Atlantic Institute for Policy Research Highlights
Economic policy commentary and research from the AIPR

Well, my optimism for the New Brunswick economy may have hit a roadblock.

I was heartened by the Premier’s state of the province speech and its focus on growing the economy, along with the "hardly negative at all" response from the Liberal Party leader.

Under the Premier’s modest targets, by 2030 we would be looking at an extra $7 billion in GDP per year, a population size of 870,000 and if spending growth could be limited to its current rate of increase, annual budget surpluses of $4 billion.

But then it happened.

The Government touched the political third rail--healthcare--and it looks like the province is back driving toward the fiscal cliff that comes with continued stagnation and revenue growth too weak to keep up with spending growth.

Canadians are blindly proud and unusually supportive of our publicly financed, privately delivered medical treatment, considering it is a system that continues to produce worsening access to care, and poor health care outcomes compared to other high income economies (other than the United States).

Publicly funded health care in New Brunswick has also become a negative “social determinant of health”. Inequality is alleged to make us all unhealthier; however, the bulk of income inequality in New Brunswick is the result of the growth of physician incomes.

I highlight physicians for a few reasons. They are the highest represented professional group in the top 1 percent of earners. An estimated 80 percent of the doubling of Canadian spending on health care since 2000, for improving access to care, was captured as higher income of doctors, along with nurses and others employed in the health care sector. Health care spending is crowding out monies for education, infrastructure and other investments we need for our future and which we need to make us and our kids and grandkids healthier, wealthier and wise. The status quo of Canadian medicare is making us sick all the while borrowing against the incomes of future generations.

When you read that the current health care system is not sustainable, other than for those of you who already can’t access care or who have opted to travel out of province to pay, it’s true. There has been some recent restraint on health spending, largely at the expense of access to care, aka rationing.

Even so, a CD Howe report showed that with current growth of public revenues over the next 50 years, the shortfall on the government’s books is equivalent to adding around $80 billion to our provincial debt. That is four times the recognized provincial debt plus NB Power debt. There is no amount of federal transfer money that can close that hole, nor should you expect newcomers or young New Brunswickers to pay the level of tax that you would need to cover that health spending. They are what is known in the economics biz as a “flight risk” should you try to tax them too much.

What more federal money does, and what more borrowing to pay for health care services does, is allow politicians to “kick the can down the road” for some future government to deal with. But by the time you are out of borrowing room and Ottawa has said “enough” to increases in transfers, there will be no fix for the health care system other than to let it fail and see what comes out the other side.

Kicking the can down the road is really a version of fiscal “musical chairs”, meaning whichever premier is left standing at the podium when the music ends will have to be the one to let New Brunswickers know that they are out of money and needing to make “drastic changes”. When the bankers or Ottawa take over managing our finances I doubt that there will be a hospital left operating as it is, or more likely where many of them are, today.

So the current government attempted to get ahead of that day (which is coming in all provinces, but much sooner in New Brunswick). That means changing something and if we believe that government is responsible for delivering health care, or more accurately paying for health care, in the province then there will be decisions that some voters will not like.

What we are seeing in Sussex, Sackville, and Caraquet is that when local health care resources are seen as threatened, the bigger picture for the province doesn’t seem to matter to those who are affected. And we are seeing that left to the political level to decide, you can’t make any changes by being honest and transparent.

For decades health policy experts have argued that for our health care system to be higher performing and sustainable, we need to get politics out of decision making and the running of the system. That means that health ministers, and premiers, need to stay out of the decisions being made by arms length bodies like Regional Health Authorities tasked with delivering services. That means having a government and political climate that is mature enough to weather the political heat that comes with change. When that is not possible, then we get what we see more often which is kicking the can down the road and sticking someone else with the hard decisions.

And the politics of health care are not just confined to political parties. The politics extend to organized medicine, the Medical Society, and the unions covering health care workers. We cannot presume at this point that these organized bodies can support change in the health care system when their own memberships cannot even agree on what changes are acceptable. We cannot count on the Medical Society or the unions to lead the change to health that their leaders say the system needs. We have been waiting for decades for change to come and the closest we got was the Choosing Wisely campaign where doctors attempted to stop doing treatments that were known to be unnecessary. It should be clear that after at least a decade, that approach hasn’t accomplished much.

The hard lesson we have learned this week is that you can’t take the politics out of healthcare decision making which means Regional Health Authorities or the government can’t fix anything when it comes to the healthcare system. Politicians won’t let leaders in the system do their jobs that we have asked them to do, and even undermine the credibility of the individuals hired on to do the impossible.

Think about it, changing hours of access without reducing resources in 6 hospitals with low overnight utilization was spun as a life threatening change and an attack on rural New Brunswick. If a change that small in terms of the totality of changes required to fix health care is enough to topple a government, then how can anyone believe that any Premier, Health Minister of any stripe can offer a long term solution?

Not even the NDP Premier of Alberta, Rachel Notley, could get the health care unions to work with government to improve health care. And for the record, the Notley government abandoned any pretense that the province’s single health authority was arms length to government.

The real cost of the Higgs government’s attempt to improve access to care in New Brunswick to make a start on the bigger project of improving the odds we have a better healthcare system is that by touching the political “third rail”, we will lose the momentum that had built to turn the economy back to growth. Pundits are almost gleeful that we are headed to an election and that the healthcare debate will be the issue, not the economy.

This means that we are about to have a costly election if the outcome results in the loss of focus on an attempt to restart growth of the provincial economy and the population. If you total up all of the potential budget surpluses that would come from having 2 percent GDP growth, and maintaining our current growth in public spending, that is $18 billion over the next decade. For anyone who is keeping track, that is about the size of our debt. And for anyone keeping track, that debt that New Brunswick has came from firing the Graham government and rejecting its plan for growing the economy after federal transfer payments were looking less reliable.

Don't for one minute believe that an election focused on health care issues will save any of the 6 emergency rooms that triggered said election. It won’t save health care. What we are about to see is politicians who say the right things but do nothing as they kick the can down the road and allow a slow death of access to care. They know full well what will happen if they try to do anything more because they killed the last government that tried to do something. This passive aggressive “managed failure” approach to health care has been what got us to this point.

If there is a silver lining, however, it is that I know that I can get access to urgent care by driving from Fredericton to Sussex or even Sackville faster than I can get care in the hospital two kilometers from my house. If those doctors are only seeing an average of 5 patients a night, I am pretty sure the waiting rooms in the three cities could supply enough patients to those hospitals to get the numbers up to 26 per night. Small towns can keep their emergency rooms and they can wait like the rest of us.