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UCP health spending not keeping up with inflation

And underspending while costs increase is essentially a funding cut.

I was recently reviewing the latest provincial budget, the 2022–2023 budget that the UCP government released later this year.

While comparing it with past budgets, I noticed that the UCP plans to increase health spending this year.

Current estimates indicate that they may have spent $21.503 billion during the 2021–2022 budget year; although that still needs to be confirmed.

(Keep in mind that figures cited in this article may differ slightly from those published in the budget, due to differences in rounding.)

This year, they plan to spend $22.019 billion, an increase of $516 million, or 2.6%.

Noticing this change in spending, it made me curious how their spending compared to previous year, so I looked up the NDP’s health spending during 2018–2019, their final year in office.

What I found was that health spending under the UCP has increased by $1.607 billion. The NDP spent only $20.412 billion in their final year.

Here’s how the difference breaks down by spending area.

2018–20192022–2023Diff% diff
Drugs & suppl. health benefits$1,653$2,033$38022.99%
Community care$1,394$1,719$32523.31%
Information technology$491$672$18136.86%
Acute care$3,767$3,881$1143.03%
Population & public health$551$661$11019.96%
Continuing care$1,121$1,223$1029.10%
Support services$1,890$1,992$1025.40%
Emergency medical services$506$587$8116.01%
Diag., therap. & other services$2,378$2,457$793.32%
Physician compensation$5,282$5,351$691.31%
Home care$682$750$689.97%
Research & education$80$106$2632.50%
Cancer research & prevention$2$11$9450.00%
Ministry support services$62$63$11.61%
Administration$553$513-$40-7.23%
in millions $

The largest increase was in “drugs and supplemental health benefits”, which saw an additional $380 million, compared to 4 years ago, a 23% increase. The largest percentage increases was “cancer research and prevention”; their $1 million in new spending was a 450% increase.

“Administration” was the only cut, with the UCP spending $40 million—or 7.23%—less this year than the NDP spent 4 years ago.

The smallest increase was in “physician compensation and development”, which is getting $68 million more than was spent in 2018–2019. That works out to a 1.31% increase.

Remember, that’s not just physician salaries: it’s all the money physicians get to pay for their clinics, including medical staff wages, admin staff wages, maintenance, supplies, equipment repair, utilities, etc.

Now back to that $1.607 billion in additional spending earmarked for this year. That’s an increase of 7.87%. And while an increase in health spending of nearly 8% does seem impressive, but we must keep something in mind.

Have you ever heard of the consumer price index? It’s basically a measurement of how much a collection of goods cost to a consumer who’d buy that container. The change in that index over time is what we call inflation.

The latest consumer price index numbers for Alberta that we have are for this past April, when it sat at 157.0. However, 4 years ago, in April 2018, the CPI was 140.6.

That means that between the time the NDP released the final budget of their first term and the time the UCP released the final budget of their first term, the CPI increased 11.67%.

In other words, inflation has risen by nearly 12% over the last 4 years.

And that means that inflation has increased at a rate that’s 48% higher than the rate at which the UCP has increased health spending.

So, while health spending has indeed increased by $1.607 billion over the last 4 years, if spending had kept up with inflation, we’d be spending $22.794 billion on health in Alberta, rather than $22.019 billion.

We’re still underspending by $800 million.

And that’s not even taking into consideration the fact that Alberta’s population has increased by 4.6% during the same time.

Which means that for every 100 people in Alberta in 2018 using health services, there are now an additional 4 or 5 people using the same services.

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By Kim Siever

Kim Siever is an independent journalist based in Lethbridge, Alberta. He writes daily news stories, focusing on municipal, provincial, and federal politics, specializing in investigative journalism and critical analysis from a leftist political lens. He also writes regular editorials on general politics and social issues.

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