When it comes to
provincial budget season, Ontario’s health sector invariably will lobby for
more funding. As part of the string of
posts I have been doing on health care spending in Ontario starting in November
dealing with the four “ages” of Ontario spending, I want to explore the case
for more funding for one aspect of the Ontario health care system in particular
– hospitals. In the lead up to the 2020
budget, the Ontario
Hospital Association has made the case that with Ontario’s aging and
growing population, there are too many patients waiting for beds. Given that Ontario spends less per capita than
any other provincial government in Canada, it needs this year an increase of $922
million for hospitals – a 4.85 percent increase – simply to maintain access.
While the shortfall
compared to other provinces is a good point, the case for hospitals is evident
even if one looks at Ontario hospital funding on its own. Figure 1 plots both nominal and real (in
$2019) per capita hospital spending in Ontario from 1975 to 2019 using data
from the Canadian Institute for Health Information’s National Health Expenditures
(NHEX) database. Real per capita nominal
spending has grown from $210 in 1975 to reach a peak of $1,494 in 2019. This may seem impressive until one adjusts
for inflation and reveals an increase from $1,118 to $1,494 instead. Indeed, real per capita spending has
essentially declined since 2010 when it peaked at $1,583. In other words, Ontario hospital spending has
not kept up with the combination of both inflation and population growth since
2010 and has actually declined by 6 percent.
Things look even worse
when you look at the average annual growth rate of real per capita spending
that compares hospitals to the other categories as done in Figure 2.
The capital category – which of course means
new or expanded facilities such as hospitals and long-term care homes as well
as equipment has dropped on average -4.8 percent annually. So much for all of that infrastructure money
at both the federal and provincial levels.
Where has it gone is a good question.
After capital, the next largest declines average annual declines are for
other professionals at -2.3 percent (i.e., provincial funding for things like
eye exams are a factor here), hospitals
at -0.6 percent and then other institutions – which include mainly long term
care homes. The increases are for
physicians, drugs, and most dramatically public health, administration and “other
health spending” which includes things like home care services.
Institutional care in
Ontario – namely hospitals and long-term care – are one area that needs some
spending revitalization (including both capital and operating spending) if
there is to be any hope of dealing with both rising costs, as well as the greater
service demands from a population that is both aging and growing.
