New budget shows UCP underfunding health spending

Earlier week, the Alberta government released their latest provincial budget. In fact, it’s likely their last one before the next election.

I’ve already looked at how it affects public sectors jobs and where the revenue came from to balance the budget.

Today, I thought I’d touch on how it’ll impact health care in the province.

According to the budget, the UCP government plans to spend $24.533 billion on health operating expenses. Last year, they spent $23.568 billion. This is an increase of $965 million, 0r 4.09%.

That seems pretty good, right?

Well, there’s something you should know. Between January 2022 and January 2023, the Consumer Price Index in Alberta increased from 149.3 to 158.9, or 6.4%. That means that the increases to operating expense spending won’t even be enough to cover the bump in inflation.

Not only that, but Alberta’s population went from 4,466,124 in the fourth quarter of 2021 to 4,601,314 in the fourth quarter of 2022. That’s an increase of 135,190, or 3.03%.

So, basically, the amount we’re increasing health spending by this year—at least as far as operating expenses go—won’t be enough to cover the increased demand on services in addition to the increased costs.

If the UCP government kept up with inflation and population growth over just this past year, they’d be spending $25.79 billion on health, which is $1.26 billion more than what they’ve budgeted.

While we’re here, let’s look at how spending will change over the next year for various healthcare areas.

	2022–23 forecast	2023–24 budget	Change	% change
Ministry Support Services	$65	$67	$2	3.08%
Physician Compensation and Development	$5,857	$6,052	$195	3.33%
Acute Care	$3,984	$4,318	$334	8.38%
Diagnostic, Therapeutic and Other Patient Services	$2,474	$2,717	$243	9.82%
Drugs and Supplemental Health Benefits	$1,923	$2,027	$104	5.41%
Community Care	$1,701	$2,002	$301	17.70%
Continuing Care	$1,273	$1,393	$120	9.43%
Home Care	$744	$893	$149	20.03%
Population and Public Health	$589	$733	$144	24.45%
Emergency Medical Services	$585	$723	$138	23.59%
Support Services	$2,116	$2,228	$112	5.29%
Information Technology	$690	$733	$43	6.23%
Administration	$463	$530	$67	14.47%
Research and Education	$107	$108	$1	0.93%
Cancer Research and Prevention Investment	$11	$10	-$1	-9.09%
COVID-19/ Recovery Plan	$983	$0	-$983	-100%
Total operating expenses	$23,568	$24,533	$965	4.09%

Here we see a wide variety of change in funding, ranging from a loss of $983 million for COVID-19 recovery plan to a gain of $344 million for continuing care.

As relative increases, the spread is from -100% for COVID-19 recovery plan to 24.45% for population and public health. That’s an average increase of 2.69%. That average jumps up to 9.54% if you ignore the COVID-19 recovery plan, which this government appears to be doing.

Only 6 areas will see an increase above inflation and population growth:

• Diagnostic, Therapeutic and Other Patient Services
• Community Care
• Home Care
• Population and Public Health
• Emergency Medical Services
• Administration

And the increase in continuing care funding meets inflation and population growth.

Every other funding area, including physician compensation and acute care, fall short of keeping up with inflation and population growth.

Now, let’s compare this budget to actual spending in the last year that the NDP were in power.

	2018–19	2023–24	Change	% change
Ministry Support Services	$60	$67	$7	11.67%
Physician Compensation and Development	$5,365	$6,052	$687	12.81%
Acute Care	$4,139	$4,318	$179	4.32%
Diagnostic, Therapeutic and Other Patient Services	$2,476	$2,717	$241	9.73%
Drugs and Supplemental Health Benefits	$2,203	$2,027	-$176	-7.99%
Community Care	$1,417	$2,002	$585	41.28%
Continuing Care	$1,127	$1,393	$266	23.60%
Home Care	$688	$893	$205	29.80%
Population and Public Health	$625	$733	$108	17.28%
Emergency Medical Services	$526	$723	$197	37.45%
Support Services	$2,241	$2,228	-$13	-0.58%
Information Technology	$584	$733	$149	25.51%
Administration	$542	$530	-$12	-2.21%
Research and Education	$136	$108	-$28	-20.59%
Cancer Research and Prevention Investment	$7	$10	$3	42.86%

Before we look at the numbers, consider that during that same time, the consumer price index has increased by 13.02% and the population has increased by 6.57%, for a combined increase of nearly 20%.

