January 6, 2015 – New Brunswick faces a $68 billion fiscal burden – the future tax bill for increased healthcare costs over the next half-century – and should prepare now for the coming demographic squeeze, says a report released today from the C.D. Howe Institute. In “Managing the Costs of Healthcare for an Aging Population: The Fiscal Impact of New Brunswick’s Demographic Glacier,” authors William B.P. Robson, Colin Busby and Aaron Jacobs recommend changes to protect New Brunswick’s next generation from the burden they will otherwise bear as the tax base grows more slowly and healthcare costs rise.

“New Brunswick’s implicit liability amounts to $76 billion, nearly 90 percent of which ($68 billion) relates to healthcare,” remarked Busby. “To cover the additional 50-year cost of these programs, the province would need assets yielding income at the same rate as its long-term bonds. This figure is more than double the provincial GDP, or some $100,000 per New Brunswicker,” he adds.

According to Robson: “One way to mitigate the impact of rising costs in some healthcare services would be to follow the lead of the late- 1990s reforms to the Canada and Quebec Pension Plans, which converted them from pay-as-you-go to schemes in which a portion of premiums collected from people today prefund their future needs.”

Recommendations to improve the sustainability of New Brunswick’s healthcare system include:

• More coordinated team-based primary care, giving patients comprehensive non-acute services from a group of practitioners such as doctors, nurses, dieticians and physiotherapists;
• Better use of information technology, particularly in coordinating patient continuing care;
• Scope-of-practice changes that would allow less expensive providers such as pharmacists and nurse practitioners to offer services currently, and unnecessarily, performed by more expensive physicians;
• Better follow-up care for patients discharged from hospital to cut down on complications and readmissions;
• Incentives for patients to take greater responsibility for maintaining their own health;
• More use of clinical evidence to reduce variation in diagnostics and therapeutics use.

The authors conclude that in order for New Brunswick to meet the future demands of healthcare and other demographically sensitive programs, public subsidies for long-term care must be targeted to those without the means to pay for it. At the same time, the government should require those who can afford it to absorb a meaningful share of the costs. Doing so means setting, and publicizing, government subsidies clearly so that private options, such as increased savings and insurance, grow to complement public subsidies.

For the report go to: http://www.cdhowe.org/managing-healthcare-for-an-aging-population-the-fiscal-impact-of-new-brunswicks-demographic-glacier/28341

The C. D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. It is Canada’s trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review. It is considered by many to be Canada’s most influential think tank.

 

6 Jan 2015