The Committee met at 10:00 a.m. at the Holiday Inn, Gander.

MR. CHAIRMAN (Windsor): Order, please!

Good morning ladies and gentlemen. I would like to welcome everybody here first of all. We have all the members of the Committee present this morning and there are witnesses from the Gander board, representatives from the Auditor General's department and a number of interested observers. I am certainly pleased to see you all here this morning. Of course, you are most welcome indeed; these are public hearings and we welcome participation from anybody who has the interest to attend our meetings.

I will first of all introduce the Committee. To my immediate right, Mr. Melvin Penney, MHA for Lewisporte, the Vice-Chair; Mr. Glenn Tobin, the Member for Burin - Placentia West; Mr. Alvin Hewlett, the Member for Green Bay; Mr. Doug Oldford, the Member for Trinity North; Mr. Oliver Langdon, the Member for Fortune - Hermitage; Mr. John Crane, the Member for Harbour Grace; seated next to Mr. Crane is Miss Elizabeth Murphy, the Clerk of the Committee and Deputy Clerk of the House of Assembly; Mr. Mark Noseworthy is Research Assistant for the Public Accounts Committee and Mr. Jack Oates is in charge of the transcribing in Hansard in the House of Assembly and for the Committee. So those are the Committee members.

I would like to ask the Auditor General, Mrs. Elizabeth Marshall who is here representing the Auditor General's department, of course, to introduce the people with her this morning.

MS. MARSHALL: Thank you, Mr. Chairman.

To my immediate left is Mr. John Noseworthy, Audit Principal with my office, and to his left is Mr. Claude Janes, Audit Manager with the office.

MR. CHAIRMAN: Thank you very much.

We also have from the Gander District Hospital Board, Mr. Feltham. Perhaps you would like to introduce the people with you this morning, Mr. Feltham.

MR. FELTHAM: Good morning, Mr. Chairman. My name is Merlin Feltham, I am the Chairman of the Central East Health Care Institutions Board. For a point of clarification, I should say that I have been invited to attend as the Chairman of the Gander and District Hospital Board - I am not, and never have been, the chairman of that particular board. However, in the interest of co-operation and to co-operate with this Committee to respond to some of the comments by the Auditor General relative to the audit of our financial statements, I am glad to be given the opportunity to attend and we will co-operate in every way we possibly can.

I will introduce the people I have here. To my immediate left is Mr. Devon Goulding, Chief Financial Officer of the Central East Health Care Institutions Board, at this point, and Mr. David Lewis, Chief Executive Officer of the Central East Health Care Institutions Board, who was at one time the Administrator of the James Paton Memorial Hospital and the Chief Executive Officer of the Gander and District Hospital Board. Thank you.

MR. CHAIRMAN: Thank you very much. We certainly welcome you. We understand the situation. The structure has changed somewhat and we might want to discuss that as we go forward and get your views on that. Some Committee members may have some questions on what is taking place and how you see that in the future. But certainly, we welcome your participation and we understand your position. You have inherited the bag of worms, I guess -

MR. FELTHAM: Apparently so.

MR. CHAIRMAN: - and we shall let you take over. I don't think it is all that bad.

If there are any members of the news media present who wish to take photographs, you may do so now. These Committee meetings operate under the same rules as the House of Assembly. We don't have media coverage other than voice coverage. You are entitled to take audio tapes. We don't allow photographs or videos during the hearings but we do give media an opportunity, at this point in time if they want, to take a couple of still photos or even some videos before we start the hearing. I don't see any cameras present but I say that anyway.

We also have with us today members from the Department of Health. I see Mr. Chris Hart here. He is the former acting Auditor General and well known to this Committee and is now, I guess, Assistant Deputy Minister of Finance for the Department of Health. Mr. Hart, we welcome you; and who else do you have with you this morning?

MR. HART: Well, with me, on my immediate right, I have Kent Decker, the Director of Institutional Financial Services, and Moira Hennessey, at the end of the row there, is the Director of Hospital Services.

MR. CHAIRMAN: Thank you very much. I might add that representatives from the Department of Health have not been summoned here this morning but traditionally the department, whenever there are hearings dealing with the department, makes it their business to have at least one or two people present and we certainly appreciate their involvement. We have often in the past, and may well this morning, take the opportunity to ask for their views on issues that are being discussed and then give them an opportunity to have input as well.

Let me say particularly to the witnesses and those who are here from the general public and other organizations, that this is not a trial by any means. We are not here to judge. We are here to gather evidence. You give evidence under oath and you will be sworn in, in due course. But we are not here to judge. We will make recommendations to the House of Assembly as to what action needs to be taken as a result of this. We are simply here to gather evidence from you.

We operate under the same rules as the House of Assembly, yet we are a little less formal and we relax a little in these hearings. If you wish to go to a washroom or get a cup of coffee - I don't see any, but there will be some in due course at the back of the room - or if you feel too warm and want to remove a jacket or loosen a tie, feel free to do so. We wouldn't get away with that in the House of Assembly. The Speaker would very quickly bring us to order and throw us out.

Other than that, we do operate under the rules of the House of Assembly. You are giving evidence under oath. Everything will be transcribed - that is the purpose of the microphones in front of us, and from that point of view, I ask all witnesses and members of the Committee to speak clearly into the microphones. Give me an opportunity to identify you before you speak. That is important for the Hansard people who are back in the bowels of the Confederation Building and will be sent these tapes and asked to transcribe them. They might recognize our voices because they listen to us all year long but they probably wouldn't recognize you. So for their benefit I try to identify each witness before he or she speaks. It makes their job much easier.

Now, I will ask the Clerk, Ms. Marshall, if she would - Ms. Murphy - I keep getting my two Elizabeths mixed up - Ms. Murphy, if she would swear in the witnesses. From the Auditor General's department I think we just have Mr. Noseworthy. The other two witnesses have previously been sworn and are deemed to be under oath.

John Noseworthy

Merlin Feltham

Devon Goulding

David Lewis

MR. CHAIRMAN: Before we get on with these particular hearings we have the Minutes of the Public Accounts Committee meetings from January 18 1995, January 19 1995, and April 6 of 1995. Are there any errors or omissions in these Minutes?

On motion, Minutes adopted as circulated.

MR. CHAIRMAN: Once again, let me say to the witnesses that we are here simply to gather evidence. We look forward to a meaningful discussion. The purpose of the Public Accounts Committee, I guess, is - many people say, that we are the final step in the whole accountability process. That is not entirely true. The House of Assembly is the final step and we are a Committee of the House of Assembly charged with the responsibility of delving into matters primarily under the Financial Administration Act.

We use as our guideline largely the Auditor General's report each year. The Auditor General with her expert staff, professional staff, obviously points out to us many areas of concern in various government departments and agencies and government-funded bodies. The Committee's mandate is to follow on with - we don't examine, I guess, all of the things that the Auditor General reports on, but we choose each year as many items as we can, and many boards and agencies, and hold hearings such as this and have a discussion.

It does two things. It gives that final step in the accountability process that the House of Assembly is examining carefully a board and an agency on an occasional basis, or a government department, but it also gives you, as board members and as administrators, the opportunity to respond publicly to comments that are made, because the Auditor General's report is a public document tabled in the House of Assembly, so it gives you that public opportunity to defend your actions and to explain them, and our experience has been largely that boards are quite able to explain what is taking place.

Nobody is perfect, and there are things that we do from day to day that are not entirely within the ambit of the act, and that is a matter of concern, I guess, for the House, because legislation is there for good and valid purpose. We may not always agree with it. We, as legislators, do not agree with all of the legislation on the books, but our job is to try to change it.

We often find that boards and agencies feel they can stray slightly outside of legislation in the interest of expediency and efficiency in operating their particular agency, but still, that is a matter of concern because it is outside of the legislation. But it gives you an opportunity to respond; it gives the Auditor General an opportunity to ask further questions and to make further comments, and it gives the members of the public, of course, an opportunity as well to see just what the process is and to see that taxpayers' dollars are well and truly guarded by the whole legislative process and the accountability process. So that is the purpose of the hearings. Again, as I said earlier, we are here to gather evidence. We will be asking questions on the issues that are commented on by the Auditor General and perhaps other issues relating.

As I indicated, Mr. Feltham, in my opening comments, no doubt we would be interested in - maybe you would like to make an opening statement. I usually ask the Auditor General to make an opening statement first, but I will switch just for today. Perhaps by way of an opening statement - and I do not know if you have a prepared opening statement; if so, by all means you can give us that. The Committee, I am sure, would be interested in your comments on how the reorganization is affecting your board and the new board, I guess, and health care in this region. What changes have taken place to date? Are they positive in your view? I am not asking you to criticize government - that is not the purpose of my question - just give us your views on what is taking place and how do you see it improving, or otherwise, health care in this region?

MR. FELTHAM: Mr. Chairman, thank you for the opportunity.

Just some background as far as the Central-East Health Care Institution Board is concerned, we were appointed as a board in February of 1994 and we took over - and takeover is not necessarily a good word, but - some governance of the various facilities as of October of 1994, so we are relatively new as far as acting in the capacity of government's board as far as these facilities are concerned.

As you know, with the restructuring there has been somewhat of an alarm by the various people who have been involved as far as employees are concerned because they did not know exactly what to expect. When somebody said `restructure', they automatically looked at cutbacks and this is what they were thinking about. We try, as a board, to reassure these people that is not what we are all about. Restructuring was necessarily a means of getting all things together so that we could possibly save dollars as far as government was concerned, avoid some of the duplication that obviously we were running into in the health care system, and we have been fairly successful so far in doing that. Twillingate hospital has come under our governance as well as Lakeside Homes, which is a chronic care institution as you are aware.

We are slowly moving along. We are taking our time, not wanting to make any fast moves so that we cause any more alarm than is already out there is the system at this point in time.

From reading the various news media, as you know, all across Canada this is the situation, not only in Newfoundland. We are not peculiar to this particular thing that is happening as far as the health care system is concerned. There are a lot of things happening all across Canada, and in Newfoundland we are doing things probably a little better. It seems to me that way, anyway. There is not as much - and I use the word alarm again - in the media and so on and so forth as far as the system is concerned.

Other than that, I don't know what to say to you. We are doing things as well as we possibly can. We have on our Central East Board our new CEO in place in the person of Mr. David Lewis, who brings a lot of experience to the health care system in Newfoundland. We have recently hired our Chief Financial Officer by the name of Devon Goulding. We have a human resource person in place, and I think that is all we have done at this point.

WITNESS: Peter Blackie.

MR. FELTHAM: Dr. Peter Blackie - I am sorry. He has been recently appointed to our board and I'm sure probably sometime this morning he might like an opportunity to speak to you, because he has certain concerns that he would like to express.

Other than that, any other questions you might have that you might want to ask we will certainly try our best to help you with them. That is about all I can say at this time.

MR. CHAIRMAN: Thank you very much. No doubt as we go forward, members of the Committee may well have some further questions on this area. I just wanted to get an overview.

Ms. Marshall, would you like to give us an opening statement this morning?

MS. MARSHALL: No, Mr. Chairman, I don't have an opening statement. The audit and the audit results are contained on pages 192 and 193 of my annual report to the House of Assembly.

