Alberta slows spending on health care, but not quickly enough to satisfy critics
Alberta’s NDP government says it is beginning the painful process of reining in skyrocketing health costs, even as the provincial budget unveiled Tuesday shows annual health spending is soon to surpass $20 billion.
While critics chastised the government for not moving hard, fast or creatively enough to control costs, Health Minister Sarah Hoffman warned the system could fall into chaos if funding is curtailed too aggressively.
“We are doing what Albertans voted for; they want stability,” Hoffman said. “Of course we need to bend the cost curve, but we are not going to do that at the impact of confidence in the health-care system or front-line jobs.”
Health care has been the fastest growing area of provincial spending in recent years, in part driven by a growing and aging population.
Annual health budgets under the former PC regime had been growing by an average of six per cent or more, though the last Tory budget under Jim Prentice dramatically changed course by calling for the first real cut to health spending in two decades.
Hoffman said she was not prepared to go that far, though she and Finance Minister Joe Ceci both cited ballooning costs for physicians, pharmaceutical drugs and hospitals as big cost drivers needing attention. Nonetheless, all three areas received substantial funding hikes in the budget, which provided few details as to how the government will decelerate future spending.
“If we are ever going to bend the cost curve, we have to do so through prevention and there seems to be no plan in this budget that speaks to that,” Alberta Party Leader Greg Clark said.
“Salary costs are always going to be a challenge … but don’t think this government is willing is to have those hard discussions and drive a hard bargain in future (union) negotiations in a way that makes sure our salary costs are reasonable.”
Total spending on health will jump 2.2 per cent to $19.7 billion this year, which represents an increase of about $800 million from the Prentice budget.
A four-per-cent hike to more than $20.3 billion is set for the 2016-17 year, followed by a threeper-cent increase the year after.
Alberta Health Services will see its budget jump about $200 million this year to $13.9 billion, rather than face a $286-million cut if the Prentice government was still in office.
The NDP government did reduce spending to Primary Care Networks, which will share $168 million. That’s a reduction of about $50 million from what they are projected to spend, and the organizations must make up the difference by dipping into their reserves. Still, that’s less than the $75-million cut called for in the PC budget.
As for infrastructure, $830 million has been budgeted over the next five years toward the new Calgary Cancer Centre, while the aging Misericordia and Royal Alex hospitals in Edmonton received only $10 million each to plan future projects.
While health unions and advocacy groups were generally complimentary about the budget, opposition parties said the government should do more to curb spending, including reducing bureaucracy at AHS.
“This government seems to be presuming that every dollar that was being spent was being spent with value,” Wildrose health critic Drew Barnes said.
Other highlights of the health budget include:
$10 million per year to implement a mental health strategy. Liberal interim leader David Swann, who is co-directing a government review of mental health services, said the sum was insufficient, though Hoffman said funding could change depending on the results of the review.
$90 million over two years, starting in 2016, to phase-in a new model of expanded public home care.
Total compensation for physicians rises to $4.8 billion from $4.5 billion.
The budget for human blood and tissue will rise $123 million, largely due to a bad exchange rate and need to import plasma from the U.S.
Funding for maintenance of health facilities jumps from $87 million to $122 million next year
Money to help the NDP meet its promise of building 2,000 new long-term care spaces is included in the capital plan, though an exact amount has not yet been determined.