The money spent on health care (as well as education) qualifies as an expenditure, not an investment. Such a mindset informs wrongheaded policies, most apparent in rural communities. Medical services and economies of scale in Atlantic Canada:
There are two broad categories of benefit associated with urbanity – the clustering of population in fairly close proximity. The first is related to the practical benefits of scale. If you have 1,000 people living in your town, you may be able to afford a single doctor to provide check ups and prescribe medicine. If you have a million people living in your town you can afford a pediatric neurosurgeon.
The more urban and dense, the greater the services. The gravity of demand justifies the quality of supply. Most places can’t support a pediatric neurosurgeon.
The relationship is backwards. The financial culture of health care touts managed decline, as cheaply as possible. Industry and government missing the investment opportunity:
Because health capital measures reflecting changes occurring among US elders (e.g., declines in disability) are not currently incorporated in BLS projections those projections are likely biased, as are forecasts of health costs that do not make explicit the effects of health improvements. In this paper, the magnitude of that bias is estimated. This is important because pressure is increasing for fundamental reform of the US health care system because of the recent rate of increases in health care costs in both the private and public sectors. The primary argument made against making such reforms is the perceived cost of expanding and completing the population coverage of the US health care system. This is paradoxical from the perspective of economic growth theory in that the health care sector is one of the few economic activities which experienced growth in the evolving US economy. Problematic is the focus on costs without consideration of both the direct and indirect returns to health care expenditures viewed as investment in human capital and, thereby, as an important stimulus to economic growth.
What kind of health care “expenditures” in Atlantic Canada would contribute to GDP growth? We assume health care as a fiscal burden. We approach education in the same way. However, the returns on education are better understood. Skill up the labor force and the entire community benefits. The entire community grows even as population declines.
Health care, the right kind of health care, spurs economic growth. Atlantic Canada doesn’t need more workers to fund the managed decline of retirees. Atlantic Canada should look at eds and meds as a way to be the mouse that roared.
Jim Russell, a geographer studying the relationship between migration and economic development, writes regularly for Pacific Standard.
