Ontario Financial Accountability Office (FAO) reports that the nominal increases in health care funding planned by the government PC of Doug Ford between 2019-2020 and 2029-30 are well below the nominal increases of the previous nine years (2010-2011 to 2019-2020, the period of public sector austerity that followed the last recession).
Indeed, the increase planned over time (between this year 2021-2022 and 2029-30) being only 2% per year, we are considering a much more severe austerity than the period 2010-11 to 2019-20, when funding increased by 3.2% per year.
As the FAO notes, the health care austerity imposed in 2010-2020 “included a number of significant spending restraint measures, including: freezing core hospital operating funding from 2012-2013 to 2015-2016; reduce physician pay rates in 2013 and 2015; and limit investments in new long-term care beds, with only 611 new beds created between 2011 and 2018. ”
This time around, the plan is to impose tougher austerity in the meantime, the addition of tens of thousands of new and redeveloped LTC beds and the increase in LTC staffing per resident by (approximately) 40%.
Significant drop in real wages
Another aspect of the spending restraint over the period 2010-2020 was a significant reduction in the real wages of hospital workers, with general wage increases lower than inflation. For comparison, this chart also includes annual average wage settlements in the private sector and the broader provincial public sector (i.e. workers in hospitals, schools, colleges, provincial utilities, etc. ).
Even before the pandemic, the government planned (via Bill 124) to further reduce real wages by restricting wage agreements in the broader public sector to below inflation for three years. The proposed funding – if implemented – would necessitate further reductions in real wages throughout the decade.
FAO estimates a gap of $ 5.7 billion between the health sector financing plan and the spending required over the next two years (i.e. 2022-2023 and 2023-24). He notes: “The cumulative spending gap of $ 5.7 billion is not distributed evenly across program areas in the health sector. FAO estimates that a the majority of the spending gap is in the hospitals program area»(Emphasis added).
The FAO notes that if the government implements its plans until 2029-30, “then the actual annual health sector expenditure per capita will have decreased by $ 490 per person (or 10.2%) since 2011-12 “.
Cuts in hospital beds
Reports that the government plans to increase the number of hospital beds in the coming years are inaccurate. FAO notes that with 3,522 extra beds in 2021-2022, we have 38,416 hospital beds. But as the FAO notes, “the ministry’s spending plan for the hospital sector implies that the 3,522 additional hospital beds will not be maintained after the end of the pandemic.” As a result, the planned “addition” of 324 beds per year will only bring us down to 37,321 beds by 2029-30. In other words, the real plan is to reduce existing hospital beds by 1,095 beds.. Yet Ontario already has very low bed capacity, so rollaway beds should not be taken away and we should build capacity from there.
Probably, the bed cuts will be covered, because the bed cut is very unpopular with the public. This is why it is essential to find and identify the cuts when they occur.
The FAO estimates that if hospitals are operating 11% above pre-pandemic volumes for surgeries and 18% above for elective diagnostic procedures, it will take 3.5 years to eliminate the backlog of surgeries that are still running. ‘is produced during the pandemic and more than three years to clear the diagnostic backlog. However, the FAO notes that the government has allocated less than half of the $ 1.3 billion in funding needed to achieve this. The suffering and illness that these delays will impose on the sick will be considerable.
Finally, the FAO reports that in the budget forecasts there is a expected decrease of $ 4.8 billion in the hospital operation transfer payment this year. The government estimates that this will be partially offset by an expected increase of $ 1.0 billion (to be achieved, apparently, through increased private payments to hospitals for things like parking and semi-private housing). These cuts this year are linked to the (hoped for) mitigation of the pandemic and are distinct from the austerity plans for the coming years discussed above. This will have a very negative impact on employment levels in hospitals. What is not clear is what will happen if a fourth wave occurs in the fall.
Doug Ford and the PCs campaigned in the last election on remarkably few promises – but one of them was to end hallway health care. Yet by the onset of the pandemic – nearly two years into their tenure – they had made little progress in improving hospital capacity. Thus, the government responded to the lack of hospital capacity at the start of the pandemic by moving patients out of hospitals and in LTC facilities. However, LTC homes were already overcrowded, exacerbating the COVID crisis in LTC facilities, with tragic results. In addition, LTC residents with COVID were rarely transferred to hospitals for treatment. They died in their LTC beds even though the LTC homes are not treatment facilities.
Even after this experience, instead of addressing the lack of capacity, the plan is a severe austerity. Without a doubt, they will try to cover this up with magic claims about how their reforms will overcome the lack of funding. But the past is a better guide: the latest reforms will meet the same level of success as all of the many previous restructuring cycles – a restructuring that the current government has for the most part rejected and recorded in history.
As with previous governments, austerity is the policy, and restructuring is the excuse the government gives to justify austerity.
Unless we change this plan, austerity will be enforced not only in health care, but also in other sectors – probably harder than in health care, as health care is an area in which even right-wing politicians are afraid to venture out. Notably, the FAO recently reported that another politically popular sector – public schools – would face a deficit of $ 12.3 billion over nine years.
The government is playing with fire: a decade of austerity tests the limits of popular patience. Two decades take it to a whole new level. •
This article first published on the OCHU website.