How Ontario public sector health care funding lags behind

The Ontario public sector spends less than almost all other provinces on health care.  And it's falling further behind.  

Over the most recent four years per capita spending increased 9.7% across Canada, but only 5.2% in Ontario.  With this, the Ontario public sector spends less per person than any other province except Quebec. 

Ontario and Canadian per capita public sector health care spending in current dollars

Ontario public sector spending equaled $3,952 per person in 2013, but the all-Canada average was 6.3% (or $248) higher, at $4,200 per person, according to a new report from the Canadian Institute for Health Information (CIHI). 

Heading for the bottom: Quebec, alone, does spend slightly less than Ontario: $8 per year per person less.  But even that is changing.  In 2010, Quebec spent 7% less than Ontario, now they spend less than a quarter of a percent less.  

With  a policy of real cuts in Ontario,  per capita public sector spending on health care has gone up more quickly in Quebec than Ontario for the last five years.    In 2013 it increased 2.8% in Quebec but only 0.5% in Ontario.  

With official plans for many more years of austerity in Ontario, we will soon have the dubious honour of having the lowest public sector health care spending in Canada.

Expenditures in Ontario and Canada: Ontario public sector health expenditures were forecast to be up 1.8% in 2012 and 1.7% in 2013. This is a-third less than the Canada-wide averages of 2.7% and 2.5%. 

This despite the fact that population growth and population aging drive up health care costs more quickly in Ontario than Canada as a whole: 2.1% per year in Ontario, but only 1.6% in Canada as a whole.

Public sector health care expenditures in Ontario are not keeping up with the new costs associated with population growth and population aging -- never mind the impact of inflation or increased demand. 

Hospital funding low, but drug and physician spending is high: Total Ontario public and private spending on hospitals is less than any other province except Quebec: 5.5% or $97 per person less than Canada as a whole.  Ontario also spends less on “other institutions” (e.g.nursing homes) than all other provinces except BC and Alberta. 

But we spend more on drugs and physicians. 

Canada as a whole spends much more on drugs and doctors than other developed nations:  69% more per-person for doctors and 52% more for drugs than the OECD average according to CIHI data. 

As a result, Ontario is a world "leader" for high costs in those areas. Another dubious honour. 

2013	Hospitals		Drugs		Physicians		Other Professionals		Other Institutions
Total Expenditure	Exp. per Capita	Exp. as Percentage of Provincial Total	Exp. per Capita	Exp. as Percentage of Provincial Total	Exp. per Capita	Exp. as Percentage of Provincial Total	Exp. per Capita	Exp. as Percentage of Provincial Total	Exp. per Capita	Exp. as Percentage of Provincial Total
N.L.	2,597	36.4	1,020	14.3	927	13	480	6.7	891	12.5
P.E.I.	1,972	31	944	14.9	765	12	486	7.6	906	14.3
N.S.	2,011	30.9	1,080	16.6	818	12.6	653	10	874	13.4
N.B.	2,146	33.1	1,181	18.2	789	12.2	532	8.2	747	11.5
Que.	1,466	26.5	1,068	19.3	788	14.2	476	8.6	769	13.9
Ont.	1,676	28.7	1,010	17.3	942	16.1	568	9.7	601	10.3
Man.	1,942	29.3	879	13.2	899	13.6	624	9.4	808	12.2
Sask.	1,892	28.6	880	13.3	911	13.8	640	9.7	796	12
Alta.	2,379	35.1	933	13.7	986	14.5	773	11.4	519	7.7
B.C.	1,750	30.3	761	13.2	844	14.6	742	12.8	370	6.4
Y.T.	2,951	29.6	716	7.2	905	9.1	600	6	1,797	18
N.W.T.	4,238	39.7	719	6.7	1,186	11.1	651	6.1	837	7.8
Nun.	4,502	34.2	704	5.4	1,450	11	566	4.3	1,274	9.7
Canada	1,773	29.6	977	16.3	889	14.8	597	10	632	10.5

Private payment:  Ontario already has the even more dubious honour of having the largest portion of private health care spending: 32.3% of all health care spending compared to a Canada-wide average of 29.9%.  

That's part of the price of lower public sector spending in Ontario. 

While the percentage of private payment is highest in Ontario, households across Canada are spending an ever-increasing percentage of their total household income on private health care, Statistics Canada reports.  While private health care spending is taking up a bigger part of the income of all incomes levels, it is especially hitting middle and low income households:

Percentage of households with out-of-pocket expenditures on health care more than 5%
of total household income, by household income quintileNote

Household income quintile	Year
	1997	1999	2001	2003	2005	2007	2009
	%
Q1 (lowest)	26	29	30	33	34	37	37
Q2	30	33	35	37	38	39	36
Q3	23	25	26	30	30	29	31
Q4	16	19	19	21	22	22	19
Q5 (highest)	10	9	10	13	13	13	14

A new report from Stats Can notes that between 1997 and 2009 private health care payments went up 63% for lower income households, but significantly less for higher income households.  By 2009, out-of-pocket health care expenditures represented 5.7% of the total after-tax income of lower income households but only 2.6% for upper income households.  Between 1998 and 2009, the percentage of households spending more than 10% of their total after-tax income on health care rose by 56%.     

Private insurance is expanding very rapidly: The three main components of out-of-pocket health-care expenditure are:

• Dental services ($380 reported per household in 2009).
• Prescription medications ($320 per household in 2009)
• Insurance premiums ($650 per household in 2009).

Of these three main categories, payments to insurance companies increased the most rapidly. Over more than two decades, private health insurance payments per household increased from $139.40 in 1988 to $686.30 in 2011.

That's an eye-popping 7.2% annual growth over more than 20 years, according to CIHI.

And again, private health insurance expenditures affected different income levels differently.  The Stats Can report indicates that payments increased 80% to 90% for households with low to medium income between 1997 and 2009, but only 52% for households in the top fifth of incomes.

This data suggests private health care payments are going mostly to giant insurance and pharmaceutical corporations -- and  that they are hurting working people the most.  That is also part of the price of low public sector health care spending in Ontario.

The CIHI report on health expenditures is available by clicking here.

Photo: Dominion of Canada one Dollar banknote of 1898, Wikimedia Commons