Health care accounting pure fudge

Hey there, time traveller!
This article was published 18/04/2012 (4932 days ago), so information in it may no longer be current.

For the better part of a decade, the provincial government has been fuelling Manitobans’ expectations of their health-care system, increasing spending in the Health Department far in excess of inflation. In 12 years, health-care spending has doubled to the $5-billion that Finance Minister Stan Struthers wrote into his budget released Tuesday. But this year, health is taking a hit, even as the NDP congratulates itself on hiking that budget by 3.5 per cent.

The government narrative says that health, like education and child welfare, will not get cut. Mr. Struthers said this preserves critical services, while other departments get less, to help tame the deficit.

The truth is that an increase of 3.5 per cent for health is a cut, effectively, because that department has consistently received increases of six or seven per cent annually since 2000. And the real story on health spending won’t be found in Mr. Struthers’ budget documents. It is obscured by an accounting that lets the province spin numbers to its advantage.

First, budget documents make it appear the Health Department came in on budget last year — a truly remarkable achievement if it were true. In fact, it saw $40 million in unspent funds carried over from 2010/11, something dubbed an “accounting adjustment.” So while it appeared to come in on budget, it actually had $40 million to spend before it started in on its 2011 allotted budget.

So how will it get by on only 3.5 per cent more than what it was “budgeted” last year?

What Mr. Struthers did not say is that there will be cuts. The department is planning some $100 million in “efficiencies,” a lot of which are not yet identified: The department will spend $6.7 million less in payments to doctors, and has identified almost $60 million of other cuts. But $40 million worth of efficiencies it is banking on have not been identified.

For a budget that will be in excess of $5 billion, $100 million sadly may seem like chump change — two per cent, in fact. But that cash can mean the difference between hitting wait-list targets in certain services or not.

Mr. Struthers stressed that his government wasn’t like the Progressive Conservatives, who, he reminded reporters, had cut nurses’ jobs in the 1990s. No, he insisted, health services were not getting cut.

And maybe they won’t, after a national review of provincial wait lists found Manitoba has not made good on its 2003 promise to get Manitobans into services such as joint replacements and MRIs when they should.

Paring back the increase to health spending comes at a cost. There was no explanation Tuesday what efficiencies in health would look like. Further, the government is on the second year of a two-year pause in wage hikes for health-associated workers and professionals. That means $100 million in savings can easily be taken up again when wage hikes for doctors, nurses and allied health professionals are triggered in 2013/14.

Health spending has been the biggest cost driver in Manitoba over the last decade. It has crowded out other departments at the table. The NDP could not tame its spending problem without hard decisions in health. The details on those decisions have not yet been divulged, but the long-term prognosis for cuts this year may prove the cure to be illusory.