June 27, 1994

PUBLIC ACCOUNTS

COMMITTEE

The committee met at 2:00 p.m.

MR. CHAIRMAN (Dumaresque): Order, please!

My name is Danny Dumaresque. I'm the Member for

Eagle River and the vice-chair of the Committee. Until our chairman arrives I

will be the chair. I don't see any media here as of yet. If they do come we will

give them their instructions at that time.

I would like at this point to introduce the other

members of the Committee. To my far right is Melvin Penney, the Member for

Lewisporte. Next to him is Oliver Langdon, the Member for Fortune - Hermitage.

To my immediate left is Glenn Tobin, the Member for Burin - Placentia West, and

the Member for Harbour Grace, John Crane. We are accompanied today by Mark

Noseworthy and Elizabeth Murphy from the Speaker's Office - they are here to

assist us in the proceedings - and our recorder over there, Mr. Oates.

At this point I would ask the witnesses to

introduce themselves, starting with the Auditor General.

MS. MARSHALL: My name is Elizabeth Marshall and

to my immediate right is Mr. Bill Drover (inaudible), and to my immediate left

is Mr. George White, an audit manager with the office who is responsible for the

audit of the hospital.

MR. CHAIRMAN: Maybe from the other side.

MR. HERRIDGE: My name is Carl Herridge, acting

administrator of the hospital. To my left is Carl Hillier, Purchasing Agent, and

Marvin Ralph, Chairman of the Board.

MR. CHAIRMAN: Probably not for the Auditor

General but for you people, it is probably one of your first times to be before

a committee of the Legislature. From the outset I want to tell you you have

nothing to fear. This is merely an opportunity for the members of the Committee

to seek information. We are not here to judge, we are not here to pass any kind

of critical assessment of what you've been doing, but we want to gather

information in light of some of the observations that the Auditor General has

made in her report to the Public Accounts Committee. You will be asked to be

sworn in and at this point I would like to call on Ms. Murphy to carry out that

exercise.

SWEARING OF WITNESSES

Marvin Ralph

Carl Hillier

Carl Herridge

MR. CHAIRMAN: Thank you.

As I was saying, we are here to seek information. As

you know, in February the Public Accounts Committee asked the Auditor General to

perform an examination of the management practices at the hospital and

investigate any other matters considered relevant. We have the information here

today. There are a number of things in that I'm sure members would want to get

further clarification on. I would say to the chairman or the administration that

if you do not have the information feel free to indicate that. We would be quite

happy to receive follow up information if it is not there. We don't expect all

the time to have all the facts and figures sometimes that might be demanded at

your fingertips. If you don't have it then feel free to indicate that to us.

When you speak into the microphones I would ask you to

identify yourselves for the purposes of Hansard. This will all be recorded and

you will all get a copy of the official Hansard in a few weeks or so from now.

I will now call upon the Auditor General, and after

that any of the witnesses who have any statements they might want to make.

The Auditor General, Elizabeth Marshall.

MS. MARSHALL: Thank you, Mr. Chairman.

On February 9, 1994 the Public Accounts Committee of

the House of Assembly passed a resolution in accordance with the Auditor General

Act requesting the Auditor General to audit the Notre Dame Bay Memorial

Hospital. The resolution requested the Auditor General to perform an examination

of management practices at the hospital and investigate any other matters

considered relevant.

My office commenced a review of the Notre Dame Bay

Memorial Hospital on February 16, 1994. Our audit was directed primarily to

those systems and processes relating to board governance, management practices,

capital assets, inventory, and purchasing. Our review was performed in

accordance with generally accepted auditing standards and included such tests

and other procedures as we considered necessary. Our review was designed to

assess whether adequate control systems were in place and were operating.

One area we looked at was the area of board governance

or the review of the role of the board as it relates to the hospital. In that

area we determined that there were several areas such as strategic planning,

public relations, and management direction where the board did not provide an

adequate leadership role.

In the area of management practices we found most

aspects of the management practices of the board could be improved. In

particular the planning and reporting processes could be improved with the

development, approval, and monitoring of strategic and operational plans.

In the area of capital assets we determined that

capital assets are not adequately controlled. Policies and procedures over the

control and use of capital assets should be properly developed, approved, and

communicated to staff.

In the area of inventory, policies and procedures over

inventories need to be properly documented and approved.

In the area of purchasing we found several instances

of non compliance with the Public Tender Act.

Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you.

Is there a statement that either one of you would like

to make?

MR. RALPH: I am Marvin Ralph, Chairperson of the

board.

MR. CHAIRMAN: Our Chairman has now arrived, Mr.

Neil Windsor.

I have run through the procedure and got everybody

sworn in for you. The hard work is done, so I will now turn it over to you. We

are just receiving a statement now from the board member and you can carry on

from there.

MR. WINDSOR: Okay.

MR. RALPH: I am Marvin Ralph, Chairman of the

board.

Basically my preliminary response is to express

appreciation for the opportunity we have had to dialogue with the Auditor

General's department of following their study of the hospital assessment. The

observations being made are reasonably fair. We can talk to some of these issues

as the evening proceeds but first of all just to say thank you for the

opportunity to collaborate and to have this opportunity to meet with the Auditor

General's department and now with you folk following.

MR. CHAIRMAN (Windsor): Thank you, very much.

Has the Auditor General made her opening comments yet?

You have. You have gone through all the

preambles with the news media and all

that kind of stuff?

MR. DUMARESQUE: There are no media here.

MR. CHAIRMAN: No media here?

MR. DUMARESQUE: There are a couple of people from

the Department of Health, and a few other people. You might want to have them

identify themselves for the record.

MR. CHAIRMAN: First of all let me apologize. I

went over to the Anchor Inn. Nobody told me that we had changed venues. I had my

wife drop me over there and found myself stranded so I just finished hitchhiking

from the Anchor Inn to here.

MR. DUMARESQUE: We did not know it either until we

got here.

MR. CHAIRMAN: I have a habit of doing that. I went

to Labrador one time, to the Bakeapple Festival, when I was Minister of Tourism

and we could not get our car on the ferry going across to L'Anse-Amour so I

ended up hitchhiking in the back of a Parks Canada pickup. I arrived at the

hotel in L'Anse-au-Meadow with a great delegation from the community, the

councillors and the head of the Bakeapple Festival to meet me and I arrived in

the back of a Parks Canada pickup because the cab was full, in a pair of blue

jeans and a t-shirt and a pair of sneakers, and very quickly got into the swing

of the Bakeapple Festival. Made a hit with them. I do apologize for being late

but that is what happened to me.

I don't know Danny if you went through, explained to

the people who are here that we are here simply to gather information, to hear

your point of view, to hear points from the Auditor General, and obviously to

give members of the Committee an opportunity to ask some questions. Our role is

to report back to the House of Assembly, of course. We are a select committee or

a standing committee of the House of Assembly. Our mandate is basically to look

into matters dealing with financial administration and accountability. As I've

said many times before we are basically I guess the last step in the

accountability process. You go through your various internal auditing processes,

and the Auditor General and her staff come in and examine carefully. You may

have individual external auditors of your own that do your audits in some cases.

Finally I guess it is the House of Assembly and we are the arm of the House of

Assembly that reaches out.

It has been a pleasure for this Committee to travel

around the Province, basically take the Public Accounts Committee to the people

of the Province, and particularly the boards and agencies which have not

previously had an opportunity to discuss or to meet directly with the Committee

to understand how the Committee functions and to have an opportunity, I guess,

before the Committee, perhaps even to question some of the points of view with

the Auditor General and her staff. Maybe you disagreed with some of the things

that have been said, and that has happened before. It is always very healthy to

have an opportunity to get both sides of the story. Of course our mandate is to

report back to the House of Assembly.

I want to welcome all of the witnesses who are here

and the Auditor General. I guess Mr. Dumaresque has already done it. I will do

it again. Perhaps now there is nothing else to be done. We will move on with

questioning.

MR. DUMARESQUE: (Inaudible) might identify

themselves for the record probably.

MR. CHAIRMAN: I know Mr. Hart of course. Who...?

MR. HART: Dave Saunders, who is the Director of

Institutional Finance.

MR. CHAIRMAN: We've met him many times before. I

apologize for not remembering the name, Mr. Saunders.

MR. DUMARESQUE: There are other people in the

audience (inaudible).

MR. CHAIRMAN: Are these visitors or are they

(inaudible)?

AN HON. MEMBER: They are representatives of the

hospital staff and the board. This is Linda Facey, our Director of Patient

Services; Jennifer Vincent, our Director of Payroll/Personnel; Gerald Peddle, a

board member; and Brian Guy, another board member.

MR. CHAIRMAN: Thank you very much. We certainly

welcome your participation.

We look forward to this discussion. Who would like to

begin today? Mr. Penney?

MR. PENNEY: Sure.

MR. CHAIRMAN: Mr. Penney, please.

MR. PENNEY: Thank you, Mr. Chairman. There are a

number of areas here that I have some questions on but I am going to - I'm

assuming everybody has a copy of the report that we have - leave the Auditor

General's report for a moment and I'm going to go into your financial

statements. If I could have you turn to the financial statement for the year

ending March 31, 1993.

AN HON. MEMBER: Page 70? Which page?

MR. PENNEY: Yes, it begins on page 70 but let's go

to page 77. My questions are simply for clarification. The in-patient income

from the provincial plan dropped in 1993 from $4.8 million to $4.6 million. In

1991 it was $5.2 million, in 1992 it went up to $4.8 million, in 1993 it dropped

to $4.6 million. Why is that? My question is not addressed to anybody in

particular.

MR. HERRIDGE: You will also notice that the

provincial plan income is broken down into three categories. It is in-patient

income, out-patient income and other services. I'm not sure of the total of each

year but you will notice on the same page the out-patient income increased

significantly for that same year. The total amount that is allocated to us each

year by the Department of Health is broken down into these three categories and

the amount that is allocated to out-patient is based on the total services

assigned to out-patient such as lab, out-patient visits, physiotherapy, x-ray

units, so on and so forth. In other words the more we allocate to outpatients

the less for inpatients.

MR. PENNEY: In 1991 you had forty-six beds,

fifteen long-term care and thirty-one acute care, and in 1993 you had forty-nine

beds with 83 per cent occupancy, so why would there have been such a dramatic

drop in the income from inpatients from $5.3 million to $4.6 million?

MR. HERRIDGE: We did not receive any additional

funding from government for the additional beds. That was part of the proposed

program that was submitted to the Department of Health but we did not receive

additional funding because of the increase in beds.

MR. PENNEY: I would just like to walk you through

the financial statement for a couple of minutes. Further down the page, recovery

for doubtful accounts. In 1991 you recovered $1600, 1992, $822, but in 1993 you

made provision for almost $4000 that you could not collect, or did not collect.

Why was that?

