SUMMARY: Five Things to Look for in Tomorrow’s “Health Budget”

By Dan Carbin, Principal at Santis Health

Tomorrow, Ontario Finance Minister Charles Sousa will table the government’s penultimate budget before the next provincial election in June 2018. While the 2018 budget is widely expected to include a host of new spending commitments and dovetail with the Liberal Party’s re-election sales pitch, the 2017 budget is shaping up to be more defensively minded and focused squarely on neutralizing health care as a potential electoral liability in 2018.

In recent months, the government has come under increasing scrutiny for its handling of the health file. Hospitals have been warning with increasing resonance that years of sub-inflationary investment is leading to ER backlogs, stretchers in hallways and over-crowded wards. Doctors are engaged in a divisive and prolonged dispute with the government over fees. CCACs in some areas of the province have been forced to dramatically increase home care wait lists in response to surging demand and constrained budgets. Patients are complaining to the media about cancelled elective surgeries and long wait lists for long-term care placement.

It is an oft-repeated axiom in Canadian provincial politics that parties don’t win re-election due to their handling of the health file. Parties certainly get voted out, however, if the public believes that they have mismanaged the health care system. With the 2017 Budget, the Liberals will be looking to address that risk head-on. Sources suggest that the Budget is squarely focused on investment in new health care programs and services to improve access to care. The ultimate goal is to take health care off the table as an area of political risk in 2018, and bolster the Liberal Party’s credibility as a “defender of public services”.

While full details of the budget plan will become clear on Thursday afternoon, stakeholders have been actively speculating for weeks about what to expect. Sources suggest that the system can expect movement in the following areas:

1. Health spending will inch up, perhaps signalling an end to the era of strict cost containment.

Over the past five years, as the government focused on returning the province to a balanced budget, health care spending growth was squeezed to just over 2% annually. As the government’s own Fiscal Accountability Office (FAO) has reported, such a level is insufficient to simply maintain access to care in the face of an aging population and growing demand for care. In fact, the FAO projects that spending would have to increase by an average of 5.2% annually for current standards to be maintained.

While no one expects the government to table a budget with over 5% health spending growth, there are suggestions that spending will finally inch back up over 3%. While this is incredibly modest in the historical context – the FAO points out that spending averaged 7.2% per year between 2005-06 and 2009-10 – it does, perhaps, signal the end to five years of singular focus on cost containment.

2. Hospitals will receive a base budget increase and targeted funding to address capacity problems.

Hospitals have been warning, loudly, for months that without targeted new investments they will be forced to close beds, cut back on elective procedures and reduce service levels. Already, the province has the fewest number of hospital beds per capita in the country. Premier Wynne has already signaled to the media that more funding is on the way for hospitals in the budget. The acute sector is anticipating both an increase in overall hospital base budgets and targeted investments to relieve over-crowding (particularly in the GTA) and ALC pressures in a number of communities.

3. There will be new investments in primary care.

In 2014, the Liberal Party platform included a commitment to ensure that every Ontarian has access to a family care provider. There is still more work to be done in this area. There are strong suggestions that Budget 2017 will include a host of measures to expand the capacity of inter-professional primary care teams like Family Health Teams (FHTs), Community Health Centres (CHCs) and Nurse Practitioner led clinics.

4. The Budget will reveal next step in the government’s strategy to shift care to the community.

The Health Accord that Ontario recently signed with the federal government commits an additional $2.3B over 10 years for investments in home care. While this is a drop in the bucket in terms of the overall health spend (around 0.5% boost in overall funding over that period), it is significant for the home and community sector. Just yesterday the government announced that it would be expanding support for caregivers an investing $20 million more per year in respite services. Budget 2017 is expected to provide more clarity on the government’s overall home and community investment strategy. The plan may also reveal details regarding the next step in the government’s plan to recruit and retain Personal Support Workers (PSWs).

5. The Budget may expand access to the Ontario public drug plan.

Ontario Health Minister Hoskins has advocated loudly and consistently for a national pharmacare program, but has done little to date to expand universal access at the provincial level. The Ontario NDP recently announced their plan to introduce a provincial pharmacare program if elected in 2018. This move appears to have caught Hoskins and the Liberal government off guard. While the 2017 budget is not expected to contain a universal pharmacare program to match the NDP pledge, there are rumblings that the government could make targeted investments to expand access in areas like cancer drugs for children. Some sources suggest that the government is also considering further cuts in generic drug pricing to support the listing of new medications of the provincial formulary. There are also rumours that the Budget will pave the way for an expanded role for pharmacists.

Of course, speculation and conjecture abounds prior to any budget. The real picture will become much clearer after 4 p.m. tomorrow when Ontario Finance Minister Charles Sousa formally tables the budget.