Hospital, long-term care funding cut by the Ford Conservative government

The Financial Accountability Office has released the Ford PC government's funding plans for the various health care sub-sectors.  

The news is not good.  

The funding plans for 2022/3 in several key line items are down compared to actual funding in 2021/2: 

• Funding plans for long-term care services are down $26 million – or down 0.4% compared to last year's actual funding. 
• Overall funding to the Ministry of Long-Term Care (LTC service funding plus LTC Capital and Development funding) is down $315 million, with the LTC Capital line item down a full $376 million. The LTC Development line item was also completely unspent over the last five quarters. These are mysterious changes when there is a 38,000 person LTC wait list, a desperate shortage of LTC facilities that meet modern design standards, new legislation that forces hospital patients to move into LTC facilities they did not choose, and frequent claims by the government that it is quickly building new, high quality LTC facilities. 
• Funding plans for hospital services are  down $166 million – or down 0.7%
• Funding plans for municipal ambulance operations are down $95 million
• Funding for "Official Local Health Agencies" (largely for public health units) is down $156 million  or 13% 
• Cancer Treatment Services funding is down $65 million or 3.1%
• In contrast, planned funding for home care operations is up significantly: $404 million or 12%
• COVID health funding is up compared to last year's actual funding.  But take this with a grain of salt.  Last year the government only spent 58% of this line item and this year the government is on track to underspend the budget once again.  In the first quarter of 2022/23 it only spent 14.7% of this line item's budget. This funding "increase" may turn in to a funding decrease.
• Community Mental Health Services is up $270 million (27%) but this only brings that sector back to the funding level planned in the 2021/2 Budget. The sector's funding was cut $273 million in the 4th quarter of 2021/2 after funding levels fell short of the target in the first three quarters.  Notably, the sector's actual funding is off to a very slow start in 2022/3 as well.

Health sector (the ministries of health and long-term care) budgeted funding is up 2.9% overall from last year's actual spend -- that is up $2.17 billion.  Drugs and doctors will get more than $1.25 billion (or 58%) of that increase, however, and another $435 million extra is budgeted for COVID and Community Mental Health Services funding -- funding increases that have not actually been implemented in the first quarter.

Even if the increase was distributed evenly, 2.9% would not offset cost pressures -- which are way up beyond the normal 5.3% due to surging inflation.  

Much worse, it is incredible that the government's plan is to cut hospital and LTC funding when we are facing an unprecedented staffing crisis and high inflation.

 

If the Ford government gets its way, this will mark the end of the relatively large health care funding increases achieved by working people during the first two years of COVID. 

For example, even with the new-found stinginess of the 2022/23 Budget, the plan is to fund the health sector $75.6 billion -- almost $14 billion (22.5%) more than the original 2020/21 plan.   

The government is saying through the 2022/3 budget that those days of big increases are done -- and austerity is back.   We shall see if they get their way. Significant changes can also be achieved after the Budget -- the health sector received $2.3 billion (3.2%) more in 2021/2 than originally budgeted.  The public demands for public health care paid off, forcing the government to rethink its plans mid-year.  

Compounding this trend towards austerity is that actual funding in the first quarter for "'health services" (line item 1416-1, mostly for hospital services) was $200 million below the budget plan.  Not only do they plan to spend less, they are not even spending what they planned.  

For overall provincial program spending on healthcare and all other social programs, the province is on track to under-spend its Budget once again: the province under-spent its overall first quarter plan by 1.9% or $776 million.  The government has also established a huge $4.6 billion contingency fund that remains untouched.  Last year's $2 billion contingency fund was also completely unspent. 

Given that the government is dramatically underestimating its own revenue (see this note), we are on track for a significant reduction in the planned deficit  (barring the onset of an economic crisis). This would continue the trend.  Over the last two years the PC government has overestimated deficits by an astounding $57.3 billion, record miscalculations. 

This also means there is, at this moment, significant room to push program spending higher – just as community and labour very successfully did last year and the year before that.

Privatization: Independent Health Facilities ("IHFs" -- for-profit surgical and diagnostic clinics) saw a big funding increase from the government in the fourth quarter of 2021-2, increasing their actual funding to $66 million in 2021-2. Curiously, their planned funding has been drastically cut back to only $39 million in 2022-23.  This sits at odds with the government's intention of privatizing hospital surgeries.  It's far from clear what is going on - but something may be afoot. 

IHFs providing surgical services remain bit players in Ontario -- with perhaps 13 operators doing a tiny range of operations (abortion, eye surgery, plastic surgery).  The money is relatively small ($20.475 million funding reportedly in 2019/20).  They would have to step up their game considerably to be anything but marginal when public hospitals operate with a thousand times more revenue. 

So it is, perhaps,  notable that the Ontario Medical Association (OMA) has recently gone public with their plan to develop  a new clinic model to replace IHFs over five to eight years,  complete with new legislation.  

Their chosen name for these clinics -- "Integrated Ambulatory Centres" --  obscures the fact that  privatization inherently fragments care by creating different centres of control with their own, private interests. The OMA's suggestion that it makes little difference if the clinics are for-profit or not-for-profit sounds off.  And so too does the claim that private clinics can serve rural areas -- when private clinics famously focus on large urban centres where the money is.  

In my view, the OMA will not do itself, nor its profession, any favours if it becomes a backer (publicly or in the back rooms) of privatization.