Achieving financial sustainability in Canadian healthcare

In the face of growing financial challenges, Canadian hospitals must adopt innovative strategies to secure long-term financial sustainability. In this report we outline key insights and approaches to "Achieving Financial Sustainability in Canadian Healthcare."

• Innovative models of care: Shift from traditional methods to innovative care models, leveraging technology for sustainable savings.
• Rapid execution: Emphasize the need for quick mobilization of changes to address financial challenges effectively.
• Partnerships: Collaborate with both traditional and non-traditional partners to enhance efficiency without compromising care quality.

1. Understanding structural deficits:
   A structural deficit occurs when a hospital's recurring expenses consistently exceed its revenue, indicating a fundamental imbalance between costs and incoming funds. This situation is exacerbated by various cost pressures, including workforce shortages and aging infrastructure.
   
2. Cost pressures:
   Hospitals face intensified cost pressures due to factors such as increasing overtime costs, surgical backlogs, and the need for expensive recruitment and retention efforts. The document highlights that "cost pressures have intensified" due to these challenges.
   
3. Six levers for financial sustainability:
   The document outlines six key levers that hospitals can focus on:
   1. Clinical operations: Optimize care delivery and resource utilization.
   2. Back-office optimization: Streamline back-office services and outsource non-core services.
   3. Workforce management: Better forecast staffing needs and optimize team roles.
   4. Automation and digital adoption: Enhance digital usage and streamline processes.
   5. Capital management: Effectively budget and finance property and equipment costs.
   6. Integration of care: Reduce system costs while maintaining clinical outcomes through partnerships.
4. Data-driven diagnostics:
   Utilizing advanced data analytics is crucial for identifying systemic pressures and assessing population health service needs. The document states that hospitals should "utilize innovations like predictive analytics and AI for sustained financial performance."

For further inquiries or assistance, please contact:

Gordon Burrill
Partner, National Health & Life Sciences
T: 416 777 3061
E: gburrill@kpmg.ca

Govind Adaikappan
Director, Healthcare Solutions
T: 416 777 3232 
E: gadaikappan@kpmg.ca