4/11/16

Ontario to cut funding for hospital infrastructure in half. Austerity bites

The Ontario government recently put out a release bragging that they will fund $50 million per year to renew existing hospital facilities. 
old Ontario hospital x-ray

However, in her September report the Auditor General reported that Ontario hospital funding is less than the renewal needs for existing hospitals. "The assessments of hospital facilities identified $2.7 billion dollars of renewal needs, requiring annual funding of $392 million to bring assets to what is considered good condition. However, since 2014/15 actual annual provincial funding has been $125 million..." 

In other words, the government has put out a release announcing that they are reducing hospital capital renewal funding -- from a level that was already only a fraction of what is needed to bring hospitals to good condition.

The release also brags that they will provide $12 billion over ten years for new hospital facilities (as distinct from funding to renew existing hospital facilities discussed above). That works out to about $1.2 billion a year -- but even this aspect of the announcement is also much less than it appears.

Over the previous five years (2011/12-2015/16) the government spent $14.8 billion in hospital infrastructure (as reported on an interim basis in the Budgets). That is very close to $3 billion a year.

So, in other words, the government is reporting that it will cut spending on hospital infrastructure by over 50% - or by about $1.7 billion per year.

It takes some chutzpah to put out a release bragging about your funding when you are actually cutting funding. 
Ten year plan for Ontario hospital facility funding


Source: Ontario Budget Papers (interim estimate from following year's Budget)

But it's even worse.  The Auditor General also noted: "Existing funding does not address significant pressures faced by ministries for new projects... the Ministry of Health and Long-Term Care has received submissions for 37 major hospital projects totalling $11.9 billion dating back to 2005/06. These submissions were endorsed by Local Health Integration Networks as needed projects requiring funding. However, the Ministry did not put forward these projects for approval to Treasury Board as these initiatives could not be managed from within their existing budget allocation."

So even with much higher funding than they now propose, $11.9 billion in needed hospital infrastructure projects could not be done.  

Notably, even with the much higher infrastructure funding, hospitals raided operating funds for capital projects. The Auditor reports that in "the last five years, hospitals spent on average $45 million a year of operating funds on capital and other funding needs." 

Given this announcement, this transfer of funds from hospital services to hospital facilities looks set to intensify.  That's especially bad news when hospitals have seen their real funding for services cut for many years.

Ironically, this announcement comes just after an infrastructure obsessed Budget.  The 2016 Budget increased funding for infrastructure projects by over $3.3 billion compared to the previous year. 


Provincial funding of infrastructure 2016


Pictures: epicmoments Inside an abandoned hospital in Ontario. TGH Wikipedia. 

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