Canadian hospital funding now 25% more than Ontario funding

Provincial government per capita expenditures on hospitals continue to decline.  This is the third year of absolute decline according to Canadian Institute for Health Information (CIHI) data.

Of course hospital services are also affected by inflation, like other services.  One way to measure this is the total health care price index.   CIHI  reports the health care implicit price index over this three year period has increased by approximately 8.3% (160.9/148.6). That is equal to about 2.7% per year.

This inflation means the 2012/13 per capita hospital funding would have to increase to $1,534.95 in 2015/16 just to keep up with increasing health care prices.  Instead the government expended just $1395.73.

In other words, in three short years, the government has reduced real spending on hospital services by 9.1% per person ($1395.73/ $1534.95). If we considered the impact of an aging population on hospital costs (usually put at about 1% per year in extra costs), the real cut in funding would be in excess of 12% in 3 years.

Across Canada (including Ontario) provincial/territorial hospital funding continues to increase on a per person basis.  Over the same period, funding increased across Canada by $27.97 or 1.8%.  Not enough to set off inflation to be sure, but more than the 1.5 percent decrease in Ontario.   Of course Canada-wide average is powerfully  affected by Ontario.  So the rest of Canada excluding Ontario saw a 3.9% increase of $65.23 in hospital funding.

$	Canada Hospital	Ontario Hospital	TROC Hospital
2005–2006	1,138.74	1,111.69	1,159.43
2006–2007	1,217.65	1,177.95	1,247.23
2007–2008	1,283.57	1,230.78	1,321.68
2008–2009	1,360.87	1,291.74	1,410.25
2009–2010	1,430.05	1,333.31	1,496.70
2010–2011	1,515.58	1,368.71	1,613.66
2011–2012	1,549.05	1,405.52	1,645.36
2012–2013	1,577.46	1,417.31	1,684.46
2013–2014	1,587.17	1,409.70	1,704.93
2014–2015	1,599.12	1,402.00	1,729.07
2015–2016	1,605.43	1,395.73	1,749.69

The rest of Canada (“TROC”), excluding Ontario, spends $1,749.69 per capita. In other words, provincial and territorial governments outside of Ontario spend $353.96 more per person on hospitals than Ontario does. That is a whopping 25.3% more than Ontario. That is up 2% from the 23.3% gap in the previous year.  Ten years ago, in 2005-06 the gap was only 4.3%. 

In the past, Ontario closely followed Canada-wide funding patterns -- but Ontario has fallen quite a long way behind since the Liberals were elected in 2003 – and especially since the beginning of Liberal austerity in 2010. With hospital funding on a downward track in Ontario, that gap will continue to grow.

Does funding in other sectors make up for hospital under-funding? Funding for "other health care institutions" (e.g. long term care facilities) does not make up for the lack of spending on hospitals in Ontario. Quite the reverse.  Ontario currently (2015-16) funds 7.2% less than the cross-Canada average.

Overspending on physicians continues, currently at 2.5% more per-capita above the Canada-wide average.  This, however, is a marked improvement from the 12.5% gap that existed in 2008-9.  Indeed in the most recent year reported (2015-16) there was a modest decline in funding per-capita by Ontario on physicians.

Ontario also spends more than the Canada-wide average on drugs. 

 

Public health funding had been higher in Ontario for the last decade. But health care administrative funding is low in Ontario compared to Canada. 

Administrative funding has fallen in Ontario from 2.6% of total provincial health care funding in 1974/5 to 0.9% in 2015/16. Across Canada, administrative funding has declined almost as quickly, going from 2.6% to 1.1% over the same period.  

Low health care administrative costs is one of the main ways that public health insurance is more efficient than the  private health insurance system that dominates the USA, and this data suggests that Canada (and Ontario) are gaining even more benefit from this advantage.

Ontario also falls behind Canada in funding the “other health care” category (e.g. home care), funding 14.3% less than Canada as a whole   -- despite all the claims by the Ontario government about investing in home and community care. During the reign of the Liberal government, the gap in funding between Canada and Ontario has remained consistently large.

In total, after many years of closely tracking the health care spending of other provincial governments, Ontario government health care funding is now falling quite far behind the Canadian average – with the the other provincial and territorial governments funding health care 12.7% more per person on average. And the gap is growing. 

Ontario health care under-funding is primarily driven by under-funding of hospitals, which accounts for 75% of the under-spending ($353 dollars out of $475). Indeed, total health care under-funding has grown in tandem with the decline in funding for hospitals in recent years.

  

The province of Ontario spends more on drugs,  doctors, and public health, but less on “other health institutions,” health care administration, health care capital projects, “other health care,” and, especially, hospitals.  

For the numbers click here.

Photo: Douglas Sprott