Part 2: Saving Lives, Saving Money: A New Perspective on ODSP

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By P. Robinson

Click here to see part one of our ODSP-reform series

Ontario has the opportunity to realize significant long-term savings in healthcare funding, improve health and health equity, reduce bureaucracy, and advance Reconciliation – all through the Ontario Disability Support Payment (ODSP).  By investing directly in Ontarians, a more productive, economically sound, and socially just province is possible.

Health Care Costs and ODSP

While the pandemic puts unprecedented pressure on people and governments alike, the strain on Ontario’s healthcare system has been growing for many years.  With a proposed expenditure of 73.3 billion dollars in 2022-23 and accounting for 41% of program spending, it is the largest item in the Ontario budget (1). Costs continue to rise as the population ages, and post-pandemic, non-communicable diseases – cardiovascular, diabetes, and kidney disease – will put increasing pressure on the health care system.  As well, mental health conditions create a very high health burden (2), and the pandemic will only exacerbate this. 

Providing an efficient, compassionate, and cost-effective health system is a significant challenge.  Decades of increasing funds for the health sector have not ended hospital capacity issues, wait times, and gaps in system coordination (1), and successive governments have struggled and failed to end ‘hallway medicine’.

At the same time, there is growing recognition of the desperate situation ODSP recipients are in, including media reports of some considering MAID (Medically Assistance in Dying). These Ontarians are without hope, and they believe that there is no other way out of the poverty they are living in. Some report having as little as $2.00 per day for food after paying rent. In fact, in the last 22 years, ODSP has increased 65 cents per day (3).  Recipients face the health detriments of deprived socioeconomic status: poor living conditions, lack of nutrition, stress, low self-esteem.  These factors all contribute to poor health outcomes, therefore adding to the strain on the health care system.

By raising ODSP levels, Ontario could achieve two feats simultaneously:  lifting the disabled out of poverty and despair and reducing healthcare costs.

Why Revamp ODSP?

The current ODSP system keeps recipients impoverished, it de-incentivizes employment, and it is bureaucratic:

  • A single person receives $497 for housing
  • Average rent in Ontario for a 1-bedroom apartment ranges from $950 – $1954
  • After paying rent, recipients do not have sufficient funds to access nutritious food, transit, recreation, or pay other expenses
  • People live with persistent stress which leads to negative health outcomes
  • It is established that people with chronic conditions also living in poor conditions will have worsening health and independence (5)
  • Additional earnings over $6,000 are taxed at 75%
  • 89% of recipients are unemployed
  • Punitive tax rate reduces capacity for employment
  • There are many benefits to work, including enhancing self-worth and self-control (4)
  • There are 4 Additional Funding Categories and 4 Additional Benefits Categories requiring applications and with an appeal process
  • Most also require a doctor’s note, directly adding to health costs

A Healthy, Just, and Solvent Approach

Providing a benefit that allows the disabled to live above the poverty line has cross-sectoral benefits and savings.  It also aligns with a “Health in All Policies” for Canada, “aiming for synergistic benefits and to minimize social and health-related harms” (2).  Ontario could take the recognized and needed step of looking beyond the health care sector to eliminate the drivers of poor health outcomes embedded in socioeconomic and environmental status.

Plus, it makes good economic sense to target measures “upstream”, before the strain and expense are placed on the health system.

  • Realize significant savings in direct health care expenditures

– If Australia had implemented the HiAP recommendations from the WHO in 2012, they would have realized 2.3 billion savings in hospital admissions per year (2)

– A study from the Southern Ontario Basic Income Pilot Project documented a noticeable impact on the use of health services, with many of the survey respondents indicating less frequent visits to health practitioners and hospital emergency rooms (7)

Nearly 80 percent of respondents reported their general health improved (7)

  • Pre-emptively address the health burden caused by mental health issues

– low socio-economic status, poor social capital and a lack of resilience all increase risk of mental illness (2)

Over 80 percent of basic income survey respondents reported a positive effect on their mental well-being (7)

60% of Ontario residents surveyed by OHRC say we don’t do enough to support people with mental health disabilities and addictions (6)

  • Align with the Truth and Reconciliation Commission’s Calls to Action

– by targeting access to government services and opportunities for healthy lifestyles (2)

  • Encourage employment by decreasing the tax burden, thereby improving lifestyles, self-esteem, and mental health
  • Eliminate bureaucratic red tape and doctors’ visits

– a liveable, base rate would end applications for additional funding and benefits, appeals, and doctor referral

(From McMaster University’s report “Southern Ontario’s Basic Income Experience”)

The ODSP Opportunity

Research has determined that Health in All Policies can support health care systems, improve health and health equity, and realize saving in the health care sectors. (2)  It will require political fortitude, as the savings may not be quantifiable in one election cycle.  However, the pandemic has made many more people aware of our fraying social safety net and those that are suffering amongst us.  For Ontario, making ODSP a living wage would be a significant step in advancing HiAP.  Ultimately, it would mean a more inclusive, just, and healthy Ontario – all achieved while realizing long-term savings in the health-care sector.

References

  1. Financial Accountability Office of Ontario: Report [Internet]. Financial Accountability Office of Ontario (FAO). 2021 [cited 2021Mar26]. Available from: http://www.fao-on.org/en/Blog/Publications/health-update-2019.
  2. Tonelli M, Tang K-C, Forest P-G. “Canada needs a ‘Health in All Policies’ action plan now.” Canadian Medical Association Journal. 2020;192(3). E61-E67; DOI: https://doi.org/10.1503/cmaj.190517.
  3. Mulligan C, Yahwar M. ODSP recipients calling for help, exploring assisted dying. CityNews [Internet]. 2020Sep2 [cited 2021Mar26]; Available from: https://toronto.citynews.ca/2020/09/02/odsp-covid19-pandemic/
  4. ODSP Rates [Internet]. ODSP.INFO. 2020 [cited 2021Mar26]. Available from: https://www.odsp.info/benefit-rates.html
  5. Graham H. Social determinants of health and health inequalities. In: Unequal Lives. ProQuest Ebook; p. 99–113.
  6. Taking the pulse: People’s opinions on human rights in Ontario Government of Ontario; 2017. Available from: http://www.ohrc.on.ca/en/taking-the-pulse-peoples-opinions-human-rights-ontario
  7. Ferdosi M, McDowell T, Lewchuk W, Ross S. Southern Ontario’s Basic Income Experience [Internet]. Labour Studies – McMaster University. McMaster University; 2020 [cited 2021Mar26]. Available from: https://labourstudies.mcmaster.ca/documents/southern-ontarios-basic-income-experience.pdf
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