Day dreaming: Economic development opportunities from health care
By now, avid readers of my newsletter will know that I advocate turning over every stone to find economic development opportunities. I took this philosophy with me when I joined GNB as Chief Economist in 2015. And, yes, I went there. Health care as as economic development opportunity.
I know, I know. I got schooled real quick.
In theory - and I state this as ‘theory’ - it’s not a crazy idea. Or at least not that crazy an idea. A province like New Brunswick gets really good at something related to health care (say, the Stan Cassidy rehab centre combined with UNB’s expertise in biomedical engineering) and then we offer that as an export service (or medical tourism, let’s say). Again, in theory, people from all over Canada and beyond would come here to get world class rehab services/technology - clinical trials, etc.
I thought about this ‘idea’ again when I read today that Nova Scotia is basically fed up with residents from the province’s west using health care services in Moncton - even though it is 1/3 the distance to Halifax. So they are beefing up these services in Amherst.
Now when I did raise this ‘idea’ while in government I got a polite response. I was even able to have a consultant develop a report on the Stan Cassidy opportunity. Basically there were multiple reasons why this is a terrible idea, I was told. We don’t have enough capacity to serve our own population so what about the queue? The amount provinces charge each other for interprovincial health services is not great - at or even below cost. Plus there is the additional canard about private health care. Could we really ‘charge’ people from Maine or Arab Sheiks to get world class rehab services in Fredericton (Tommy D. rolling in his grave)?
This antipathy helps explain why New Brunswick generates only 19 cents in ‘export’ revenue from health-related services for every dollar of ‘imports’ over the five-year period for which we have recent data. We bought $575 million in services - mostly government-related but this includes dental service (two of my three kids went to Pugwash for braces and if many of you are honest, you did this too - there was a guy down there charging half). Over the same five years, we only ‘sold’ $112 million in services for a deficit of $463 million. To put this into some perspective, the New Brunswick government likely lost close to $100 million in tax revenue (it went to the provinces where these services were procured)*.
Again, with the shortages of health care workers and everything else going on right now, even putting this on paper is likely to trigger a lot of folks.
But, please, let me just live in fantasy land. Just for a while. In that fantasy, New Brunswick is pumping out health care workers in an area (s) where we have developed a national expertise (if you don’t like Stan Cassidy, pick something else like radiology or, I don’t know, cancer treatment in Moncton). Those high paying jobs are creating high value economic activity and generating tens of millions of dollars in tax and fee revenue that is used to reduce the cost of health care for NBers.
Maybe in this fantasy land, we reduce our health services trade deficit to the same as Saskatchewan (no deficit at all).
*PS - this doesn’t cover the lost economic activity from health-related training. New Brunswick ranks 9th among the 10 provinces for health-care related graduates from PSE every year. I haven’t quantified this but it would be in the millions.