MR. CHAIRMAN: Thank you very much. Do you have any formal opening statement dealing with the issues here this morning that you wanted to make before we get started, Mr. Feltham?

MR. FELTHAM: No I don't, Mr. Chairman. I don't know if Mr. Lewis might have one or not.

MR. CHAIRMAN: Okay, thank you very much.

MR. LEWIS: (Inaudible).

MR. CHAIRMAN: I'm sorry? Mr. Lewis, by all means.

MR. LEWIS: I would just like to welcome you to Gander, number one, and thank you for coming out. We are very pleased to have you here with us today to discuss this audit. We know that every day in the hospital business we are responsible for what we do, and we accept the other half of that, and that is accountability. In this Province we know, as Mr. Feltham as already said, there is an accountability issue. Health care is changing, the finances of the Province are changing, and we believe honestly that we should be accountable as well.

As Mr. Feltham has said, we have become a new body, the Central East Health Care Institutions Board. Up until this point we have always managed Fogo Island Hospital, Brookfield Hospital. Last year Bonnews Lodge, which is a long-term care facility, combined with Brookfield Hospital and came under our Board voluntarily. This past October we took over control of Twillingate Hospital and also Lakeside Homes. It is a new structure but we look forward to the future.

In going through the audit, I think it is self-explanatory. We will answer any questions you have. We have brought some of our people, and some of the people you see around are some of the department heads who work with us. I guess there are two functions. They are here for any points that you may want to delve into in-depth. The second thing, I guess, is they are here for an education. For people who are controlling different departments in the hospital it is a good education that they be exposed to the accountability process as well. It makes their function all the more important for them.

I think there are two issues that we would like to discuss in-depth at some point. I guess they are two problems which we think are very significant in the health care system in Newfoundland in particular today. One is the recruitment and retention of specialists and general practitioners, which is very acute in this Province today. As the chairman has mentioned, Dr. Blackie is here, our medical director, who has been in Gander since 1966, and is a Newfoundlander, and is quite aware. He does all our recruitment and he has a lot of thoughts on that issue, and it is a very relevant one today. I guess, from an internal perspective, the other big problem that we think we are facing is the sick leave issue in this Province. Some of the figures coming out, what it is costing this Province and the institutions for sick leave is a very big problem.

The reason I mention these two particularly is they have been raised in the Auditor General's report and I think they are very relevant to the health care system today.

Thank you.

MR. CHAIRMAN: Thank you very much. We certainly agree with that, and that is no doubt an area that we will want to get into in some detail.

Let me also say this is very much an educational process for the members of the Committee to get an appreciation for the board's difficulties, particularly in this time of changeover, so it is a very, very worthwhile process we have found in the past. It gives you some concept of where we are coming from as legislators in fulfilling our obligations to the taxpayers of the Province, and it gives us an appreciation of your responsibilities and the difficulties of fulfilling those that you find as well. So it is in that spirit that we are here and we appreciate your comments very much indeed.

Mr. Langdon, you are up bright and early this morning and ready to go. Would you like to begin questioning this morning?

MR. LANGDON: I don't know about bright, but I was up a little early.

MR. CHAIRMAN: Early, anyway.

MR. LANGDON: Well, I want to deal first of all with one of the issues that you raised, and that is the control over sick leave; I think it is on pages 22 and 23 of the report. The figures are there for James Paton Memorial Hospital, and there for Brookfield and Fogo, and a total average of 9.51 sick days per person, with an annual relief cost of probably $500,000. That was for 1993, and I was wondering if that for 1994 and the trend in 1995 is in the same number, because they are relatively high, and how would your figures compare with the provincial average? So whoever would like to answer that.

MR. LEWIS: As a point of clarification, Mr. Chairman, I have my personnel director with me, human resource person, who deals with this every day. Would it be fair, if he wants to carry it on this one, would he just come forward and be sworn in?

MR. CHAIRMAN: We have no problem at all. We would have to get that person sworn in, I guess?

MR. LEWIS: It is Mr. Jim Beaton.

MR. CHAIRMAN: Mr. Beaton?

MR. LEWIS: Yes.

MR. CHAIRMAN: We certainly welcome this. By the way, feel free to refer questions to anybody or, also, I should have said that if we ask a question that requires a detailed answer you do not have, it is quite acceptable to the Committee if you provide information later on. We are not here to put you on a hot seat.

James Beaton

MR. CHAIRMAN: Mr. Beaton.

MR. BEATON: Yes.

MR. LANGDON: Okay, so I guess I will direct the question to you, then.

MR. BEATON: Sure.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: In the Auditor General's report on pages 22 and 23 we see the number of sick days per staff that is outlined there, and the sick leave relief cost is roughly $500,000, and 9.51 days per person. My question to you is: How does this stack up with the provincial average? I don't know. Then, is the trend continuing for 1994-1995 at this rate, or has there been an appreciable depreciation in the number of days lost?

I see in the Auditor General's report, before you get a chance to answer that, that it appears there were a number of leaves where the staff did not have a doctor's sick leave permit, or whatever you want to call it, in there; so I guess, basically, I want to ask if this has been improved or if you have a handle on it.

MR. CHAIRMAN: Mr. Beaton.

MR. BEATON: I guess it would be fair to say, from the information that we have and that we have gathered, it has probably remained about the same. We have put a number of things in place, I guess. We started an employee family assistance program in 1990. We are using a leave request form that people have to complete when they return to work, and they have to list what their medical condition was. We went through our problems with that with the unions as to whether we had to write to ask people what their medical problems were and all those kinds of things. And we are building on that, I believe, day by day; however, it is a very long and difficult process. The age of our employees, I think, too, is a factor. We are dealing with people now who, five years ago, did not have a lot of sick leave now that they have worked for twenty-five or thirty years, there are all kinds of factors that come into that, I believe.

In the collective agreement, there are a number of issues in those agreements that, with NAPE support, for example, the largest group that we are dealing with, those people do not have to bring a medical certificate until they have been off on sick leave for three days or more. Well, we brought in this leave request form and we want that for all leave that has been taken. I guess, trying to get this through to the regular staff people that it is not only because of the leave that you are taking but we are health care and we are instituting your health and your well-being and because of that - like before those forms came into effect, there were lots of people who were off perhaps for two months under the old system, and we found that after two months, this person has a back problem and they need to see an orthopaedic surgeon. We happen to have three or four of those at any given time and we get them in. So we are doing all kinds of things in that light through employee family health and the employee assistance program.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: So the sick leave - the number of days that is indicated here and you were referring to anything above three days you need a doctor's note. How many of these sick leave days are there with just one day and just two days? Is that the majority of it or are the majority of your sick leave more than three days?

MR. BEATON: No, I would say that the majority are shorter linked. There are some long-term sick leave cases, for sure, but the majority of them, I would say, is the short duration.

MR. LANGDON: Do you see a pattern?

MR. BEATON: Yes, we do see patterns and we deal with them lots of times the best we can. With patterns under the old shift system, people under the collective agreements, they had to work seven shifts in a row and if they were sick the first one or the last one there were patterns established but like now for the most part, most people work twelve-hour shifts and they only do three at a time. If they are off sick at all it is either - if it is not the middle one, well then, it has to be after a day off or before a day off because there are only three anyway. The patterns that you are dealing with have changed substantially with that kind of a shift system.

MR. LANGDON: So the bottom line is that you are doing everything you can to improve on the situation, that the number of days per person is primarily the same now as it was two years ago or is it less? I thought you said it is pretty much the same.

MR. BEATON: I think it is pretty well the same. I don't have the figures with me as to what the exact - but as we compare, I guess in the Province and it does not give us much relief to know that we are as good as someone else because we would like to be better than most of them but looking at the averages for the Province, yes we fit into what is happening throughout the Province. I guess, one of the big problems we have with it, too, is that during the collective agreement processes over the years, people have been given - and I would venture to say we are probably one of the highest in the country, that get twenty-four days sick leave a year. Our funding has only ever been - a few years ago if people had more then twenty days, well then, we would go back to the Department of Health and look for other funding because we are only funded for what we have. In our budgets now I think we are probably permitted to budget for six days per person and everybody has twenty-four every year; well, that causes a real budget problem when there is extended sick leave.

We are doing a lot of things and we continue to do them but there is a lot of this that is over and above our control when it comes to all this sick leave that is on the books.

MR. LANGDON: I will leave it at that and now let somebody else ask some other questions.

MR. CHAIRMAN: Just tell us, how does this average from your board area compare with other board areas of the Province? Can you give us that answer or maybe somebody from the Department of Health will be able to answer it? Mr. Hart could answer that?

MR. HART: I have some information on it.

MR. CHAIRMAN: Would you come to a microphone here, or grab one here or something, Mr. Hart?

MR. HART: We have had some analysis of sick leave utilization done for the whole hospital sector because we are very concerned, I guess from an overall point of view. Essentially, we did an analysis that went back to 1987 and up to as far as 1994, and that showed that the average number of days - we don't have it broken down by facility - was about twelve days to twelve-and-a-half days when we started this project, and at the latest year that we have, 1994, it was down to 11.3 days per employee. So there has been an improvement but it is small comfort when you look at it.

We went through and just did a costing of that for the entire system and it looks to be somewhere in the range of $25 million that sick leave is costing the hospital sector. You can see there is an awful lot of opportunity there if you could in some way control that better than it is now being controlled. There are a great many ways that $25 million could be used to benefit the system.

One thing I would like to point out as well is that in 1992 government introduced a paid leave program, and that paid leave program was essentially for government departments. What it amounted to was that instead of getting the twenty-four days per year that was mentioned, each employee, in exchange for that, they were allowed ten days leave a year without question. It could be used for medical or any other purpose, family leave, whatever. Since they've introduced that there has been an improvement in departmental sectors. That program was made optional for hospitals. I understand that maybe half-a-dozen or so hospitals have utilized that project. I'm not sure now if Gander - Gander is using that paid leave program as well. So the management employees now get ten days per year instead of the twenty-four. When we analyzed the figures we found out that management were using on average about four days to five days per year, whereas when you got into the unions, NAPE and CUPE, that brought the average up. They were up to twelve days and thirteen days per year.

I think what has to be looked at - I know some provinces have utilized systems, I guess, incentives, to keep people from using sick leave. One in British Columbia, was of particular interest to me, because what they did there, every time somebody went on sick leave they used seventh-eighths of a day of their sick leave entitlement but the one-eighth came from their annual leave. So every time they used it they were using a bit of their own. That in itself, it is almost like a user fee, I guess, if you want. There is more of an incentive to be really sick before you stayed at home.

It is a difficult - it is not just restricted to the hospital sector. It is a government-wide problem and I think one that has to be addressed probably from a global point of view before any real effort is going to be gotten into. Because it is very difficult to determine whether it is a valid claim or whether people are abusing it. We all have our thoughts on it in trying to come to grips with it. It is not an easy thing. There are various ways of getting at it. As I said, you can have an incentive or a penalty for taking it and having to use your own annual leave, that sort of thing, but I think these are issues that government are going to have to deal with.

