Blog Post Five
Written By John J. Maddigan
The Cost of Not Dealing with NL's Surgical Backlog - $308,274 a Day!
In May of this year, 2023, the Fraser Institute published a Research Bulletin which reported that the private cost borne by Canadians because of surgical backlogs was estimated at $3.6 billion in lost wages alone. This estimate may be low based on research done in 1990 by Steven Loberman and Lorna Hoye, which used a much higher cost basis. According to the Fraser Institute's calculations, the private cost borne by Newfoundlanders was estimated to be $112,520,000 annually or $308,274 per day.
The government of NL is losing big time as well. Using the average NL marginal rate (8.7% to 21.8%) of 15.25%, the province is losing approximately $17,159,300.00 annually in income tax revenue. Now let's assume that Newfoundlanders spend 50%, after taxes, of course, of this extra income on goods and services:
Let's do the math: $112,520,00 less NL and the federal combined tax rate of 39.25% would leave approximately $68,355,900 in disposable income. Assume that 50% is spent on taxable goods and services: $34,177,950 taxed at NL's share of the HST is $3,417,795.
So not dealing with the surgical backlog costs the provincial government $20,577,095 in lost tax revenue annually ($17,159,300 in lost income taxes and $3,417,795. in lost HST). This is simple back-of-the-napkin math, but it should tell the Premier how much he can spend to resolve the backlog and still not be out of pocket for his next provincial budget.
Economists call this deadweight loss - a loss of economic activity when the optimal outcome is not achieved.
And sadly, this does not account for the average 12.6 weeks the patient waited to see the specialist after being referred. Nor did it take into account the cost of care provided by family members caring for the individual waiting for surgery.
It could be reasonable to say that the Fraser Institute’s calculations could be underestimated by 10-25%.
Numbers like this should light a fire under Minister Tom Osborne and the Ministry of Health and Community Services. Every day the minister delays is costing Newfoundlanders $308,274 and the Provincial Government $56,375.00 in lost tax revenue.
This is only one measure of the costs of NL surgical backlog - financial. The pain, frustration and mental anguish that goes along with not being well is incalculable. The feeling of helplessness when waiting for a surgery slot can be more painful than the surgery itself!
Transforming Canada’s Healthcare one day at a time.