MR. HERRIDGE: There is no particular reason except

for the fact that we do have a number of - under the inpatient's income you will

see medically discharged - unnecessary care income, $126,000 in 1993. That $3700

is representative of that amount, I guess, probably a deceased patient who we

were not able to collect for.

MR. PENNEY: Would that not have applied in 1991

and 1992?

MR. HERRIDGE: Not necessarily. It varies from year

to year.

MR. PENNEY: So there is nothing unusual about

that?

MR. HERRIDGE: There is nothing unusual. Actually,

it is very small considering the amount of income.

MR. PENNEY: I was not suggesting the number was

excessive.

On the next page, Page 78, offset income under

rentals, 28 Wood Street. What is that?

MR. HERRIDGE: That is a residence that was

purchased for housing our medical staff.

MR. PENNEY: How many people does it house?

MR. HERRIDGE : Just one family. One medical doctor

and his family.

MR. PENNEY: I notice the rental from that was

$5,838 but your expenses in maintaining it were over $4000, and the expenses in

maintaining it the previous year was over $9000.

MR. HERRIDGE: As with any of our rental

properties, and because of our transient medical staff, there are times when

these properties are vacant and when they are vacant, of course, we still have

to maintain the heat, light and so on. Back in 1992 I recall that we did a fair

amount of renovations and repairs on that particular property which would

justify the expenditure amount for that particular year.

MR. PENNEY: Even though you did $9000 worth of

repairs in 1992 in 1993 there was still another $4500 required again?

MR. HERRIDGE: Yes. Not necessarily repairs. It

could be routine maintenance. It does not say repairs. It says expenses.

MR. PENNEY: Now, what other property does the

board own? Further down the page it says rentals and then in brackets,

residential, and then board owned facilities. You have an income of $15,340

compared to $11,000 in 1992. What is that for? How many facilities are we

talking about?

MR. HERRIDGE: The board owns a house in

Summerford, and all these properties we have are for the housing of our medical

staff, medical residents and students who come here from time to time. The

majority of them are (inaudible) regular full-time medical staff. We have one

additional property here in Twillingate for our medical staff and another

property for the housing of our administrator.

MR. PENNEY: What is the next category, other

facilities, what is that?

MR. HERRIDGE: Other facilities would be apartments

that the board feels necessary to rent out in the community from time to time,

for residents or the medical students who might come in periodically.

MR. PENNEY: How long have you maintained those

facilities?

MR. HERRIDGE: They vary from year to year

depending on the demand. At the present time for instance we have one other

facility that we are renting out in the community.

MR. PENNEY: The reason I say that, I notice that

your expenses in the last two years have been somewhere in the area of $26,000.

Your total income has been somewhere in the area of $7,000.

MR. HERRIDGE: Again, the reason for it is it is a

board policy that we not charge rent to residents and medical students who come

into the area. Although we have to pay the rent on these apartments we don't

collect anything as income.

MR. PENNEY: Is that consistent with other hospital

boards or is it because of your geographic location?

MR. HERRIDGE: I think it is consistent with what

is happening throughout the Province.

MR. PENNEY: The next page. Mr. Chairman, if you

wish you can pass the questioning on to another member.

MR. CHAIRMAN: Go on for another few minutes.

MR. PENNEY: Okay. Up on the top of the page.

General salaries and wages of administration is $174,000 and supplements $9,500.

Who were those supplements paid to?

MR. HERRIDGE: The supplements were paid to the

previous administrator, Mr. Max Saint, in the amount of $7,000 and to myself in

the amount of $2,500. I think that information is contained in one of the notes

in the....

MR. PENNEY: Is this the amount that is covered off

in the letter from the minister suggesting that it not be done any more?

MR. HERRIDGE: Yes, I guess it is.

MR. PENNEY: Was the practice discontinued upon

receipt of the letter from the minister?

MR. HERRIDGE: No it wasn't.

MR. PENNEY: Could you give us some explanation as

to why the recommendation - I'm sorry, it wasn't a recommendation. When the

minister told you that it was not to happen any more and you continued on with

the practice, could you give us some justification for that? Ignoring the

letter?

MR. HERRIDGE: Mr. Ralph, would you care to answer

about that?

MR. RALPH: Yes. Basically what had happened, we

received the letter but in the same time the NHNHA had gone to bat for the

various institutions across the Province to have this changed. We held that in

abeyance or tabled it until we received further notice. There was none so we did

not act upon it. It was not brought to our attention just before the - during

the Auditor General's statement to us, or meeting with us. It wasn't a

deliberate attempt to ignore what the minister had said but at the same time

negotiations were ongoing, like I said, with the NHNHA on behalf of the

institutions, and we received no further direction beyond that point.

MR. PENNEY: What is happening today?

MR. RALPH: What is happening today, we are still

waiting to hear the result of this hearing, I guess, and what the Auditor

General, what you people say to us. Presently we are carrying on with the

practice.

MR. PENNEY: I'm not absolutely sure I understand.

The minister directed you to discontinue the practice. The Auditor General has

reported it in this report. You are waiting to get something from who?

MR. RALPH: Basically we haven't received a report

in the sense that it is a direction to us. When those hearings are over and done

with - and I'm assuming as well, or we are assuming, that you are going to give

us some direction, at which time we will take action. That is the only reason

why there has not been any further action.

MR. PENNEY: May I direct a question to the Auditor

General? Did you interpret the letter from the minister as being a directive, as

an order?

MS. MARSHALL: Yes, I did.

MR. PENNEY: So the board has already gotten its

directive then?

MS. MARSHALL: Yes. When I met with the board I

recommended that they cease the payments as of the date I met with them.

MR. CHAIRMAN: Maybe Mr. Hart would like to give

his comment as to government's position to the minister's letter.

MR. HART: I just want to say that it was

subsequent to my arrival at the Department of Health that I became aware of this

letter that had been issued under Mr. Decker who was the Minister of Health at

the time. I understand there was some concern about salaries being supplemented

in the various hospital boards. I guess the only comment I can make on looking

at this, and I do not know the precise details of this particular institution,

but one thing it mentions there is that salary supplements were to be

discontinued. In situations where somebody resigned a position they would not be

continued then for the successor. It also stated that where there was a

contractual obligation, or an arrangement between the board and the particular

individuals, that those particular supplements would not be tampered with.

Now, I guess it is being construed here that we are

talking about a written contract. In law you can have an old contract - and I am

not sure of the details, whether these particular supplements were agreed with

the board at the time so there was an obligation to continue on with those. I am

not sure what the terms were. Maybe the gentleman across the way can add to

that, but I just throw that out, that a contract does not have to be a written

contract.

There should be a few lawyers around the table, I am

sure there is, but I just throw that out for consideration right now. At the

same time I should say that the Department of Health is looking at board funds

in general and we are going to try and bring this rather complicated issue to

some sense. We are going to try to develop some guidelines as to what would be

an appropriate use of board funds and also what would be appropriate to bring in

as income and include them as board funds, because there are a number of things

that they are composed of.

I am sure we have talked about this many times. For

example, I think the biggest segment of board funds in most hospital boards

would be the interest earned on advances from the provincial government. In my

opinion those funds are directly related to government advances and therefore

should be controllable by the direction of the Department of Health. There are

other funds that are in board funds that would be private donations, that, I

think, we really have no direction as to how they are spent. That would be

determined on the basis under which they were received from the various private

contributors or whoever may have contributed.

In terms of salary supplements our position is that

unless there are previous contractual arrangements in place they should be

discontinued obviously in accordance with this letter. Looking at this letter it

appears to be fairly straightforward and clear that they are to stop at a

certain point in time, yet it goes on to say that unless there is a specific

agreement in place. The other thing it mentions, too, that sort of throws a

little monkey wrench into it, is that the authority of boards to commit or

expend discretionary funds is still mentioned, so it is conceivable, I suppose,

that some of the funds received from other than public funds may be capable of

being used to in fact supplement salaries where it is deemed necessary.

Sometimes in a lot of institutions - we've heard time and again that it is very

difficult to recruit in some rural hospitals, and get the quality of people that

you want. It is always that sort of thing that gets you to get involved in these

sorts of arrangements.

I will leave it at that and I will let Mr. Drover take

his seat back again, if he wants it.

MR. CHAIRMAN: Mr. Hart, can you tell us has this

direction gone out to other boards as well? Are there other boards in the

Province -

MR. HART: This direction was circulated as I

understand it to all boards.

MR. CHAIRMAN: It is a general direction.

MR. HART: It wasn't just this particular

institution.

MR. CHAIRMAN: Can you tell us what number of

boards have complied with this or are there other boards which are similarly

questioning the direction and waiting for further direction?

MR. HART: I'm not - I couldn't tell you - I could

I guess tell you that I can check and find out for you and then table a document

with you to show you where there is any other supplement. I'm not aware of any

right now off the top of my head. That's one of the things we were looking into

to see where these supplements were being paid and what the arrangements were to

direct those payments.

MR. CHAIRMAN: Thank you very much.

Mr. Penney, are you finished with that line of

questioning (inaudible)?

MR. PENNEY: Well, I will allow somebody else to

go. I would want to get back to this later on but that's fine.

MR. CHAIRMAN: Perhaps we will move on. I guess on

that issue, obviously it is not within the Committee's mandate to give any

direction other than to point out that there is a direction from the minister.

Mr. Hart now obviously is aware that the direction has not been followed and no

doubt will report back to his minister in that regard, and the Committee will

report of course what we found as well. Is there any other comment on this topic

before we move on?

MR. TOBIN: Just one brief comment on it if I

could, Mr. Chairman.

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: I'm just wondering. Do you have a legal

contract with the people who are receiving these supplements?

MR. HERRIDGE: No, except as documented in the

minutes, the actual terms of the agreement. But there is no written contract as

such.

MR. TOBIN: Before or after the person was hired?

MR. HERRIDGE: After - sorry, what did you mean?

MR. TOBIN: You said it is written in the minutes.

Was that before or after the person was hired?

MR. HERRIDGE: I'm referring specifically to the

bonus or the supplement, and that was after the gentleman was hired.

MR. TOBIN: So it was not part of the initial

agreement.

MR. HERRIDGE: No it was not.

MR. TOBIN: Mr. Chairman, I have another question

(inaudible).

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: On page 82 I notice on the top of the

page for salary and wages. The expense for the nursing administration went from

$79,968 in 1992 to $331,614 in 1993, an increase of 315 per cent. Yet at the

same time salaries for nursing units went down $172,000, or 11 per cent, along

with the salaries of operating room nurses going down 20 per cent. What is the

explanation for this?

MR. HERRIDGE: The explanation for it is that up to

1992 the salaries of the nursing supervisors for the various departments were

being charged off to the various units. Medical surgical unit, long-term care

and so on and so forth. In 1993 we changed our accounting practice and all the

nursing supervisor salaries were being charged to nursing administration. That

is the only reason for it. For consistency's sake, really.