MR. CHAIRMAN: Thank you, Mr. Hart. I think you are quite right. I think it is obvious to us, and we have seen it in so many areas of government, as a Committee. There is abuse of the sick leave provisions in the agreements. Obviously, we first have to deal with that non-requirement of certificates for three days.

MR. HART: Exactly.

MR. CHAIRMAN: I think my - I hesitate to say it, but my experience is that sick leave goes up very quickly during moose season and other particular times of the year.

MR. HART: That is right. Christmas vacation time and that sort of thing, Christmas shopping time.

MR. CHAIRMAN: Christmas vacations, they tend to tack on, and long weekends get longer. I assume that is the common experience.

MR. HART: Yes. Sometimes - we looked at the trends. The Mondays and Fridays generally had higher utilizations there, you know.

MR. CHAIRMAN: That is right; so people are using their sick leave as additional vacation is what it amounts to.

MR. HART: Yes.

MR. CHAIRMAN: Instead of taking a vacation day they are taking a sick leave day.

MR. HART: I think if we could sell to the union membership the paid leave concept instead of the entitlement to the twenty-four days sick leave that would show major dividends, but that is a negotiation thing that will have to be dealt with by Treasury Board.

MR. CHAIRMAN: Obviously, it is not a problem unique to this board.

MR. HART: No. Anyway, I hope that has been of some help to you.

MR. CHAIRMAN: Thank you very much, Mr. Hart.

MR. HART: Thank you.

MR. CHAIRMAN: Mr. Lewis, do you want to make a comment?

MR. LEWIS: Yes, I just want to make a couple of points. I am very pleased - not pleased to hear it, but to have Mr. Hart say the average in the Province is around twelve to thirteen. I think my figuring was that we are at about ten, which is better per employee than the average. I think a lot of it has to do with the employee family assistance program which we have, which is not unique to us, I guess, but the family aspect is, because right now we have someone hired who handles that and they deal with not only staff problems but family problems. As we all know, when employees have family problems they translate into the workplace.

MR. CHAIRMAN: Absolutely.

MR. LEWIS: And we spent a lot of time on that.

The other point, I think the price tag that I am hearing on sick leave as a figure is something like $25 million a year it is costing the Province, which is really our budget.

MR. CHAIRMAN: It is costing us a tremendous amount of money; there is no question about it.

MR. LEWIS: And I think from the employees' perspective, as Mr. Beaton has mentioned, the employees are getting older. Our staffing, usually with sick leave nowadays we have to replace almost 100 per cent because our staffing is very tight. If someone is off sick we have to replace them. Years ago we had the luxury, if someone was off sick, maybe someone else could cover within the institution.

MR. CHAIRMAN: Could you answer a question? I was told not too long ago that if a nurse calls in sick, legitimately sick, and you call another nurse to come in and that nurse says that she is sick, then she gets sick leave then as well? And you have to call a second nurse or a third nurse before -

MR. BEATON: That would not happen, not with a nurse.

MR. CHAIRMAN: Not with a nurse?

MR. BEATON: Because nurses are casual and they get no benefits -

MR. CHAIRMAN: What about other employees?

MR. BEATON: A nursing assistant?

MR. CHAIRMAN: Yes.

MR. BEATON: Yes.

MR. CHAIRMAN: So if you called me, as a nursing assistant who is off today, and I said, `Well, I am not well today,' now I get sick leave?

MR. BEATON: It depends on what your schedule is, or what you have done so far this week. Up until fairly recently, you had to be called and you would have had to have started your bout of shifts. If you had started the bout and you were booked for this bout then yes, you would be paid, but right now if you worked on Monday and Wednesday and then we called you for Tuesday, and you are NAPE support, and you said, `No, I cannot come into today, I am sick,' we have to pay you, because there was no other shift that you could have done and the sick leave is here for this. For all intents and purposes, you are hired and laid off at the end of each shift.

MR. CHAIRMAN: Better benefits than we have, Mr. Penney. That is amazing. Obviously, that is in a union agreement; it is nothing we can deal with here. It is a matter of concern that perhaps we might pass along to the President of Treasury Board.

MR. LANGDON: Can I just ask one more question?

MR. CHAIRMAN: Mr. Langdon, by all means.

MR. LANGDON: How much does that cost the hospital board per year, that type of agreement with the union, roughly?

MR. BEATON: I could not put a dollar figure on it. With the new computer system we are getting today, and under the MIS guidelines, we will be able to track it hopefully, but right now when that is tracked we track relief by: Is it vacation relief, sick leave relief, stat day relief, all those kinds of things, but how many or who replaced each one, I could not answer.

MR. CHAIRMAN: Is it a common occurrence, though, in your view or your experience? Is it something that is happening on a regular basis?

MR. BEATON: Oh, it is happening, yes.

MR. CHAIRMAN: Happening on a regular basis?

MR. BEATON: There are some places in the Province where employers allow their employees to call in to the switchboard to report their sick leave, and the less restraint, the easier it is to do, I believe; so ours, when they call in, they have to call to the management person on duty or the department head, and then we have a battery of questions that are asked like: `What is your problem? How long do you expect to be off?' And if they are just off for today they are expected to work tomorrow. We call them this evening and say, `How are you doing? Do you expect to be here tomorrow?' Now some people get very upset, but it is becoming a part of the way we operate, and people know that we are doing this because we need them, but also we are interested in their health. Because if there is a problem we want to do something for them and get them back as soon as we can.

MR. CHAIRMAN: Mr. Beaton, tell me, just explain again the difference in nurses, why the nursing agreement is different?

MR. BEATON: A nurse, if you call in for a shift, is a casual nurse.

MR. CHAIRMAN: I see.

MR. BEATON: Casual nurses get - they have no benefits of the collective agreement other than - I shouldn't say no benefits, they have the benefits (inaudible).

MR. CHAIRMAN: So you wouldn't call in the nurses off duty, you would call in substitute nurses, the same as substitute teachers, type of thing.

MR. BEATON: Yes, and the casual nurses that you call in get 14 per cent onto their salary - that is the collective agreement - in lieu of annual leave, sick leave, stat days, all those kinds of things.

MR. CHAIRMAN: Mr. Penney, you had a question.

MR. PENNEY: Yes. Before we leave this topic I have just one question. I have been looking through the report here and I see 9.51 sick days per employee. Could you tell me whether that varies from Gander to Brookfield to Fogo? Is that an average?

MR. OLDFORD: It is there on page 18.

MR. BEATON: Like Fogo is 6.53, Brookfield is 8.29.

MR. LANGDON: Page 22, Melvin, I'm sorry.

MR. BEATON: Page 16 in this one.

MR. LANGDON: I was looking at - down at the bottom, page 22.

MR. CHAIRMAN: Oh, it is at the bottom of the page.

MR. PENNEY: Mr. Chairman -

AN HON. MEMBER: (Inaudible) the wrong page number.

AN HON. MEMBER: It is 22 on the bottom, 16 on top.

MR. CHAIRMAN: Mr. Feltham.

MR. FELTHAM: Mr. Chairman, for your convenience, I am just wondering if we might all use the same book that we have here, which is the Public Accounts Committee - prepared by the Auditor General.

MR. CHAIRMAN: That is what we were doing. We were looking at the 16 on top instead of the 22 on the bottom.

MR. FELTHAM: We are going to page 22 of the Auditor General's report while we are now looking at page 16 of the consolidated report, and some other people are going to another (inaudible).

MR. CHAIRMAN: For clarification, we will use this document that was prepared by our research assistant. The page numbers are on the bottom. Mr. Penney.

MR. PENNEY: Referring to this breakdown that is on page 22 of our report, Fogo Island shows sick days per staff, 6.5; James Paton in Gander shows 10. That is a major difference. How would you explain that?

MR. BEATON: I guess I don't have any real explanation for it except if - you know, like lots of times we find that workload plays a part in the amount of sick leave. Shifts also play a part. If you have people who work all days, sick leave is appreciably less than what it is for someone who works days and evenings. Then if you add the nights in there it gets worse. People have problems sleeping at night and all kinds of other factors.

In Fogo Island Hospital during the night there were only three people who worked. Their average is based on those three, whereas ours, you are talking about in our place, almost all departments have people on nights, when in Fogo it is only the nursing department. Those figures are done by groups and then based on the whole institution.

MR. PENNEY: Okay.

MR. CHAIRMAN: Thank you.

Mr. Beaton.

MR. BEATON: I guess I have to say, too, in those smaller institutions there seems to be something about, I don't know, I guess commitment, I don't know what it is. But there is something in Fogo Island Hospital that is different from larger institutions, there is still a commitment of the people that is different from that found in a larger institution, I believe.

MR. CHAIRMAN: The work ethic is different.

MR. BEATON: Yes.

MR. PENNEY: Let's hope that never disappears out there.

MR. BEATON: We hope not.

MR. CHAIRMAN: Mr. Tobin, would you like to carry on from there? Thank you, Mr. Beaton.

MR. TOBIN: Yes. I would like to change the subject there for a minute, Mr. Chairman, and deal basically with page 4, where the Auditor General indicates that the Board has given preference to local suppliers in this area which contravenes the Public Tendering Act. I'm wondering if the - and I think he does give the bids there within 10 per cent of the lowest provincial -

MR. PENNEY: I think we have these gentlemen confused with page numbers again.

MR. CHAIRMAN: No, we are on page 4 of our report.

WITNESS: Four at the bottom.

MR. TOBIN: Within 10 per cent of the lowest bid, and the policy doesn't comply with the Public Tendering Act. I am wondering if someone can tell me why you felt it was necessary to contravene the Public Tendering Act to deal with a specific area of this geographic part of the Province?

MR. CHAIRMAN: Mr. Goulding.

MR. GOULDING: This is going back prior to my time, so I am basing it on information that I have gathered. That was a policy that we had in order to support local business, and I think, at the time, no one really put consideration to the fact that it was against the Public Tendering Act. Since the Auditor General has been in and pointed this out, that policy has been removed from our policy and procedures manual. We no longer stick to that. Now, when requesting prices, in order to make them comparable, we ask for everything to be FOB Gander, so there is no longer local preference in our policy manual.

MR. TOBIN: Switching to page 5, the second paragraph, the board received three tenders for a photocopier for the Brookfield Hospital; however, there was no tender called. How did that happen?

MR. CHAIRMAN: Mr. Goulding.

MR. GOULDING: That is a difficult question to answer. I don't think we can sit here and tell you beyond a reasonable doubt how it happened. Our expectation is that the people involved at the time have since retired and are not available for us to go back and get our facts or their opinion. What we are basing our answer on is the information that we have been able to obtain from our records. I think our assumption is, at the time that photocopier was received, the expectation was that the price would be less than $5,000; so they just picked up the phone and called three vendors and asked for a price. When they got the prices they were over $5,000 - I guess an error was made - and they just went ahead and purchased it without making a second (inaudible).

MR. CHAIRMAN: So these were quotes rather than tenders?

MR. GOULDING: Yes.

MR. TOBIN: Does your record show that these were quotes?

MR. GOULDING: The records show that we had three quotes; yes, it does.

MR. TOBIN: And it was done by telephone?

MR. GOULDING: I cannot say beyond a reasonable doubt that it was done by telephone, no, but records show that we have three quotes on file.

