When we talk about health care in this country it is all too often in Chicken-Little-esque terms: The aging population will bankrupt us, drug costs are out of control, health care is gobbling such a large proportion of provincial budgets that there’s no money left for anything else and other overheated rhetoric.
So it is refreshing to see the Conference Board of Canada, in a recent report, remind us there is a flip side of the coin.
The health sector, public and private (and let’s not forget we have plenty of both), is an economic driver, a generator of wealth, a source of good-paying jobs and a stabilizer in times of economic upheaval.
In fact, one of the most intriguing aspects of the new report is the reminder that, while health spending has outpaced economic growth for three decades, it has also served as a ballast in tough economic times.
Canada’s political leaders like to brag that Canada weathered the global recession a lot better than many other countries (and the U.S. in particular) because of sound fiscal management and a well-regulated banking sector.
What is too often neglected is the role of the health sector – and the universal health insurance program in particular – in this equation.
In a telling graphic, the Conference Board charts the growth (actually shrinkage) of the economy from 2007 to 2012 and, alongside, the slow and steady growth of the health sector in the same period. You can clearly see an offsetting effect.
The message here is clear: Universal health care helps make Canada recession-proof.
The Conference Board report also reminds us of the sheer magnitude of the health sector.
It is, in economic terms, about the same size as the manufacturing sector, more than 10 per cent of gross domestic product. Health care plays an even more important role in poor parts of the country: 13.2 per cent of GDP in Nova Scotia, for example, compared to 7.6 per cent in Alberta.
The 1,200 hospitals across the country are often among the largest employers in their cities and towns, and the other 93,000 ambulatory care centres (dentists’ offices, optometrists, community health centres, etc.) that we take for granted stabilize the tax base in addition to providing key services.
Nationwide, the health-care sector employs one in every 11 workers – 1.6 million direct jobs and another 500,000 indirect jobs. And let’s not forget that they are good-paying jobs.
Those 2.1 million recession-proof jobs, as much as anything, mitigated the effects of the recession.
Total compensation for health workers was $127-billion, just shy of $60,000 per job. Those workers paid a lot of taxes, just as the purchase of health goods and services generates sales taxes.
Over all, the health sector generates $30.6-billion in tax revenues annually. For every $5 Canadians spend on health, government gets back at least $1 in taxes.
And while the Conference Board analysis is strictly an economic one, let’s not forget that, in countries with universal health-care systems such as Canada, the health-insurance system contributes greatly to a more stable and productive work force, reduces absenteeism and generally leaves people healthier and more apt to work. (So, too, do many other redistributive social programs, but that’s a discussion for another day.)
Of course, none of this suggests we cannot deliver health care more efficiently and cost effectively. On the contrary. We shouldn’t advocate spending for the sake of spending.
But, as we engage in talk of health reform in the years to come, as the rhetoric about our “unsustainable” health system heats up, let’s not lose sight of the fact that the $200-billion Canadians spend each year on health care is not just shovelled into a big black pit.
It’s actually good medicine for the country’s economy, especially when the economy is ailing.