MR. TOBIN: Mr. Chairman, there is another

situation on page 18 if I may just get back to that, and that is in terms of the

public tendering regulations. There is a significant amount of purchasing that

has taken place that did not comply with the Public Tender Act. I would like to

ask why the Public Tender Act has not been followed.

MR. HERRIDGE: With regard to the purchases - you

are referring to the items that -

MR. TOBIN: Yes, I'm referring to the items that

contravene the Public Tender Act.

MR. HERRIDGE: With regard to the first one there

for $8514, the energy management system. That was a payment for a long-term

contract for our energy management and that contract was awarded prior to the

implementation of the Public Tender Act. That $8514 represents one monthly

payment only, and not a total contract.

MR. CHAIRMAN: Excuse me. Did you say prior to the

implementation of the Public Tender Act?

MR. HERRIDGE: Yes, to my knowledge.

MR. CHAIRMAN: This was done in 1987?

MR. HERRIDGE: Yes.

MR. CHAIRMAN: The Public Tender Act was in,

surely, long before 1987.

MR. HERRIDGE: Not long before it, not to my

knowledge.

MR. CHAIRMAN: The Public Tender Act was introduced

in the early 70s.

MS. MARSHALL: I think the new act came in sometime

in 1987.

HERRIDGE: I think the limits were changed

somewhere, but the act itself was in existence, as you said, back in the 70s, I

would think.

MR. CHAIRMAN: The original Public Tender Act came

into place in 1971 or 1972. There must have been some clarification as it

relates to boards and agencies.

MR. HERRIDGE: There were some major changes during

MR. TOBIN: (inaudible) before the new act being

implemented or would the Auditor General point it out.

MS. MARSHALL: My recollection is that it was

enacted sometime in 1987. That is my recollection.

MR. CHAIRMAN: At any rate, this payment was made -

Mr. Tobin, if I might?

MR. TOBIN: Go ahead.

MR. CHAIRMAN: This is from last year's accounts, I

assume?

MR. HERRIDGE: Yes.

MR. CHAIRMAN: So the payment was made under a

contract signed in 1987. What is the term of that contract? How long is that

contract?

MR. HERRIDGE: The term of the contract would have

been seven years.

MR. CHAIRMAN: A seven year contract.

The energy management system, what does that entail?

MR. HERRIDGE: The energy management system was the

replacement and installation of all the boilers, the steam boilers in the

heating plant in the hospital. The equipment that was there before consisted of

two large steam boilers which were very inefficient and under contract with

Honeywell. By the way the contract itself was done through consultants on an

invited bid basis rather than a tender, and although I was not in this position

at that time it was my understanding that was acceptable policy, so like I said

that $8500 represents one payment. Out total yearly commitment on that energy

management system is about $120,000 per year.

MR. PENNEY: Mr. Chairman, before you leave that

energy management may I ask a question?

MR. CHAIRMAN: Sure.

MR. PENNEY: The 1993 financial statement has a

comment in there, Honeywell has guaranteed that energy savings over the period

of the contract will amount to at least $944,265 and in the event that this

saving is not met they will pay the difference in cash. Has that saving been

met?

MR. HERRIDGE: Yes it has.

MR. PENNEY: How much did you say it is costing?

MR. HERRIDGE: It is costing about $120,000 a year

approximately.

MR. PENNEY: And you're saving $944,000?

MR. HERRIDGE: Over the time of the contract.

MR. PENNEY: Over seven years?

MR. HERRIDGE: Yes.

MR. PENNEY: Thank you.

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: Just back to Page 19, the end, the

second paragraph there. It says, one purchase was awarded to a bidder who was

not the preferred bidder. Prior authority was not obtained from the Cabinet and

the forms not completed and forwarded to the minister. If there are procedures

to be followed and in place why was that not done?

MR. HERRIDGE: Mr. Hillier would you care to take

that one?

MR. HILLIER: I feel that in this particular case

they picked up only the equipment that was on the contract but there are two

other items there as well, one being service and the other being consumables. If

you take the total contract then we did go with the preferred bidder. On the

equipment alone, no we did not, but in the other two instances we did. We

combined the contract (inaudible).

MR. TOBIN: So you believe that you did go with the

preferred bidder.

MR. HILLIER: Yes, I do believe that, yes.

MR. TOBIN: Has the board now implemented any

policies as it relates to the Auditor General's recommendations on public

tendering?

MR. HERRIDGE: Yes we did. We've implemented the

policy that we will follow the guidelines of the public tendering act.

MR. TOBIN: Okay, Mr. Chairman.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: I would like to go back to page 3 and

look at the Findings and Recommendations of the governance management. It

appears from the Auditor General's report that the hospital board of directors

which should be in control of the hospital, whose ultimate authority it is to

run the thing, that that has not been the case. That the executive director and

people involved within the hospital itself have had authority and have pretty

much run the institution the way that they see it. That the board of trustees,

the hospital board, management board, has not been in on the decision making

when it should have been. That is the impression I get from reading this. I

would like for you to comment on that.

MR. RALPH: We certainly don't feel that way at all

as a board and our feeling as well that our management people don't think that

to be so. As chairperson for the last ten, eleven years I've been very cognizant

of basically everything that is going on at the hospital of major concern, and

certainly from a policy decision making. (Inaudible) the board (inaudible)

various committees involved and the executive committee as well. We've been very

well informed, both the present CEO and the acting CEO presently. We certainly

don't feel that is a correct observation. I understand you can get it from the

reading but certainly not in experience. That is not my perception. If I felt

that way I would certainly be dealing with it. That is certainly not our

experience.

MR. LANGDON: So in other words then the board of

directors, the governance, have been setting the policy for the hospital and

these people have been carrying out the wishes of the board.

MR. RALPH: Indeed, yes.

MR. LANGDON: Alright. That didn't seem to be the

way it was written and I just wanted to follow up on that.

The other question I would like to follow up on is on

page 4, I guess. I haven't got my glasses so I can't see very well, I think it

is page 4. In a time of constraint and rationalizing the health services and

what have you it appears to me that you people have a large expense at the

clinic at Summerford. The fact that it is only twenty miles from the hospital

here in Twillingate and you are spending almost $200,000 to keep that particular

clinic in operation.

Ideally I guess it is good to have that but with the

dollars being as they are I understand the last statement that is being made, it

says that: "Officials at the Hospital and at the Department of Health suggested

any decision to close the clinic at this time would meet with strong public

resistance." Again, the board of directors, the board of trustees who have been

given the authority to run the hospital and governance of it, you have to make

decisions that are going to be tough fiscally speaking. Do you still feel the

same way or do you see an opportunity or possibility of this clinic being closed

and the administration being incorporated within the hospital to save a number

of dollars, or can these dollars not be saved if the clinic was assumed under

the administration of the hospital itself?

MR. RALPH: A couple of observations, and Mr.

Herridge can probably make an observation as well. This area as you may know is

rather traditional as some rural areas in this Province are and we've been given

some strong direction. Despite the fact that we may encounter some public

opposition I do not think it is going to be as strong as what is suggested here

in the report.

What is happening on New World Island is a bit of an

evolutionary process. We are now bringing on for the first time a fee for

service doctor and suspect that when the present doctor who has been there for

twenty-five years, Dr. John Sheldon, once he moves out it will probably go total

fee for service at which time it will become an asset to the hospital rather

than a liability. We do have a report that makes some indication in that regard

and gives some direction as how that can be done.

In this area we have had long-term doctors like Dr.

John Sheldon, Dr. J. Mullins, and presently Dr. Chalker. We feel as a board to

change the process right now would incur some difficulty for the present doctor,

Dr. Sheldon, but when he leaves in the next year or two, due to retirement, we

feel it will be an opportune time.

At present we have gone half way with that move in

that Dr. Furlong who just took up practice in June, this month, is now fee for

service, and we visualize, I think, two fee for service doctors who will be

again an asset from a monetary point of view to the hospital rather than an

expense. We recognize that it is a major expense but it did occur on the island

when there was no linkage by road but just a ferry service.

If you look at our stats from the hospital you will

discover that we are serving a large number of people in outpatients and this

kind of thing, so it does reduce the demand on the hospital. Your point is well

taken and we do have that in hand and are looking for the opportune time to make

the move.

MR. TOBIN: If I could just interject for a moment?

MR. CHAIRMAN: Go ahead.

MR. TOBIN: That is the mandate of the hospital

board, to make the decision as to what to do. That has nothing to do with the

Auditor General's department or with the Public Accounts Committee. As I

understand it, it is your mandate and policy and you carry it out as such.

MR. RALPH: Yes.

MR. LANGDON: I have one more question.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: It seems also from the report we have

in front of us that there is some criticism, probably insinuated mildly rather

than very harshly, that when the hospital itself probably went from major

emphasis on acute care to chronic care there was a bit of disgruntlement among

the community, and when I say community I mean communities that you serve.

It was suggested again in the report by the Auditor

General that you people had not done an adequate public relations job to give

the information to the public to suggest what you were doing, and if that had

been done then there would probably have been less controversy. Hindsight is

20/20, or whatever the case may be, but I am just wondering what is the board

doing, or has done recently, to inform the populous, the people that you serve,

what the hospital is doing to improve health care within the community?

MR. RALPH: There is a bit of a long history in

acute chronic care here so if I could just backtrack a little. It started some

years ago, as some of you people will remember, with a bed study and a

recommendation for the hospital at that time to have twenty beds, that would be

long-term. When the hospital was first instituted we had an fifteen or eighteen

bed chronic care as opposed to forty-nine acute care.

The bed study made a recommendation relevant to

chronic care in this area. The hospital board of the day refuted that and said

it was not sufficient and as a result the government of the day bought into our

argument and commissioned another study, Kellogg or some long name. I cannot

remember all the names, but anyway their study came back and recommended that

there be an expansion to the hospital which is presently being done through a

functional plan.

In the interim there was a local committee started at

Summerford on New World Island to look at a freestanding institution. Prior to

this in Mr. Smallwood's day there was a freestanding institution promised to the

Twillingate district but that did not materialize so in the process of the

Kellogg report, and prior to that, the bed study, there was a committee set up

on New World Island to look at a freestanding institution. That did a very

thorough investigation and made a presentation to government and it looked quite

promising.

The Department of Health again asked for another look

at the needs of this area and Irene Baird of the day was asked to come look and

her findings supported the Kellogg Report as opposed to the freestanding

institution at which time the government asked the board to take on the

responsibility of chronic care. The board accepted that mandate and we proceeded

with talking to the government. They gave us funding for a functional study and

to date that functional plan has been done. We are coming close to - a master

plan has been done, a functional plan and we are now pushing for actual

development of blueprinting and I think, Mr. Herridge that's in the process.

There is some blueprinting being done. So that's where we are relevant to that.

