of the page. It cost the

Corporation $85,604.20 in March 31, 1998 and $75,552.43 in March 31, 1997.

WITNESS: We did that one.

CHAIR: We did that one? I did not mark it off,

sorry. Alright. Volume II, page 143. The cost of the energy performance contract

increased by 17 per cent. Would you want to comment on that?

MR. CROCKER: I was just looking for a sheet here

before I comment, because there are (inaudible).

SR. DAVIS: Just to explain to everybody, this is

the Energy Performance Service Contract we initiated early in our existence as

an organization. Because most of our buildings which, as you know, are quite

large, are heated through boiler plants that have become significantly outdated.

We had a major concern expressed by the community with the burning of Bunker C,

for example, around St. Clare's and the Grace Hospital site, and around the

Janeway site. They were concerned about the residue from the Bunker C.

We were concerned we were going to have failures in

our equipment that would significantly impact on our ability to provide service.

We needed a large output of money to replace the boilers, to be blunt about it,

so we would have more efficient boilers that burn the cleaner fuel and that we

could depend on for reliability (inaudible) our systems.

We did not have any way of getting the money to do

that through the normal process. ESCos are common now throughout the country as

ways of getting the money up front and paying back through the efficiency

systems. That is what we went for. We went to tender for that kind of system, so

what we have here is the budget for that ESCo that we have agreed with Honeywell

for.

MR. CROCKER: Again, understanding the process,

when you go into an ESCo it is really a request for a proposal process that you

go through in terms of going to the market. The ESCo companies come in and

basically tell you what they can do for their system in terms of installing new

boilers, lighting and insulation, which are the three big things people tend to

get.

In terms of discussing with your facilities management

staff, it is what you think both sides need and what the project is. Once you

actually get into it, that is where you get into more detail. The major change

that we made to our ESCo, the big one, was the expansion of the boiler plant at

the Miller Centre to look after the workshops. We did not put that into the

ESCo. We certainly knew we had to do it because we were tearing down some space

there that had workshops in them. That is an issue that does not give you any

increased energy savings. The only way you could do that through your ESCo is if

there was some flexibility in your ESCo to be able to handle that. We did not

put it in the tenders and let's see how our ESCo comes in. If it comes in that

we are comfortable with the repayment period over the seven- or eight-year

period that you want, then we will do that project through the ESCo.

Even though that was done through the ESCo, which is

with Honeywell, that would have been tendered in terms of when we did the boiler

plant. We put it in the ESCo but it was certainly tendered, and we called it

part of the ESCo in terms of: How do we finance it.

The other two major changes that we made were these.

One had to do with the St. Clare's boiler plant. We went into an old boiler

room, tried to live with the piping that exists between the boiler plant - I

mean, with St. Clare's, which is across the road from the building. We tried to

live with the piping that was in place. When they started working with the

piping, it was old and corroded and they said: Look, you are putting in new

boilers, you can't install it with this old piping. So we had to replace the

piping, hence the $200,000.

The lighting retrofit, there was an increase in

lighting retrofit at the General because when we did the ESCo we were also doing

plans for the site redevelopment. We were not quite sure in some areas; would

the site redevelopment handle the work, or would the ESCo? Once we had the final

plans from the site redevelopment there were some areas where the old lighting

was remaining, so we added that to the ESCo. That was just a case of - we didn't

know exactly where one project would stop and where the other one would pick up.

That was some of the overlap that we had to do. Those were the three big areas

that we did on that ESCo. It is after coming in pretty decent outside of that.

CHAIR: Thank you.

I am just skipping through the notes I made here now

and marking them off. You have a lot of the questions answered that I had

highlighted.

On page 15, I had three questions on that page and two

have been addressed. The bottom sentence on page 15, Volume I, says, "Requests

for proposals to design and manage the construction of the child health care

centre were issued in September 1996. Health Care Design Consultants were

selected and engaged for a three year contract."

I would imagine you had certain criteria put in place

when you put the request for proposals or whatever. How much was that contract

worth, for the three year period?

SR. DAVIS: I am not certain where you are.

CHAIR: On page 15, Volume I, the last sentence on

the page basically. "Health Care Design Consultants were selected and engaged

for a three year contract." How much was the contract valued at?

MR. CROCKER: I cannot recall off the top of my

head on that, but it was a tendered process that we went through.

MS MARSHALL: Page 64 of the document provide some

details on consultants. I don't know if Mr. Crocker can determine from that list

(inaudible).

CHAIR: Also in that same document, the Auditor

General pointed out the (inaudible) planning - four contracts with no proposal

call.

MR. CROCKER: In terms of the first question, I

guess the major contract at that point was the $3.5 million, which was Health

Care Design Consultants, which was an association of four or five engineering

firms in St. John's. So that was the original (inaudible).

SR. DAVIS: I think it is important to point out

that those consultants charged a standard fee, which is a percentage of the work

that they do. that is how they are paid. It is regulated by their own industry

in terms of how much is paid. That is the group that is overseeing the new

building, the Janeway (inaudible).

