Ontario’s public health care system is once again making headlines – this time with respect to emergency room waits. In the GTA, wait times in emergency rooms can be six to eight hours while in some smaller centres in Ontario you cannot even get an emergency room physician. Hospitals in general appear to be at 100 percent capacity or more and it is not just a bed shortage but also a staffing shortage. Growing and aging populations, continued COVID-19 admissions as well as treatment for long-COVID and not to mention the surgical backlog from procedures cancelled during the peak COVID waves and one begins to see alarming strains on a system that was already strained pre-pandemic. All of this does not even consider what has been happening in long-term care. And of course, a rather large chunk of Ontarians still does not have a family physician even though we now have more physicians per capita than we did a decade ago.
Of course, looking ahead one begins to see that Ontario’s health care spending by the provincial government – already amongst the lowest in per capita terms amongst Canada’s provinces – is not going to improve anytime soon. Indeed, if one looks at the spring 2022 Ontario budget, makes some projections for population growth and inflation, one sees that by 2025, real per capita Ontario government health spending will be where it was in 2019 just before the pandemic. Moreover, that spending in real per capita terms was essentially flat since the end of the Great Recession circa 2010.
Figure 1 provides some evidence. Real per capita spending from 1975 to 2021 is calculated from the most recent edition of the Canadian Institute for Health Information’s 2021 National Health Expenditure Release. Another series for 2021 to 2025 is calculated from the Ontario Spring 2022 budget with the numbers assuming inflation of 2.5 percent annually until 2025 and population growth of 1.2 percent. The money is inclusive of COVID-19 support spending with 2021 marking an interesting break point depending on whether you use the CIHI estimates for 2020 and 2021 or the Spring 2022 budget medium term fiscal plan numbers that start in 2020-21.
For 2021, the CIHI has Ontario provincial government health spending forecast at $75.2 billion (including COVID-19 supports) and $71.7 billion excluding them. On the other hand, the Ontario spring 2022 budget says base health care spending for 2021 (fiscal 2020-21) will be $64.4 billion with COVID-19 limited time funding at $19.1 billion bringing us to a total of $83.5 billion. There have been issues with what the provincial government has said they would spend on COVID-19 and what they actually have.
No matter, combining the numbers and going forward to 2025, real per capita provincial government spending including COVID-19 spending (in $2020 dollars) was $4,523 in 2019 and in 2021 reached $4,987 using the CIHI numbers and $5,538 using the 2022 Ontario spring budget numbers. Spending on health in Ontario did rise dramatically during the pandemic - it is just a question of by how much. The provincial budget then shows base spending in health rising to $78.3 billion by 2025 (up from $64.4 in 2021) while COVID-19 spending declines to $12 billion in 2022, $6.9 billion in 2023 and then is zero afterwards. So, by 2025 real per capita provincial government health spending will be $4,486 dollars – down from $4,523 in 2019. From 2010 to 2025, real per capita provincial government health spending will have grown from $4,388 to $4,486 – an increase of 2.2 percent spread out over 15 years – annual growth of just over one-tenth of one percent.
How can the Ontario government increase health spending by billions of dollars more and yet spending per person is essentially flat for a fifteen-year period? The spending on health has essentially not kept up with inflation, and population growth as well as given the additional demands being made for new drugs and treatments and an aging population. Moreover, compensation has grown in the health sector – with additional payments during the pandemic – and the fact is that despite all these demands for additional in real terms we will be spending the same amount per person that we were fifteen years ago.
From a historical perspective, flat real per capita health
spending appears to be a new era given the increases of 1975 to the early 1990s
and then the late 1990s to about 2010.
Real per capita spending fell from about 1991 to 1996 in Ontario as the
federal fiscal crisis led to a reduction in transfer payments. The last fifteen years are in a league of
their own when it comes to trends. Not
automatically spending more every year and keeping up with inflation and population
growth means that the health care cost curve that everyone was worried about as
being unsustainable has been sustainable for over a decade now – once you
factor out the effects of the pandemic. In some ways, one might claim this as a success story unless of course you are in an ER waiting for a bed.
At the same time, keeping spending per capita constant means that over time more and more difficult choices will need to be made as the population ages, labour shortages worsen, and new treatments clamour for funding. And remember that per capita spending has been constant, but Ontario already ranks pretty much as the bottom of several health resource indicators including hospital beds per capita and spending per capita.
There is no immediate way out of this. How to get more resources into the
system? You can raise taxes and spend
more – an unpopular solution especially now during a time of inflation and
rising costs. You can spend less on other things such as education, social
services, transportation, and other government services and spend more on
health. This will of course generate
political winners and losers in the government funding sweepstakes and generate
as many unhappy campers as happy campers.
Governments generally like to keep as many campers as possible happy
unless they happen to be considered an inconsequential voting bloc. Just ask families with one stay at home parent when it comes to tax treatment by the income tax system.
You can delist services currently being provided by the Ontario public health care system and transfer them onto the public as private spending which will provide more money to spend on the remaining public services. However, this always seems to be forbidden territory in Canadian public health care despite it being a feature of other public health care systems we sometimes hold up as models – namely western Europe - and is therefore done incrementally. Over the years, Ontario has delisted certain services but always on a piecemeal basis rather than part of a comprehensive reform package to contain the political fallout. It also remains that Ontario already has the largest private financed share of health spending in Canada at about 66 percent.
You can try to reform the current system to make it more “efficient” but short of delivering a pay cut it is hard to see how much more efficient you can get after fifteen years of standing still in per capita terms. Sure, there are some efficiencies from reorganizing and implementing new technology or changing payment systems for health professionals or having physicians take on more patients but that will take more money in the short term and as the aftermath of the Romanow Report shows, more money for transformative change does not always get you the change you were looking for.
As a result, it is unlikely that we will see any dramatic changes or improvements to Ontario’s public health care system. Any changes will likely be a short-term response to an immediate problem driven by which affected parties scream the loudest. Right now, its emergency services but next week it might be driven by headlines in another long-term care home or perhaps a flare-up of monkeypox. Firefighting driven by the media focus of the moment is not the way to deal with long-term public policy but that seems to be the world we live in. With a four-year majority mandate and a collapsed opposition, this might be a window of opportunity for more dramatic change in Ontario health care but don’t count on it. All governments are inherently conservative when it comes to change. No pun intended.