Your observation on (inaudible) to the public, there

is an element of truth to that. A citizen's committee was formed, as you'll read

in the report, but what had happened I think to complicate matters, it wasn't

just a chronic acute care situation, we had a layoff of nurses which put some

pressure on the community because of loss of jobs. In the meantime our

anaesthetist, ran into some problems relevant to continuing his practice because

of the possibility of liable. The surgeon of course couldn't operate without him

so he tendered his resignation. With the tendering of his resignation last year,

some time in 1993, Dr. (Inaudible), our present surgeon, had no choice but to

discontinue. So these factors all came together at a very critical time together

with the downsizing or the cutbacks in our budget. The restraints had created

some difficult times for us.

The board did hire a gentleman, Mr. Hicks, from St.

John's who had done some work with the Waterford. He came by and gave us some

direction relevant to public information and since then we've been - we had been

doing some things prior to this with our people but we've done some very good

public relations following his observations. So it's a long story and it would

take maybe an hour or two for us to go through the whole process with you but

the observations and the report of course are truth except the fact that you

need a fair amount of background to understand why it came to that particular

point.

MR. LANGDON: I would like to ask more but I don't

want to monopolize.

MR. CHAIRMAN: Go ahead one more if you like.

MR. LANGDON: No go to someone else but I'll come

back to that.

MR. CHAIRMAN: Mr. Crane.

MR. CRANE: Thank you, Mr. Windsor, I'm having a

terrible time myself.

There was one thing - you were talking about New World

clinic and I don't understand what you're saying. You're saying that a new

doctor could come in there now and we'll be charged a fee for services?

MR. RALPH: Yes.

MR. CRANE: Well, you know that's a new one on me.

I didn't think - I thought doctors were paid automatically under the Medicare

Plan and there was no fee for services in the Province.

MR. RALPH: Basically, Mr. Crane, some of our

doctors are salary physicians. We presently have three doctors who are `fee for

service.' That means they operate their own practice. It is my observation - we

haven't discussed this thoroughly as a board but it is our observation that in

the short run as soon as the present long-term - Dr. Sheldon has been there for

twenty-five years, as I previously stated. When his practice discontinues,

because of retirement, the belief is that we will be going fee for service at

which time the clinic itself - hopefully if the doctors desire to use it, it

will be rented to them. If not it will be disposed of hopefully through the

proper procedures. So that's what's meant by, `fee for service.'

MR. CRANE: Yes, okay, thank you.

One question on page 5, you're talking about the

laying-off of nurses causing some problem with the committee - one statement

made there in the report, "The February 1993 external review of the Nursing

Department concluded with the comment "Nursing staff may well be anxious as to

the contents of this report and if you agree I would be pleased to know that it

was indeed shared with the nursing supervisors who in turn might discuss it with

their staff." Nursing supervisors were directed not to discuss this report,

which lead to the elimination of nine full-time jobs.

Being the board chairperson, chairman, how do you feel

about laying off nine nurses sort of very secretively? What does that do to the

nursing staff that is left? How do you feel that affected the nursing staff that

was left by not coming out and very openly telling them in advance they would be

laid off? Because according to that paragraph there it looks like things were

done very secretly and quietly. All of a sudden somebody slapped on the nursing

staff that we are going to lay nine of you off. Certainly if I was part of that

staff it wouldn't make me feel very comfortable to work there in the future.

Don't you feel it had some bad effect on the nursing staff to do that?

MR. HERRIDGE: From the administration point of

review the report that is being referred to here was what we referred to as the

Vardy report. It was the director of patient services at Western Memorial who

was invited to come in and do an assessment of our nursing staff. Our occupancy,

especially in our intensive care unit and our obstetrics unit, has been

declining over the past number of years, although we were continuing to staff

these two units on a full-time basis around the clock 365 days a year, which we

thought was a very inefficient use of our resources.

Mrs. Vardy in her report recommended that because of

the low occupancy in these two units that staffing be done on an as needed

basis. In other words, when a patient was put into intensive care we would call

in a qualified nurse to staff it. The same thing applied in the obstetrical

department. That particular report was discussed to my knowledge probably not to

great length, but certainly it was discussed with the nursing supervisors of the

day, although it was not discussed I don't think with the nursing staff

themselves. The report itself was held pending the announcement of the 1993-1994

budget from the Department of Health, and at that time that proposal was

submitted to the board and subsequently to the Department of Health for the

elimination of the full-time positions.

While this report indicates that nine full-time

positions were laid off at that particular time that is true, but the equivalent

of some six positions, the dollars for some six positions, were put back into

the budget as either on a relief or to be used on an as needed basis.

MR. CRANE: Yes, I understand that, what you did,

from reading the report. Still, if you are going to lay off in such a way, even

the people who are left, don't you think they are somewhat disturbed by it?

Because they don't know tomorrow if it is going to be their turn, right? If you

are going to do it secretively this time are you going to do it the next time

round? If they get that feeling they are not very comfortable in their job even

though they are full-time staff, right? So I certainly wouldn't feel very

comfortable if I was working in a position like that, although maybe I am and I

don't know it, right?

On page 4 the Auditor General has some problem, that

the board hasn't developed a vision, a mission statement. Have you developed

such a statement yet since the report?

MR. RALPH: We do have a mission statement and it

is being revised. In fact we have a committee, and it was discussed prior to the

coming of the Auditor General's people. We do have a committee in place, and one

of their mandates is to revise, review or revisit the mission statement of the

hospital. Relevant to the fact that the focus of the hospital is changing.

Certainly it has taken on a dual role as opposed to a singular role of acute.

Now it is going to be acute chronic and there is a resource committee in place

to address that. That is one of its mandates.

MR. CRANE: Does the board feel that with this

mission statement can the public relations program convey that to the community

and maybe ease the feelings of the community in general?

MR. RALPH: As it relates to the mission statement

you mean?

MR. CRANE: Yes.

MR. RALPH: Yes.

MR. CRANE: Do you have some PR person, or persons,

willing to go out and relay that to the community so as to help ease the tension

as I understand is built around the hospital anyway?

MR. RALPH: Well, the committee I refer to is made

up of community folk as well as hospital staff. It is a combination of both and

they will report at appropriate times to the people. It is a new committee that

has been functioning for the last three or four months. Mrs Facey is our

chairperson who is also our director of nursing and if you wish to question her

on it you may.

MR. CRANE: She looks like a person doing a good

job.

MR. CHAIRMAN: Are you finished Mr. Crane?

MR. CRANE: Yes.

MR. CHAIRMAN: Thank you.

Mr. Dumaresque.

MR. DUMARESQUE: Thank you, Mr. Chairman.

I want to touch on the tendering aspect of the game,

particularly on Page 3 where you see the list of the exceptions and I note one

of them, 26867, is the automatic transfer switch. I want to ask a couple of

questions on that.

First of all as you see from Page 143 there was an

initial request for this automatic transfer switch on October 22, 1993, and then

there was another letter shown here back in February 1994, just one page back,

142, where you indicate that the transfer switch has been installed. I am

wondering why you would think it would be an emergency if you knew you needed

this particular switch in October, and I do not know when it got installed, but

supposedly it got installed sometime in January, why that could not go to public

tender, and was there any attempt to find more than one quote for this

particular item?

MR. RALPH: There were several quotes to my

knowledge for this. The document you are referring to, of course, was the letter

I initially wrote to the Department of Health requesting funding which was a

follow-up to a telephone conversation that I had with the gentleman in the

facility planning division. The date of February 17 that you referred to was the

date that I actually submitted our request to the Department of Health for

reimbursement. The actual installation of that piece of equipment was well in

advance of that date, so there was an emergency for it because of the items that

are outlined in our letter of November 1.

Our plant is under what we refer to as a guarded plant

status and when our engineers go off duty at 4:00 o'clock in the afternoon then

our plant is unguarded so if we have a power failure at any time from 4:00 in

the afternoon until 8:00 the next morning with this switch not working then one

of these engineers would have to be called to come in in order to transfer the

power over to another generator.

MR. DUMARESQUE: I don't see any other invoices in

the document, maybe there are other quotes but I only see one really. A couple

from Harris and Roome, two or three pages relevant to that company, but I don't

see any others, but I don't question what you say.

The other aspect of this that I just wanted to get

some explanation on is that you wrote on November 1 but you called on October 22

and said that you wanted this particular item. You are saying that arrangements

must be made "...to purchase the unit and have the problem rectified as quickly

as possible... [W]e would appreciate your consideration in providing funding up

to $17,000 this fiscal year..." The next letter on February 17, you say:

"Although we have not received a reply in this regard we now enclose copies of

the relative invoices for your consideration."

I'm just wondering about the process there. You ask

for the approval and then you gave him the bill. Is that the way that you would

ordinarily work with the government? Do you have to do that to get your money

or...?

MR. HERRIDGE: You can try anything once.

MR. DUMARESQUE: I suppose.

MR. HERRIDGE: No, the gentleman, Mr. LaCour, in

our telephone conversation indicated that he would try his best to obtain

(inaudible) prior to year end. If not he indicated that he would try to provide

funding in this fiscal year, 1994-1995. Obviously he couldn't come up with the

funding during the last fiscal year so I'm confident that we will get it in this

fiscal year.

Yes, normally we do get prior approval for these

things but in this particular instance I guess we were - it was an emergency

item anyway and as he indicated to me on the phone: Go ahead, and if we can't

provide the funding we will - if not, it is something that you are going to have

to get anyway.

MR. DUMARESQUE: The other aspects of the tendering

process. You indicated earlier you intend to follow the public tendering act.

I'm looking at the areas of whether there is a conflict of interest policy. I

notice the Auditor General said there was none in place. Is there a conflict of

interest policy in place now with respect to public tendering?

MR. HERRIDGE: There has not been a public conflict

of interest policy developed to date, no.

MR. DUMARESQUE: Do you intend to develop one?

MR. HERRIDGE: Yes we do.

MR. DUMARESQUE: There are a couple of comments

(inaudible) with respect of the process of accepting the bids and the opening of

the bids and where they were not being witnessed, or at least the evidence

didn't show that they were being witnessed and stamped appropriately. Have you

had any tenders since the Auditor General's report?

MR. HERRIDGE: No we haven't. Mr. Hillier, would

you like to comment on that one?

MR. HILLIER: Yes, I would like to comment on that

particular thing. Unfortunately, as you say, the documentation wasn't kept but I

can assure you that (inaudible) through the process. The envelopes were stamped.

There were three people present on each day (inaudible) was public. I guess like

most of us we have a tendency to discard envelopes, I think. At least I do. We

apparently didn't keep the documentation.

MR. DUMARESQUE: Okay, so -

MR. HILLIER: We shall in the future.

MR. DUMARESQUE: I'm sure nobody doubts it. It is

just that the perception. If you haven't got the evidence to show, I guess -

MR. HILLIER: Yes.

MR. DUMARESQUE: - the perception can be there.

MR. HILLIER: We really didn't give any thought

towards keeping envelopes.

MR. DUMARESQUE: Right. You are not unique in it, I

must tell you.

