​Sticker Shock: no balanced budget for a while

There is a strong body of opinion amongst fiscal conservatives in New Brunswick that the provincial budget should be balanced and the debt should be reduced if not eliminated.  I have had that discussion with several strong advocates of that position and the logic is clear.  The overwhelming interest on debt could build nursing homes, it could free us from fiscal bondage, it is just the prudent business strategy for government.  These same advocates point out, correctly, that any business that carries debt at the level carried by the province would be in deep trouble if not bordering on insolvency. 
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However, Government has the responsibility for a health and long-term care system, education system, provincial infrastructure, post-secondary education and much, much more.  In each of those sectors, Health and Social Services representing nearly 50% of budget expenditures, structural cost growth happens year after year at 3-4 times inflation despite the best intentions of policy makers.  To slow down the growth of debt or reduce it, government needs to find a way to generate operating surpluses year over year for quite a few years!  Mr. Higgs was elected on his promise to get to fiscal stability and responsibility which meant trimming the debt and interest payments.

Why do health and long-term care costs continue to increase year over year?  As previously described in these columns, it is the result of the combination of labor cost growth, professional fee growth, rapid growth in technology, and the impact of population aging.

The latter should not be taken as an affront by people of my generation.  The reality is that we in the over 65-age group tend to have chronic ailments that plague us, some mild and some very challenging.  We have huge volumes of drugs prescribed for us and we have lots of major surgical procedures.  When highly expensive procedures like open heart surgery, hip and knee joint replacement “came on the market”, the rule was that because the procedures created such high risk for patients, it was not deemed advisable to perform them on persons over 65.  Within a few years that age limitation stretched to 70, then 75, and now it is not uncommon to hear of joint replacement surgery for persons well into their 80’s and similarly with some invasive cardiac procedures.  So as the population ages, there are just so many more candidates available for highly expensive surgery.

Add to that the cost of caring for persons of my vintage who have suffered stroke, cancer, major urological problems and then add to that the rapid growth in the cost of seniors requiring long term care at some level.  Then try to balance a budget by instructing government departments to “hold the line” or “live with zero’s”.  Trying to balance budgets in health and long-term care simply by government fiat is largely a fool’s errand.

The best laid plans of mice and men “aft gang awry”.  It is true that the pandemic, coming by surprise and shock as it did, has added much fiscal pressure.  Sure enough, the federal government has transferred significant cash but the province has been left with huge unplanned expenditures and many of the unplanned expenditures are incurred in, no doubt, support services that have nothing to do with health care such as border security, policing, communications, and much more.  Health authorities and long-term care facilities have incurred sudden, unplanned, and un-reimbursed cost increases attributable to the pandemic.

​Finance Minister Steeves, in his CBC interview, indicated that the plan to return to balanced or surplus budget is pushed down the road a couple of years.  And by then we will be ramping up for the next outbreak since they seem to appear at roughly 4-year intervals.

With a plan to return to surplus in two years the challenge of success is minimal because those in the health and long-term care fields know that systems, methods, care processes all need to be re-tooled.  The process of organization of medical surveillance and consultation through such things as e-health consult and other technologies was given acceleration during the pandemic and now many new methods and innovations must be rolled out.  Long term care must, indeed, be reformed as the pundits have said for years.  Primary Health Care, Emergency Medical Services, organization of specialty services all need to be truly reformed as do the systems of governance that oversee and direct health care.

News Flash:  it takes serious up-front investment in order to turn a health and long-term care system around and re-direct it to where it needs to go!  We are talking here of many millions of dollars in initial investment.  Then when systems are re-structured and stabilized, attention can be directed to serious reductions in cost, improvements in efficiency, better engagement of labor and professional services.  But you can’t do that until you get the systems stabilized.  They are not even close to stability at this time.

These columns, for two years, have described many areas in our health and long-term care systems that are woefully deficient in organization, focus, structure, and public service.  I hear much from the public and hear very little push-back on the observations made.  It is fair to believe that the general public and many influential health professionals and leaders support and strongly encourage major overhaul of structures and organization of services.

With the need to infuse transitional funding to bolster and turn programs around, it seems highly unlikely that government will be able to achieve a balanced budget, let alone get to a modest surplus, during the term of the current government. 

Economists and Economic development people may hopefully help lead to some new economic initiatives that will cause growth in government revenues.  Strategies such as promoting immigration so that our agriculture and fishery can flourish makes great sense and hopefully will make an impact.  A vibrant, growing economy with low unemployment would, of course, be of enormous help and, as a native, that is my prayer. 

The provincial budget, in terms of optics, gave the appearance of more of the same:  wages for care workers, $11 million for doctor recruitment.  What was not readily seen was the commitment to the reform that is needed in order to re-set essential public services.  A true commitment to reform would identify transitional funding to enable reform to happen.

Decades of publicity around long term care, accelerated during the pandemic, make a clear case for reform.  Thousands of people struggling without primary care might look at the commitment to doctor recruitment as a major achievement.  And hiring more Nurse Practitioners for rural communities is more of the same.

As one prominent physician mentioned to me, “what difference will it make if recruitment results in new physicians who choose to do locums, after hours clinics, emergency rotations...all the elements of medical practice that have no impact on fixing the primary care issue.

Instead, the $11 million should be targeted to restructuring primary care, perhaps setting up a few integrated primary health centres that would respond to huge issues in primary care.  Or it might be targeted toward the creation of a demonstration Urgent Care Centre to meaningfully attack the issue of overcrowded Emergency Departments.

Ken McGeorge,BS,DHA,CHE is a retired career health care CEO, part time consultant, and columnist with Brunswick News, and author of Health Care Reform in New Brunswick; he can be reached at kenmc1@bellaliant.net.