Manitoba’s health expenditures require scrutiny

Opinion

Hey there, time traveller!
This article was published 10/04/2022 (893 days ago), so information in it may no longer be current.

THE COVID-19 pandemic has focused attention on the Manitoba health system perhaps like never before. While Alberta, Saskatchewan, Quebec, Prince Edward Island and the Northwest Territories have all had higher per-capita case counts than Manitoba, only Quebec has more deaths attributed to COVID-19.

Manitoba was forced to send 57 patients out of province for critical care in 2021, and has yet to address its high and growing surgical backlog.

The Progressive Conservative government of Brian Pallister was elected on promises to get the province’s books in order and, as I argued in an earlier opinion piece (Jan. 27, 2021), achieved this goal by cutting back disproportionately on health expenditures, the largest entry in any province’s fiscal ledger.

More specifically, the government reduced annual growth in health spending from 4.1 per cent to 1.9 per cent over the four budgets leading up to the pandemic.

Was the Manitoba health-care system then poorly prepared for the pandemic in financial terms? Over a period of 35 years from the early 1980s, health expenditures had been growing at a fairly steady annual rate of 5.6 per cent up to 2016. We should adjust this for inflation, since prices grew at 2.9 per cent over the same period, but that still leaves real growth of health expenditures at 2.7 per cent per annum, well ahead of population growth.

As a result of the growth in health spending, health expenditure as a proportion of all program expenditure increased gradually but steadily over the years. In 1980-81, health spending was 31.6 per cent of all program expenditures. By 2015-16, before the exit of the Selinger NDP government, health expenditure had grown relative to all program expenditure by about one per cent every three years to reach 44.7 per cent of all program spending.

Pallister’s restrictions on health spending reined in this growth a bit, such that health spending was only 44 per cent of total program spending in 2019-20 before the pandemic struck.

How did Manitoba’s spending compare to other provinces? Most were facing the same demand pressures from an aging population and improved treatment technologies. And they were facing similar revenue restrictions insofar as equalization and other fiscal transfers from the federal government served to allow less-prosperous provinces such as Manitoba to provide comparable services.

In 2019-20 only two provinces, British Columbia and Quebec, spent more of their program dollars on health than Manitoba. Each spent about 47.5 per cent, compared to Manitoba’s 44 per cent.

Our geographic neighbours in Ontario and Saskatchewan spent 41.8 cents of every dollar of program spending on health.

There is no obvious link between provincial prosperity and health spending. A prosperous province such as British Columbia spent more of its program dollars on health than Manitoba, but other have provinces, including Alberta, Ontario and Saskatchewan, spent less.

Nor is there an obvious link between health spending as a proportion of total program spending and health outcomes during the pandemic. B.C. has done far better than Manitoba in deaths per capita, but Quebec has done worse, and both spend more of their program dollars on health.

Alberta has had more cases per capita but fewer deaths, while spending fewer of its program dollars on health, and Ontario and Saskatchewan have fared better on both criteria. The Atlantic provinces have done considerably better and spend less of their program dollar on health.

It would be hard to argue from this aggregate analysis that Manitoba is not spending enough on health, notwithstanding recent restrictions on health spending by the Pallister government leading up to the pandemic. Yet justifiable concerns about outcomes persist, and they are not just confined to the pandemic.

The Canadian Institute for Health Information (CIHI) regularly reports the proportion of Manitobans waiting for benchmark procedures such as hip and knee replacements and cataract surgery is worse than the Canadian average. A wait times reduction task force was struck in 2016 and issued a report in 2017, but it seems to have been largely ignored.

This government, or the one that follows the next election, should be careful to avoid the simple idea that putting more money into the health system will necessarily improve outcomes. Manitoba’s record on health expenditures places it in the top echelon, without commensurate strong results.

Spending smarter may be needed rather than spending more, and greater attention to reports such as that from the wait times reduction task force might be a good place to start.

Wayne Simpson is a professor of economics at the University of Manitoba and a research fellow at the University of Calgary School of Public Policy.