Hospitals across Canada have for years been trying to generate revenue from subsidiary sources to augment their government subsidies. A worthwhile thing to do, but only when managed skilfully, and, sadly, such management skills are not always available in our hospital sector.
Take Newfoundland’s Health Sciences Centre whose hospital administrator—as reported in the May 31 edition of the National Post—predicted in 1995 that a new Tim Hortons coffee shop on the premises would have a profit of up to $300,000 annually.
The problem is the coffee shop lost about $260,000 last year. And in 2008-2009, the coffee shop lost a stunning $296,110. This while the average Tim Hortons reportedly earns $265,000 in profits—a massive turnaround of over half a million dollars a year. And, aside from the coffee shop, the hospital reportedly losses $1.2-million annually on dietary services.
Then there’s the case in this morning’s Post of the Windsor Regional Hospital which is reportedly losing up to $265,000 a year operating Tim Hortons outlets on its premises. And, according to the Post, the hospital loses about $500,000 on its cafeteria services—which are apart from the in-room food the hospital prepares for patients.
So why the huge losses? One needn’t look beyond the fact that most of the coffee shops across the land pay minimum wage (about $10 an hour) to service staff, but these spendthrift hospitals pay twice that in wages plus a nice benefit package.
Newfoundland’s Health Sciences Centre’s staff who are pouring the coffee get paid $28 an hour, while Windsor Regional Hospital servers reportedly make about $26 an hour—$20 in wages, $6 in benefits.
What a sad display of careless management and union greed, a toxic combination all two prevalent in our government operations and those of government funded institutions.