Hospital spending on private staffing agencies shot up by 216 per cent in North Eastern Ontario: CCPA report

In the North East region, hospitals spent $71 million on agency staff in 2022-23

SUDBURY, ON –(COMMUNITYWIRE)– A new research report by the Canadian Centre for Policy Alternatives recommends Ontario significantly increase hospital funding while phasing out costly for-profit staffing agencies and making investments in preventative health care.

The report Hollowed Out: Ontario public hospitals and the rise of private staffing agencies shows a co-relation between the dramatic growth in agency usage and underfunding of public hospitals over the last decade.

Between 2013-14 and 2022-23, Ontario’s hospitals paid out $9.2 billion to for-profit staffing agencies that cost up to three times more than employing in-house hospital workers.

In the North East health region of the province, inflation-adjusted, per-person hospital spending on agency staff increased by 216 per cent compared to the 98 per cent provincial average. In contrast, hospital expenditure on in-house staff only increased by two per cent.

“The use of for-profit staffing agencies is part of a vicious cycle that hollows out the public sector workforce, thereby increasing hospitals’ dependence on private agencies,” said Andrew Longhurst, research associate with the Canadian Centre for Policy Alternatives and author of the report. “The government must take a range of measures to resolve this crisis, but central to that is increasing hospital funding. The wasteful public spending on private agencies would have never emerged as a problem if Ontario’s investments in employed hospital staff kept up with patient needs.”

In the North East Region – which includes Sudbury – spending on for-profit agencies in 2022-23 compromised 10.8% of hospital expenditures on frontline staff, compared to six per cent for the entire province. In 2013-14, hospitals in the North East were only spending 3.8 per cent on agencies as a share of frontline staffing.

“Boom for private profits, austerity for public hospitals”

The report notes that Ontario’s per-capita funding for hospitals is the lowest across Canada. In the period between 2013 and 2022, the Ontario government made real dollar spending cuts in seven out of 10 years, contributing to insufficient growth in staff relative to demand.

Longhurst noted that last week’s budget promised more of the same as the funding announced for 2025-26 won’t match the growing demand for hospital services. Meanwhile, he said the government had allocated $280 million in funding for for-profit operators to perform surgeries and diagnostic tests, even as hospital departments providing those same services were understaffed and underfunded.

“This appears to be the most significant injection of funding into investor-owned facilities over a two-year period outside of Quebec,” Longhurst said. “It’s very concerning to witness the Ontario government pursuing private expansion of health care services at the cost of intensifying the crisis in the public system. It will predictably result in poorer services for Ontarians at a higher cost.”

The report documents a 330 per cent increase in hospital job vacancies since 2015, while employed workers’ real incomes declined by 13 per cent and agency usage proliferated.

The staffing crisis has precipitated a decline in access to care, according to the report, as evidenced by frequent ER closures and long wait-times.

“Saving our hospital services requires an investment in the staff who deliver them,” said Michael Hurley, the president of CUPE’s Ontario Council of Hospital Unions (OCHU-CUPE). “The government must commit to staffing standards including nurse-to-patient ratios to ensure manageable workloads, which would allow staff to provide care to the best of their abilities, improve morale and retention, and help stabilize the system.”

But the system is instead fracturing due to a combination of rising demand, ballooning agency costs, and provincial underfunding, said Longhurst. As a result, nearly half of hospitals faced a budget deficit in 2023-24 with a majority expected to be in arrears this year.

Longhurst recommended that Ontario follow the example of British Columbia and create a public sector staffing agency that provides relief to the most beleaguered hospitals, while phasing out private agencies over three years.

Other prescriptions to address the crisis include the development of a health care staffing strategy, and investments in hospital services ($2 billion annual increase) as well as primary and community care.

“We can’t afford to underfund much-needed hospital care even as other services are also required,” he said. “We can have better primary and community care and well-funded hospitals to meet the health care needs of Ontario’s residents.”

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For more information, please contact:

Zee Noorsumar, CUPE Communications
znoorsumar@cupe.ca
647-995-9859