MR. CHAIRMAN: Doesn't make it right, though.

MR. DUMARESQUE: It doesn't make it right, no.

MR. CHAIRMAN: I might just say, if I can just

(inaudible) for a second. One thing that this Committee has found over the past

three years - because I think it has only been really three years that this

Committee has had a mandate to deal with government agencies, Crown corporations

and boards, any agency or body financed by government - that one of the real

weaknesses found has been in the public tender area. A lot of it has been

basically ignorance or not really recognizing the responsibility of various

boards and agencies to comply with the Public Tender Act, and previously I guess

probably nobody bringing it to the boards' attention. I think the Committee has

played a role in that regard and generally speaking we've found boards and

agencies have welcomed the opportunity of finding out exactly what their

responsibilities are.

Mr. Dumaresque.

MR. DUMARESQUE: I want to just touch on the other

area that was brought up earlier by Mr. Penney. It is the area of income

supplements. I understand, coming from Labrador, that we have a tremendous

difficulty getting doctors, specialists, to come to rural Newfoundland and

Labrador. I don't doubt that supplements and income supplements, housing

allowances and everything else are essential. I guess you try to wrap up the

package in all the best paper you can to try and attract doctors and specialists

to areas like Twillingate. Do you think that supplements are necessary to

attract the administration side of the equation? Or is that something that the

board has considered? Do you intend to proceed with it? I guess you wouldn't if

the minister calls everybody in I suppose and brings down the law in a strict

sense. In the absence of that kind of direction have you thought about whether

supplements should be still considered for administration, as a separate item

for doctors and other specialists?

MR. RALPH: The acting CEO, Mr. Herridge, is

receiving basically the same supplement, but that is because he is continuing in

the office for a year while the present CEO is on sick leave. The last CEO, Mr.

Saint, was at the hospital for some ten, eleven years. Prior to that the

hospital went through CEOs like they were going out of style. Very difficult to

keep a CEO here. That is my understanding, Mr. Herridge. We did provide a

supplement from probably seven, eight years ago since the board made that

decision. We haven't had an occasion to review it until this particular hearing.

I certainly feel there is a need to provide some

incentive. Maybe not as much as it used to be because there are more people

available to hospitals. We haven't had an occasion to advertise for a CEO

because the present CEO has been here for ten, eleven years and is now off sick

for a year or for a period of time. I'm not sure what would happen. I am

involved in the Central East board and we just advertised and accepted a new CEO

for that board, and there was no discussion relevant to (inaudible) - we had

sufficient applicants. I suspect the need for it is becoming less and less.

There is no doubt of that.

MR. DUMARESQUE: Yes, that was the point, I guess.

I expect that the need for the administrator side of things, CEO side, would be

more availability out in the marketplace these days than there would be for

specialists, and therefore that might not be considered.

One of the budget items there I noticed for the

communications

section of the hospital operations, the salary budgets for

communications, $96,000 and $97,000 respectively for 1990 and 1991, and then it

increased to $106,00 and stayed the same for 1992 and 1993. There is an extra

$10,000 or $9,000 there for communications. What would that be for in terms of

salary? Would that have been in keeping with the guidelines as far as salary

adjustments under the freeze period?

MR. HERRIDGE: Well I don't have the benefit of the

information with me, I can only suspect that the difference is due to annual

leave, sick relief or something of that nature. The number of personnel that's

assigned to our communications area hasn't changed for the past number of years.

So I can only assume that the difference is as a result of some sort of a relief

which would be indicated in there.

AN HON. MEMBER: (Inaudible).

MR. DUMARESQUE: There's an increase of $9,000

between '91 and '92 so that may have been the year. So you had a nurse -

AN HON. MEMBER: We had a nursing assistant

-(inaudible).

MR. DUMARESQUE: $2,000 a year more probably.

AN HON. MEMBER: Pardon me?

MR. DUMARESQUE: $2,000 a year more probably.

AN HON. MEMBER: Yes probably.

MR. CHAIRMAN: Could we have a microphone please.

Would she like to come to a microphone? Are you finished what you were going to

say?

AN HON. MEMBER: (Inaudible).

MR. CHAIRMAN: Because it's important that we get

it in on the record and we can't pick you up when you're not on a microphone.

AN HON. MEMBER: I just wanted to repeat the fact

that we (inaudible).

MR. HERRIDGE: Yes, just for the record, actually

that was the year when we did have a number of layoffs in our nursing assistant

area and they bumped into some of the other lower classifications and of course

the difference between a nursing assistant and a switch board operator would be

around $3,000 per year. So that certainly would justify the additional expense.

MR. DUMARESQUE: Okay, that's it for me thank you

very much.

MR. CHAIRMAN: Mr. Penney, would you like to carry

on with further questioning?

MR. PENNEY: Thank you, Mr. Chairman.

I'd like to go back to the 1993 financial statements,

page 79, under travel. You've got travel listed in five categories, since the

last category says, `board' we're assuming that the first four would be for

travel other than for board members, am I correct? The cost of the board

travelling was $6,800 for the year. Can you give me some idea what the other -

this totals $54,000 for travel for the year - general; $19,000, recruitment;

$19,800. Now recruitment I suppose is if we had travelled to try to get doctors

or nurses to come to the area. Could you explain?

MR. HERRIDGE: The recruitment would be

specifically for medical recruitment and that would be their expenditures in

getting here. The majority of our doctors come from South Africa, and as you can

appreciate is very expensive.

MR. PENNEY: And you pay their way over?

MR. HERRIDGE: The boards policy is that we pay a

maximum of up to $5,000 per year per doctor providing they stay for the full

year. It's obvious of course from that particular amount that there was a large

number of doctors who came in here during that time.

With regard to the speech therapist travel that's

there, we have an arrangement with Gander Hospital that a speech therapist comes

out as a visiting therapist once a month, once every three weeks and that again

is our travel expenditure.

MR. PENNEY: That still leaves $19,000 on the top

just marked `general.' How do you explain that?

MR. HERRIDGE: The `general' would be local travel

which would incorporate travel by administration, nursing supervisors and any

other supervisors going away on hospital business, meetings, seminars and

whatever.

MR. PENNEY: No, you've got conventions and

seminars listed separately for $6,000.

MR. HERRIDGE: The conventions - actually it is not

conventions and seminars, it should be conventions. Seminar is not part of that

title actually. The seminar would be in the general travel.

MR. PENNEY: Seminars is up in the top category.

MR. HERRIDGE: Yes, it would be.

MR. PENNEY: So how many conventions would you have

sent people to for $6,000? How many individuals would you have sent in a year?

MR. HERRIDGE: I'm sorry but I don't have that

information.

MR. PENNEY: Generally.

MR. HERRIDGE: Six or seven, probably.

MR. PENNEY: Six or seven conventions?

MR. HERRIDGE: Yes.

MR. PENNEY: What type of conventions would they

be?

MR. HERRIDGE: Well, it would be the engineering

convention that we sent our plant maintenance engineer to in Toronto last year.

It would be a number of conventions for various - like the x-ray radiologist

convention, these types of things.

MR. PENNEY: Okay, so we've gotten conventions

taken out of it. So now the $19,000 in the top marked general is mostly for

staff travels for seminars, that sort of thing.

MR. HERRIDGE: For staff travel, for meetings,

seminars.

MR. PENNEY: The questions that I had for page 82

have all been covered, so page 83. There is probably a very logical explanation

for this but it just escapes me right now. Under Out-patients you've got drugs,

$22,000 worth of drugs for out-patients. Can you explain that to me? Aren't

out-patients given prescriptions where they go to the local pharmacy and get

their prescriptions filled?

MR. HERRIDGE: Yes they are.

MS. FACEY: In our Out-patients department we have

seen a trend over the last few years develop where antibiotics are given as an

out-patient. Many patients will come and receive their antibiotics by what we

call a heplok. It is just a little needle that goes here in their hand and the

patients will come and have their antibiotic therapy, go home again, and come

back in the evening. Of course, to give antibiotics is a very expensive method

of treatment so I would say that is perhaps why. It would be through this trend.

The other thing is chemotherapy. It is extremely,

extremely expensive. These are the cancer drugs that we give. They are extremely

expensive.

MR. PENNEY: Aren't chemotherapy and specialty

cancer drugs supplied from St. John's to the patient? Directly from St. John's,

from central supply?

MS. FACEY: I'm sorry, I can't answer how we obtain

that.

AN HON. MEMBER: I can answer: no they're not.

MR. PENNEY: Let's go back to the drugs. These

$22,700 worth of drugs, is there any attempt to recover the costs from the

patient? Like if the patient was being prescribed an antibiotic orally the

patient would be given a prescription, take it to the pharmacy, and would have

it covered off by either the Department of Social Services or by his medical

insurance or out of cash. If you prescribe this particular type of an antibiotic

then the hospital covers the cost? Is that what you are suggesting? The hospital

is not reimbursed for the cost?

MS. FACEY: For an intravenous medication, yes, we

do bear the cost of that. That is not charged to the patient.

MR. PENNEY: Even for outpatients?

MS. FACEY: No, not for outpatients. It has not

been our practice.

MR. PENNEY: Do you know if that is similar to the

practice of other hospitals across the Province?

MS. FACEY: I have not done any investigation into

that, but as far as I know it is similar to other practice based on my knowledge

today.

MR. PENNEY: The same thing would apply, the next

line up from that, medical and surgical supplies. What kind of medical supplies

would that be? I see you are providing surgical medical supplies and drugs to

the tune of $42,000 to people who are not inpatients at the hospital and there

seems to be no attempt to recover it from the patient.

MS. FACEY: You are correct, Sir, we are not asking

for any monies for these items and the medical supplies there are bandages, and

did we not mention the other day neck collars?

MR. PENNEY: I am sorry, I did not catch that.

MS. FACEY: Plaster of paris for application of

casts which we do in our outpatients department as well.

MR. PENNEY: What other sorts of things?

MR. FACEY: Oh!

MR. PENNEY: I have been a pharmacist for some

twenty-odd years and I see prescriptions being prescribed for those kind of

things on a regular basis, and I also see people coming into the pharmacy

telling me they are getting their cancer and chemotherapy drugs directly from

central supply in St. John's, and we have had to bring in through the pharmacy

enough to hold them over until they get their shipments. So, what other kind of

things would be included in $20,000?

MR. TOBIN: You are a pharmacist and I am not, is

that a lot of money $20,000 for drugs?

MR. PENNEY: I do not know because I do not know

what it is for.

AN HON. MEMBER: Excuse me. Maybe we can help

clarify it here. Mr. Saunders is the Director of Institutions.

MR. SAUNDERS: Under the Canada Health Act and

under hospital insurance all drugs issued within the building on an inpatient or

an outpatient basis are an insured service. I have often brought my child down

to the Janeway, and received at maybe 12:00 or 1:00 o'clock in the morning,

enough to tide me over for the night until I got to the drugstore the next day.

