Hack one reason for BWH $6.9 million deficit

Heather Wright/The Independent

The hackers who crippled Bluewater Health’s information systems also dealt a financial blow to the hospital.

That from Bluewater Health CEO Paula Reaume-Zimmer after the hospital’s annual general meeting.
Reaume-Zimmer says at least $2 million was spent recovering from the October 2023 incident which sent health care providers across southwestern Ontario scrambling. And it is one of the reasons the hospital group finished the 2023-2024 fiscal year with a $6.9 million deficit.

All five hospitals in southwestern Ontario affected by the Daixin attack had some employee records compromised. Employees were given access to two years of free credit monitoring to make sure their information isn’t being used by criminals.

But Bluewater Health bore the brunt of the hack, with the records of 269,000 patients accessed and 20,000 Social Insurance Numbers stolen and sold on the black market.

Thousands of patient procedures were cancelled and hospital staff were using pens and paper charts for months after the hack.

Reaume-Zimmer says much of the cost of dealing with the hack was for staffing.

“We went to manual procedures for a very long time, so we need the normal staffing levels to care for our day-to -day operations, but (we) also needed additional staff to make up for the gap in the electronic resources.”

The hospital also needed to upgrade equipment, which also added to the expense.

As a result of the hack, Reaume-Zimmer says the board decided to purchase the Oracle record management system early. It costs $40 million to purchase – a cost which will be spread out over 10 years but which still pinches the bottom line.

“That is a substantial expense. And although we were planning to go in that direction, it’s sooner than we are expected. So, that has an impact on our current state as well.”

The hospital also faced new union contracts after the province’s legislation freezing wages was declared unconstitutional.

“When the wage freeze was lifted, and all the bargaining units were all able to bargain, it had a substantial impact on all the hospitals across Ontario,” says Reaume-Zimmer.

“Throughout COVID there were no wage increases, and there were large settlements that were beyond the hospital’s capacity to respond to.”

Mix in funding increases below the rate of inflation, Reaume-Zimmer says Bluewater Health is left a $6.9 million deficit at the end of the fiscal year.

Hospitals across the province face many of the same issues and Reaume-Zimmer is hopeful the province will increase funding to keep hospitals out of debt.
For now, Bluewater Health has to deal with the deficit on its own. “It depletes our working capital and our working capital is what’s required to purchase new equipment,” the CEO says.

That, she adds, makes the role of the hospital foundations even more important.