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Watchdog says Ontario underspending on health care by $21B

Financial Accountability Office issues report saying Ontario is not spending enough money on health issue and needs to boost spending by $21B in five years

Ontario's Financial Accountability Office (FAO) said the province is not spending enough health care money to meet all of its commitments and growing demands for better health care.

That was one of the key findings as the FAO released a formal report on Ontario's health sector spending plan for five priority areas; hospital capacity, long-term care and home care, surgical waitlists and wait times, emergency departments, and the health sector workforce.

It is the job of the FAO to provide independent analysis on the state of the province’s finances, trends in the provincial economy and related matters.

The report projects a net shortfall of more than $21 billion over the next five years.

"The shortfall means that the province has not allocated sufficient funds to support existing health sector programs and announced commitments," said a news release from FAO

To address the shortfall, the province will need to either add new funding to the health sector spending plan (such as from the contingency fund or new federal health transfers) or make changes to existing programs or announced commitments, said the FAO report.

The report commented on the provincial plans to address capacity issues in Ontario hospitals by adding new hospital beds, continuing to fund beds that were added during the COVID-19 pandemic and introducing measures to free up existing capacity occupied by alternate level of care (ALC) patients. 

The FAO report said if these measures are successful, it could add 4,500 new hospital beds in the next five years and free up 2,500 existing beds occupied by ALC patients — meaning a total increase in available capacity of 7,000 hospital beds. 

The FAO said it’s "unlikely" the province would reach this target due to the "significant risks with permanently freeing up 2,500 beds occupied by ALC patients.”

The FAO further projects that the 7,000 bed target will fall short in the next five years because of the increasing demand for hospital services from the growing and aging population.

Another key concern that is expected to hinder health spending plans is the shortage of professional health workers which includes physicians, registered nurses and personal support workers, said the report.  

"Failure to address this projected shortfall in nurses and PSWs will result in the province being unable to meet its expansion commitments in hospitals, home care and long-term care,” said the FAO.

“The shortfall will also have additional impacts on health sector service levels, including in hospital emergency departments, the waitlist and wait times for surgeries, and average hours of direct care provided to long-term care residents.”