The Progressive Conservative government has justified its health restructuring plans with the claim that administrative expenses are much higher in Ontario than in Canada.
When introducing the reforms, health minister Christine Elliott claimed, “Over the last five years, Ontario has spent 30% more than the Canadian average in administrative expenses on its health care system.”
Elliott did not indicate her source of information. Presumably, however, the Progressive Conservatives are referring to the CIHI simplified and user friendly “Your Health System” graphs. Those graphs show “administrative expenses” in Ontario at 5.8% in Ontario while it is 4.5% in Canada.
This CIHI measure is actually fairly narrowly defined. It is the percentage of “the legal entity’s” total expenses associated with the administrative, finance, human resources and communications functional centres.
However “the legal entity” used for this estimate is [1] only for certain types of health care providers, and [2] uses a different type of health care provider in Ontario than in other provinces. Indeed, “the legal entity” is much more narrow in scope in Ontario than elsewhere.
As CIHI notes as a caveat and limitation for this report: “The indicator is calculated at the legal entity level. For most jurisdictions, this is the health region. However, for Ontario and Yukon, the legal entity is the hospital, and for Quebec, the établissement is the legal entity.”
So this is not a comparison of apples to apples.
It’s hardly surprising that an organization that provides a range
of health services (such as a regional health authority) would spend a smaller proportion of its budget on administration, finance, human resources, and communications than an organization that provides only one service, especially if that organization is a small hospital, as many are in Ontario. For regional health authorities, the finance, HR, communication, and administrative departments may serve hospital, home care, long-term care and other health care sub-sectors. As well, the geographic scope of the regional health authorities is also much larger — sometimes the entire province.
of health services (such as a regional health authority) would spend a smaller proportion of its budget on administration, finance, human resources, and communications than an organization that provides only one service, especially if that organization is a small hospital, as many are in Ontario. For regional health authorities, the finance, HR, communication, and administrative departments may serve hospital, home care, long-term care and other health care sub-sectors. As well, the geographic scope of the regional health authorities is also much larger — sometimes the entire province.
But even if this was a comparison of like to like, there are reasons to doubt its significance.
The more significant measure is not what is spent on administration, but what is spent overall — and overall Ontario spends considerably less than any other province on hospitals. So for example, here’s CIHI’s report on the cost of a standard hospital stay in Ontario and the other provinces:
Cost of a standard hospital stay 2016-17. Source: CIHI
The difference between Canada as a whole and Ontario is over $600 per standard hospital stay.
On a per capita basis, the other provinces spend about $400 more on hospital services than Ontario does. That is about 28% more than Ontario spends.
Moreover, given that the rest of Canada spends so much more on hospitals than Ontario does, the 4.5% spent on administration means that they spend about the same dollars per capita on hospital administrative expenses as Ontario hospitals that spend 5.8% of total expenses.
As well, its not clear the PC reform will reduce the proportion of hospital budgets spent on administration as the new administrative structure proposed in Bill 74, the Integrated Care Delivery System (ICDS or “Health Team”), will add an extra layer of administration for hospitals.
Finally, the “Your Health System” indicator is not a measure of administration costs for the health care system as a whole (as Christine Elliott suggests), but rather only for the hospital, the health authority, or “établissement” (depending on the province).
CIHI however does provide a figure for provincial spending on “administration” for health care as a whole through the more detailed data charts supplied with its National Health Expenditure Trends 1975-2018. There we see that Ontario actually spends an almost identical proportion on health administration as Canada as a whole. CIHI reports them both as 1.0% of total provincial health spending in 2018 — and also reports that in recent years Ontario spent 0.9%, while Canada as a whole spent 1.0% or 1.1%.
Finally, the “Your Health System” indicator is not a measure of administration costs for the health care system as a whole (as Christine Elliott suggests), but rather only for the hospital, the health authority, or “établissement” (depending on the province).
CIHI however does provide a figure for provincial spending on “administration” for health care as a whole through the more detailed data charts supplied with its National Health Expenditure Trends 1975-2018. There we see that Ontario actually spends an almost identical proportion on health administration as Canada as a whole. CIHI reports them both as 1.0% of total provincial health spending in 2018 — and also reports that in recent years Ontario spent 0.9%, while Canada as a whole spent 1.0% or 1.1%.
In other words, thePC claim is misleading — at best, while another measure of administrative spending suggests that Ontario spends about the same as other provinces.
Administrative costs are, of course, much higher for privately funded health care. The latest figure reported by CIHI for private sector expenditure is that 4.5% is spent on administration in Ontario, and 5.3% is spent across Canada as a whole. If the province spent 4.5% of its health budget on administration as defined here, administrative costs would go up $2.05 billion. We can’t afford privatization.
Comments
Post a Comment