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".

Comments

Popular posts from this blog

Ontario long-term care staffing falls far short of other provinces

CUPE and others are campaigning for a legislated minimum average of four worked hours of nursing and personal care per resident per day in long-term care (LTC) facilities.  New research indicates that not only is LTC underfunded in Ontario, it is also understaffed compared to the other provinces. 
LTC staffing falls short:  The latest data published by the Canadian Institute for Health Information (and based on a mandatory survey undertaken by Statistics Canada) indicates that staffing at long-term care (LTC) facilities falls far short of other provinces. 
Part of this is driven by a low level of provincial funding for LTC.





Ontario has 0.575 health care full-time equivalent employees (FTEs) per bed staffed and in operation.[1]  The rest of Canada reports 0.665 health care FTEs.[2] The rest of Canada has 15.7% more health care staff per bed staffed and in operation than Ontario.[3] 


No other province reports fewer LTC health care staff per resident (or per bed) than Ontario.[4]

Occupancy r…

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 than they have ann…

Health care funding falls, again

Real provincial government health care funding per-person has fallen again this year in Ontario, the third year in a row.  Since 2009 real funding per-person has fallen 2.6% -- $63 per person. 

Across Canada real per person funding is in its fourth consecutive year of increase. Since 2009, real provincial funding across Canada is up $89 -- 3.6%.
In fact the funding gap between Ontario and Canada as a whole has gown consistently for years (as set out below in current dollars).

Ontario funds health care less than any other province -- indeed, the province that funds health care the second least (B.C.) provides $185 more per person per year, 4.7% more.  
Provincial health care spending in the rest of Canada (excluding Ontario) is now  $574 higher per person annually than in Ontario. 

 Ontario has not always provided lower than average health care funding increases-- but that has been the general pattern since 2005.
Private expenditures on health care have exceeded Ontario government increases …