Ontario doctors' contract to increase health spending by $1.5B: watchdog

TORONTO – Ontario’s new contract with doctors will increase health spending by $1.5 billion over four years, the budget watchdog said Wednesday in a look at the province’s fast-growing health costs.

The financial accountability officer said that projected increase, however, will not have a significant impact on Ontario’s overall health budget, which he expects to quickly rise over the next several years due to inflation, population growth and aging.

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Last month’s arbitration ruling put no hard cap on increases in the $12-billion physician services budget, which the government had urged. It means the government will foot the bill for any growth at a time when it is working to eliminate a $13.5-billion deficit.

In terms of the overall health budget, though, Peter Weltman said the extra costs for physician services won’t have a significant impact.

The FAO projects that the rate of growth in overall health spending will rise over the next several years – having already grown from an average of 2.2 per cent between 2011-12 and 2016-17 to 4.4 per cent over the last two years – to an average of 4.6 per cent between now and 2022-23.

The $60-billion health budget could rise to over $73 billion in 2022-23, the FAO said.

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The government has pledged to balance the budget without raising taxes, though it has yet to lay out a timetable for a return to the black. The FAO said if Ontario plans to eliminate the deficit over the next four years exclusively through restraining spending, health-sector costs would need to be $8.6 billion below the status quo projection by 2022-23.

“This represents a health spending reduction of almost 12 per cent,” Weltman said. “Restraining health-care spending to this extent without compromising health-care access or quality would be a significant challenge.”

When asked if cuts were coming, Health Minister Christine Elliott said, “We anticipate that we are going to be able to put more people into front-line services.”

Despite the FAO’s report coming on the heels of an announcement from the government of a major health sector transformation, Weltman said he couldn’t factor it in to his findings.

© 2019 The Canadian Press

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