MR. TOBIN: You have nothing on record to indicate how these people were asked to give quotes?

MR. GOULDING: No, I cannot find that.

MR. TOBIN: And when they were over $5,000 what happened?

MR. GOULDING: I guess, like I said, our assumption is that they just went ahead with the purchase without stopping at that point and publishing a tender in the paper.

MR. TOBIN: So they contravened the Public Tendering Act right throughout the process?

MR. CHAIRMAN: Mr. Lewis.

MR. LEWIS: Well, I think in the Public Tendering Act, under $5,000 you can get telephone bids, and I think the problem was, from our assertion of it when we are looking at it, is that at that point when it was known that it was $5,000 then they should have stopped and gone back and done a public tender, yes.

MR. CHAIRMAN: Generally speaking, that is right, I guess. What we are trying to determine here is whether these were quotes that were invited in that spirit or whether there was actually a tender call and a tender form submitted. Does the Auditor General's Department have any comment on it, or anyone who can clarify it? Ms. Marshall.

MS. MARSHALL: No, just to say that the information we have in our files is that the cost was just over $7,000 for the successful bidder.

MR. CHAIRMAN: Okay, Mr. Tobin.

MR. TOBIN: If I could just follow through there for another second, Mr. Chairman, the board also goes on in the next paragraph to say that none of the eight tenders called that they examined had placed tender opening disclosed. It means that, I guess, when the tenders were being called there was no opening date disclosed on the tender. What is the practise there now in that?

MR. LEWIS: The practise is now that tender opening is on there. It has been taken care of; it has been rectified.

MR. CHAIRMAN: Thank you, Mr. Tobin.

Mr. Crane.

MR. CRANE: Looking at the report, in 1992 you were at a deficit of $851,000; in 1993, $4.5 million; in 1994 $900,000. Has the Board any controls put on that now, any way of correcting the situation?

WITNESS: What page are you referring to? I would certainly like to (inaudible).

MR. CRANE: Page 29.

WITNESS: I guess that is the one at the bottom.

MR. CRANE: I don't know if it is the bottom or top now.

MR. CHAIRMAN: Page 29 on the bottom, Consolidated Statement of Income.

MR. CRANE: Yes.

MR. GOULDING: The $4.5 million deficit recorded in 1993 resulted as a change in accounting procedures. Prior to that time the Board, and I guess like many other boards across the Province from what I can understand, did not book its accrued vacation and accrued severance pay that was due at March, or that was a liability outstanding at March 31. At that point in time the Department of Health changed its policies and asked that that figure be booked. I guess, rightly or wrongly, the auditors in that year booked the accrued severance and that in the current year. It probably should have been done a little bit differently as a prior period adjustment. The main reason for that $4.5 million deficit in 1993 is a change in accounting policy, accounting practise.

MR. CHAIRMAN: Nevertheless, though, these are running deficits.

MR. CRANE: Yes.

MR. CHAIRMAN: The board obviously had deficits for a number of years.

MR. GOULDING: What was the other year you referred to?

MR. CRANE: They were 1992 and 1994.

MR. CHAIRMAN: In 1992, $851,000, in 1993, $4.5 million, in 1994, $909,000. The Board was running deficits on a regular basis for at least those three years and we don't have evidence of previous years.

Mr. Lewis.

MR. LEWIS: Yes, that was an accounting change which really makes the deficit appear a lot more because it was an accrual. We did run some deficits but they were picked up by Board funds at the time. We have taken a lot of measures over the last little while and we have had some layoffs and adjustments in services. The last audited statements we got were - we are waiting for 1994-1995 right now. In 1993-1994 we did operate in the black and have a small surplus.

MR. CRANE: That indebtedness at March 31 1993, $1.3 million, you are doing something to correct that now.

MR. LEWIS: Yes. I think the next year it was down to $600,000, the total indebtedness.

MR. CRANE: Very well. I was looking at one place there, I don't know what page, on the Board's expenses, where they paid so much money for a doctor who was moving out. I can understand very easily trying to recruit doctors and bring them in and paying their way in here, but in this one particular instance, I'm sure I read that they were paying the doctor's expenses to move out of here. How do you respond to that?

MR. LEWIS: If it is the one I am thinking of, I believe, at the time that the physician agreed to come there was a contractual agreement that when his duty was over he would be paid back home. I think that is the way that went. That was an agreement coming up front.

MR. CRANE: Would the new board consider recruiting doctors on the same scheme now?

MR. LEWIS: I don't think we would, but the whole recruitment process depends on the competitive market we are in. I'm afraid that in the situation we are going to find ourselves in in the next little while that the whole Province is going to be in a very desperate situation to recruit specialists, or even general practitioners. With the major outflow from our own University when our own graduates aren't practising here, we can't expect mainland graduates to practice here, in most cases.

MR. CRANE: No, that's for sure.

MR. LEWIS: So we are bringing in people from overseas, but the concern now is that the overseas pool is drying up as well. I don't know if Dr. Blackie wants to speak to that.

MR. CHAIRMAN: Dr. Blackie, would you like to come forward? I will have to ask you to take an oath as well.

Dr. Peter Blackie

MR. CHAIRMAN: I would like to welcome Dr. Blackie. I have known him for quite some time actually, back to 1970 when we first met. Dr. Blackie would you like to respond to those questions?

DR. BLACKIE: Yes, Sir, thank you, Peter Blackie. I will give you the thumbnail sketch on where we are and I know you are willing to listen to me but you may not want to hear some of the things I have to say. Some of the expenses that we have paid in the recent past, in the last couple of years, are really markers and indicators of what we fear. What the medical recruiters fear at the moment is a disaster that we are on the edge probably this summer of having a crash in medical services in a number of areas in Newfoundland. Some of you are probably from areas that you know are in trouble already. We - the medical recruiters, the medical directors and the CEO's that are doing recruiting - may very well be able to get through the summer without other places crashing but there is a very high risk of it. Even as recently as yesterday we had one speciality service in our hospital that was not covered, until yesterday, for a weekend.

There is a major problem in the Province with the demand for physicians. There are numerous speciality jobs and numerous family practice jobs that are open at the moment and despite the fact that we have a medical school 110 air miles from here producing fifty or sixty graduates a year and numerous specialists in a number of specialities, we are just not able to access these people for a number of reasons. Fifty-one percent of the problem is probably an economic one, it is probably salary and income or the fee for service income that is available but there are a number of other sources Dave referred to that are drying up. Our traditional sources used to be Ireland but in the last decade the Republic of South Africa has been the major source. Also, the landed immigrant population of physicians in Toronto, Ottawa and Montreal who cannot work elsewhere, have been a source. This past year with the ads the responses have dropped off almost to none and this is a frightening revelation because without that source of physicians then we just don't have a physician source.

Immigration - that has become tougher. It is much more difficult in the past year to get people through the system and the U.S.A. is probably taking larger numbers of all of the people that I have mentioned. There are a number of other problems - and I can go on all day about that but I won't - employing physicians in rural areas where they have spouses who are unhappy and spouses who are unemployable and they don't necessarily need to be female. We have had two or three male unemployable spouses in our rural areas here and they just leave because they cannot tolerate living without employment.

So I am not sure what is going to happen but I think it is appropriate for this Committee to hear the problems. Offering solutions, if I may, one of the things I think we need to go back and take a look at is central recruiting. All of the recruiters are spending identifiable dollars in huge chunks, and huge chunks of the dollars that are not identified in terms of the amount of salary time that myself, Neil Harvey and Dr. Hillyard in St. Anthony are spending on recruiting; it is unidentified but it is a huge sum. I think if some of those sums could be diverted into a central office that did recruiting for the whole Province we would be a lot better off.

MR. CHAIRMAN: Would you find it acceptable to have some central agency recruiting doctors for your board?

MR. BLACKIE: It was tried for a short period of time and yes, we certainly would. It has worked in the past in a variety of different ways and I think I speak probably for all of us in that it would be great to have another shot at that.

MR. CHAIRMAN: You would retain the final decision, I guess, as to (inaudible).

DR. BLACKIE: Oh yes. In fact, whether you hire somebody or not to practice medicine depends on the credentials committee which -

MR. CHAIRMAN: Of course.

DR. BLACKIE: The individual has to have a licence and then the credentials committee has to say: Yes, okay, we will accept this person. So it will be an institutional decision in the final analysis.

The other thing that I think is incredibly important and I think there is a lot of provincial agreement on this, we are paying now $20,000 to medical students, starting them as young as first-year medicine, and we will get three years back of service at some point later. I think, and I think it is a consensus, that if we paid those dollars as a signing bonus to people who were finished, either in family practice or in specialties, we would have a much better immediate yield.

There is also another problem with the doors that have been closed or appear to be closed in Grand Falls, Corner Brook and Gander to family practice potential candidates. The med students now see the only openings in Newfoundland as rural spots. A lot of these kinds are going to shunt from family practice into specialties and that will shunt them off the Island forever. I haven't counted in the last year or so, but a year-and-a-half ago we counted the number of Memorial graduates who have specialty tickets who were practising off Avalon, and I think the number was eleven or twelve. That is just not a population group that we have been able to access in the past.

MR. LANGDON: Dr. Blackie, may I ask you a question before you go on? Has your Board here, for example, been able to give a Newfoundland student, a rural student - contributed so much of the $20,000 toward his education while he is at the University, and then when the person graduates, rather than the person following up on his commitment and coming to Gander, there is a position in the United States and the hospital there has paid off his loan that he had to the hospital board here, and that relieves him of his obligation: has that happened to this Board here?

DR. BLACKIE: No, Sir. Our first graduate is due out in I think June or July of 1998, the first one we have signed up.

MR. LANGDON: I heard that has happened in a number of cases, where a number of Newfoundland students have committed themselves to come to a certain hospital - I will use Gander just as an example - and then, when the person graduates, he has a job in the United States, then that hospital pays the student, and the student then takes the $20,000 and pays it back to the board, and he is free of the obligation. I think there is something wrong with the ethics in that situation if that is happening, and it is happening.

DR. BLACKIE: I'm not sure - and I think I know the case you are referring to - but the way the contract is written now with our students, that technically can't happen.

MR. LANGDON: Okay, I'm glad to hear that.

MR. PENNEY: So this student who is coming in 1998, did you say? you have a contract with him that he would not be able to buy out of?

DR. BLACKIE: I would have to go back to the contract. I think there is a buy-out option but there is a waiver that would have to go through other boards in the Province before the candidate can buy out. In other words, if we were full at the time, then we would be able to offer the option to Central West or to one of the other hospital boards before the individual would buy out.

MR. PENNEY: But he wouldn't be able to buy out his obligations or his commitment to you and leave and go down to the United States?

DR. BLACKIE: Not in the first instance. My understanding of the contract is that would void the contract if they decided: We are going to buy out and go.

MR. LANGDON: Mr. Chairman.

MR. CHAIRMAN: Mr. Langdon.

WITNESS: (Inaudible).

MR. CHAIRMAN: Mr. Lewis wanted to respond to this, and then I will get to Mr. Langdon.

