Ontario budgets are special events.
They’re finely crafted financial and political documents that undergo incredible scrutiny from numerous players, both political and bureaucratic, inside the government of Ontario.
When the minister of finance gets up in the house to read the budget speech, it’s the culmination of nearly a year’s worth of intense consultation by numerous public servants who advise on the financial and political implications of every decision and decimal point.
And that’s why it’s so astonishing that a little more than a month after the Feb. 25 budget was unveiled, the provincial government is climbing down on one of its most significant announcements. It’s a fascinating case study on what happens when the best intentions run headlong into brass-knuckle politics.
Originally, the budget proposed to hike the annual deductible that seniors pay under the Ontario Drug Benefit program to $170 from the current $100, and increase the fee paid per prescription by $1.
How would such a policy have made it into the budget in the first place? Here’s a behind-the-scenes look at what happened.
When premier Bill Davis’s government set up the Ontario Drug Benefit program in the 1970s to help seniors afford increasingly expensive medication, the costs were about $50 million a year.
Now, with the greying of Ontario and skyrocketing drug prices, the province spends $3.8 billion per year. There’s no means testing to determine whether seniors are eligible for this government assistance – it’s a universal program. As the government’s favourite analogy goes, Conrad Black pays the same annual fee for prescription drugs as someone earning $20,000 a year.
In the 2012 budget, the government indicated it wanted to move towards income testing for seniors to make the program more sustainable, but so far it hasn’t pursued that goal. The proposed increases in co-payments and fees were designed to do that instead.
At least, that’s one explanation. Here’s another:
Every year, the premier’s office and the finance ministry set spending reduction targets that every ministry needs to hit. It’s then up to the cabinet ministers and their staff (on both the political and bureaucratic sides) to come up with ideas about how to find those savings.
In the Ministry of Health and Long-term Care, the options for finding savings are tough. Inflation in the health-care sector normally runs well above what it is in the rest of the economy. Given the prominent focus the Liberal party has put on health care for the past 13 years, cutting back services goes against the brand. Furthermore, about 70 per cent of health spending goes to salaries for doctors, nurses, administrators and other employees in the health-care sector, and those costs are essentially locked in.
Health ministry bureaucrats would have offered some options: How about getting tougher on doctors? Well, the reality is the government already has been plenty tough on doctors. It imposed a contract settlement on the Ontario Medical Association that lowers doctors’ compensation and caps doctors’ incomes.
How about hospitals? Again, too many hospitals in Ontario are already running deficits, meaning they can’t pay for the services their patients are demanding. Could hospital budgets be cut more? Not likely.
What about the cost of prescription drugs in Ontario? Could the ministry save some money by requiring seniors to pay more?
But to stem the anticipated protest over such a move, a further recommendation was included: What about dressing up the plan by raising the income threshold of those who are eligible to avoid getting dinged by the co-payments and throwing in some free shingles vaccines for Ontarians aged 65 to 70? True, it might look like the government was giving with one hand and taking away with the other, but ultimately it might save money and, it was hoped, soften any discordant voices. They’d shut a door, but open a window a little wider at the same time.
That option was accepted by the health minister, and recommended to the premier’s office and finance ministry advisers, who did their own political and financial analysis, and, voila, the policy ended up in Budget 2016.
At first, yes. The government’s “free tuition” plan for low-income post-secondary students got most of the budget coverage. But a few days later, the opposition latched on to the drug cost issue and raised it over and over during question period.
The premier’s office started to get anxious. They’d seen the province of Nova Scotia try to raise drug co-payments, only to back down when seniors revolted.
Suddenly, the same thing began happening in Ontario. The government looked out of touch, suggesting seniors earning just $20,000 a year could handle a 70 per cent increase in drug co-payment costs and prescription fees. Before long, Premier Kathleen Wynne was indicating a willingness to revisit the issue “if we got it wrong.” There was also an acknowledgment that the government’s consultation wasn’t satisfactory.
The pressure continued. Wynne announced a 30-day period to review the policy, after which she confirmed her government would climb down on the fee increases, pending a much more substantial three-year review of how the drug program is funded. But the increased threshold would stay. And 160,000 more low-income seniors would therefore not be paying extra drug fees.
The results are interesting. As a political stink bomb, the issue has temporarily gone away for the Liberals. However, if the original policy was to put the drug benefit plan on a more sustainable footing, that clearly hasn’t happened. And if the added intention was to save money for the ministry of health, that hasn’t happened either.
They say that politics is the art of the possible. Clearly, when it comes to seniors and health care, the possible seems to be impossible, at least for now.
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