Ontario’s hospital sector has made a submission to the provincial finance committee making the case that overcrowding has become so serious that there is a need for more funding. They are seeking a 4.55 percent increase in operating funds for the 2018-19 fiscal year in their pre budget submission. According to numbers calculated from data from the Canadian Institute for Health Information(CIHI), over the period 2010 to 2017, the average annual growth of nominal provincial government hospital spending in Ontario has been 1.9 percent while provincial government health spending as a whole has averaged 2.6 percent.
Part of what is going on here is the usual maneuvering for more funds as part of any budgetary process which this year is expected to be a bit more active given that Ontario is apparently out of the deficit woods and balancing its books. This should provide fuel for any number of claims across the province that there is a crisis and more funding is needed. The provincial government health care sector has seen its nominal spending growth since 2010 restrained to just over 2 percent annually (compared to about 7 percent annually between 1997 and 2009) as part of the Ontario government’s attempt to slay its deficit. However, a look at the longer-term numbers also suggests that the hospital sector in Ontario has borne a disproportionate share of spending restraint over the last few decades.
In terms of the expenditure change over time, Figure 1 plots real per capita provincial government hospital spending over time alongside all other real per capita provincial government health care spending. In 1975, more was being spent per capita on hospitals by the provincial government than all the other health expenditure categories combined. By 2017, the CIHI estimates show that nearly two dollars per capita is being spent on all other health expenditure categories (physicians, other professionals, drugs, capital, home care, etc…) for every dollar being spent on hospital. Figure 2 provides the average annual growth rates of real per capita provincial government hospital and all other health spending both for the entire 1975 to 2017 period as well as for several sub-periods. Generally speaking, the hospital sector has seen its spending grow much more slowly than all the other sectors in Ontario. It was particularly hard hit over the 1991 to 1996 and 2010 to 2017 periods and the era of the health funding escalator after 2000 saw growth at half the rate of other health care spending. The sector certainly claims it has now exhausted all efficiencies and needs more money to deliver care.
Some of this restraint reflects a restructuring of the province's health care system away from hospital based care and towards other sectors of spending such as drugs, capital spending, home care and public health. Whereas in 1975, the hospital sector accounted for 56 percent of Ontario government health spending, by 2017 it is forecast to account for only 36 percent. The hospital sector is arguing it needs more money and a glance at Figures 1 and 2 certainly seems convincing evidence that the sector has been “starved” relative to other health spending in Ontario.
Yet, that is probably not the right approach. Just because you have been seeing your funding grow at a slower rate over time than other sectors is not necessarily a case for more funding. The more interesting question is really whether or not this restructuring of the system’s expenditures over time has improved health care system function and outcomes in the province. If Ontario health system performance in terms of wait times for procedures has been getting worse or population health indicators have stopped improving or been worsening, then one can make a better case that this restructuring of Ontario health system may have gone too far in one direction. Otherwise, it will be business as usual. Such an evaluation of the long-term restructuring of the provinces health care system by the province's Auditor General or Financial Accountability Office would make for some interesting reading.
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