Commission on the Reform of Ontario's Public Services

The results of this inefficiency include people in hospital beds who could be better cared for
elsewhere, crowding of emergency facilities, cancellations of surgeries because beds are not
available and a clogging of ambulance services bringing people to and from hospitals.
These are classic symptoms of a system built for acute care at a time when the needs have
shifted more to chronic care. It must be noted that in Ontario, which has one of the country’s
highest levels of ALC (such patients occupy seven per cent of hospital beds, compared with
five per cent nationally), the government introduced its Aging at Home Strategy in 2007,
designed in part to reduce the number of ALC patients. More recently, Ontario wisely
commissioned a study by Dr. David Walker, who made recommendations (we will return to
these later) on ALC and steps that should be taken to shift the health care system towards
caring for an older population. 32
The OECD researchers who took a stab at measuring inefficiency costs in health care systems
came to a startling conclusion about this country. They estimated that if Canada became as
efficient as the best-performing countries, there would be a saving in public health care costs
of 2.5 per cent of GDP in 2017. 33 Securing such efficiency gains would not permanently lower
the growth of health care costs, but could certainly do so over the transition period.
The OECD suggests that Canada as a whole “wasted” $40.6 billion of the $136.9 billion that
the public sector spent on health in 2010; the comparable figure for Ontario, if the 2.5 per cent
figure also holds true for the province, would be $13.4 billion in “waste” out of $47.8 billion in
total public spending. In other words, efficiency gains would amount to almost 30 per cent of
public-sector spending in 2010. 34 Of course, measuring inefficiency, especially by comparing
differing international systems, is very difficult, so we must be cautious in interpreting the
OECD figure. Further, it simply may not be feasible to eliminate or even substantially reduce
the figure. That said, it is not a large leap to presume that if we could remove as little as 10 per
cent of this inefficiency over the next 10 years, public health care spending could be restrained
to a very low growth rate over that period.
32 Walker, op. cit.
33 Organization for Economic Co-operation and Development. “Healthcare Systems: Efficiency and Policy Settings 2010,” downloaded at
http://www.oecd.org/document/39/0,3343,en_2649_33733_46491431_1_1_1_1,00.html.
34 Calculations based on CIHI, “National Health Expenditure Trends, 1975–2011,” op. cit., Table 4.
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