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Declining Health Care Funding in Ontario

Federal Health Cash Transfers ("CHT") to the Ontario government will rise 5.94% in 2016/17, or by $778 million. This, in itself, would pay for a 1.5% increase in Ontario health care funding even without a single extra penny from Ontario tax revenues.  This follows a $736 million increase (5.96%) to federal health care cash transfers to the province of Ontario for this year.

Despite this, the Canadian Institute for Health Information (CIHI) estimates that total health funding by the Ontario government is only going up by about $352 million this year -- or about 0.7%. This falls well short of aging, inflation, utilization, and population growth cost pressures and deepens  the trend in recent years to reduce health care and hospital funding in real terms.  So far, there are precious few signs that the government will reverse its policy of health care austerity in its upcoming 2016/17 budget. Likely, Ontario funding will fall far behind federal health care funding once again:

Health Care and Hospital Funding Declining as a Share of the Economy: As a percentage of the total economy, Ontario government health spending has declined consistently since 2009-2010, when it is was at 7.6% of Gross Domestic Product. Last year it was at 7.15%, and this year it is 6.91%.  

hospital funding in Ontario - chart


Ontario health cafe funding declines as percentage of GDP

The current Budget plan is to increase Ministry of Health and Long-Term Care funding by 1.8%  (to $51.7 billion) in 2016/17 and by 1.9% (to $52.7 billion) in 2017/18. With nominal GDP expected to go up at a much quicker rate, health care funding would continue to decline as a percentage of the economy.

Hospital funding is also declining as a percentage of the economy:

Ontario hospital funding declines as percentage of GDP

CIHI figures  indicate that (contrary to widespread suggestions) Ontario provincial health care funding has been falling as a percentage of total provincial government program spending.

health spending declines in Ontario

According to data in the 2015/16 Ontario Budget, this trend continues with Ministry of Health and LTC funding falling from 38.8% of total program spending last year to 38.5% this year.  This directly contradicts claims by many that health care would assume a much larger portion of program spending.  

But this squeeze on hospital and health care funding comes with consequences. Here's two:

Nursing: Ontario has far fewer nurses working in hospitals than the rest of Canada according to CIHI data.

more nurses in rest of Canada compared to Ontario

Most (but not all) of this is driven by fewer practical nurses in Ontario hospitals compared to the rest of Canada:

More practical nurses in rest of Canada than Ontario

Currently, Ontario has 1.11 practical nurses working in hospitals per 1000 population while the rest of Canada has 1.74 practical nurses. In other words, the rest of Canada now has 57% more practical nurses working in hospitals per capita than Ontario does.

This lack of resources results in significantly fewer nursing hours per patient in Ontario according to CIHI data:

Hospital inpatients with the same condition can expect to receive 16.6% more nursing care if they are treated at a typical Canadian hospital than if they are treated at a typical Ontario hospital. 

Re-admissions: Coinciding with the cuts is a large increase in hospital re-admissions. Canadian Institute for Health Information indicates that across Ontario the number of all patients readmitted to hospital has increased since 2009-10 through 2013-14 from 8.3 per 100 patients to 9.1 per 100 patients. This is an increase of 9.6% over just four years. In other words an extra 9,000 patients have to be readmitted to hospitals each year compared to four years earlier. Moreover, Ontario has gone from having below average re-admissions to above average re-admissions compared with Canada as a whole:

Ontario hospital readmission now higher than rest of Canada

To deal with these problems the Ontario Council of Hospital Unions has called for:
  •          Significant ongoing increases to hospital, LTC and home care funding to offset population growth, aging, and inflation, as well as  increases to offset the funding lost in the last several years
  •         Ontario, as a relatively wealthy province, should aim to fund and provide care at the same level as the other provinces or better.


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