Little change in course for health care – more restraint ahead

Like the rest of the budget, Ontario Finance Minister Charles Sousa did little to change the course of last year’s austerity budget with regards to health care.

One thing is certain – health care is gradually shrinking as a percentage of program spending by government contrary to the hysteria by anti-Medicare advocates. This year it’s projected to be 41.8 per cent of what the government spends on programs and services. Just two years ago the government was talking about spending 46 cents of every program dollar on health care and the media were regularly rounding it up to half the Ontario budget.

In dollar terms, health care gets $1.3 billion more over last year, moving it up to a total of $48.9 billion in spending. That’s about $300 million more than was forecast in 2012. The bad news is the government left $560 million of last year’s health budget unspent, much of it in the hospital sector where job and service cuts are becoming increasingly common.

If the government had been budgeting for inflation (1.2%) population growth (1%) and the effects of aging (1%) health care would need an absolute minimum of $1.52 billion more simply to stand still. That may even be a bit low – health care costs generally rise a bit faster than general inflation. Drug costs, for example, are expected to rise by 5.4 per cent next year.

No matter how the government shuffles the deck, that means continuing austerity for health care.

Most of the additional money will end up in home and community care, the Toronto Star reporting this morning that these sectors will receive a 6 per cent increase to a combined $4.5 billion share of the budget. That’s up from the 4 per cent these sectors were given last year. The government is reiterating its plan for three million more hours of personal support-worker care over three years, widening the proportion of support to clinical care provided by the CCACs. As we noted early this week, actual clinical care provided by the CCAC has been in decline for some time.

Surprisingly, spending will slow in the long-term care sector. Last year the sector was given a 2.8 per cent increase. This year they will only have 2 per cent to work from. However, there will be 250 more short stay beds in the sector to accommodate up to 1,500 alternate level of care patients from Ontario hospitals.

On the other hand, hospitals will have to make do with a continuing freeze on base budgets. That won’t mean hospitals will receive no increases – targeted spending for wait times procedures and other initiatives will average out to a 1.7 per cent increase.

Deb Matthews calls that hospital restraint deliberate and part of the plan to shift more patient services to community-based providers (as if hospitals somehow didn’t exist in communities). However, when we look at the type of cuts taking place in hospitals, there is little chance that these services are going to wind up at a Community Care Access Centre any time soon. For example, in this morning’s Toronto star the president of The Scarborough Hospital medical staff association says the hospital is planning to close two operating rooms, a surgical wing with up to 20 beds and several outpatient clinics.

The budget does give us a clue as to where the next round of contracting out is coming. The government plans to shift from hospitals a range of routine procedures, “including colonoscopies, dialysis and vision care.” Matthews maintains these will go to not-for-profit clinics.

Despite the small amount of extra cash, multi-year projections for average increases in health care spending have dropped slightly from 2.1 per cent per year over three years to 2 per cent. Last year’s increase was 2.45 per cent.

While the government deficit projections came in $5 billion below forecast for 2012-13, Sousa might as well have winked at us in predicting a $11.7 billion deficit for the coming year. This is the annual con game to make us believe such levels of austerity are necessary.

With low-interest rates on government borrowing, the $9.8 billion deficit will only add modestly to interest costs, adding about $230 million to a budget of $127.6 billion. Total government expenses are expected to rise by $3.6 billion. This hardly strikes us as a reason to panic given the deep recession Ontario is digging out from.

Toronto Star columnist Thomas Walkom notes that the Premier, “like her predecessor Dalton McGuinty, has drunk the metaphorical Kool-Aid of the right, insisting that the only way out of economic slump is to balance Ontario’s budget by 2018.”

Other Comments:

“The government has again failed to commit to creating a comprehensive health system capacity plan, or provide hospitals multi-year funding planning information. Hospitals need this kind of planning and information to ensure coordinated health system planning and sound decision-making, particularly in an environment where funding increases will be flat or minimal for the foreseeable future. Planning and information sharing is vital to creating a system where Ontarians get the health care they need, when they need it, in the most efficient way possible.” — Ontario Hospital Association

“CCACs are not just serving more people, they are increasingly serving more vulnerable and complex patients with higher care needs.  Many patients already receive care in less than 5 days.  With this  investment we will be able to achieve this target with even more people.” — Ontario Association of Community Care Access Centres.

“The government’s continual claims that hospital cuts are offset by increases in home care are demonstrably false. Home and community care funding increases, while welcome, are not sufficient to meet existing backlogs. Neither are the services commensurate (you don’t treat a heart attack in home care for example), nor are they sufficient to deal with downloading and offloading of hospital patients.” — Ontario Health Coalition

3 responses to “Little change in course for health care – more restraint ahead

  1. The health care system in Ontario is horribly inefficient. There would probably be enough money to deliver exceptional care if money wasn’t wasted repeating tests or imaging that had just been done a week or two prior, but it was ordered by the patient’s family doc instead of the attending ER doc, so they order it again so the technician at the hospital gets another billing. This kind of nonsense is rampant in our system, and that is one of the main reasons it is no longer working. Then there are the people who take their kid into the ER because they have diaper rash or they need stitches removed. People, that is what the walk-in clinic is for, not the emergency department!

  2. It is a bit much to say the system isn’t working — the data just doesn’t support that. But it’s true there are major inefficiencies in the system. Just look at home care — which is getting the biggest increase. Money starts at the Ministry, flows to the LHIN, which flows to the CCAC, which flows to the agencies (most of which are for-profit) and often flows again to individual care providers who are working not as salaried employees of these agencies, but as their own contractors. Now the Ministry even wants to add a new layer to this mess by creating new care coodinators at the agency level. The mind boggles.

  3. Health care is a very important issue and neglecting it or say diverting attention from it is certainly not a step that can be expected from the government at-least. It would be better to give equal importance so the population can give perfect output in a healthy way.

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