Ontario Faces a $1.19 Trillion Collision Course with Healthcare Costs

December 10, 2014 – Ontarians carry a $1.19 trillion fiscal burden – the higher tax bill for increased healthcare costs over the next half-century – and should prepare now for the coming demographic squeeze, says a report released today from the C.D. Howe Institute. In “Managing Healthcare for an Aging Population: Ontario’s Troubling Collision Course,” authors William B.P. Robson, Colin Busby and Aaron Jacobs recommend that Ontario prefund selected healthcare services and benchmark against other provinces to get better health bang for their tax bucks.

“Ontario spends less per capita than any other province on hospitals and has relatively low administrative costs,” says Busby. “By contrast, Ontario spends more per capita on physicians. These gaps between Ontario and the national average are large.” Report co-author William B.P. Robson added that, “at present, we know more about healthcare costs than we do about its quality: For example, Ontarians may get appropriately greater value from their physicians than other provinces do – but we do not know.”

The report rejects higher federal transfers as a solution, noting that boosts in federal funding have discouraged reforms that would have made Ontario’s healthcare more sustainable in the past, and that transferring resources to Ontario from other provinces is neither economically nor politically attractive. As for getting more bang per healthcare buck, and more efficiency in spending on an older population particularly, Ontario should:

• Reduce the ambiguity of current public-private responsibilities for financing long-term care to bolster private savings, and better target public long-term care subsidies to those without the means to pay for it;
• Switch from an age-based drug plan to an  income-based one;
• Implement scope-of-practice changes that would allow less expensive medical providers such as pharmacists and nurse practitioners to deliver services that are currently, and unnecessarily, performed by more expensive physicians;
• Develop better follow-up care for patients discharged from hospital to cut down on complications and readmissions;
• Allow for improvements in, and more use of, non-institutional care for seniors with chronic conditions;
• Incorporate better use of information technology, particularly in coordinating patient health records.

The report concludes that in the face of Ontario’s healthcare challenges, selective prefunding and benchmarking against other provinces’ best practices can help Ontario deliver high-quality healthcare in a sustainable fiscal framework for years to come.

For the report go to: http://www.cdhowe.org/managing-healthcare-for-an-aging-population-ontarios-troubling-collision-course/28203

For more information contact: William B.P. Robson, President and CEO, C.D. Howe Institute; Colin Busby, Senior Policy Analyst, C.D. Howe Institute, at 416-865-1904; E-mail: amcbrien@cdhowe.org.

NT3