MR. LEWIS: If I could just clarify, not in medicine, but we have had some experiences with physio students who have gone off and been paid a stipend. I think it is very difficult to draft a contract that someone can't walk away from.

MR. PENNEY: Exactly.

MR. LEWIS: Because if you don't have any moral fibre, then it really doesn't matter, as long as you have the money. One of the instances that really concerned us a few years ago - and I know Mr. Beaton was involved in it - was where a student came back and spent two weeks with us, or three weeks, and complained the whole time, and then went on back to Halifax and had a job back there. It was simply a case of her having to pay back - Jim, how much a month did she have to pay back?

MR. BEATON: Well, you know, it was done through - I think the person could choose what they wanted to do. We sort of felt that the persons - you know, if someone is buying them out then you do it and you pay it back now. You shouldn't be able to do that but you can so do it. But they were offered a very low rate, like probably $30 or $40 a month, you know, (inaudible) to get paid back, and that made it really easy for that person.

Granted, we really didn't want that person on our staff either; if her heart and life were in Halifax, well then, go back. But you know, it leaves a lot to be desired. I think, as Dr. Blackie is saying, especially in the medical staff, if there is something when you sign them up that this is given at that point, well then, you have to, certainly for that period.

MR. CHAIRMAN: Mr. Tobin, you have some questions on this topic.

MR. TOBIN: Yes. I live on the Burin Peninsula, in Marystown, so I know all about the shortage of staff. I think we have one out of eleven. There were about twelve last year and we have one there right now and there are a few extra coming. I am wondering if there are any of your specialists in Gander who would like to move to the Peninsula.

DR. BLACKIE: I would like to thank you for supplying a number of locums to us over the past couple of years.

MR. TOBIN: Dr. Blackie, there are couple of things that come to mind here. One is, I think, as you said earlier, the economic aspect of it. I spoke to a doctor the other day who is going to - he is leaving Burin and is going to Saskatoon, I think it is, the northern part of Saskatchewan. And the whole system of attracting medical personnel to that province is different than it is in this Province. For example, he can go up there and work I think it is for two or three years up north and then automatically he comes to the urban part of Saskatchewan. The salary is almost twice the money that he is making here.

I think if we are going to attract the people of this Province - I mean, we were bringing people from the United Kingdom ten years ago, and at that time the money here was much greater than they were making over there. It seems to have stayed here and has risen over there to the extent that there is no incentive now for these people to move from the U.K. I think that the Province is going to have to look at making a better benefit package available to attract the type of people we need in this Province.

The other thing, and I would like to get your opinion on this, is that I have contended for some time that the policy that Memorial University has for admission to University is not really open to all of the people in this Province. I have said it in the House of Assembly and I say it here, that I believe if you are the son or the daughter of a medical specialist in the City of St. John's, your chances of getting into medical school are much greater than if you are Joe Blow from the outports.

The other thing that bothers me somewhat is that if we continue, as we have in the past, maintaining a number of seats in the medical school in this Province for people outside of Newfoundland and at the same time are not putting in place an incentive program for people from rural Newfoundland to be admitted to University, then we are going to continue to have some sort of a complex shortage in this Province. I believe that if we are going to look at - well, we have to look externally at South Africa, the United Kingdom and other places to attract these specialists, and medical personnel per se, family practitioners, or other practice, whatever the case may be. I believe at the same time we are going to have to put in place some sort of system in this Province that is going to make it attractive for young rural Newfoundlanders to have the opportunity to be trained in this Province and an incentive to provide them the opportunity to go back and practice in rural Newfoundland. I don't think it is there at Memorial right now.

DR. BLACKIE: Memorial has a program of attracting rural high school students in - and the name of the program escapes me at the moment - every summer, but it is active this summer in focusing on that population group.

One of the experiences has been that kids who grew up in rural Newfoundland and their wives want to head for the big cities and don't want to go back to rural Newfoundland. And although the University has some statistics that show that rural kids do go back, I think that the former comment really is very pertinent, and I think in attracting these rural kids back to rural Newfoundland with the hope of a four or five or long-term career, the best shot would be to have a signing bonus at the time. They are all coming out loaded with debt. It is not unusual now for a graduate specialist to come out with $100,000 worth of debt.

I would like to reply to your other comment on the medical children getting into med school. I have been tracking this somewhat closely, and I know that feeling is out there but in fact I think that is probably not true. I think the physician's children who get into med school probably have to perform on the average better than somebody else.

MR. TOBIN: Well, I say that for reasons that I know of people who have gone there. I have two students in my own district who went away and got a science degree at Dalhousie and other universities - led their class with 95 per cent averages - a science degree after five years in Dalhousie, and came back and worked in the Burin Hospital and volunteered for two years trying to get into med school, and finally ended up having to go in to do pharmacy. I think that if they were someone from St. John's they would be in the med school.

MR. CHAIRMAN: We have strayed a little bit outside of the Financial Administration Act. Mr. Lewis, would you like to comment.

MR. LEWIS: One point that Pete mentioned and I would like to expand on is that I think that when we just talk about our own graduates and we talk about Newfoundlanders, I think that we owe a real commitment to the people who come here and practise from foreign countries. One of the problems that we see also is the fact that these people, when they come here, get a provisional license and they try to get into Memorial to do a couple of years to get their Canadian license. I think I know in Burin and places like this it is a real problem because these people want to stay here and want to be part of the community but they really cannot get the courses or cannot get the year in the medical school to upgrade their qualifications to write their exam.

MR. TOBIN: A big problem.

MR. LEWIS: I think these foreign physicians come here and give us their time and add to our community. They are qualified enough to see our patients but they cannot get into our medical school and get qualified, which is sort of strange; it is the cart before the horse type thing.

MR. TOBIN: Then they can only stay two years under that system; is that right?

MR. LEWIS: Yes.

MR. TOBIN: (Inaudible).

MR. LEWIS: I think you know we are trying to work with the university to upgrade that. I don't know, Pete, if you want to add a comment to that.

MR. CHAIRMAN: Dr. Blackie.

DR. BLACKIE: No, I think that sums it up. We have a number of candidates within our own system that if we had funding we would be able to get them psychiatry or paediatric or general surgical training and get them back probably for a career, certainly for four or five years, and that is another medium term source if there was some way of funding that kind of training program.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: Dr. Blackie, back to the issue of our young medical graduates not wanting to practice in rural Newfoundland. We have graduated I believe it is nine doctors originally from Lewisporte, the community that I am from, and of the nine doctors from Lewisporte only one of them is now practising in any rural community; now that happens to be Lewisporte at this time. Of the other eight, half of them are out of the Province and the balance would be in St. John's. I find that shocking. It is something about which I have had several discussions with the Minister of Health and other doctors. Take a couple of minutes and tell us what you would suggest that we, as a government, or the Minister of Health or anybody - or the university, School of Medicine - tell me what we can do to correct that.

MR. CHAIRMAN: Dr. Blackie.

DR. BLACKIE: Well, back to being repetitious, a signing bonus specifically for communities to pay off the debt that they come out with. I have said this before, and I will say it to you, I think communities somehow have to take a larger role in attracting physicians and retaining them. I really do not have a prescription that lays out what people can do, but communities do not participate in that kind of encouragement and retention. On the negative side, and it happens to people particularly in isolated rural practices, there is an abuse factor that patients will bang on the doctor's door at nine or ten o'clock at night for something that could wait until the next day. So you are looking at some kind of an education program for communities to say: look there is a code of behaviour that will give you the best chance of retaining physicians. I really don't have any other magic answers and I am not sure what the University could do.

One of my other hobbyhorses - which I will get shot for saying by some people - is using the military model. We had an opportunity with the ten seats that came up this year when New Brunswick jumped ship on the ten seats - they have been in for the last twenty years or whatever - that if there were some way of selecting ten students from rural Newfoundland and paying the whole shot, as the military does - they put them on a salary, pay for their books and other expenses - then you certainly have a more solid contractual agreement with people that owe their whole training basis to a system rather than just the $20,000 or $25,000 a year that they pay out. I think it works fairly well for the military in North America. It certainly works for the Canadian Military. I know that there will be objection from many areas but I think it is something that is worth looking at.

MR. CHAIRMAN: Thank you, Dr. Blackie. Mr. Oldford you had a question?

MR. OLDFORD: Thank you, Mr. Chairman. Dr. Blackie you mentioned a central office for recruitment for the Province, when you look on page 23 they talk about the competitiveness, I assume, between different boards when it comes to recruiting. I would like for you to explain to us how that works. I am making an assumption that there is a doctor some place outside of Canada and all the boards in Newfoundland who would need, in the case say of a specialist, that all the boards will be out recruiting that same person. So the ante would be up, one board would try and outdo the other board, in a monetary sense, when it comes to recruitment. I wonder if this central office concept, when it comes to recruitment, would be a cost saving to the Province? Would it do away with the competitive factor?

DR. BLACKIE: Yes, you are absolutely right, we are doing parallel recruiting. I am spending money on ads and telephone calls to the same physicians that Neil Harvey, sixty miles down the road, is doing the same thing for. If one central office was focused on recruiting - I think there is a huge reduction in dollars to be realized by that kind of a mechanism. It might take a bit of education with the individual recruiters that are out there. We have a meeting with some medical directors next week to try and make that a formal recommendation from that group but I just see huge amounts of parallel expenditure on talking to the same people in different countries.

MR. CHAIRMAN: Mr. Langdon.

MR. LANGDON: Dr. Blackie can you tell us how much, in your own opinion, it would be for the whole Province?

DR. BLACKIE: That would be a very crude guess, sir. I don't know if crude guesses are allowed in this forum or not.

MR. CHAIRMAN: Sure, by all means.

DR. BLACKIE: We have a recruitment budget that is in the $70,000 or $80,000 range and that does not count lots of miscellaneous stuff that goes into recruiting; the amount of time that my secretary spends on recruiting. It would be many tens of thousands of dollars per year additional over the budget for recruiting and the same in all of the other six or seven boards. You are looking at several hundred thousand dollars.

MR. OLDFORD: Excuse me.

MR. CHAIRMAN: Mr. Oldford, go ahead.

MR. OLDFORD: Dr. Blackie when you come to the competitive thing, do boards offer extra special things to doctors? I suppose there is a set salary for doctor's wages but would then a board in order to entice that doctor to come to the area, would they give him extra things like free rent?

MR. CHAIRMAN: Dr. Blackie.

DR. BLACKIE: Since April of 1993 MCP has taken over all the decision making on doctors' salaries so that any of the boards that go upscale from what MCP says are doing it off the record and have to find some other funds to do it. I do not think there are many boards doing that at the moment.

When some of the new hospitals started, and I think I can say this safely about Clarenville, they had to bring in a whole group of specialists (inaudible) into a new hospital, and I think they probably got all started upscale, but we are not able to outbid one another at the moment by jacking upscale on the salary. There are some fringe things that some boards are able to do with housing, but it is not very much; you are looking at a few hundred bucks. You might be able to give a locum three months of three rent; you might be able to give a specialist who is coming in for the first time, who is going to stay, three months of free rent, but that is about it. There are no other perks out there that are funded.

MR. OLDFORD: There are no salary top-ups, or anything like that?

DR. BLACKIE: I cannot speak to the other boards.

