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There is no doubt that funding health care for all
of Ontario's citizens is expensive. Or is it?
Please read on and consider these points.
The government will talk about
millions and billions of dollars spent on funding.
We agree that this seems like a lot of money, but when one
considers the approximate 11 million Ontarians
who receive health care, then the actual cost per person is
makes more sense. According to information from the
Canadian Institute for Health Information,
Ontario per capita health care
spending is falling as is Ontario's percentage of its GDP
(gross domestic product). This is contrary
to what the government leads you to believe.
Please read on:
The
Ontario Health Care Budget
The total annual government
of Ontario public budget spent on all health care is about
$20 billion ($20,000,000,000.00). This
includes the money spent on doctors.
(About another $11 billion is spent on private health care)
Let's break the public figure down into some meaningful numbers:
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In
terms of our gross domestic product (GDP), this large
figure represents about 8.7 percent of our GDP.
This percentage is one of the lowest
in Canada. |
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About
$2.7 billion ($2,700,000,000.00) of this
funding comes from Employer Health Taxes |
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The
population grows by about 1.5% per year. Inflation
has been around 1 - 2% per year lately. In addition,
the population is ageing (costing several times more compared
to a young adult) and more costly advances in medical
care continue. |
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Dividing
$20 billion by the 11.5 million population gives us
$1,739.00 per Ontarian per year.
This is one of the highest in Canada; however, Ontario
has one of the highest cost of living rates. (Incidentally,
did you know that employer-employee premiums for extended
health (e.g. "drug plans") can cost over $2,500.00
per year?) |
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Dividing
the $1,739.00 by 365 gives us $4.76
per day per Ontarian. In other
words, Ontario pays less than $5.00 per day per person
for essentially complete health care.
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Federal
Government Contribution 
Please note that the Federal
Government health care spending was to pay for half (50%)
when OHIP began in the 1960s. This had fallen to less
than 20% until recently, it has increased to 22% and should
rise to 24% by 2002.
Physician
Portion of Ontario Budget
The portion of the above $20
billion annual Ontario health care budget spent to pay the
approximately 20,000 physicians (family physicians and specialists)
is about $4.5 billion dollars ($4,500,000,000.00).
Are your doctors over-paid? Let's break this down into some
meaningful numbers too:
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Dividing
this "gross" number by 11.5 million Ontarians
gives us $391.30 per Ontarian per
year. |
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Dividing
this number by 365 gives us about $1.07
per day per Ontarian spent to pay for doctors.
This includes doctor over-head
costs. |
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It
is very important to understand that this figure represents
"gross" payments to doctors and not "salaries".
An average of around 50% (one half) over-head
is spent for office salaries, expenses, insurance, licensing
and etc. |
Now, please consider how much
you spend every year. Things such as car expenses, telephone,
cable television, cigarettes or even coffee can cost you much
more!
Other
points to consider about doctor funding:
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It
takes a minimum of 8 to 13 difficult years after high
school to become a doctor. Work weeks of 100+ hours
is commonplace during residency programs. |
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It
can often take several years to build a practice.
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As
many of you may know, most doctors are paid by a fee for
each service that is covered by OHIP. These fees
exclude such things as telephone
calls, prescription renewals and sick notes. |
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What
you don't likely know is that the current
OHIP fees schedule rate is only slightly above 60%
of the rate that the Ontario Medical Association
has determined accounting for the costs of the years of
education, office over-head, hours spent working and on
call, continuing medical expenses, insurance and personal
medical benefits expenses and etc. Think of this
as if you owned a dollar store and that every item was
on sale for 40% off every day! |
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Also,
over the years in the late 90s, during the "Ray"
and "Harris" governments, doctors funded health
care by approximately $845 million ($845,000,000.00)
from "claw-backs" from our gross pay from 3
to 10% (Please realize that a 10% loss in gross income
could reflect nearly a 50% loss of disposable or spending
money due fixed over-head expenses --- would you be happy
if your boss cut your pay by half?) These
claw-backs have meant that Ontario doctors have worked
and operated their offices for over 2 1/2 months for free.
(In terms of the "Dollar Store" analogy,
this is similar to running the business with all its over-head
costs for 2 1/2 months and paying back every dollar received
back to the government) |
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The
government has also imposed another cost-control measure
we call "caps". When physicians reach
arbitrary annual levels of OHIP billings, they are penalized
by having 1/3 to 2/3 withheld from their fees over
this "cap". |
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The
majority of doctors receive no benefits package
from the government (no paid holidays, no extended health
coverage plan, no dental plan, no pension plan, no RRSP
contributions, no sick days.....) |
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Family
Doctors work an average of 52 hours per week
according to a recent Canadian
Medical Association survey. (In comparison,
a typical "9 to 5" job with a 5 day work week,
1 hour lunch and two 15 minute breaks adds up to 32.5
hours per week) |
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From
the Ontario Medical
Review (OMA journal) February 1996, an average family
doctor earns approximately $34,702.00 of disposable (after
tax and expenses) annual income. If one assumes
a 49 week work year, then an average family doctor
earns about $13.62 per hour after tax
(spending money) from OHIP. |
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The
Ontario government plans to reform primary care (family
doctor care) to reduce costs. We believe that their
goal is to reduce and take greater control over doctors'
incomes and distribution. Ultimately, we
believe that accessibility and quality of health care
will suffer.
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Summary
The costs of operating the
Ontario health care system is huge. Federal funding
is significant and cuts in transfer payment affect Ontario's
budget. When broken down to a per capita per day figure
funding is much more understandable. Doctor funding
similarly is more clear when broken down. There are
many factors to consider when looking at doctors incomes.
Current OHIP fees are 40% less than the fees recommended by
Ontario Medical Association. Government claw-backs have
forced doctors to work and carry their over-head costs for
a total of over 2 1/2 months without funding. Future
changes in primary care will likely reduce funding to doctors
and hurt the accessibility and quality of health care.
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