Institute for Competiveness & Prosperity report calls for a re-think of how Ontario delivers and finances health care
TORONTO, ON In Working Paper 20, Building better health care: Policy opportunities for Ontario, the Institute for Competitiveness & Prosperity examines how the performance of the Ontario health care system compares internationally on dimensions of efficiency and equity, and analyzes what drives health care costs. The Institute finds that, overall, Ontario could get better value for money from its health care spending. Ontario is among the jurisdictions with the highest total per capita health care spending in the OECD, with spending 33 percent above the OECD average. Yet despite exceptional resources, Ontario trails international peers in overall health care performance. Countries that spend less on health care have comparable or better health care outcomes, higher quality care, and more extensive public coverage than Ontario.
Ontario cannot afford to maintain the status quo of its health care system. Although spending on health care has recently slowed, over the last decade public expenditures on health care have continuously outpaced the provinces economic growth rate and its ability to raise revenue. If major changes are not made now, rising health care expenditures could lead to further deficit financing, rationing of health care and higher tax burdens on the working age population.
To have a health care system that is affordable, yet provides high quality care, Ontario needs to tackle the main cost drivers. Institute research shows that population aging is a contributor to rising health care cost, but its significance may be exaggerated. There is a need to control age-specific cost increases and attention related to end of life care is critical. Advances in technology, primarily drugs, increased service utilization, and physician compensation growth are more influential causes behind rising health care spending, but that remain largely unaddressed in current policy initiatives, even when these factors, unlike aging, hold significant potential for policy intervention.
The Institute offers eight policy opportunities for Ontario to make headway in realizing greater efficiency and equity in health care. These include strengthening primary care, engaging physicians to drive change, accelerating the deployment of IT, implementing a pharmacare program, and scaling up policy focus on end of life care, as well as strengthening the revenue base by introducing a savings plan for prefunding drugs, implementing a co-payment model and abolishing the tax subsidy for employer health insurance benefits.
The Institute urges Ontarians to consider what we give up in spending more on health care. More money for health care means less money available for investment in education, infrastructure, and other pressing societal needs. Neglecting these areas is a huge challenge to the provinces future prosperity. Ontario will not be able to afford the cost of its public services unless it prioritizes spending on areas that will drive economic growth and, in turn, revenue.
Our research shows that Ontario could be getting considerably more bang for its buck in health care, and new priorities are needed to make our health care system work smarter, says Roger Martin, Chair of the Institute for Competitiveness & Prosperity. This Working Paper is the first in a series of research papers on health care, and our goal is to contribute to the discussion of strategies that can be used to raise the performance of Ontarios health care system.
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