MR. OLDFORD: Okay. Thank you, Mr. Chairman.

DR. BLACKIE: Thank you, Sir.

MR. OLDFORD: Thank you, Dr. Blackie.

MR. CHAIRMAN: Thank you, Dr. Blackie.

I am just wondering, in view of Mr. Tobin's comments about wanting some neuro-specialists down on the Burin Peninsula, how would this central agency determine where these specialists would go if we were able to attract them?

DR. BLACKIE: I see the central agency as taking the needs in from all of the areas and, in a co-ordinated manner, advertising for these people and then farming the names back out and sending a list of ten or fifteen candidates down to Burin.

MR. CHAIRMAN: And let them fight it out from there.

DR. BLACKIE: Yes.

MR. CHAIRMAN: Let the boards fight it out, because the boards are competing with each other to some extent.

DR. BLACKIE: Oh, yes, there is no doubt about that, and it is getting worse. The competition is getting meaner.

MR. CHAIRMAN: Mr. Lewis, you wanted to make a comment?

MR. LEWIS: Yes.

If I was just to expand a little bit on the competition, just to give you some appreciation of what is happening, and I know Craig Ivany in Clarenville is going through it, and Sally down in Burin, if all of a sudden this week I do not have an obstetrician - the GPs won't deliver a baby unless there is an obstetrician and a paediatrician present - then your women are travelling to St. John's or wherever, and that is an awful lot of pressure for Peter Blackie, as a medical director, that if he doesn't come up with someone quick then the service crashes, and this is a service which has been available, and we have almost come full circle if you talk about midwives. Most of us in this room, probably, were born in our own home, and that was fine, but the way we have specialized everything nowadays, in order for us to do our job we have to have two or three other specialists with us. There is a tremendous amount of pressure on the medical directors who are doing recruitment because there are very few people out there, and there are specialists and GPs who shop around. They want the best deal, and you cannot really blame them for that either, I guess.

I think a lot of it, too, has to do with the geography and the situation, and often times small communities cannot understand why physicians will not come live there, because as far as they are concerned it is the best place in the world, because they are living there. They have made that decision; they have grown up there, and they feel very offended that someone would come in and say: Well, I am not living there. It is very sad, but the medical directors and the competition will continue and get a lot worse.

Thank you.

MR. CHAIRMAN: As Dr. Blackie pointed out, many of our rural students cannot wait to get into St. John's to live, and we townies can't wait to get the heck out of it.

This has been an excellent exchange. It is an appropriate time to have a ten minute break and a coffee and a muffin at the back; please help yourselves. We will adjourn for ten minutes.

MR. CHAIRMAN: Order, please!

The Vice-Chair has gone out for a moment, but we will carry on. Mr. Crane, were you finished your questioning?

MR. CRANE: I have more information than I ever bargained for.

MR. CHAIRMAN: You amazed us both, Mr. Crane.

Mr. Hewlett, would you like to continue with the line of questioning?

MR. HEWLETT: Thank you, Mr. Chairman.

To the I guess Hospital Board, or the Health Care Board, whatever their phraseology is. There was some talk about competition in terms of various boards and whatnot. One of the things we've come across in the six years I've been on this Committee is the business of whether hospital or other sort of government-appointed boards, board funds, this notion. Does this particular Board have Board funds? What is the source of those funds? Is it through rebates from government, fund-raising with the general public, that sort of thing? What sorts of things are they dispersed for?

MR. FELTHAM: As a board we do have Board funds. We are not sure, as the Central East Board, just how much funds we have at this point in time because we are in the process of taking over these other boards that existed prior to October. In the Gander & District Hospital Board we did have a certain board fund which came to our use through some surpluses that we did gain at one point in time. There is a formula, and I'm not sure of the exact formula that was used as far as surplus funds that we gained that we can retain as Board funds. But over the past few years as you can see from our financial statements our Board funds (inaudible).

We have attained some means of obtaining Board funds in the past little while where had some residences that we were able to purchase from Newfoundland and Labrador Housing, and this will give a boost to our Board funds and give us some means of obtaining some dollars. Other than that, I would say at this point in time we are just looking to see exactly what we do have.

MR. HEWLETT: Do you have for this particular area any sort of charitable fund-raising foundation? Does that sort of feed into the Board funds, or do they make their donations directly to government? How does that sort of work?

MR. FELTHAM: We have a trust foundation. If you want to gain some information we have Mr. Peter Lush here, who operates that foundation for us and does an excellent job. Thank God that we do have him, because of the scarcity of funds. If we didn't have our foundation in order to give us certain equipment then we would be a lot worse off than we are today. So if you want to get into that particular foundation I'm sure Mr. Lush would only be too pleased to answer some of your questions.

MR. CHAIRMAN: By all means, we welcome any input Mr. Lush wishes to make. Mr. Lush, would you like to come forward? Ms. Murphy, if you would like to swear in Mr. Lush. Maybe we should swear in the whole room here this morning. We all swear to tell the truth.

WITNESS: Mr. Chairman, we brought ample staff with us just to make sure that (inaudible).

MR. CHAIRMAN: We are delighted you did sir, and we welcome all of them.

Peter Lush

MR. CHAIRMAN: Thank you. Mr. Lush, do you want to give us an outline of your foundation and the measure of success you've had in supporting the hospital financially.

MR. LUSH: The foundation first of all, I want to say, was formed approximately five years ago. The mandate, the objective of the Gander & District Health Foundation is to raise funds for the Board so that they can provide quality care and equipment to the Board-operated facilities. Of course, Mr. Lewis and Mr. Feltham have indicated to you what these are.

We have a volunteer Board. We have two people in the Foundation office and I, in addition to the Foundation - it is only an honourary position for me - that in addition to the Foundation I'm Director of Plant Services and Maintenance. I'm not a full-time fund-raiser.

I have to say that over the past five years we've found the Foundation to be a great source of revenue for us for the Board facilities, and I have to say that the public here in this particular area whenever we undertake a project is certainly only too willing to give. One of Mr. Hewlett's questions - and I guess the biggest concern of the public when you go fund-raising, is: Are you supplementing government and by raising these funds will that mean that government is going to cut back on what you are going to get?

Of course, I have a concern about that also as the person who is out raising funds. There is no question about it, that the government people know that foundations are in place and sometimes I think they probably try to sneak it in the back door.

The first year of the Foundation we raised $1 million. We do an average of between $250,000 and $300,000 a year. We could do more if we wanted to, and you could ask: Why don't you? Because we take the approach that there are many other groups in the community which want to do fund-raising. If we had to go out and every year have a campaign for $500,000, well then there are the Lions groups, there are the ladies groups, the Knights of Columbus and many others, obviously, which wouldn't have success. There are limited dollars. Therefore we try to operate within that particular range. I have to say that whenever we go to the public the response is certainly tremendous, and like I say, I think the big negative thing that they always ask is: Does this mean that government won't be doing its share?

MR. TOBIN: So you are still maintaining a level of support there from the public?

MR. LUSH: Yes.

MR. TOBIN: I notice on the Burin Peninsula, the twenty-four relay, the first year we had it I think it turned in something like $70,000-odd, and the next year it fell back, and last year it was really down. This year they are advertising to become involved and donate to the charity of your choice. It all goes back to what you are saying, I guess people are frustrated with the decline in specialists and the decline in the amount of health care they were getting, and they became very suspicious that government was substituting their funding for monies that they were giving themselves.

MR. LUSH: From the corporate side the donations are down, to be honest with you. Of course, as governments and politicians, I always say, they play into the corporate side. Because as soon as the corporate side hears the government say that the economy is on a downturn, when you go in and sit down with somebody from the corporate side they will say: I guess you heard the news this morning, boy, it is affecting my business, and these things just for expediency.

However, I haven't seen any indication. Our relay has been continuously on the increase. As a matter of fact, we have calls from other foundations wanting to know what we do differently. I think that number one is you have to make people - as Dr. Blackie indicated with regards to bringing physicians in your community, a community has to be a part of that process. We try to make the people who give to the Foundation, we use it so that they become partners with us. Because it is their institution. If they want to improve their services then they have to give. I think probably the success that we've had is that we've tried to cultivate them and make them a part of the process.

There is no question, fund-raising is very difficult. As the economy goes on the downturn of course it is more difficult to get money. We get away from little projects. We organize five or six major projects a year.

MR. HEWLETT: The monies that you raise, are they sort of purpose driven? Like you are raising x-thousand for such-and-such a piece of machinery, or do you just raise lump sum cash to turn over to the hospital board, or to use at their discretion. How are the monies directed?

MR. LUSH: No. We have in place a committee which is comprised of administration, representatives from the Board, people from the medical staff, and we identify particular needs in the institutions, whether it is in our clinics outside or whether it is for Fogo or Brookfield Hospital or the James Paton. We try to identify a particular piece of equipment. People want to give. They don't want to give just to a general fund, they want to give to something. Laser equipment for the operating room was one of the pieces of equipment that we purchased. That was over $350,000. People just wanted to give to that.

Of course, you have to sell people. Why do you give? What are they going to benefit? Is this a new service that you already don't have? Is this a new service that you do not already have?

Before the board makes the decision on whether they go for that particular piece of equipment, of course, they have to ask these questions also: Do we need more staff, or can we operate with the staff we have?

Yes, the answer to the question is when we go for fund-raising we go for a particular piece of equipment.

MR. HEWLETT: So monies from your foundation do not support recruitment of physicians or extra benefits or whatever to maintain people in the areas served by your hospital board as such?

MR. LUSH: I hope not. No.

MR. HEWLETT: Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Lush.

Just an observation, the fact that you are chairman of that foundation, you are also a senior employee in the hospital system, indicates a measure of commitment, I think, to the hospital which I think is very refreshing.

I want to ask Mr. Hart if he would - because I want to follow along this line of questioning; it is a very interesting topic that we are into here - perhaps, Mr. Hart, you would like to come forward and tell us, from the department's point of view and answer these charges which we hear not only from this source but from every department of government. We often hear public servants say: We have to spend it or we will lose it next year, and if we raise money outside we are sure to lose it.

Would you like to tell us, Sir, how the department operates in your budgeting? Would you look at an agency or a board that has the ability to raise some funds? No doubt, obviously, a board centred in Gander could raise funds here more than a board centred in St. Anthony for example, would have a larger market to draw from to raise some funding. Do you look at that when you are allocating funding, or is there a formula based on the population served, the number of physicians that are deemed to be there for the types of services that are being provided and so forth? Is there a formula, and can you answer it - it is a very unfair question - because this board has been successful in fund-raising?

MR. HART: Do you want me to come forward?

MR. CHAIRMAN: Please come forward.

MR. LUSH: I want to conclude, I always wanted to sit in front of politicians, but I thought I was going to be sitting in the hon. House instead of here.

MR. CHAIRMAN: Well, Sir, judging by your performance this morning the day may yet come. Mr. Hart.

MR. TOBIN: You could easily replace your brother. You sound more convincing.

MR. HART: Thank you for the question, Mr. Windsor.

MR. CHAIRMAN: I should say, Mr. Lush, if you were in the House while your brother was in the Chair you might have a rough time.

Mr. Hart.

