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Health unit looking at $5M line of credit to cover 'extraordinary' COVID bills

Ministry of Health sets up reimbursement method for payment of COVID services
2018-07-27 Simcoe Muskoka District Health Unit RB
The Simcoe Muskoka District Health Unit office on Sperling Drive in Barrie. Raymond Bowe/BarrieToday

The local health unit could apply for a maximum $5-million line of bank credit to tide it over until the province coughs up the remainder of its pandemic relief funding.

But the Simcoe Muskoka District Health Unit says this shortfall has not adversely affected its COVID-19 services.

“In no way whatsoever,” Karen Ellis-Scharfenberg, the health unit’s chief financial officer, told BarrieToday

“The timing of reducing our mass immunization clinics… is based on service,” she added. “The way that the public now wants to get immunized isn’t quite so much in those big, big arenas. The attendance and the number of appointments booked has reduced somewhat.

“We’re now open for walk-ins, some when it is convenient for you, if we are open. The service to the public… will be case and contact management. So as the case numbers of COVID reduce, so too does the amount of work in contact management; but as those numbers go up, so too does the amount of hours of labour to contact cases (and) notify contacts.”

Ellis-Scharfenberg said the Ministry of Health has set up a reimbursement method for payment of COVID services and on the day that the municipalities were to be notified, its four municipalities  Barrie, Orillia, County of Simcoe and District of Muskoka  had not received any funding.

But she said the day after the local health unit received just about 50 per cent of its COVID funding from the province.

“So yes, we still require up to a $5-million line of credit. That really will be the caveat, the 'up-to' part,” said Ellis-Scharfenberg.

The health unit hasn't yet applied, she noted. 

"We must have the approval of the four municipalities based on the Municipal Act in order for us to apply, so that’s in the process," Ellis-Scharfenberg said. 

Barrie city council next meets Aug. 9. An item for discussion on the agenda asks that correspondence be provided to the Simcoe Muskoka District Health Unit to provide consent of its application for a line of credit from TD Commercial Bank for as much as $5 million as a temporary measure, while the health unit awaits further COVID funding from Ontario’s Health Ministry.

Ellis-Scharfenberg says the provincial funding is for COVID extraordinary expenses. A budget was established in January for 2021 and submitted to the Ministry of Health.

“We hadn’t received any funding until two weeks ago, so we were using our other flow monies from the province for things like salaries, particularly for the mass immunization clinics,” she said. “There’s 13 of them in our county and district, and there’s lots and lots of people (working there).”

Expenses include salaries, supplies, personal protective equipment (PPE), vaccine transport, etc.

The interest rate on the line of credit will depend upon how much funding the health unit actually needs, Ellis-Scharfenberg said.

“It’s not like we’re taking out a loan for $5 million. We’ll only apply for what we actually require,” she said. “We have been told that the province would reimburse for interest charges.”

Health Ministry spokesperson Bill Campbell said the public health system has demonstrated remarkable responsiveness to COVID, as the pandemic has evolved locally and globally.

“Under normal circumstances, public health units are expected to respond to and manage infectious diseases of public health significance through existing operating budgets and funding allocations,” he said. “However, COVID-19 has required a level of response from the public health sector that goes way beyond the norm or business-as-usual, resulting in increased expenditures.

“In recognition of the very unique circumstances and cash-flow considerations at the local level, processes have been put in place for public health units to request reimbursement from the Ministry of Health of extraordinary costs incurred with responding to COVID-19 at the local level,” Campbell added.

He said provincial funding allocations for all public health units in 2021, including one-time funding to offset extraordinary costs incurred responding to the pandemic at a local level, were confirmed and recently communicated to public health units.

“Funding is expected to flow shortly,” Campbell said.

Since 2020, he said the ministry has invested approximately $665 million in additional one-time funding for public health units to support and enhance COVID monitoring, case and contact management, and delivering local vaccine programs.