Nova Scotia Must Deal With $89 Billion Healthcare Glacier, Or Risk Fiscal Deep Freeze

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Page Title:Nova Scotia Must Deal With $89 Billion Healthcare Glacier, Or Risk Fiscal Deep Freeze – C.D. Howe Institute
Article Title:Nova Scotia Must Deal With $89 Billion Healthcare Glacier, Or Risk Fiscal Deep Freeze
URL:https://cdhowe.org/publication/nova-scotia-must-deal-89-billion-healthcare-glacier-or-risk-fiscal-deep-freeze/
Published Date:January 7, 2015
Accessed Date:February 15, 2025

January 7, 2015 – Nova Scotia faces a $89 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 “Delivering Healthcare to an Aging Population: Nova Scotia’s Fiscal Glacier,” authors William B.P. Robson, Colin Busby and Aaron Jacobs find that the current configuration of demographically sensitive spending threatens to require a 70 percent increase in the province’s tax take.

“Nova Scotia’s looming liability amounts to $98 billion, of which $89 billion – more than 90 percent – relates to healthcare,” remarked Busby. “To cover the additional 50-year cost of these programs, the province would need that much in assets yielding income at the same rate as its long-term bonds. This figure is more than double the provincial GDP, or some $105,000 per Nova Scotian,” 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 Nova Scotia’s healthcare system include:

  • Incorporate team-based primary care models where patients can get comprehensive non-major services from an organized group of healthcare professionals;
  • Let less expensive medical providers, such as nurse practitioners, deliver simple services that are currently performed by more expensive doctors;
  • Foster improvements in, and more use of, non-hospital care for seniors with long-term conditions; and
  • More use of clinical evidence to reduce variation in diagnostics and therapeutics use.

The authors conclude that in the face of challenges, selective prefunding and benchmarking against other provinces that allocate their healthcare budgets differently are two steps that should help Nova Scotia deliver high-quality healthcare in a sustainable fiscal framework.

Click here for the full report.

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.

For more information contact: William B.P. Robson, President and CEO, and Colin Busby, Senior Policy Analyst, C.D. Howe Institute, at 416-865-1904; E-mail: amcbrien@cdhowe.org.

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