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Hospital funding increase: more than it appears

The headline remains the same as last year's: hospital funding will increase 1.5% in 2011-12.  But buried in Table 20 of Chapter II  of the Ontario Budget is the fuller story: total hospital funding is expected to increase 4.7%.

TABLE 20. Selected Expense Risks and Sensitivities
Program/Sector2011–12 Assumption2011–12 Sensitivity
Health SectorAnnual growth of 4.3 per cent.One per cent change in health spending: $476 million.
Hospitals' Sector ExpenseAnnual growth of 4.7 per cent.One per cent change in hospitals' sector expense: $212 million.
Drug Programs UtilizationAnnual growth of less than 4.8 per cent.One per cent change in program expenditure of all drug programs: $43 million (seniors and social assistance recipients).
Long-Term Care Homes77,800 long-term care home beds. Average Provincial annual operating cost per bed in a long-term care home is $48,300.One per cent change in number of beds: approximately $38 million.
Home CareApproximately 20 million hours of homemaking and support services.
Approximately 8 million nursing and professional visits.
One per cent change in hours of homemaking and support services: approximately $6 million.
One per cent change in nursing and professional visits: approximately $6 million.

The 1.5% increase that the media highlights refers only to the "base" (or "global") hospital funding increase. Sadly, the government has moved away from funding hospitals through global funding increases, preferring instead to dole out special surprise funding announcements throughout the year, with lots of local media attention.

In fact, by far the largest part of hospital funding will come through these one-off  announcements to local media.  That will play especially well during an election year.

Look in particular for announcements bailing out hospitals with big debts.  The government announced  in Chapter I of the Budget that it will set aside $600-$800 million over the next three years for that purpose.  This alone should amount to somewhere between a 1 % and a 1.3% increase in total hospital funding in each of the three years - almost as much in each year as the 1.5% global funding increase announced for this year.


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