CHAIR: Thank you.

On page 16, Volume I, the first bullet, "...that the

savings achieved by the consolidation of the hospitals would be in the order of

$25 million". We have been using the figure of $20 million over the past two

days. Is it $20 million or is it $25 million?

SR. DAVIS: We said it was $20 million. We have

always maintained it was $20 million.

MR. CROCKER: The government at one point put $25

million in their documents, but that was not our figure; that was their figure.

MS YOUNG: If you go back to the announcement that

we made in June of 1995, when we made that announcement the number twenty was

used.

WITNESS: That would have actually been an excerpt

(inaudible) document.

CHAIR: On page 65, Volume I, Proposal Calls, the

third and fourth paragraphs down, I will take the second-last paragraph:

Engineering consultants are engaged on a regular basis by the Corporation to

manage construction and renovations projects at the seven sites. While

individual projects may not exceed $100,000, total engineering fees paid are

significant. Fees, including GST, paid during the -

MR. LUSH: Excluding GST.

CHAIR: Oh, I am sorry.

"Fees, excluding GST, paid during the period 1 April

1995 to 31 December 1996 exceeded $500,000. A proposal call has not been

undertaken by the Corporation for on-going engineering consulting services for

the existing seven sites."

Could you comment on that, or have we covered that

already?

MR. CROCKER: First when we came on the scene,

there were two sites that had tender calls for engineering on their own

individual basis. The Waterford used an engineering firm that we had gone to

proposals for in terms of RFPs and had chosen the (inaudible). The Janeway

tended to use BFL. The other buildings were using one of (inaudible) engineering

firm.

We continued that practice because what we found was

that these firms knew the buildings. The things that we were doing were

renovation type projects and fees we were getting, again in terms of engineering

fees, were based on percentages. So you don't tend to get any (inaudible)

appeals from engineering firms. These firms knew the buildings and did not have

to spend as much time in terms of actually acquainting themselves with all the

buildings, so we tended to use that.

At this point, we have not gone to the market for

engineering services for ongoing work. We still use different firms. The fact

that we are using so many for the sites we are developing, we are still

basically using just about everyone in St. John's for one project or another.

CHAIR: With respect to pages 66 and 67, Contract

Documents - I will start on page 66. "The contract documents for the thirteen

projects reviewed indicated the following:..." - these are some of the points

the Auditor General had, I believe - "...Neither letters of agreement nor

contracts were prepared for the engagement of consultants for the asbestos

hazardous waste management plan and the graphic design services."

Next, "The contract with the Health Care Design

Consultants was prepared in draft but had not been signed as at the time of our

review. Work under this contract was started in December 1996 and two invoices

totalling $315,940 were approved for payment prior to the completion of our

review."

The last one there, the third sentence, "In some cases

clauses addressing issues such as responsibility for delays, ownership of

documents resulting from the consultant engagement and record keeping were not

included."

Would you like to comment on why, for all three?

MR. CROCKER: Just in terms of my personal

involvement in some of the contracts, the second bullet there related to a

contract in terms of site redevelopment. There were some ongoing issues about

actually signing off that letter, and we certainly were delayed in terms of

getting that signature, but the work was certainly ongoing. We certainly had an

agreement with the contractor, and the letter did get signed after the fact.

Also since that time, in terms of the Corporation,

again it relates back to the Corporation just coming into being, trying to get,

in that case, the facilities management department consolidated and then getting

a process in place. Since then, we do get the signatures and we do have a policy

that was approved by our board in terms of Sister Elizabeth having to personally

sign off on any change orders in terms of projects we are doing.

CHAIR: Thank you.

The last page, page 77, that chart there, says that

acute care beds in operation in 1992 were 1,163 - I touched on this earlier -

and in 1996 there were 924; acute care occupancy rate, 83.3 per cent, up to 85.6

per cent in 1996; and the acute care length of stay is down, of course.

The question I had here was with respect to the acute

care occupancy rate, up basically 2.3 per cent. I just made a note there. Is

that because of the percentage of the beds - there are fewer beds so obviously

that would have to increase?

SR. DAVIS: The occupancy rate that we strive for

in hospitals generally is 85 per cent, so we are well within the overall number

here. The problem is, it varies across our sites. That is why we are working at

the number (inaudible) to try to get everywhere at 85 per cent so the places we

have - medicine is our most difficult one and is often at 100 per cent. Trying

to get that back down to 90 per cent is our goal right now. We have processes in

place involving physicians, nurses, and other staff, looking at a number of

strategies to get us there.

CHAIR: Again, that is the allocated beds.

SR. DAVIS: Yes

CHAIR: Not really the available beds but the

allocated beds.

SR. DAVIS: No, the 85 per cent would be the actual

beds that we have in operation.

CHAIR: Yes.

I really do not have any further questions. Does

anyone else on the Committee have any more questions?

