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B.C. budget a 'turning point' on controlling health costs, says Finance Minister

Emergency RN Louis Cowlishaw looks through patient records at the new 5-bed Clinical Decision unit at Nanaimo Regional General Hospital.

Geoff Howe For The Globe and Mail/geoff howe The Globe and Mail

B.C.'s government is holding future increases in health spending to lows not seen since the early days of Liberal governance of the province, committing to hikes of 3 per cent going forward.

While overall health spending is set to increase by $1.5-billion, Finance Minister Kevin Falcon dubbed the 2012 budget, tabled Tuesday, a "turning point" on cost control.

"We are bending the cost curve down," the former health minister told the legislature.

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The increases in health spending will be the lowest since about 2004, when the rate was 1 per cent, Finance Ministry officials said. They noted the government has always met its targets in this area. Only three years ago, in 2009, Mr. Falcon's predecessor, Colin Hansen, was forecasting a 6-per-cent target annually over three years.

"Before the worldwide economic crisis, health-care funding in B.C. was rising at an average of about 7 per cent per year. Since 2009, the rate of increase has declined to about 5 per cent. And now, going forward, we're looking at lifts closer to 3 per cent per year," Mr. Falcon said Tuesday.

Despite the austerity, health spending will account for 42 per cent of government spending by 2014-15, when the health budget will be $1.5-billion higher than today.

A Health Ministry report released earlier this year forecast a 2.8-per-cent increase for 2012-2013 and 3.7 per cent for 2013-14.

"We can't just keep pouring more and more dollars in. We have to find creative ways to minimize expenses," said Mr. Falcon, who touted advances in the effort such as joint services among health authorities and encouraging British Columbians to take better care of their health. "We will continue to seek out efficiencies and administrative savings to maintain health outcomes while limiting – to the extent possible – the cost pressure on consumers."

Jock Finlayson of the B.C. Business Council said Mr. Falcon's ambitions for health-care spending increases were notable.

"It would be nationally significant if we achieve it," he said. "You're seeing provinces across the country starting to talk this line. B.C. has actually gone further up until now in having some success moderating the pace of spending increases in health. It's a big, complex, messy beast to manage, the health-care system."

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Bonnie Pearson, secretary-business manager for the Hospital Employees Union – the largest health-care union in the province – said she was skeptical about Mr. Falcon's goals.

"We've been harvesting efficiencies in health care for a decade now," she said. "The minister knows, as a former minister of health, there are very few areas left, very few closets not open and cleaned out in terms of efficiencies in health care."

According to Ottawa's plan, federal health transfers will continue to grow at a rate of 6 per cent – a rate set in a 10-year accord enacted in 2004. After that, transfers would rise according to a system that ties increases to growth in nominal gross domestic product, a measure of real GDP plus inflation. The increase in nominal GDP from 2011 to 2015 is expected to average 4.6 per cent. With a stronger economy, the growth in transfers might be consistent with 6 per cent. Health transfers are not to fall below 3 per cent, Ottawa says.

The new plan allocates money based on population, which gives Alberta a boost in transfers, at a cost to others such as B.C., Ontario and Quebec.

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About the Author
B.C. reporter

Ian Bailey is a Vancouver-based reporter for The Globe and Mail.  He covers politics and general news. Prior to arriving at The Globe and Mail, he reported from Toronto and St. John’s for The Canadian Press.  He has also covered British Columbia for CP, The National Post and The Province. More

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