Skip to main content

For-profit sectors drive up health care expenditures

Expenditures on hospitals saw some of the smallest increases in public sector health care expenditures over the last decade, according to a 2011 report from the Canadian Health Services Research Foundation (CHSRF).  

In contrast, health services from the sectors dominated by for-profit corporation (drugs and capital expenditures) saw the highest expenditure increases.  In fact the real per capita annual percentage increases for these two sectors were about double the increases for the hospital sector. 

Compound annual growth rates of real per capita public sector health care expenditures, 1999 to 2009, Canada
Use of funds                                                      Compound annual growth rate
Total health                                                                        4.13%
Hospital care                                                                      3.41%
Other institutions                                                                 2.45%
Physician care                                                                     4.30%
Other professionals                                                            -0.82%
Drugs                                                                                  6.32%
Capital                                                                                7.35%
Public health                                                                        5.77%
Administration                                                                     4.05%
Other health spending                                                          4.62%
Source: Research Synthesis on Cost Drivers in Health Sector and Proposed Policy Options, (chart 2.1), February 2011,CHSRF Series on Cost Drivers and Health System Efficiency  (2009 figures forecast)

In Ontario, the annual growth rate for hospitals was smaller still at 2.7% (the second lowest in Canada). 

What remains unclear is the health benefit the rapidly rising expenditures on drugs and capital provide.  Part of the increased costs for drugs and capital is for technological innovation (e.g. new drugs or new capital technologies like MRIs).  Here’s what the CHSRF report says on technological innovation:

In the context of rising public healthcare spending, an important question is whether increased expenditures generated by technological innovation are associated with positive net benefits. Some studies suggest that there are not many opportunities for productivity improvements, such as increased use of ambulatory surgery or reduced length of stays in hospital.  Therefore, measuring the costs and benefits of medical technologies is essential in evaluating technological change and assessing the productivity of medical care.

The report recommends "instituting a wider use of health technology assessment at all levels".
Labels:

Comments

Post a Comment

Popular posts from this blog

Ford government fails to respond to 72% increase in COVID inpatient days, deepening the capacity crisis

COVID infections continue to drive up hospital costs and inpatient hospitalizations in Ontario. For the most recent fiscal year (April 1, 2022- March 31, 2023) hospital stays related to COVID cost $1.221 billion, according to new CIHI data.   This is about 4% of total hospital spending, creating a very significant new cost pressure beyond the usual pressures of population growth, aging, inflation, and rising utilization.   Costs for COVID related hospitalizations increased 22.2% in Ontario in 2022/23 from the previous fiscal year, rising from $999 million to $1.221 billion.  That rise is particularly notable as the OMICRON spike of late 2021 and early 2022 had passed by the the 2022/23 fiscal year.   The $222 million increase in COVID hospitalization costs came in the same year as the Ford government cut special COVID funding and, in fact, cut total hospital funding by $156 million.     In total, there were 60,653 COVID hospitalizations in Ontario in 2022/3, up from 47,543 in 2021/2. 
Post a Comment
Read more

More spending on new hospitals and new beds? Nope

Hospital funding:  There is something off about the provincial government's Budget claims on hospital capital funding (funding to build and renovate hospital beds and facilities).    For what it is worth (which is not that much, given the long time frame the government cites), the province claims it will increase hospital capital spending over the next 10 years from $11 billion to $20 billion – or on average to about $2 billion per year.   But, this is just a notional increase from the previous announcement of future hospital capital spending.  Moreover, even if we did take this as a serious promise and not just a wisp of smoke, the government's own reports shows they have actually funded hospital infrastructure about $3 billion a year over the 2011/12-2015/16 period. So this “increase” is really a decrease from past actual spending. Even last year's (2016-17) hospital capital funding increase was reported in this Budget at $2.3 billion - i.e. about 15% more th
Post a Comment
Read more

The hospital crisis: No capacity, no plan, no end

While Canada has achieved universal public healthcare coverage, that does not mean conservative forces have given up trying to erode that coverage and expand corporate care where it does not currently exist. The battle has become particularly intense in Ontario under the Ford Progressive Conservative government, which is implementing serious cuts to the level of care and moving to bring in for-profit mini-hospitals. Inadequate Staffing.   Less and less of hospital spending is on staff.   Employee compensation as a share of hospital expenditures has consistently shrunk in Ontario. This is not some immutable law of hospital development.  It is in stark contrast with the rest of Canada, where compensation has become a larger share and now accounts for 67.1%. Hospitals in provinces other than Ontario now have 18 percent more staff per capita than hospitals in Ontario. Overall, if Ontario had the same staffing capacity as the other provinces and territories, there would be another 33,778 full t
Post a Comment
Read more