From The Mayor's Desk:
The Value and Cost of Public Health
Doug Lawrance - Mayor, Sioux Lookout
In April 2019 the Provincial Government detailed changes to public health organization and funding in Ontario. This included reducing the number of public health units across Ontario from 35 to 10. It also included decreasing the Provincial share and increasing the municipal share of costs for delivering public health care in Ontario. For the most part our health care system is reactive: it reacts and responds to disease and injuries in individuals. ‘Public health’ occupies a small corner of the health care system that is proactive in purpose, delivering a wide range of services to individuals, families, groups and communities. Public health services include: health promotion and protection, disease and injury prevention, emergency preparedness, population health assessment and surveillance. In Sioux Lookout, and across the Districts of Kenora and Rainy River, public health services are provided by the Northwestern Health Unit (NWHU).
The value of public health is underscored by the words that describe its’ services: promotion, prevention, protection. By promoting population health, preventing disease and injury, and protecting the population by reducing risks from unsafe water, food, and other hazards, the NWHU contributes significantly to reducing pressure on other more expensive components of health care and social service systems. Public health can also be a significant player in ending hallway medicine. Unfortunately the return on public health investment is revealed over the long term. The measurements of the returns are in overall population health - healthy lives lived longer by more people. This long game is a tough sell in political cycles in which there are often calls for fiscal restraint, budget cuts, and a need to show progress in the short term. Consistent investment is needed.
The Provincial intention is to save $200 million Provincially by shifting that share of the cost to municipalities by 2021/22. This financial shift and Provincial savings is being accomplished in part by revising the cost shared formula from 25% Municipal/75% Provincial to 30% Municipal/70% Provincial. The shift also includes some previously 100% Provincially funded programs. For Sioux Lookout, based on this year’s NWHU budget and the new Provincial formulas, these shifts will result in an estimated $80,000 to $100,000 increase in the local municipal contribution to NWHU costs – this would require an approximate 1% municipal tax rate increase. Other NWHU municipalities will have their proportionate share of this change in the Provincial-municipal cost share formulas.
Understandably some municipalities have pushed back against this increased municipal share of the public health care costs. Some have asked the NWHU to not make up the loss in Provincial contribution by increasing municipal contributions. The Provincial cost-sharing formula is such that for every $1 municipalities contribute, the Province contributes $2.33, and NWHU receives $3.33. The opposite is that for every $1 municipalities do not contribute, the Province does not provide $2.33, and the NWHU loses $3.33 from it’s’ budget. Overall if the NWHU does not pass this on and absorbs the estimated $1.1 million increase cost to municipalities resulting from the Provincial funding changes, the NWHU will lose approximately $3.6 million from it’s’ budget and service reductions would be required. This would mean that the NWHU overall cost shared budget would be reduced by 43%. A reduction of that amount would be a challenge to any municipality and would drastically impact the services provided to citizens.
As is often the case, budget reducing proposals such as these are accompanied by calls for more efficiency in service delivery. However, after years of lean operations, the NWHU can demonstrate its’ efficiency in many ways, including: service delivery successes, flat organizational structure, and minimal budget increases over many years. Looking back from 2019 to 2009 the NWHU levy to the Municipality of Sioux Lookout has increased less than 1% ($234,814 in 2009, $235,315 in 2020). While the Sioux Lookout municipal budget has increased considerably over this period, the proportionate share of the local budget required by the NWHU levy has actually decreased significantly. In that same eleven year period while the NWHU municipal levy remained relatively constant, the cumulative impact of inflation has been over 20%.
Regarding the reduction in public health units across the Province from 35 to 10, if the NWHU is set to merge with the Thunder Bay District Health Unit (TBDHU), there is a great risk for our community and communities within the NWHU region. In a larger district health unit, smaller municipalities will have less say for more pay. One regional board of health for all of Northwestern Ontario, combining the NWHU and TBDHU, would be approximately 400,000 sq.km., about 40% of the total area of Ontario. This would make service delivery very difficult. The centralization of services along with budget reductions would very likely lead to office closures and service reduction in smaller municipalities. While the cities of Thunder Bay and Kenora may have gains or remain stable, overall the smaller municipalities would experience negative economic and service impacts.
For a community such as Sioux Lookout with a 12-staff member NWHU office located here, a significant part of the municipal payment to NWHU is returned directly in property tax for the building and indirectly in property tax for the 12 staff members living in the community, a realistic estimate is $50,000. Using a multiplier factor of 1.33 on the total salaries and benefits the economic impact of the Sioux Lookout NWHU office in Sioux Lookout is over 1.4 million dollars. A significant benefit to the municipality. For the larger communities with larger offices the economic impact is multi-millions of dollars.
Another real benefit is the cost-savings NWHU interventions have repeatedly demonstrated through evidence based programs. Research has shown that every $1 spent on immunizing children saves $16 in health care costs. It also supports employers by keeping parents at work, not at home looking after sick children. Every $1 spent on early childhood development saves up to $9 in future spending on health, social, and justice services. Every $1 spent on mental health and addictions saves $7 in health costs and $30 in lost productivity and social costs. In Sioux Lookout statistics related to engagement with many services, including municipally funded ones such as policing, are skewed to youth and mental health and addictions issues. More, not less, NWHU public health interventions make sense for the people being served and for overall economic savings.
As is often the case, cost and value are related. Health care takes the largest slice of the Provincial budget, approximately $40 billion. Public health receives 3% of the total health care budget. Evidence based statistics prove that investments in public health pay large dividends and significantly reduce Provincial spending in health care and social services. The Province and municipalities would benefit from truly valuing the contribution of public health. For the sake of both people today and future generations, the Province needs to increase investment in public health, not decrease it or shift payment of it to already over-burdened municipal budgets and taxpayers.