Insights January 2012

The "Efficiency Dividend” and the Changing Face of Ontario Healthcare

Tom Closson


Recently, the Canadian Institute of Health Information (CIHI) released their 2010 National Health Expenditure Report. To access the report, click here. CIHI tracks health care spending by each source of finance in the National Health Expenditure Database (NHEX).

This publication includes updated expenditure data by source of funds (sector) and use of funds (category) at the provincial/territorial level and for Canada. It also contains an overview with discussion on the trends of health care spending in Canada. International comparisons such as health spending to GDP ratio are also included, in addition to a comprehensive set of data tables and methodological notes.

Some highlights of the report include:

  • National health expenditure;
  • An overview of health expenditure trends from 1975-2010, including 2008 figures which are now considered to be “actual” rather than a forecast, and an outlook for 2009 and 2010;
  • An update of provincial/territorial government health expenditure by age and sex, including four years of expenditure data;
  • Updated data tables; and
  • International comparisons.

The focus on health care expenditures includes data for total health, hospitals, physicians, drugs, other institutions (including nursing homes), other health (including home care), and a summary of where the money has gone.

The Ontario health care system is notably one of the most efficient in Canada, with hospitals traditionally occupying a prominent place in health care provision. The report highlights that in 2008, Canadians spent $49.4 billion on hospitals, accounting for 28.7% of total health expenditure. Hospital spending is forecast to be $52.1 billion in 2009 and $55.3 billion in 2010, accounting for 28.6% and 28.9%, respectively.

Ontario’s hospitals are also some of the most efficient in Canada. The Ontario government spends $1,291 per capita on hospitals. This year, the “efficiency dividend” created by Ontario’s hospitals – the difference between what Ontario spends per capita on hospitals versus what is spent in other provinces totals to $3.5 billion which is approximately 17% less per capita than is spent in other provinces.

By comparison, Ontario would need to spend an additional $631 per capita to match Alberta’s per capita hospital expenditure level. With over 13 million people in Ontario, this would translate into an increase in hospital expenditure of $8.3 billion to an overall level of $25.3 billion. This would require a 49% increase in the projected 2010 level of provincial government hospital expenditure.

The Ontario Hospital Association has compiled a slide deck with information that pertains to provincial government spending comparisons only. To access the slide deck, click here. I encourage you all to view the slides, read this report and visit for further technical details.



From an entry in The Tom Closson Blog - Ontario Hospital Association, 17-Nov-2010


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