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“Ontario’s performance in health care is uncompetitive among international peers”

April 16, 2014

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 province’s 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 province’s 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 Ontario’s health care sys­tem.”

  • How does the per­for­mance of the Ontario health care sys­tem com­pare inter­na­tion­al­ly on dimen­sions of effi­cien­cy and equi­ty?
  • What dri­ves cost in health care in Ontario?



  • Ontario is among the top spenders on total per capi­ta health care spend­ing in the OECD with spend­ing 33 per­cent above the OECD aver­age.
  • Ontario’s over­all per­for­mance on key health care out­comes and qual­i­ty indi­ca­tors trails that of inter­na­tion­al peers.
  • Pop­u­la­tion aging is a con­trib­u­tor to ris­ing health care costs, but its sig­nif­i­cance may be exag­ger­at­ed, while cost relat­ed to end of life care may be under­es­ti­mat­ed. Advances in tech­nol­o­gy, includ­ing drugs, increased uti­liza­tion of health care ser­vices, and physi­cian com­pen­sa­tion are more influ­en­tial caus­es behind ris­ing health care spend­ing.



  • Strength­en pri­ma­ry care. A strong pri­ma­ry care sys­tem is the back­bone of a high per­form­ing health care sys­tem, but Ontario has yet to iden­ti­fy an effec­tive mod­el.
  • Engage physi­cians to be lead­ers for change and renew the pay­ment mod­el. Enabling physi­cian lead­er­ship and height­en­ing account­abil­i­ty is cru­cial to sys­tem effi­cien­cy.
  • Accel­er­ate the deploy­ment of IT in health care. Ontario needs to take bet­ter advan­tage of IT, and use peer per­for­mance data to stim­u­late healthy com­pe­ti­tion among providers.
  • Imple­ment an Ontario-made phar­ma­care pro­gram. A major reori­en­ta­tion of phar­ma­ceu­ti­cal pol­i­cy is need­ed to tack­le issues of cost con­trol and inequity in access to drugs.
  • Scale up pol­i­cy focus end of life care. Devel­op­ing a sys­tem-wide end of life care strat­e­gy is nec­es­sary to meet patient pref­er­ences and reduce unnec­es­sary costs.
  • Intro­duce a sav­ings plan for pre­fund­ed drugs. Sav­ing up for future health care costs, just like Ontar­i­ans do for retire­ment, could ensure a sta­ble financ­ing mod­el and raise inter­gen­er­a­tional equi­ty.
  • Build the case for co-pay­ment. A co-pay­ment mod­el could cre­ate greater cost aware­ness and allow for oth­er areas of health care, includ­ing drugs and home care, to be includ­ed in the pub­lic pack­age.
  • Abol­ish the tax sub­sidy for employ­er pro­vid­ed health ben­e­fits. Ontario could set a new stan­dard for Cana­da by end­ing the sub­sidy for employ­er health ben­e­fits, which is both expen­sive and regres­sive.

About the Insti­tute

The Insti­tute for Com­pet­i­tive­ness & Pros­per­i­ty is an inde­pen­dent not-for-prof­it orga­ni­za­tion estab­lished in 2001 to serve as the research arm of Ontario’s Task Force on Com­pet­i­tive­ness, Pro­duc­tiv­i­ty and Eco­nom­ic Progress. The Insti­tute is sup­port­ed by the Ontario Min­istry of Eco­nom­ic Devel­op­ment, Trade and Employ­ment.

The com­plete report can be down­loaded direct­ly from:


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