Only 6 areas surpassed that 20% mark over the last 5 years, assuming Alberta ends up sticking to this budget:

• Community Care
• Continuing Care
• Home Care
• Emergency Medical Services
• Information Technology
• Cancer Research and Prevention Investment

On the other hand, we’re spending less than under the NDP in 4 areas:

• Drugs and Supplemental Health Benefits
• Support Services
• Administration
• Research and Education

The remaining 5 areas have received more funding than under the NDP, but not enough to keep up with inflation and population growth:

• Ministry Support Services
• Physician Compensation and Development
• Acute Care
• Diagnostic, Therapeutic and Other Patient Services
• Population and Public Health

Oh, and remember, “Physician Compensation and Development” doesn’t just refer to physician salaries. That’s the money they receive to operate their practice. It includes their salary, but also the money they need to pay nurse salaries, clinic leases, equipment maintenance, medical supplies, utilities, and so on.

One thing that the UCP has consistently claimed since taking office is that Alberta spends more per capita on health than other provinces (specifically, BC, Ontario, and Québec). And they’ve used that gap to justify their reduced health spending.

But that figure leaves out two key facts.

First, it’s more expensive to live in Alberta. Here, take a look at the consumer price index for all the provinces over the last 5 years.

	2018	2019	2020	2021	2022
AB	140.6	143.1	144.7	149.3	158.9
PEI	136.3	137.9	137.9	144.9	157.8
NS	135.3	137.5	137.9	143.5	154.3
NL	137.9	139.3	139.6	144.7	153.9
SK	137.5	139.9	140.7	144.4	153.9
MB	133.8	136.8	137.5	142.0	153.2
ON	135.0	137.5	138.4	143.2	152.9
NB	134.0	136.3	136.6	141.8	152.1
QC	129.0	131.7	132.8	137.8	147.0
BC	128.4	131.4	132.4	136.1	145.5

As you can see, Alberta tops the list in every year. That means, overall, things cost more here. The CPI includes everything from shelter and food to transportation and clothing.

Second, wages are higher in Alberta. Take a look at average weekly earnings for all the provinces in every December of the last 5 years.

	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
AB	$1,150.36	$1,184.09	$1,201.20	$1,234.97	$1,263.64
ON	$1,049.89	$1,082.46	$1,168.37	$1,178.19	$1,212.35
NL	$1,056.45	$1,071.14	$1,083.76	$1,103.92	$1,176.90
BC	$992.83	$1,032.17	$1,117.24	$1,145.73	$1,168.57
SK	$1,016.85	$1,059.57	$1,102.91	$1,123.99	$1,150.09
QC	$947.44	$990.23	$1,073.52	$1,096.51	$1,138.23
MB	$949.18	$962.66	$1,022.21	$1,042.75	$1,085.38
NB	$928.38	$968.75	$1,014.37	$1,038.96	$1,085.00
NS	$899.53	$929.98	$979.19	$1,007.95	$1,043.24
PEI	$874.80	$897.95	$956.93	$969.81	$1,004.01

Once again, Alberta is the highest. People are paid more in Alberta.

So if things cost more in Alberta and wages are higher in Alberta, then it makes sense that we would have to pay more for the same services than other provinces pay for.

Hospitals will have to pay shipping companies more to delivery the new equipment they purchased. Doctors will need to pay the janitorial company more that cleans their clinic. And if a plumber or a web designer is going to make more in Alberta, then it makes sense that a nurse or a radiologist will, too.

If you insist on paying health care workers less than what is made in other provinces, even though it costs more to live here and the private sector makes more here than in those other provinces, then ultimately, you’ll end up with worse health care delivery.