This is a combination of all drugs that have been issued on outpatient basis and

it is a standard practice right throughout the Province.

MR. PENNEY: Do those figures seem in line to you?

MR. SAUNDERS: For this size of a hospital that is

probably very appropriate. If you get into some of our more regional centres

those numbers are ten times those figures.

MR. PENNEY: Please do not misunderstand my

questions. It was not meant as an interrogation.

MR. SAUNDERS: You were not looking for business or

anything.

MR. PENNEY: No, I was trying to protect my

pharmacy colleague here in Twillingate. I was just trying to see if you were

taking his business from him.

Further down, under clinical laboratory, clinical

laboratory expenses, I see medical and surgical supplies and drugs. What would

the drugs be for the clinical lab, because it is not laboratory supplies? That

is there separately. That is $65,000. What would the drugs be? It has gone from

$45.00 to $629 in one year.

MR. TOBIN: $600?

MR. PENNEY: Yes, halfway down the list.

Okay, that is fine. Let us leave that one then. Let us

go to the next one, diagnostic radiology. We have drugs for $7000. What would

that be?

MR. CHAIRMAN: Mr. Hillier.

MR. HILLIER: There are some x-rays that are done

that require certain drugs to be taken prior to. I'm not too familiar with this

kind of procedure but I believe (inaudible).

MR. PENNEY: That's fine. Okay, then I'll turn to

the next page under food services and tell me what the drugs are under food

services, $1,000 worth of drugs under food services?

MR. CHAIRMAN: Food must be (inaudible).

MR. HILLIER: In our accounting system we have

certain things like formulas under the drug category and I'm talking food

supplements under the drug category not knowing really what else to do with them

and that's why they're showing up there.

MR. PENNEY: Yes, okay that's fair enough.

If I may, Mr. Chairman, a couple or a few questions on

page 87 and I'll stick to the same category. Page 87 under New World Island

Clinic, back to drugs again you've got $3,000. Now are these drugs that are

administered in basically the same kind of a system to outpatients through the

clinic? Okay, if you come down to the bottom what's the income recovery of

$2,600?

MR. HERRIDGE: The $2,600 would be basically

medicals and things of that nature that the doctors perform at the clinic.

MR. PENNEY: But not for sale of drugs?

MR. HERRIDGE: Nor for sale of drugs, no.

MR. PENNEY: Now coming to the bottom line here,

under Change Islands Clinic, I see drugs of $12,752. Is it the same thing that

the people who live on Change Islands are not charged for their drugs either

simply because the Change Islands Clinic is an extension of the Notre Dame Bay

Memorial Hospital?

MR. HERRIDGE: It's been practise at the Change

Islands Clinic for a number of years that the clinic out there would dispense

drugs to the residents of Change Islands and charge them for that service.

MR. PENNEY: Oh they're charged for it?

MR. HERRIDGE: Yes they are. That's where the

income is derived.

MR. PENNEY: So this is where the income recovery

is shown there as $21,000?

MR. HERRIDGE: Yes, it is.

MR. PENNEY: Okay, so they actually make a profit

then?

MR. HERRIDGE: On drugs I guess they do, yes.

MR. CHAIRMAN: (Inaudible).

MR. PENNEY: They're supplying them with $12,000

and that's where the $21,000 recovery is coming from the sale of drugs, okay.

MR. CHAIRMAN: Mr. Penney maybe about a year or so

ago I was aware that the nurse that was on Change Islands left and there was

nobody there capable or licenced to -

MR. HERRIDGE: Yes.

MR. CHAIRMAN: - dispense drugs. Has that been

dealt with? Is there somebody there?

MR. HERRIDGE: The Change Islands Clinic now or the

administration of the Change Islands Clinic has been transferred over to the

Gander and District Continuing Care program. So we no longer administer the

clinic on Change Islands.

MR. PENNEY: Yes but the same basic system applies

doesn't it?

MR. HERRIDGE: I think it does yes. I'm pretty

sure, nothing has changed.

MR. CHAIRMAN: But there is somebody there -

MR. HERRIDGE: There's a nurse there yes but that

nurse has no authority to dispense medications.

MS. FACEY: Yes, there is a nurse there, Tony

Richards is his name and I think that the people now have to pick up their

medications in Lewisporte or Gander. I think that's the way -

AN HON. MEMBER: Yes, usually they're mailed out to

them.

MS. FACEY: Yes.

MR. PENNEY: Severance pay, is that the severance

paid to the retiring nurse Mrs. Chaffey?

MR. HERRIDGE: Yes it is.

MR. PENNEY: And her salary I would presume for the

previous year was $48,833? Shown right there on the next line above that for

MR. HERRIDGE: Not necessarily. We did provide some

relief down there at the time when she was off the island.

MR. PENNEY: Okay, so her salary was less then the

$48,000?

MR. HERRIDGE: Her salary would have been less then

$48,000.

MR. PENNEY: Is that a normal severance pay?

MR. HERRIDGE: Yes, that's in accordance with the

nurses collective agreement.

MR. PENNEY: Okay, fine. No further questions.

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: (Inaudible).

AN HON. MEMBER: Mr. Saunders has a question.

MR. CHAIRMAN: Mr. Saunders.

MR. SAUNDERS: I just wanted to add one comment.

That with respect to pharmacy services in the communities - like Change Island

or New World Island clinic - there has been a lot of pressure over the last five

to ten years that when a pharmacy moves into the community usually the clinics

or the hospitals get out of the business of providing the outpatient services.

That has been a bone of contention over a number of years. Generally in

communities where there are no pharmacies these clinics do provide the

outpatient services. They may provide enough drugs for the person to get through

the night but then they will charge for any supplies of them.

MR. PENNEY: Yes. I understand. I think the people,

or at least some of those people, will remember the problem when the pharmacy

moved into Twillingate a few years ago. It was a problem that lasted for several

years I think before it was finally resolved.

I've no quarrel with that, but if a person is getting

drugs on an outpatient basis for enough to last him over the night at the cost

of government, that is one thing. But if the medication is being dispensed to

out-patients and the patient comes back on a regular basis and continues to get

the medication indefinitely, that is an entirely different matter.

MR. TOBIN: That is not the case here though.

MR. HERRIDGE: But it is when it comes to IV type

antibiotics.

MS. FACEY: But I think that is normal practice. I

do not know anywhere where people go and receive IV antibiotics. Usually they

have to be hospitalized and in reality that is helping us with our bed

situation, to be able to give them this form of treatment as an outpatient

rather than having them as an inpatient because it costs more to keep them in a

bed than have them come to the hospital whatever times are required in a

twenty-four hour period.

MR. TOBIN: Would that be done as a cost-saving

measure then?

MS. FACEY: We see it as being cost-saving.

MR. TOBIN: Is that why you practice it, because of

the cost-saving measure in order to facilitate your budget?

MS. FACEY: Well, it certainly helps and it is what

the people want as well. They prefer to do it this way.

MR. TOBIN: So it has something to do with cost

cutting the budget and government cutbacks?

MS. FACEY: Yes.

MR. TOBIN: So as a result of government cutbacks

you find yourself in a situation where this has to happen.

Thank you, very much.

MR. DUMARESQUE: If I might, Mr. Chairman. I just

went through a couple of days with the Minister of Health actually, and is it

not a policy objective to try and offer more care through the outpatient in-home

community-based service as a result of changes in the way health care is being

delivered and what people are demanding? Is that not also a factor?

MS. FACEY: You are correct, and that is our plan

for the future, certainly to expand on our ambulatory care service, and it is

what the public and the people want as we see it, and government as well.

MR. CHAIRMAN: Where were we? I am lost now.

Mr. Crane.

MR. CRANE: There are a couple of items here. On

Page 79 under general administration there is an amount for entertainment for

$4,450, initially an increase of 87 per cent over the previous year. Why would

entertainment jump that much?

MR. HERRIDGE: I am sorry, I cannot offer any

explanation as to the increase at this particular time.

MR. CRANE: In times like these when everything is

so tight and we cannot find money for essential things some times. I do not know

about anybody else but it really irks me to see how you can spend that much for

entertainment when I am sure you do not have enough to pay people to keep your

ledgers and count all your properties. You have not found enough in your budget

for that, have you? You have about $2.08 million in capital assets and up until

the time that the Auditor General went in you did not have a ledger, you did not

have any account of your fixed assets, and you did not have any marking done.

Have you done any of that yet?

MR. CHAIRMAN: Mr. Herridge.

MR. HERRIDGE: That is a major undertaking to go

and record and take all of the capital assets of any institution when you look

at the amount and the number of different types of equipment that's in the

institution. They attempted it a few years ago I guess, under an annual

operating system. It was a major task then and we didn't get very far with it.

It's something that we certainly intend to do in the very near future. It is a

major undertaking.

MR. CRANE: (Inaudible).

MR. HERRIDGE: Yes we are.

MR. CRANE: That's why I say when you can't find

money for something as essential as that and yet they find money for having a

party in the boardroom but when things are so tight I think you -

MR. TOBIN: But what's the purpose of that

entertaining?

MR. HERRIDGE: It would be some kind of retirement

party.

MR. CRANE: Yes, I would say that's what it was.

That's what it usually is.

MR. HERRIDGE: In that particular year we did have

a number of retirements, it didn't all happen at one time. I guess it was

probably -

MR. TOBIN: When we're talking about retirement,

Mr. Chairman, we're not talking about somebody who came and stayed for a year

and then left. We're talking about someone who devoted their entire life to the

health care of this area and a couple of people who retired they spent $1,000 on

them (inaudible).

MR. HERRIDGE: Yes.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: Mr. Herridge, on the payment of all

of your tangibles under the (inaudible) have you ever looked into this fact of

getting a co-op student from an area university on a business term say for three

months or whatever the case might be and to have him do all the work for you, to

put it on computer rather than having somebody at the hospital do it? It could

be done under a work term because these students are available and work all over

the place. Basically they're dying to find some work, meaningful work and there

you have an opportunity as a business student at MUN where they could place

these people and it would be just given to you on a platter for a small sum of

money, a one time deal.

MR. HERRIDGE: No, we haven't considered that.

MR. CHAIRMAN: It's rather difficult, nobody

(inaudible).

MR. HERRIDGE: I take your suggestion under

advisement.

MR. LANGDON: Yes, it's worth looking into. They

could do it over a three month period and wouldn't involve the hospital staff in

doing it.

MR. CHAIRMAN: Go ahead. Mr. Langdon.

MR. LANGDON: Yes, not very much. I want to

congratulate and commend Marvin, Mr. Herridge, Mr. Hillier and the other people

for coming in and being so open, candid and discussing your ideas up front with

us and supplying us with the answers.