MS S. OSBORNE: Just this one, and it is just a

matter of interest. When you have the central kitchen, do you anticipate that

the level of food services for patients will drop, improve or remain the same?

SR. DAVIS: We do not anticipate it will drop.

Certainly, we have had a good experience. We are not just creating a central

kitchen, we are also using a new mode of tray delivery connected with that. We

have actually had an opportunity to begin the testing of the tray delivery

system from the present General Hospital site to the Miller Centre and to the

Janeway site. That has proven to be better than it was.

I have been in health care since 1985. The very first

time I have gotten letters complimenting us on the quality of food has been

since we put that new tray system at the General Hospital. Some of our sites

have better records of good food. I always said if I was to get sick I would

want to go to the Grace because they have the best food. We have variable levels

of food quality across the sites. What this will do is insure standard quality.

It will also help us improve the safety, which is always a major concern. Since

we have had problems in other provinces and other countries it becomes more of

an anxiety level.

Will the food be the same as you get in your own home?

No. It will actually probably be closer to it than we have traditionally had in

hospitals in the City. Overall, the quality will improve. At some sites it may

not be what people are used to, but we are comfortable with the new tray systems

they have, which are quite sophisticated from an engineering point of view, that

that will happen.

The other good thing we have is that our staff in that

area have been very responsive to patient complaints. So if there is a family or

a family member who has a major complaint, staff will immediately go meet with

that person and they will look at what they can to improve it. This is

particularly sensitive for our long-term care residents. If you are only in

hospital for five days it is really not an issue.

MS S. OSBORNE: It doesn't matter.

SR. DAVIS: For people at the Miller Centre, at the

Veteran's Pavilion for example, it does. Our food services' staff have worked

very closely with the Canadian Legion advocates at the Veteran's Pavilion, and

we are very pleased with the outcome there. We have been much more pleased than

I ever thought we could possibly be, actually.

We have been very clear with patients and families

that this is an ongoing process and that we want to be notified when people have

concerns so that we can continue to improve the system for that. That measure of

comfort comes from the fact we have already implemented, for over a year now,

the tray system and it has given us a lot of benefits.

CHAIR: Thank you. Before we clue up, would you

like to have any closing remarks? I will ask the Auditor General the same thing,

if she feels free to do it.

MS YOUNG: Just to say to the Committee this is my

first experience at this. This is my university degree every time I have this

experience, and it was really a good experience, wasn't it? There was a bit of a

concern when we came here, but when you look at former students (inaudible) then

you realize they are not out to get you at all. This has been an excellent

thing, and I thank you all very much for the very important questions you did

ask. I hope that we answered them to your wishes. If there are any more...

CHAIR: No, that is fine for now.

SR. DAVIS: We have certainly benefited from the

review done by the Auditor General's staff. We would rather she had come at a

different time. We were right in the middle of the changeover, but what we did

learn from her and her staff did help strengthen system we were putting in place

and it helped us target certain areas that we needed to place priority on. In

hindsight, that six-month period was an important learning experience for us. We

very much appreciated the time and attention to detail that Ms Marshall and her

staff gave us, because it could not have been easy for them either. It was not

just new for us, it was new for everybody. That has been an important element in

terms of enabling us to strengthen the foundations for our new organization. We

are very grateful to them for that.

CHAIR: Thank you. Ms Marshall.

MS MARSHALL: I was pleased to hear that most of

the issues raised during the audit have been resolved. I would just like to

mention again that there are still a couple of issues outstanding. The first is

the savings required to finance the debt. I still have concern over that and

whether it will in fact materialize.

Another issue I am concerned about is the total cost

of restructuring. Some of those costs are reflected in the books of the Health

Care Corporation, but there are some reflected in the books of the Department of

Health and some in the books of the Department of Works, Services and

Transportation. At some point in time somebody has to go through and consolidate

all those expenditures to find out what the total cost of restructuring in the

St. John's area actually cost and compare it to the actual savings that are

going to materialize. Because I think it is important to go back and take a look

and make sure whether the savings that were generated were actually sufficient

to cover the total cost of restructuring in the St. John's region.

CHAIR: Thank you.

Before we clue up I would like to thank Sr. Elizabeth

Davis, Ms Young, Mr. Crocker, Ms Marshall and her staff, Committee members, and

the Clerk and the recording people for spending the past two days here. I

personally got a lot of information from the questions I asked and listening to

the questions that were asked.

I think what we probably should do is this. I will

recommend that maybe a few months after the completion of the restructuring is

done we will probably have another look at it, as has been suggested by Ms

Marshall. That will be some time in the year 2000.

Other than that, I just appreciate you coming here and

giving us the answers. You were pretty forthright, as far as I can see, and

hopefully we will make some recommendations, if need be. We will be reporting, I

would expect, to the House of Assembly probably early in the new year when the

House opens, which will be at the call of the government.

Other than that, thank you for coming out. We

appreciate it.

On motion, the Committee adjourned.