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Socialist Project • E-Bulletin No. 1452
July 21, 2017

Socialist Project - home

Privatizing Healthcare:

More Private Funding of Hospitals

Doug Allan

The Canadian Institute for Health Information (CIHI) reports that total expenditures on Ontario hospitals increased to $23.7-billion in 2016. This is an increase of 2.4% since 2015 and 6.1% since 2012. While provincial government expenditures increased 4.7% over the four years between 2012 and 2016, private sector expenditures on hospitals increased at a much faster rate – 15.8%. That is more than three times the percentage increase of the provincial government increases.

Private sector expenditures increased $124.9-million in 2016 to $3.62-billion. That was a typical increase. The four year private sector increase was $493.1-million, averaging $123.3-million per year. That's a lot more than chump change.

Hospitals are now relying significantly more on private sector funds. In 2012 private sector expenditures accounted for 13.99% of total expenditures on hospitals but by 2016 they accounted for 15.27%.

Looking deeper, this in fact continues a decades long trend of an increasing portion of expenditures on hospitals coming from the private sector.

Comparison of private and public expenditures on Ontario hospitals

In 1975 just 6.17% of expenditures on hospitals came from the private sector. But this has continuously increased:

• 10.57% in 1985
• 11.95% in 1995
• 13.34% in 2005
• 13.99% in 2011
• 15.09% in 2015
• 15.27% in 2016

The average increase in private sector expenditure on hospitals since 1975 has been 8.9% compared with a total average expenditure increase on hospitals of 6.4%. Over the last 41 years, private sector percentage increases have averaged almost one-third more than public sector expenditure increases.

Private sector payments to Ontario hospitals compared to total payments to hospitals

Over the last four years, however, private sector percentage expenditure increases have been over twice as much as total expenditure increases.

Here is a comparison of the annual percentage increases for the last four years:

Comparison of the annual percentage increases

This is an alarming trend – private payments are made for a purpose and that purpose is likely access to some aspect of hospital service on better terms than the general public.

As this change is four decades long, it likely reflects some deeply entrenched trends that will not be easy to reverse, unfortunately. It certainly sounds like it fits with the squeeze of public services and the increasing inequality that has characterized developed capitalist societies since the 1970s.

But the larger role of private sector expenditures on hospitals also indicates that provincial government or public sector expenditures no longer paint a full story of hospital funding.

Even with provincial government (austerity) expenditure increases of only 4.7% over the last four years, total expenditures on hospitals increased 6.1% thanks entirely to a 15.8% increase in private payments.

The relevant CIHI numbers are embedded here. For all the CIHI healthcare expenditure data, download “data tables” on this CIHI hyperlink. •

Doug Allan writes the blog Defend Public Healthcare.


#2 prof. meyer brownstone 2017-07-21 11:46 EST
private funding of hospitals
Doug Allan is to be congratulated for bringing this issue to our attention. The trouble is it is far from the complete story. The process of private funding follows this pattern: The funding occurs; the private source receives a tax reduction; the loss of tax revenues is made up by all of us from a flawed taxation structure favouring the rich; the non-rich pay. Thus the private funders (corporate, individuals, families and their foundations) achieve media acclaim and their names on parts of the hospital; the funders attain powers in various forms respecting hospital policy and practices; the non-rich public has its potential political power via state power reduced (as well as its disposable income) because state power is diluted by this process of very cheap private funding.

Clearly this nonsense should be stopped by a process where the private funders become public funders via a more appropriate taxation system providing for more public funding. Private funding should then be prohibited.

(The same category of phenomenon is occuring in our university system and is being plotted in secret negotiations for much wider application by Canada and other countries through yet another trade agreement but this time in Trade in Services Agreement (TISA) which aims at corporate takeover of a wide range of what are now public services-health, education etc. replacing democracy and enshrining profits and accumulation by the few.)

#1 fjwhite 2017-07-21 07:56 EST
Private sector funding of public hospitals
Help me out here -- Please provide examples of the kinds of services that the private sector is funding in public hospitals?

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