Just one more question, a line of questioning along

the idea of morale within the institution. It was brought up earlier that when

the full time nurses were actually laid off and then after they were laid off

some of them were hired back on as needs be or whatever the case might be. The

people who were directly involved were not consulted in any way. Since that time

with the report done and the decisions have been dealt with, how is the morale

at the institution now? Has it improved considerably and are people working

totally together and giving the best possible health care to the people out

there or is there lingering animosity or whatever toward the institutions? Is it

a personal thing because I think if you're going to have a team that's going to

be dedicated to providing the proper health care for a region then everybody has

to work in unison one with the other in order to have this done, and obviously

the best result is not given to the person who needs it most and that's the

patient.

MR. HERRIDGE: I could answer that question

directly but I think because the majority, I suppose, of the impact was in the

nursing area, I would like for Linda Facey to comment on that directly.

MR. CHAIRMAN: Ms. Facey.

MS. FACEY: The morale at the hospital has improved

tremendously within the last little while. I know what these nurses went through

last year because I experienced something similar in 1991 when I lost my

position in education, because we eliminated that. It was sort of a surprise to

me, although I knew that they were going to make changes and education is always

such an easy target when it comes to cutting money.

Last year when I knew that they were feeling the pain

- when it was announced that they had lost their jobs I went immediately to the

locker room to be with these nurses who were crying and very upset. Most of

these women are either sole breadwinners in their family or they make the major

contribution within the household, and they all have young families. However,

time passes by and they did get some work over the past year, and sometimes more

than what we could really handle, because we have been busy. This year at our

annual association meeting one of the guest speakers addressed the issue of the

stages of having to go through a major crisis. One of these nurses who was laid

off last year, she turned around and said: This is what happened to us.

The bitterness, the anger, and everything that they

felt towards us in administration and the hospital, they have come to a full

realization of what has happened. Now I think they want to make a difference,

not only in their personal lives but within their commitment to nursing and the

health care in the area. This Wednesday we will have Mrs. Adey, who is the

executive director of the nurses association in the Province, will be here in

Twillingate to discuss the primary health care model. The hospital has so

generously supported us in providing a luncheon so that we as nurses who are

working and with families don't have to make our pot-luck and bring it in. That

was really appreciated by the nursing staff.

We are communicating within the group, the union,

everything that we are doing. All the changes that are being implemented are

being discussed up front with the president of our union. We feel that we are on

track for an improved and better future.

MR. LANGDON: I'm glad to hear that.

I think that goes back obviously to the work of Marvin

Ralph and the board of the hospital management team, and it is to your credit

that you are able to do that. That in itself you need to be commended on.

MR. CHAIRMAN: Mr. Tobin, you wanted to comment?

MR. TOBIN: Yes. I was just wondering, if these

nurses were so important to the hospital and all of that, and you had to bring

them back now, why did you lay them off in the first place?

MS. FACEY: Mr. Herridge had explained (inaudible)

because of the Vardy report.

MR. TOBIN: Yes, I know the report.

MS. FACEY: That is true. But we didn't have -

occupancy rate in our ICU and OB - in obstetrics, okay, the number of births per

year has been decreasing. When I came to Twillingate in 1975 we had about 250

babies being born per year and now we are down to forty-seven per year. There

has been a significant decrease in the number of births. Naturally, the number

of staff that we need to look after that unit on a twenty-four hour basis

decreased.

MR. TOBIN: The need is not there to have these

nurses remain, is what you are saying.

MS. FACEY: Not on a full-time basis. They accepted

that, they could understand that. I suppose in a way they knew when the Budget

came out last year that there were going to be changes. We are all part of our

world that we are living in. They almost predicted that there would be changes

there with that, but when it came to the intensive care unit and almost doubled

the number of people, that is where, you know, they felt the pain.

MR. TOBIN: What I was trying to determine - and I

think you've said it - I mean, the Budget is one thing, and a consultant's

report is another story altogether. The reason why these nurses were laid off is

because you were overstaffed at that period in time.

MS. FACEY: Yes.

MR. TOBIN: They have accepted that.

MS. FACEY: Yes, now, yes.

MR. TOBIN: (Inaudible).

MR. LANGDON: Just one more question, Neil, if I

could finish with that.

MR. CHAIRMAN: Mr. Langdon, yes, carry on.

MR. LANGDON: Twillingate Minor Hockey Moms, eighty

dinners, on page 109. Being involved in minor hockey all my life I just wanted

to know what the hospital was doing (inaudible).

AN HON. MEMBER: Eating dinner.

MR. LANGDON: To support them?

MR. HERRIDGE: No, seriously, the eighty dinners

that were referred to, the Lions Club undertook a local telethon on the

community channel which they were successful in raising $55,000 for equipment at

the hospital. This was the board's way of showing appreciation.

MR. LANGDON: The minor hockey people (inaudible).

MR. HERRIDGE: They served the dinner, basically,

to the Lions Club.

MR. LANGDON: Okay. Thanks for your answers.

MR. CHAIRMAN: Mr. Dumaresque.

MR. DUMARESQUE: Thank you, Mr. Chairman. I just

had a couple of questions on the budget thing, particularly with the land

improvement. I noticed in each of the

schedule 11s attached to various financial

statements that former staff house, on page 89 and in

schedule 10 and 11 in the

other respective statements, and we see a $50,000 expenditure every year. How

long has that expenditure gone on for and how long will it go on for? What

exactly is the land improvement that is taking place at the former site?

MR. HERRIDGE: Excuse me, that is not an annual

expenditure of $50,374, that is an asset of the hospital. The expenditure itself

took place some years ago and it is just being carried forward on the balance

sheet from year to year.

MR. DUMARESQUE: That is the same thing for the

pavement for the administrator's residence?

MR. HERRIDGE: That is correct.

MR. DUMARESQUE: Fifteen thousand dollars. That is

just your asset.

MR. HERRIDGE: Yes, that is correct.

MR. DUMARESQUE: Alright -

MR. CHAIRMAN: Do you not show any depreciation on

any of that stuff you (inaudible)?

MR. HERRIDGE: Our auditors over the years haven't

applied any depreciation on any of these assets, no.

MR. DUMARESQUE: Just one other item. When you were

talking about earlier recruitment you noted that very well all your doctors come

from South Africa. What is your experience? We in the northern region of

Labrador are having a lot of problems recruiting. We know that there are a lot

of Canadian doctors even in our own Province I guess, so many graduating every

year. What is the main thing that you run up against in recruiting Canadian

doctors, as opposed to obtaining and successfully getting foreign doctors to

come to places like Twillingate.

MR. HERRIDGE: The main thing, I guess, that we run

into in recruiting is dollars. We are not able to compete dollar wise with the

mainland, and a lot of our doctors that have gone through here have gone there,

and went to Saskatchewan, and some have gone to the States, and some have just

gone back to England or South Africa. We just had two locals show up here today,

who were previously here from South Africa, (inaudible) the summer months,

basically because we couldn't find any local doctors.

MR. DUMARESQUE: Even like fee for service, I

guess; say in St. John's, a fee for service doctor would probably make more than

you can pay in Twillingate.

MR. HERRIDGE: Yes, definitely.

MR. DUMARESQUE: Do you think that the move that

the government is making will bear any fruit, that new graduating doctors will

not be reimbursed in full - I think only 50 per cent of the MCP charge in some

areas of the Province; and are there any other suggestions you would like to

give to government in that recruitment process?

MR. HERRIDGE: It won't work if - providing the

students don't leave the Province, I guess. I guess it is already public

knowledge that a number of graduating students have already shown their

intentions to leave the Province. We are fortunate in one regard but again, I

guess, time will tell whether or not it will deliver.

At the present time we have three medical students

assigned to our hospital. One will graduate next year, and has expressed a

desire to come to Twillingate and practice. Two other medical students, one from

the Lewisporte area and one from Twillingate, have also expressed a desire to

come to Twillingate to practice. When the time comes, whether or not they will

come and stay I guess time will tell.

AN HON. MEMBER: (Inaudible).

MR. CHAIRMAN: Do you want to come to a microphone,

please, and state your name.

MS. PINSENT: My name is Jennifer Pinsent.

You had asked for suggestions in terms of the

recruitment of physicians. I am not personally involved with that recruitment

but has government, in general, looked at a comparison between the salaried

physicians and the MCP or fee for service physicians? Have you looked at the

possibility of having all physicians salaried?

Furthermore, hospitals right now have to compete for

physicians. What one institution does may differ from what another institution

does. Some institutions may put physicians on steps higher than that which the

regulations would require you to do. I don't think it is fair that institutions

individually should have to compete for physicians. I think there should be a

government body which addresses the need for physicians in certain areas, and I

understand you are going toward that direction but I don't think we, as a

hospital, should have to fight against another hospital to go through board

funds or what have you to try to recruit physicians. There should be some

attempt to have policies in place so that a rural hospital may be able to put a

physician on a higher step, where the area has a difficulty to recruit as

opposed to probably some underhanded policies which may or may not be occurring

across the Province.

MR. DUMARESQUE: I appreciate that. I can't answer

it directly, but I am sure the minister's officials would probably take note of

that and give you a response to it in some other detail.

One point that I was wondering about from time to time

is that other areas of jurisdiction where government spends a fair bit of money

in educating people - I know in the ministry, for instance, there is a condition

when you go and get funding under their bursary or any other aspect of it you

have to give a commitment for three to five years or something along those

lines. Do you think that is something that government should consider, having

some kind of a condition that if you are in receipt of a substantial degree of

funding for your education in this way, doctors, specialists, that may be

something that would be a reasonable request upon that student?

MR. CHAIRMAN: Mr. Herridge.

MR. HERRIDGE: I think you can go around the

Province right now because a similar arrangement is in place with the

physiotherapy program. We had experience this past spring. There was a

physiotherapist assigned to Twillingate from three years ago when they entered

the bursary program and the person just refused to come. We - when I say "we,"

the government through the hospital has invested some three years of bursary to

this student and when the time comes for them to be assigned to a certain area

they just refuse to go.

Yes, we could impose the terms of the contract I guess

and force them to come but I certainly don't want an unhappy physiotherapist

walking in through my doors down there, especially when the person is from St.

John's and she wants to live in St. John's, she wants to practice in St. John's,

and so on. (Inaudible) Baie Verte I understand went through the same experience.

The program in certain areas may be working but in the

rural area, no, they are not working. I think that is the general consensus of

most places throughout the Province right now.

MR. DUMARESQUE: Thank you very much.

MR. CHAIRMAN: Mr. Penney, do you have any other

comments?

MR. PENNEY: Just one brief question. That must be

very frustrating Mr. Herridge, when you invest that much time, energy and money

in a student when you find that the graduate refuses to honour his or her

commitment.

MR. HERRIDGE: Yes it is, it is very frustrating,

because in this particular case I guess we were sort of telling our community,

telling our board, telling our (inaudible): We have a physiotherapist coming in

the spring of 1994. Then all of a sudden we receive notice: No, this particular

person is not coming.

