FAO says province not on track to meet 2016 budget health sector expense targets


TORONTO, January 10, 2017 – The Honourable J. David Wake, Ontario’s Temporary Financial Accountability Officer says, “if the 2016 budget health sector expense targets are to be met, the Province will need to implement additional program changes.”

The Financial Accountability Officer of Ontario has just released the report Ontario Health Sector: Expense Trends and Medium-Term Outlook Analysis, which reviews how the Province plans to achieve the health sector expense targets in the 2016 Ontario Budget, and whether the low growth rate required to achieve the targets is sustainable after 2018-19.

The Province began to restrain the growth rate of health sector expense in 2012-13, as part of its plan to balance the budget by 2017-18. The annual growth rate of health sector expense has been reduced to around 2%, largely by slowing growth in the hospitals and OHIP program areas. Key program changes since 2012 include a four-year freeze in base operating funding for hospitals and reductions in physician payment rates in 2013 and 2015.

However, the FAO’s forecast for health sector expense, which reflects the program changes implemented by the Province to date and maintained through to 2018-19, shows that additional program changes totalling expense savings of approximately $0.4 billion in 2016-17, $0.9 billion in 2017-18 and $1.5 billion in 2018-19 would be required if the Province is to meet its 2016 budget health sector expense targets.

After 2018-19, if the 2016 budget targets are achieved, then health sector expense will average 2.1% annual growth over seven years. The FAO’s review of health sector expense growth rate trends and cost drivers raises questions about the sustainability of 2.1% annual growth, if health care quality and service levels are to be maintained. Read the FAO’s report here.

About the FAO

Under the Financial Accountability Officer Act, 2013, the Officer provides independent analysis on the state of the Province's finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario.  Visit our website at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.


For further information or to schedule an interview, please contact:

Kismet Baun l (416) 254-9232 l kbaun@fao-on.org l fao-on.org