Audit’s advice for Manitoba health-care agencies surprising, ‘ridiculous’

February 12, 2025 Canuck

Some of the recommendations offered in recently released audits of Manitoba’s health authorities are surprising and “ridiculous,” a health finance expert says.

The majority of Manitoba’s health agencies — including Shared Health and the Winnipeg Regional Health Authority (WRHA) — regularly ran in the red between the 2019-20 and 2023-24 fiscal years, according to three independent audits commissioned by the provincial government.

The audits, which included CancerCare Manitoba but excluded Southern Health, recommend the agencies under the review use zero-based budgeting, which would see them start from scratch in each new budget period, then create a budget to match expenses with revenue.

But the director of York University’s master of health industry administration program says he was surprised by that suggestion, as zero-based budgeting is better suited for a health-care system that isn’t under stress.

“I think zero-based budgeting is the wrong thing to call for in this kind of a system,” Amin Mawani told CBC News.

“You’re in the middle of a crisis in the sense that, if you don’t have enough nursing staff, your budgeting basically says, ‘Let’s justify every expense from zero.’ You can’t do that in health care.”

Mawani says the problem lies in the budgeting systems at the audited health authorities: The audits show that they have been “suboptimal” and reliant on “wishful thinking.”

Mawani says health care is a team sport, and zero-based budgeting would mean justifying every part of that team. However, the audits indicate many Manitoba health authorities don’t have a fully functional team in the first place, causing them to rely on overtime and/or private agency nurses.

“They should allocate the resources to what they need, and then they might be surprised. The budgets will come down and the actual [figures] will resemble the budget.”

Deficit remedy ‘hard to enforce’

The audits show that salaries, benefits and other staff compensation, including a new collective agreement that gave Manitoba nurses retroactive pay bumps, were a leading factor behind the deficits.

Manitoba Health Minister Uzoma Asagwara told reporters last week that the health authorities included in the audit have been spending on the “wrong things,” including private agency staff, administration and contracts with out-of-province health providers.

Asagwara also says the reviews reveal dysfunctional workplace cultures that have led to fiscal mismanagement.

Mawani doesn’t see it that way.

“Anytime you have insufficient resources, then you can’t get some things done and then it’ll come across as red ink, so you need appropriate resources,” he said. “Blaming it on the health-care culture and so on may not be the appropriate thing to do.”

Any budget that doesn’t predict cost drivers will lead to deficits, he said, adding the health authorities’ budgets should reflect changes in patient volumes.

The audits also urged stronger demand projections at Shared Health and the Winnipeg Regional Health Authority, as their annual planning processes are largely based on past costs and demand, which can result in the authorities being one to two years behind trends.

The audits recommend that if either of those health authorities reports a quarterly deficit they should be required to put forward a list of cost-saving measures equivalent to three times the reported deficit within 90 days.

That recommendation can be demanding and “hard to enforce in a crisis,” Mawani said.

“I saw that and I had a chuckle. I mean, that’s ridiculous,” he said. “If that kind of savings could be easy to spot and find, people would have done it in the first place.”

‘Provide audits from every region’: nurses union

The audits were released as the province looks to trim the fat from the health-care system.

Last month, the province directed western Manitoba’s Prairie Mountain Health Authority to cut private agency costs by 15 per cent. That came after the province ordered health authorities in December to redirect eight per cent of their administrative costs to the front lines.

The head of the Manitoba Nurses Union worries those directives could mean big health-care cuts are on the horizon.

Ordering a health authority to cut its agency use “just means that we’re not filling those shifts, so the nurses that are there are working harder and faster than they’ve ever worked before,” said Darlene Jackson.

“It’s great to put directives out, but if we’re not looking at the whole picture, then we don’t see where patient care is actually, sadly, lacking [and] where funding needs to be increased and hasn’t been increased.”

A woman with short hair and wearing a grey v-neck shirt stands and smiles. Behind her is a sign that says, 'Manitoba Nurses Union.' — Darlene Jackson, president of the Manitoba Nurses Union, says the issue identified is not overspending, but instead a health-care system that ‘has not been adequately resourced for many, many years.’ (Travis Golby/CBC)

She also finds the audit’s exclusion of Southern Health unfair. Asagwara says it was not included because the health authority has a record of balanced budgets, but Jackson says there’s more to the story.

“I speak to nurses all the time, and when I speak to nurses from Southern Health, what they tell me is the reason they don’t run with a deficit is they don’t fill those vacancies with overtime or agency,” she said.

Jackson would like the province to look into the number of nursing shifts and positions that remain unfilled in Southern Health.

“I think if you’re going to be transparent, then you have to provide audits from every region,” she said. “At the end of the day, it all affects patient care.”

‘Huge problem’ if nurses cut: prof

Jackson says the issue highlighted in the audits is not really about overspending, but instead shows a health-care system that “has not been adequately resourced for many, many years.”

She’s not confident that removing the CEOs of Shared Health and the WRHA, which were announced as the audits were released, make any difference. Jackson says nurses need to be prioritized as Manitoba continues to struggle with a shortage.

“We desperately need to retain our nurses until we can get enough new nurses from our nursing education into the system.”

Nursing positions tend to get cut after they’re flagged as taking up a lot of resources, says Sonia Udod, an associate professor at the University of Manitoba’s college of nursing. The audits show that health authorities failed to predict spending on private agency nurses, she said.

Udod says a potential cut to nursing positions would be a “huge problem,” as the university recently boosted the number of seats in its nursing program by 50 per cent.

“Do not cut nurses, because we’re spending money on educating them,” she said.

“We’re spending money on recruiting physicians, [so] spend money on the nurses. But we also need to include nurse practitioners more in clinics in the cities, in the rural areas and use them as an adjunct to the work that nurses and physicians are doing.”

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Canada News

Audit’s advice for Manitoba health-care agencies surprising, ‘ridiculous’

Deficit remedy ‘hard to enforce’

‘Provide audits from every region’: nurses union

‘Huge problem’ if nurses cut: prof

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