MR. LANGDON: Is there any way to recover from

that?

MR. HERRIDGE: No, because the arrangement is

through the bursary program of the Department of Health. In this particular case

I think the student was assigned to another institution. I'm not sure if it was

in the region but certainly within the Province, so....

MR. PENNEY: What do you think of the idea of the

government subsidizing the cost of a med student for a full year or two years or

three years, and then in exchange for every year that the government would

subsidize the cost of his training he would then be required to go to a portion

of the Province selected by the Department of Health? One year for one year. If

we paid his way through med school for two schools and you need a doctor down

here for two years, send him out here.

MR. HERRIDGE: In theory it sounds good, but when

that person graduates and they decide they don't like the area or they don't

like the terms or they can't come to a reasonable deal with the institution,

they say: I'm leaving the Province, I'm going to the mainland, and an

institution on the mainland offers to pay out the bursary. You just can't

compete.

MR. PENNEY: Yes, I guess at that stage (inaudible)

MR. HERRIDGE: That does happen.

MR. PENNEY: Yes. If I might go back just for one

second to the public tender exemptions on page 18. Just a brief explanation

on.... Sigmoidofiberscope. It says that the "doctor required specific equipment

even though other suppliers exist." Did other suppliers exist for the same

equipment or was this a special case?

MR. HILLIER: No, this was a particular brand name

of equipment that this physician requested. There may be six or seven different

types of instruments out there that would basically perform the same thing.

MR. PENNEY: Was there much of a difference in the

price of them?

MR. HILLIER: No, there's usually not very much

difference in the price.

MR. PENNEY: But this was a brand that the doctor

was familiar with?

MR. HILLIER: Yes. It was compatible as well with

the equipment that was in house and the (inaudible) source that was used to do

this work.

MR. PENNEY: Had you gone to public tendering and

gotten a cheaper one (inaudible) do you consider a possible savings advantage?

MR. HILLIER: Well, I'll go -

AN HON. MEMBER: (Inaudible).

MR. HILLIER: Yes, let me answer that this way,

I'll ask the same question to you that I asked the CPA about four or five years

ago, what do you do when you have one physician that you're desperately trying

to hang on to and he/she says to you, `you get me what I want or otherwise it

will sit in the box and I won't use it.' You're going out and spending $30,000,

you tell me what you'd do. What they said to me was, `give her what the hell she

wants.'

MR. PENNEY: I think we would also come to the

(inaudible) as detailed.

MR. HILLIER: That is the explanation for me.

MR. PENNEY: Okay, thank you very much.

MR. CHAIRMAN: Mr. Penney are you finished?

MR. PENNEY: Yes, thank you, Mr. Chairman.

MR. CHAIRMAN: There's just a couple of general

things I'd like to raise. First of all from the point of view of the capacity of

the hospital now and staffing there, in a report that was done in '93 it was

recommended I think an additional twenty-nine long-term care beds. That's in

addition to the acute care beds you have now. I think you said that you have

enough acute care beds and so on, term care that you're looking for. This ties

in with the policy that we heard earlier of more ambulatory care. Is there a

real need for that? What is your view with the board with that Mr. Ralph?

MR. RALPH: Yes, definitely a real need. All the

studies that we've had done or has been done apart from the provincial bed study

which we took exception to but everything else supported that kind of capacity.

If you look at the functional plan, the master plan is indicating by the year

2006 the increased capacity of the hospital bed wise will be between sixty-nine

to seventy-five with about twenty-five of these in acute and the remainder in

chronic. So from all indication of the studies that have been done, there is a

desperate need right now and certainly a long-term need by the year 2006 for

that type of capacity. We have an aging population and we have a significant

number in this area that are aging people. I think the average occupancy rate in

the hospital, the age of the people, something like seventy and over a little

while ago, the age of the people.

MR. CHAIRMAN: It's becoming an old age home.

MR. RALPH: Yes.

MR. CHAIRMAN: How does that priority stack up? Was

I not reading recently that you've lost some of your surgeons here and this sort

of thing? How does that tie in with that problem?

MR. RALPH: How does it tie in with the problem?

Our only surgeon Dr. Chalker is leaving at the end of this month and that's due

to, with reference I made earlier, the fact that the anaesthetist is

discontinuing service. The litigation that's ongoing now is that you don't solo

practice an area like this, it's very risky. So that's why he gave up and our

efforts to recruit have basically ended in no success. Even if we did get

someone to come and serve they probably only would be here until six months to a

year and if you read the recent

article in the Pilot on Dr. Chalker's

leaving it will give you a good indication of what the problem is. So surgery in

this area is basically, as in any rural area of the Province, we are one of the

few hospitals who do any surgery of any sort apart from lumps and bumps and this

type of thing but basically it will be a nonentity in the very near future.

MR. CHAIRMAN: So you basically will not be an

operating hospital or surgical hospital?

MR. RALPH: That is correct. In fact as she made

reference in the

article if she were to return she could not see it continuing

beyond nine months, I think, the reference was, because of the danger and risk,

and a couple of possible serious cases we had just within the last year. It is a

matter of litigation that is the real problem, and the changing times of course.

We have access to two regional hospitals that provide services that are much

better than what we are able to provide from an equipment point of view and from

a staff point of view and people themselves are demanding that type of service.

It does not appear from the public things you hear but in essence most of our

people are going off both islands to receive speciality care. They are either

being referred or by choice.

MR. CHAIRMAN: The Auditor General in the report

went to some great lengths to talk about management controls, budgeting

controls, lack of

schedule for completing a budget, lack of monitoring on a

regular basis throughout the year, compliance or variances from budget, problems

in human resource management identified under staffing in their view in that

particular area. In other words there are quite a number of concerns expressed

in this report relating to overall general management and administration in the

hospital.

Can you tell us what your views are on some of these

things and have you undertaken, or are you proposing to undertake some of the

recommendations, or all of the recommendations made by the Auditor General here?

And let me explore a very broad question as well. Are you satisfied with the

degree of control? I realize you have touched on it earlier, the degree of

control that the board is exercising over here in administration. Is there a

clear delineation here between the administrative function and the overall

management policy function of the board, the board being ultimately responsible,

of course? It is a broad question, a big question. Would you like to try to

address some of that?

MR. RALPH: Well, certainly as board chair I feel

that we have adequate control and do not feel that anybody is trying to hide

anything from us. We have had very open and frank discussions as a board with

the CEO, the present and the past CEO. My experience with the CEO and myself has

been very open. I have been informed almost to the nth degree as to what is

going on. We have committees in place that report back to the boards, whether it

is the executive and ad hoc committee, finance or property. All of these

committees we have sitting on the board as well. We have the Director of

Nursing, and also Mr. Herridge when he was Director of Finance sat on the board

and also our senior medical officer.

The board of the day feels that it has been adequately

informed and involved. There is somewhat of a dichotomy between governance and

management. If you look at how a board is constituted in this area, how it is

made up, you will find that most of us came from town councils or from church

boards, or whatever, where governance and management was one and the same thing.

Health care, hospital boards have put us in a new

direction. We have had some difficulty coming to grips with that but I do feel

confident that the board of the day has had three years of experience and some

of us have gone off to seminars. A recent excellent seminar put on by Dr. Carver

in St. John's a few months ago certainly gave us good information, and I do

believe we are getting a handle on what is going on. The criticisms are fair but

I certainly do not feel that the board is in the dark, or is not in control. We

do have in place, as I mentioned to you earlier, a resource committee and one of

its mandates is strategic planning. We are into that area as well.

MR. CHAIRMAN: (inaudible) such things as

management policy manuals and strict scheduling for budgets, that sort of thing.

I thought I hear you say earlier that you are looking at that now.

MR. RALPH: Yes, we are.

MR. CHAIRMAN: I think our concern was that there

is no strict policy guidelines, no management booklet that says: Here is what

shall be done that is approved by the board. In other words, the board has not

said these are the guidelines - may have said them but they may not be

documented.

MR. RALPH: The report is absolutely right when

they say that they are not documented but that doesn't necessarily mean that

they are not being done.

MR. CHAIRMAN: Exactly.

MR. RALPH: We do go through a fairly formal

budgetary process every year and have consultations with the various department

heads, senior management and ultimately to the board, but you are right, there

is no documented policy as to the procedures to follow. As far as reporting to

the board, reporting is done both statistically and financially. Financial

reports are presented to the board on a monthly basis and all variances are

normally accountable.

MR. CHAIRMAN: Any final comments you would care to

make in cluing up this round of discussions?

MR. HERRIDGE: Basically to say a word of

appreciation to the PAC. We appreciate the questions you've asked and we have no

problems with understanding why you've asked them. Our experience with the

Auditor General's office has been nothing but very positive. They did an

intensive review assessment of the hospital, gave us all a chance to have input.

In fact, Mr. White and the other gentleman sat with myself for about an hour and

a half and were very fair. We have nothing but commendation for you folk, and it

has been a very worthwhile experience. At times we've been tense and wondering

why it is happening, but there is no problem. We are very pleased. I think it

will make us a better institution. We have nothing but the intent to carry what

has been recommended. We (inaudible) thank you for it.

MR. CHAIRMAN: Thank you very much. That goes along

with what I said earlier that one of the great things I think this Committee has

accomplished is making boards and agencies more aware of their responsibilities

in the accountability process, and our responsibilities as elected

representatives to ensure that everything is accounted for properly.

Ms. Marshall, do you have anything by way of a final

statement you wish to add? I've not bothered you very much here today, you've

gotten away easily.

MS. MARSHALL: No further comment.

MR. CHAIRMAN: Thank you very much.

Any members of the Committee have anything final to

say other than...? If not, let me also express to the board, to the management

and staff, our appreciation for being here today, for the candid way in which

you've responded, and the approach that you've taken in responding to our

questions. I want to assure you again that we are not here to judge, we are here

simply to gather evidence and present it the House of Assembly. We appreciate

your time and effort in preparing for this and being here with us today.

Thank you also to the Auditor General and her staff,

officials of the Department of Health, officials of the House of Assembly who

make this all possible and look after us when we are on the road, and members of

the Committee for your diligence today once again.

MR. RALPH: Mr. Windsor, could I make one final

comment?

MR. CHAIRMAN: By all means, Mr. Ralph.

MR. RALPH: I'm not sure the report made any

reference to it but we are very happy to blow our own horn. I think you people

should know that this institution has received accreditation for five times.

Three year accreditations five times in a row. After going through a very

difficult year and last year too with the cutbacks and these kinds of things we

again came up with a first-class accreditation. When you consider that we have a

board that commits a lot of its time to the hospital and we have a management

group, people at the hospital, working under such stress and strain yet coming

through with that kind of accreditation, I believe you should commend us. I'm

joking, but I mean this.

MR. CHAIRMAN: Thank you very much. On behalf of

the Committee I commend you on the excellent performance. I'm sure you will

continue.

The Committee adjourned.