MR. HART: Well, I can say as a general rule up front that we do not look at what the fund-raising ability is in a community in terms of reviewing operational budgets for hospitals and that sort of thing. What they raise is outside that gambit. Normally board funds, and that would be part of board funds, have been expended as discretionary funds at the board's direction, so when we develop budgets for hospitals we look at the needs within the hospital environment. Obviously, I suppose, if there is a major fund-raising initiative in that community then that may convert into a lesser need from an operational point of view, but we do not take that into account - it is not part of our formula saying that because they have these board funds we cut back on operating grants and that sort of thing. We just look at the needs within a community and that sort of thing.

MR. CHAIRMAN: It is probably fair to say, though, if there is a need for a piece of equipment that is going to cost $300,000, the department has a capital, obviously, of current financing and capital, budget financing.

MR. HART: Yes.

MR. CHAIRMAN: You would look at your capital budget and say: These are the priorities across the whole Province. Gander has a requirement for this. The fact that they have been able to raise funds to buy it -

MR. HART: It certainly helps the cause, no question about it.

MR. CHAIRMAN: Helps you.

MR. HART: Yes.

Generally speaking, as you said, there are obviously two processes to get enough money to do all the things we would like to do. We get a list in during budget process of all the capital projects they would like to undertake. It far exceeds the available funding that we have. There is always I guess probably a ten to one ratio of what we can provide in the way of capital funding compared with what they actually put forward as needed. We try to prioritize those and try to be fair and evaluate and go to the biggest needs.

I think without these foundation doing their civic duty and that sort of thing it would impose a greater responsibility on the system, and that money would have to come out of the system in some way, yes.

MR. CHAIRMAN: I think I'm clear and I think we were told that none of these funds are used for current account fund purposes. Nothing for salaries or operation of the hospital. It goes primarily into capital equipment, is it?

WITNESS: (Inaudible).

MR. CHAIRMAN: Yes. Has the department ever considered putting in place any kind of an incentive. Obviously foundations are successful now in raising funding and it is a major contributor to the whole health care system. Has this department, or has government, to your knowledge ever considered putting in place an incentive? In other words, if you can raise a certain amount of money for an operation we will provide an incentive which gives you 20 per cent, 30 per cent, 50 per cent, whatever the case may be, or match it dollar for dollar. To encourage these types of foundations to do even more fund-raising, and so that the public - and I think there is a very real concern that: Is this money going for purposes for which we intend, or is it simply reducing the burden on the Department of Health in St. John's.

If there was an incentive there and it was known to be an incentive that says: We will get a better health care system or health care service here in this area because the public contributes more, there is an incentive. Have you considered that?

MR. HART: To my knowledge I'm not aware of any incentive program, although it is a worthy venture to probably look at. There is an incentive program for the other side, the operational side, as you are probably aware. Essentially if a board is able to achieve a surplus in any given year, under a formula they can retain a portion of that surplus to be used, and that becomes (inaudible).

MR. CHAIRMAN: The key word is portion.

MR. HART: Pardon me?

MR. CHAIRMAN: The key word is portion.

MR. HART: A portion, yes.

MR. CHAIRMAN: You retain a portion of it this year and if you get a surplus again next year you would only get a portion of that.

MR. HART: The formula is I think the first $50,000 savings is shared, 50-50 I believe?

WITNESS: (inaudible).

MR. HART: The first $50,000 goes to the board, yes. We are looking at that right now. Because with this new restructuring going on we may have situations like the St. John's Hospital Corporation will control ten times as much funding as would a smaller board, so we are trying to look at the logistics of that formula now because it may not make sense. That $50,000 in that area would not be a whole lot, whereas in a smaller board it would be significant. We are looking at revamping that formula.

MR. CHAIRMAN: The percentage base is wrong.

MR. HART: Yes. But there is an incentive there to retain it. That money goes into their board funds, along with any foundation money that they raise, and in addition to that any interest that they earn on advances from operating grants goes into board funds as well. That is one area that we are looking at now, because we want to make sure that the funds are being expended in a reasonable manner. We want to make sure that the funds are spent for medical equipment and make sure that the expenditures are not of a nature that would cause concern to us.

MR. TOBIN: Mr. Chairman?

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: A couple of things he said there. The first thing you said about discretionary funding, there is a certain amount of discretionary funding that the boards have. In answer to a question from the Chairman, it can't be used for current expense. What would hospital boards use discretionary funding for?

MR. HART: I guess maybe I could refer to a specific example here. If you look on I guess page 70 of your hand-out.

WITNESS: Top or bottom?

MR. HART: There is no number on the top on this particular page. That happens to be consolidated saving of board funds. That shows there in the case of Gander the money that came into the system and the money that was expended. You can see there for example that under expenditures they purchased various equipment. They also picked up the deficit that they incurred in the previous year, $184,000. There was one, the expenditure there below that, the executive director received a bonus there of $9,959.

MR. TOBIN: What's that?

MR. HART: Put Mr. Lewis on the spot here now. No, this was a contractual arrangement that was entered into years ago, as I understand it. It is a salary supplement I guess is what it is.

MR. TOBIN: So discretionary funds can be used for salary supplements?

MR. HART: They have been in the past. There is a -

MR. TOBIN: (Inaudible), okay. Just to get back to what we said earlier this morning about Dr. Blackie. What we are seeing here then is that you can use discretionary funds for salaried people but you can't use it for medical people because of the MCP limitations. Would that be right?

MR. HART: No, I don't think that would be a fair statement. I think -

MR. TOBIN: Can you use it then to supplement the salaries for specialists?

MR. HART: I think it has been in the past. I can't give you a specific example right now, but we directed - before I moved over with the Department of Health there was a directive that went out indicating that these supplements had to stop with immediate effect, and the only -

MR. TOBIN: Why?

MR. HART: Because I guess there was a feeling that whatever the salary scales were that is what they should be paid. There should not be supplements beyond that, and -

MR. TOBIN: So it is because of the directive from the Department of Health -

MR. HART: Yes.

MR. TOBIN: - that the hospital boards are not permitted to give outright salary supplements to attract specialists?

MR. HART: No. This was dealing with management employees particularly in this particular instance.

MR. TOBIN: Yes, we went through that somewhere else before I think (inaudible).

MR. HART: Yes. Now I should say, Mr. Tobin, that the way it was worded was that if there was a contractual agreement in place it could continue on until such time as that person either terminated employment or whatever. It was grandfathered essentially, but there were no new ones to be entered into and that sort of thing.

MR. TOBIN: Was that done -

MR. HART: So in this particular case, when the board ceased to exist and a new board took over, this supplement also ceased to exist at the same time. Under the terms of employment now for the executive director of the new board there would be no salary supplement involved in it, so that you won't see that there beyond this fiscal year.

MR. TOBIN: Okay, that was an accepted practice by the Department of Health.

MR. HART: I guess it was going on over the years. That is one of the concerns I guess that I've had since I've gone in there, how board funds are utilized. That is why I say we are in a process of developing guidelines for appropriate utilization of those funds. We want to give the hospitals some guidance as to how it would be appropriate to use those, and how it would not be appropriate to use those.

MR. CHAIRMAN: It appears to me if the community is prepared to put up these funds, and that is largely where these funds are coming from -

MR. HART: Yes.

MR. CHAIRMAN: - is from the community. We've heard Dr. Blackie this morning talking about the need for the community to be more involved, to take more responsibility for the level of health care services that are being provided. If the community of Gander and area chooses to put funds forward which allows Dr. Blackie to provide subsidies to get the kind of specialists he needs here, what is wrong with that, and why would the department be concerned? If we have a salary allocation for a specialist which is consistent across the Province, but an area because of socio-economic reasons, whatever reasons, needs to supplement that to get the qualified person in place, what is wrong with that? Why would the department be concerned?

MR. HART: That is a very fair question. It is one that we are working with. My feeling on this whole issue is that you have to segregate board funds almost into two separate types of funds. There is the source that has come in through interest on government advances and from payments under the incentive program, that sort of thing. Those are the public funds that I'm talking about that should be spent in line with certain guidelines that we issue.

MR. CHAIRMAN: It is a question about whether those need board discretion anyway.

MR. HART: Yes.

MR. CHAIRMAN: If they are government funds which are in place and earning memory then the government budget should really represent (inaudible) -

MR. HART: Any funds coming from a private donation -

MR. CHAIRMAN: All funds. Funds raised by foundation, for example.

MR. HART: No. Those raised by foundation, I don't believe they are public funds in the sense of government source money. I think those should be able to be spent as directed by the people donating those funds.

MR. CHAIRMAN: Then why did the department issue a directive to all hospital boards as I understand it that you can't provide the kinds of supplements that, for example, were deemed to be necessary to attract a qualified CEO?

MR. HART: My feeling personally is that if they choose to use foundation money and they have guidance to use it to that extent, that generally as it was mentioned here earlier, those funds are raised for specific equipment, that sort of thing. But if the funds were raised to attract physicians or something like that, well then -

MR. CHAIRMAN: At this point in time the government directive, department directive, would not permit that.

MR. HART: The directive didn't specifically get into it. I wish I had it here in front of me now - but it dealt -

MR. CHAIRMAN: I know we discussed it before.

MR. HART: Yes, we did discuss it, and it dealt primarily with -

MR. CHAIRMAN: I think we have a copy of it coming. Thank you. Miss Hennessey, I believe.

MR. HART: Thank you, Moira.

MR. TOBIN: You still never got out of it, Chris.

MR. HART: Pardon me?

MR. TOBIN: Still never got out of it.

MR. HART: This was issued in 1991 and this was issued by the Minister of Health at the time, Mr. Decker.

MR. TOBIN: (Inaudible).

MR. HART: It reads:

"I write to inform you of a recent Government decision to request all hospital and nursing home boards to eliminate the provision of monetary and non-monetary supplements to management staff covered by the HL Pay Plan." So it is dealing with management staff.

It goes on: "This directive does not, in any way, alter the current definition of `board funds' or impose any other additional limits on the authority of boards to commit or expend `discretionary funds' in carrying out the role of the board."

This is the sentence here: "The supplements are requested to be eliminated immediately where the benefit is not specifically provided in an employment contract, but, in any event, should be discontinued when incumbents receiving these benefits terminate their employment. The current level of these benefits should not be increased in the interim."

MR. CHAIRMAN: I'm guilty of leading you into an area of government policy which is outside of your purview and also outside the mandate of this Committee.

MR. HART: Yes, it is an issue - yes.

MR. CHAIRMAN: We will leave that. Perhaps the Clerk would make a note that the Committee in its deliberations on this issue would consider this issue further and take it up with the minister (inaudible).

MR. HART: Yes. It is something internally that we are -

MR. CHAIRMAN: We are getting outside of our responsibilities here.

MR. HART: We are working on guidelines, as I said, for board funds, and we will be issuing directives at some appropriate time later on.

MR. CHAIRMAN: Thank you very much, Mr. Hart. Mr. Lewis, you wanted to (inaudible).

MR. LEWIS: Yes, I just wanted to clarify that I don't have any board subsidy. Straighten that one. I just wanted to clarify that.

