A new report shows that Ontario is in the midst of a massive staffing crisis in Ontario’s healthcare system. This concern is inextricably linked to inadequate reimbursement for hospitals. As the province navigates its financial challenges, the reliance on private staffing agencies has surged, raising concerns among healthcare experts and advocates about the sustainability of patient care.
The Organization for Economic Co-operation and Development (OECD) paints a similarly distressing picture for Ontario. In fiscal year 2022-2023, Ontario was 33rd out of 38 comparable countries in number of staffed hospital beds per capita. The province had one of the lowest per-capita hospital beds in Canada at the time. Taken together, these figures paint a portrait of a healthcare system in freefall. Chronic underfunding and an ever-growing dependence on costly private staffing fixes are only compounding the problem.
For the last 10 years, Ontario’s public hospitals have funneled a mind-boggling $9.2 billion into the pockets of private, for-profit staffing agencies. In particular, agency staff represented only 0.4 percent of all hours worked in hospitals. They made up six percent of Ontario’s total labor expenses. This gap in cost vs performance leads to reasonable questions around the efficiency and efficacy of using private agencies within a public healthcare setting.
For example, in 2022, Ontario had the lowest real per capita hospital expenditure in Canada at $1,805. Moreover, hospital spending as a share of the provincial GDP was just 2.6 percent, a decrease from 2.8 percent in 2013. Such numbers are a testament that our financial investments in healthcare are simply not keeping up with the rapidly increasing needs of our population.
Extreme GHG Emissions Cuts passed Bill 60 in May 2023. This legislation encourages private facilities to assume publicly funded surgical and diagnostic procedures that have been outsourced from public hospitals. This decision has sparked renewed debate about the long-term impact on hospital expenditures and quality of care.
In December 2024, legislation that recently passed Ontario’s legislature will force the staffing agency to reveal their rates to the government. But worries remain about the effects of the high turnover in EDs, especially among nursing personnel. In a report released last month, the Auditor General of Ontario identified key factors contributing to this exodus. One major driver is provincial legislative efforts like Bill 124, legislation that limits annual wage increases for public sector workers to one percent. Critics respond that these kinds of policies have unintentionally only exacerbated the expansion of for-profit staffing agencies.
From 2013 until 2023, expenditures on private staffing agencies skyrocketed, specifically increasing by 98 percent. By comparison, funding for hospitals barely moved, increasing by just six percent during that same period. This concern is amplified in the very small, very rural and very northern hospitals with annual revenues below $100 million. Here’s another example, this time from northwestern Ontario — agency staff spending has exploded in the last decade. It skyrocketed from only 3.7 percent to a staggering 17 percent of overall frontline labor expenses.
As experts such as Andrew Longhurst have continually stated, the over-reliance on private agencies is a big part of the problem. He remarked, “The private agency model is not intended to solve [the problem of the workforce crisis]. In fact, it’s making it worse and that’s what we’re seeing.”
Longhurst highlighted the paradox of relying on private staffing solutions: “It’s a nasty disease where the more you entrench and depend on private agencies to staff your hospitals, the more you hollow out that same workforce that’s no longer available to pick up or accept permanent employment, all at a very significant cost to taxpayers.”
He emphasized the need for immediate action to stabilize hospital finances and increase capacity: “We need to immediately stabilize hospital finances … and from there increase hospital capacity.” Longhurst further criticized the provincial government’s pressure on hospitals to seek out expensive labor options: “Hospitals have been really pressured by the provincial government to seek out the most expensive form of labor to [stay open] … private agencies are making out like bandits in terms of the rates that they charge hospitals.”
The Ontario government is firmly committed to improving access to high quality home, community and hospital care. They commit to having an additional 3,000 new hospital beds by 2032. Long-standing staffing issues remain, and fiscal cliffs are approaching. For this reason, healthcare leaders from each state are urgently urging decisionmakers to rethink their funding plans and workforce policies.
