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Better planning could save Ontario hundreds of millions in health costs: Auditor-General

Ontario Auditor General Bonnie Lysyk speaks at Queen's Park in Toronto on Nov. 30, 2016.

Christopher Katsarov/THE CANADIAN PRESS

Ontario could save hundreds of millions of dollars annually if it purchased cheaper generic drugs and improved plans for health treatments, according to an annual report by the province's Auditor-General that looked particularly closely at the health-care system.

Bonnie Lysyk said her office found numerous instances across government where money could have been saved over the past year. Released on Wednesday morning at Queen's Park, the 1,119-page report highlighted possible savings in health care, the electrical system and services for newcomers, proof that the government needs to "plan better," she said.

Half of the 14 audits released by Ms. Lysyk's office looked at possible savings and inefficiencies in Ontario's $52-billion annual health budget. The Auditor-General found that the province is overpaying by hundreds of millions of dollars on overpriced generic drugs, laboratory services and stem-cell treatments.

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Read more: Twelve highlights of the Ontario auditor general's report for 2017

Despite the extra money, she also pointed to excessive waiting times for cancer biopsies. "Our audit of cancer-treatment services found that Ontarians' needs were not fully being met in the areas of radiation treatment, PET scans and waiting times for some urgent cancer surgeries and diagnostic services," Ms. Lysyk said. Ontario spends about $1.6-billion annually on cancer care.

One issue highlighted by Ms. Lysyk's office was shortcomings in Ontario's stem-cell-treatment program which has required the province to send patients to the United States for care. At the time of the report, the Auditor-General's office calculated that stem-cell transplants cost $28-million more than necessary because 53 patients were sent to the United States. The transplants cost five times more in the United States than similar care in Ontario's hospitals – $660,000 for every patient sent to the United States, compared with $128,000 in Ontario.

Ms. Lysyk said the stem-cell issue was raised in 2009, but it took the government eight years to approve funds to expand the Ontario-based program. "This issue led to excessive waiting times and costly out-of-country procedures," she said. "Earlier planning could have mitigated many of those difficulties."

The Auditor-General said projections show 106 patients will go to the United States for stem-cell transplants over the next four years for a total cost of $70-million – about $56-million more than similar care in Ontario.

Health Minister Eric Hoskins said he welcomed the Auditor-General's report but argued that the province has improved access to stem-cell treatments in Ontario. This year's budget allocated $35-million to increasing stem-cell capacity in Ontario. "Our goal is repatriating those individuals and ensuring they don't need to leave the province," Dr. Hoskins said.

The audit also found that Ontario is lagging other provinces in covering the full cost of new cancer drugs. Cancer pills in Ontario are not covered for everyone by the publicly funded system, which only pays for pills consumed by adults in hospitals. While youth and seniors are fully covered, Dr. Hoskins said the province has no plan to expand coverage to all adults.

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Ontario could also save a substantial amount of money with more generic prescription drugs, Ms. Lysyk found. Ontario is paying up to 70 per cent more per pill than New Zealand for 20 commonly used generic drugs, costing the province $100-million annually. "Opportunities exist for the province to get more discounts on generic drugs," she said.

Ontario's Health Ministry spent $5.9-billion on drugs last year. However, the audit found that some hospitals in the province pay up to 85 per cent less than the Health Ministry by negotiating better prices with suppliers, a possible savings of about $271-million on common generic drugs.

Despite technological advances, the government has not updated the list of prices it pays for laboratory tests in nearly 20 years, according to the report. Mr. Hoskins said an updated list of prices, which reflects the decreasing costs of many tests, will be ready next year. The province spent nearly $2-billion on about 260 million tests last year. The Auditor-General found that had the new price list been in place, the government would have saved $39-million.

The province's Progressive Conservative opposition said that it found about $1-billion worth of annual savings in the report, a figure that represents about 0.7 per cent of the province's $141-billion budget.

"Recently, Kathleen Wynne had the nerve to say there is no waste to be cut, but today's Auditor-General's report is a disgusting display of Liberal entitlement and waste that knows no limit," said Tory MPP Lisa MacLeod.

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