MR. CHAIRMAN: I think we got that. The question is: Why aren't you now, and whether or not you should get it back.

MR. LEWIS: No. I think that is a policy and that is a fine policy and that is it.

MR. CHAIRMAN: Policy is policy. Obviously we have to follow it.

MR. LEWIS: If I could get back to -

MR. CHAIRMAN: By all means.

MR. LEWIS: - something that we talked about. You mention incentives for communities. You talk about incentives for communities to raise funds and for organizations to raise funds. One of our very first projects taken on by the community was of a mammography machine. The incentive obviously for the community was to have that service. That was equipment. The second one that we had was a laser surgery. We were the first hospital in the Province to offer laser surgery. The big benefit, incentive, to the community, to the employers, was that their employees who had gall bladder surgery or whatever were back to work a lot quicker. They could go back to work in two days as opposed to the traditional eight.

There are built-in incentives. Our Foundation deems that we go buy medical equipment and that is what we buy it for. There are some built-in incentives for the communities, because we all know we live in Newfoundland and we don't have an endless amount of equipment money. If a community is to make their hospital - which is very important that they buy ownership in the hospital - a little bit better with more equipment, then they have to buy into it and to raise money to put equipment in their hospital so they can offer the services, instead of having to go to St. John's or Corner Brook or wherever. There is a built-in incentive for the organizations.

In my history with the hospitals I've never seen any case where the Department of Health has said: They can raise money, we are not going to give it to them. This is stuff over and above. Thank you.

MR. CHAIRMAN: Thank you very much.

Mr. Hewlett, we go back to you. We interrupted you (inaudible).

MR. HEWLETT: No, that is fine with me, Mr. Chairman. I think Mr. Oldford would like a word.

MR. CHAIRMAN: Finished?

Mr. Oldford.

MR. OLDFORD: Yes, I have just the one question. Maybe it has been answered already. The Board response to the deficits. I think Mr. Feltham mentioned that the deficit was reduced to about $600,000 from $1.3 million.

MR. FELTHAM: I did mention that fact. The attachment there is the 1994 statement that our boardroom debt was $600,000-and some odd compared to 1993, which augurs well I think as far as the operation of the facilities are concerned.

MR. OLDFORD: You also said you paid it from your own resources. I would like an explanation of where that funding came from.

MR. FELTHAM: That funding was an accumulation of board funds that we had available which we no longer have at this point in time. I don't know how we are going to deal with any deficit that we might have in the future. Those funds came about from the sharing arrangements of other funds that we were able to retain plus sale of assets that we had as board funds as well.

While I'm at it I would like to make a point. The Chairman raised the question that as far as government funds are concerned, if you don't use them you lose them. I think that is one of the things that has got us into some of the problems that we have now today, where we became a little bit less efficient than we should be. Because the tendency was that come the end of the year if you had surplus funds then either you created a position in order to expend those funds or you came up with some means of getting rid of them, because you knew that the government was going to take them back. I think government probably has to look at some means whereby it can make sure that boards, if they operate effectively and efficiently, then any surplus funds they are able to retain can be used towards their future year, and not have to look at a situation whereby they are going to lose those funds.

MR. CHAIRMAN: One of the real weaknesses in our overall accountability process is in justifying people's positions and programs. We've not done a good job, and the Auditor General keeps pointing that out to us. She has brought that concern to the House of Assembly a number of times. People are not reviewed as regularly as they should be.

Perhaps it is a fair question to ask, then. What kind of a review process, program, does this Board have in place to review your personnel for effectiveness and whether or not they are really required, or whether that position could be eliminated and a more important position created? Is there this kind of an efficiency review on a regular basis? Mr. Lewis.

MR. LEWIS: Yes, thank you, Mr. Chairman. Each year when we do our budgeting process each department sits down and they go through the whole process. They have to justify what they want and what they have. Each year as well in most of our departments we have a system where we look at the utilization. Workload measurement, we call it. Take x-ray for instance. If we are doing this many x-rays this is the number of staff you should have, this is what your staff are producing per.... So we say that in the x-ray department the staff members should be utilized about 80-odd per cent of the time, because you have to look at lunch, you look at coffee break, you look at the ordinary stuff.

If you are running at 80 per cent efficiency then your staff is working pretty good. If you get up to 100 per cent then we know you need extra staffing, because that is related directly to workload. We have that in place in most of our departments, workload measurement and this sort of thing. Each year we know what the percentage of people being occupied is, if you will. If anybody wants any additional staff, we know. If we know the percentage has dropped significantly then we are going to have a look at drawing back some staff on that department.

We think we have to get into that. In nursing, the same way. You have to have workload measurement. If you are going to staff you had better make sure that you have the workload of staff, and that has to be able to float up and down. Because if you are dealing with a fixed situation, then no matter how many patients you have or you don't have you are going to expend that money. In order for the system to get more efficient you have to be able to measure it. So that if I know that I have five coronaries in, I know the acuity level, then we should have this many staff. That is not only a safeguard for the patient, that is also a safeguard for the nurses who are working there.

MR. CHAIRMAN: Thank you very much.

Mr. Langdon?

MR. LANGDON: Probably just one more mundane question, I guess, on the Auditor General's report, and that is inventory. We've found that every hospital board that we have examined over the past number of years, the school boards and what have you, there doesn't seem to have been, until the Auditor General has reminded the institution, whether it is school board or hospital board, whatever, that there has not been proper inventory of the things that you have. I understand from here that you are taking control of that and that it is on the computer or about to be put on the computer. I want to see how far along that is.

MR. CHAIRMAN: Perhaps a comment from Mr. Goulding on that would be appropriate.

MR. GOULDING: I take it, sir, you are referring to the capital asset ledger, capital asset inventory.

MR. LANGDON: Yes.

MR. GOULDING: Up to the present time, no, we haven't had a capital asset ledger. I think back about four years ago we sat down and looked at a computerization process for the hospital as a whole. Not only from the financial side but the patient care side. Part of that plan was to have a full integrated system of which one module would be a fixed asset module. On the schedule we are currently going I think the implementation of that module should be in about June of 1996.

MR. LANGDON: Okay. Thank you.

MR. CHAIRMAN: Well, if there are no further questions, then it simply remains for me to thank the witnesses for coming forward today. Are there any additional points you would like to clarify, or any other points you would like to make? You or any of the people who you brought with you. Take the opportunity by all means to bring up any other issues you would like to have discussed here, to make a point or an observation on. Mr. Feltham.

MR. FELTHAM: Mr. Chairman, before we go I would just like to take this opportunity to thank the Committee for giving us an opportunity to - particularly with Dr. Blackie, to expound on some of his views, which are very pertinent to the situation that we have at this point. As well, I think it has given some of our staff the opportunity to see how the review process works; and that the fact that anything we do as far as the financial end of it is concerned, that we are going to be accountable. That in itself, if the Committee has served no other purpose, and I'm sure that it has served others, that if it served no other purpose other than that then that has been a good thing, and we certainly appreciate that. I thank you very much.

MR. CHAIRMAN: Thank you very much.

Mr. Penney has some personal business that is pressing him this morning.

MR. PENNEY: Yes, but there is one question I would like to ask. I will take the time out of my other business for a moment. I would like to turn to page 8. My first question is for the Auditor General. She makes a note in there under Inventory. She is talking about the physical inventory counts. She says: "...the pharmacy inventory is not current." Could you explain what you mean?

MS. MARSHALL: That would mean that the manual itself is not up to date.

MR. PENNEY: I'm sorry?

MS. MARSHALL: The manual itself is not up to date.

MR. PENNEY: How far behind would it be?

MS. MARSHALL: I'm looking for it now. They had put in a new computerized system and once they had that system implemented they didn't update their policies and procedures to reflect that new system. That should be done.

MR. CHAIRMAN: Mr. Lewis, are you going to bring in another person?

MR. LEWIS: Yes, another person to speak to that. Our chief pharmacist, Mr. Dalley, is here.

MR. CHAIRMAN: Mr. Dalley, come forward sir. Ms. Murphy, would you swear in Mr. Dalley?

Gary Dalley

MR. CHAIRMAN: Thank you very much. Mr. Dalley, did you hear that question? Would you like to address that?

MR. DALLEY: Effective February 1994 our policy and procedure manual as it did pertain to inventory taking and records of such was amended to incorporate the recommendations of the Auditor General. From our perspective the issue is now dealt with.

MR. PENNEY: Mr. Dalley, the information we have shows that there was a variance of $11,000 in your inventory in 1994. Could you give us some idea where that was?

MR. DALLEY: It would reflect I think in the primary instance in two cases where - for example, if one deals with an emergency situation, a nursing unit calls down and says: I need a drug, I need it right away, the staff will drop everything and run up with it. I have cases where one treatment for example of a heart attack might cost $4,000 for the drugs involved. If your attention happens to be distracted from billing that out through the system well then there is $4,000 of that drug. The only way around that of course is to have something in the sense of a bar code reader on the door that grabs everything on the way out, and that would be it.

MR. PENNEY: My question was more specific. Was this dealing with the hospital here in Gander, this $11,000?

MR. DALLEY: This would incorporate our inventory as it is dealt with in issues to all the satellite institutions in our Board. It is physical inventory in place at Gander.

MR. PENNEY: Do you have any idea whether this is schedule F, schedule G drugs, whether they are narcotics? Is there any reason for you to be concerned at all about the discrepancies?

MR. DALLEY: They are not in any way, shape or form restricted drugs, so any drugs that would be possibly subject to abuse - the alcohols, the narcotics, the sleeping pills, the tranquillizers, whatever - we have documentation in place which records each and every dose of those. This is just general stock which is not an abuse potential.

MR. PENNEY: Thank you very much.

MR. CHAIRMAN: Thank you very much, Mr. Penney. Mr. Goulding.

MR. GOULDING: If I may just comment on that $11,000 inventory variance. I would like to point out that was a favourable variance in which the actual inventory was above what our GL control said it should be.

MR. CHAIRMAN: Somebody brought back something that had disappeared (inaudible).

MR. GOULDING: I think in all fairness to Gary, Gary is pretty good at scrounging samples and everything which get into inventory without cost to us. I think that was one factor. I think the other factor is the inventory system we are using costs drugs at the most recent cost. In times when prices are going up we do expect that type of variance to occur.

MR. CHAIRMAN: Thank you very much. If there are no further comments from there.... The Auditor General, would you like any final comments? If not, let me thank again the witnesses and I will say that -

MR. PENNEY: (Inaudible).

MR. CHAIRMAN: Okay, we understand. We have to excuse our vice-chairman, he has some urgent business. I can say on behalf of the Committee that this has been one of the best hearings that we've held in the last number of years. Very informative. We've appreciated the input from the witnesses who are here and from the support people who came with you. You've been most informative to the Committee. We hope in turn that the Committee has given you some concept of where we are coming from, and our responsibility and role as members of the House of Assembly representing the people of the Province. Let me say that we appreciate the level of expertise and professionalism that you've displayed here this morning. I think we are confident that this health care board is in very good hands. We offer our congratulations to you all.

Thank you very much for your involvement, the Auditor General and her staff, members of the Committee and our staff. This meeting stands adjourned. Thank you.

The Committee adjourned.