The new Ontario Autism Program is a colossal waste of money that cannot be fixed. Here’s why.

Yesterday, I wrote a letter to the Mayor of Guelph, Cam Guthrie, who is Chair of the Large Urban Mayor’s Caucus of Ontario, describing the extreme level of waste in the new Ontario Autism Program (OAP), calling it “irredeemably flawed”.

Here’s a short explainer why, using the economist’s favourite tool: a series of poorly hand-drawn diagrams.

As the name Autism Spectrum Disorder implies, it is a spectrum disorder, with the clinical needs of children differing significantly (we’ll limit our discussion to children, since the OAP does not apply to adults). If we took all the children in Ontario and rank-ordered their needs from most to least, it would look something like this:

I told you these would be crude diagrams.

The OAP assigns a budget to each child on the spectrum: $20,000 for children under the age of 6, and $5,000 for children above that age. For each of the groups, we can then graph out the funding level for each child:

I’m leaving the units intentionally blank, so that this diagram applies to either age group. Otherwise, you’d have two similar looking charts, one with a $5,000 funding level, and another with a $20,000 one.

The problem is immediately obvious: some children are going to have significant unmet needs, while others are going to receive far more resources than they can use. If we had real data, we could calculate the dollar amount of unmet needs and wasted spending, as follows:

Again, I told you these would be crude diagrams.

You’ve got a pile of needs, which are represented by the area shaded in blue, which are unmet. At the same time, the government is overfunding a bunch of other kids, shown by the area coloured in red. This is pure waste. Taxpayer dollars flowing out, with no purpose.

The Ontario government has repeatedly talked about giving extra funding, to address the unmet needs shown by the blue area. Which is great! But they’re doing nothing to address the waste, shown by the red area. These are dollars that could meet the healthcare needs of other kids (with or without autism).

Any healthcare plan for autism where the funding model deviates significantly from the need curve is inherently going to be wasteful. In my letter, I make the following comparison:

It would be like the government replacing OHIP by giving every Ontarian a cheque for $6500 to buy their own health care. That would benefit me, a relatively healthy 42-year-old, but it would be at the expense of those with real health issues. It would be an incredibly wasteful way to run a healthcare system.

The Canadian Institute for Health Care Information has a fantastic data set on healthcare expenditures, including health care expenditure by age. In 2016, the Ontario government spent $3,871.13 per Ontarian (in my letter, I mistakenly used the figure $6,500, which represents the per capita health care expenditure of Ontarians, both public and private. I regret the error.)

Comparing this to average public expenditure by age group, we see that healthcare expenditures are not equally distributed:

An aside: In 2016, the Ontario government spent $2.9 billion on healthcare for those aged 90 and up. In 1998, they spent $627 million. Population aging is going to continue to present fiscal challenges to provinces.

We all have some healthcare needs and we all use the system. But it would not make any sense to simply give every Ontarian a cheque for $3871.13 to cover their health care expenditures, as it would be overfunding most Ontarians, while failing to meet the needs of newborns and seniors (not to mention all the variation of needs within an age group). Simply put, it would be a gigantic waste of scarce taxpayer dollars.

Any healthcare plan for autism where the funding model deviates significantly from the need curve is inherently going to be wasteful. Time to completely scrap the plan and start over.