Regional health authorites in B.C. have been told to cut costs to stay within their allocated budgets. ((CBC))

Health authorities around B.C. are taking a scalpel to their operations to cut hundreds of millions of dollars to meet their budgets, according to memos released by the provincial government on Wednesday.

The cuts follow statements by Health Minister Kevin Falcon earlier this week that because of declining government revenue, there will be no more year-end bailouts for budget overruns, and that regional authorities will have to live with the money they were given in the February budget.

Chief executives of the major health authorities sent out memos this week saying most of the savings will come through measures like administrative cuts, smarter purchasing practices and overtime bans.

"We try and do as much as possible so that all our changes are invisible to the public," said David Plug, the vice-president of public affairs at Fraser Health, the largest of five regional authorities.  

"But given the scope of our challenge, we will have to make some modest caps or reductions in services," he said Wednesday.

Memos detail cost-cutting measures

The ministry released the regional authorities' cost-cutting plans as they were laid out in the memos, showing some health services will be capped or reduced, including MRI scans and elective surgeries. Patients in B.C. hospitals could also find themselves paying more for private rooms and hospital visitors will face higher parking fees.

The CEO of Fraser Health outlined cuts in travel, administration and overtime, along with laying off or moving staff. The health authority also plans to cut 2,000 elective surgeries during next year's Olympics, according to a Fraser Health internal memo released by the NDP on Wednesday.

It's a similar story for Vancouver Coastal Health, where there will be cuts in sick leave, overtime and elective surgery. The authority is also looking for ways to generate more revenue, and will be cutting elective surgeries during the Olympics, based on the experience of other host cities that saw demand fall during the Games.

Interior Health said Tuesday it has already cut 100 administrative jobs. More cuts and longer wait times for elective surgery may be coming, while the Vancouver Island Health Authority has increased parking rates and is also considering selling non-essential assets.

Managing pressures

Funding for the regional health authorities actually increased this year, but the health authorities had been spending at deficit rates that outpaced the increases, Falcon said Wednesday in Victoria.

The minister said the authorities have to "manage" about $360 million in cost pressures this year and he knows there will be many difficult decisions, but he was pleased the health authorities' managers have since committed to balancing their budgets.

"What they will be doing is taking a very hard look at administrative costs. Probably 40 per cent of all the savings will probably be found through administrative cost reductions," Falcon said.

The current B.C. health-care budget is about $15.7 billion and is expected to climb by more than $2 billion by 2011 — for a total rise of 87 per cent since 2001.

"That, I think, is a very positive thing," Falcon said. "It's not easy for them, but they recognize that receiving a 20 per cent budget increase over three years is pretty good given the economic situation that the province and the country finds itself in."

With files from The Canadian Press