Yukon Hospital Corp. used capital funds just to meet payroll last year, report says

A review of the Yukon Hospital Corporation's finances says the corporation ran a $7.6-million deficit last year, and had to pull capital funds from a planned Mental Wellness Unit just to meet payroll.

The review, done by the accounting firm Ernst and Young, was completed in October and released by the territorial government on Friday. It analyzes governance and financial management at the hospital corporation. 

According to a government news release, the review was "necessitated by the evolving health care landscape in the Yukon, particularly the challenges and financial pressures intensified by the COVID-19 pandemic."    

Among other things, the review looks at the "root causes" that led the Yukon Hospital Corporation (YHC) to take the unusual — and unapproved by the government — step of using money intended for a capital project to cover basic operating expenses.

The YHC, the review states, has been dealing with a "chronic cash flow and operating shortfall."

"We note that the YHC has been under financial strain, which has caused the use of unusual measures to stay financially viable," the review states.

The report states that the hospital corporation was so strapped last year, it used $7.3-million in capital funds — intended for the building of a new Mental Wellness Unit — to cover payroll and operating costs.

It cites inflation, workforce changes, and post-pandemic population health needs as some of the factors putting ongoing financial pressure on the hospital corporation.

It also found problems with how the YHC communicated its problems to the Yukon government — which provides almost all of the corporation's funding.

"This made it challenging for the [Yukon government] to appropriately fund the YHC," the review states.

"While the deficit was clearly communicated, there was a lack of clear communication on its implications, or put another way, no one asked where the money was going to come from."

The review also found other oversight problems, including a lack of reporting requirements for the hospital corporation on metrics like wait times.

It includes several recommendations for improvements, including more streamlined funding agreements. The government and the YHC say they accept all the recommendations. 

To Brad Cathers, health critic for the opposition Yukon Party, the report from Ernst and Young confirms what his party has been saying — that the governing Liberals have been under-funding Yukon hospitals.