Hospitals built on flimsy foundations

Yukon Hospital Corporation has launched an advertising campaign to defend its move to build new hospitals in Watson Lake and Dawson City with borrowed money. "Expense?" asks one speech bubble in a newspaper ad printed Monday.

Yukon Hospital Corporation has launched an advertising campaign to defend its move to build new hospitals in Watson Lake and Dawson City with borrowed money.

“Expense?” asks one speech bubble in a newspaper ad printed Monday. “Investment,” answers another.

The ad asserts the two projects, expected to each cost approximately $25 million, will end up saving the territory money in the long run.

“Sure, it’s expensive, but if we put it off, the costs will be even greater, in both dollars and Yukoners’ health,” the ad states.

But if there’s any evidence to support this claim, it hasn’t been provided to the public by the hospital corporation or the Yukon Party government.

Nor was it coughed up by the corporation after a recent access to information request.

There’s no cost-benefit analysis to be found to weigh the benefits of bringing 24-hour acute care to both communities against the several million dollars in operating and maintenance costs each facility would add to the territorial budget.

Instead, there are sketchy statistics, based on a raft of assumptions, that optimistically project the outlying areas surrounding Watson Lake and Dawson City to grow by more than 13 per cent over the next decade.

These numbers were cooked-up in the summer of 2009, well after the decision had already been made to build both new facilities. This helps reinforce the perception that both projects have less to do with meeting health needs than with fulfilling long-time Yukon Party promises to replace aging health facilities in both communities.

Some questionable numbers are also found in the hospital corporation’s advertisement. It claims that “Yukon’s population continues to grow at 2-3 per cent annually.”

True enough, the territory’s population grew by 2.2 per cent in 2009 and by 3.4 per cent in 2008, according to Yukon’s statistics branch.

But over the past decade as a whole, growth has been more modest, averaging at 0.9 per cent from 1999 to 2009. This average hides considerable variations, from 2008’s high of 3.4 per cent to a low of -1.6 per cent in 2001. Yukon’s population grew by 2,958 people over the decade.

The hospital corporation is betting Yukon’s population will continue to boom over the decade to come. It projects the population to boom over the coming decade, according to consultants’ reports used to plan the new hospitals.

This would result in the population surrounding Watson Lake to grow by 243 residents, to 2,018 from 1,807. Dawson City’s outlying population would gain 394 residents, to 3,357 from 2,963.

(Yukon’s statistics bureau uses health records to calculate its 2008 community populations. Watson Lake’s catchment area includes the BC communities of Lower Post, Dease Lake and Good Hope Lake. Dawson’s catchment area includes Mayo, Old Crow, Pelly Crossing, Keno, Elsa, Stewart Crossing and Eagle Plains.)

These forecasts assume the Yukon will see an annual net intake of 300 residents until 2018, and that a considerable number of these newcomers will settle near either Watson Lake and Dawson City.

That net migration figure is plucked from the Yukon statistics branch’s “high-growth” model used to forecast the territory’s population growth. But the branch’s own forecasts come with a number of caveats that have been dropped from the hospital corporation’s projections.

The branch also issues low-growth and medium-growth projections, and “each scenario is equally likely,” said statistician Sebastian Markley. Relying on one is “not necessarily prudent,” he said.

Yet that’s what’s been done by the hospital corporation.

The number of newcomers who arrive in the Yukon is largely dependent on the health of the economy. By all accounts, the territory has weathered the global recession well, and there are promising signs of future growth.

Yukon Zinc Corporation’s Wolverine mine, 190 kilometres northwest of Watson Lake, is to open later this year. It is expected to employ 160 workers and remain open for at least 10 years.

And Kinross Gold Corporation’s recent acquisition of Underworld Resources, the owners of the White Gold property near Dawson City, is good reason to believe there will be an open-pit mine in the Klondike in the near future.

But not all growth projections are as optimistic as the hospital corporation’s.

When the Conference Board of Canada released an economic forecast for the Yukon in January, it projected the territory would receive 136 newcomers annually from 2009 to 2020. That’s less than half as many as predicted by the hospital corporation, and closer to the statistics bureau’s medium-growth model.

It’s also worth noting that the statistics branch doesn’t publish population projections for individual communities for a reason. It’s because there’s no easy way to predict migration within the territory, said Markley. Yet the hospital corporation is banking on a sizable number of newcomers settling near Watson Lake or Dawson City.

That hasn’t happened in recent years. As the territory’s total population has bulked up, demand at Watson Lake Hospital has steadily declined to 976 in 2008 from 1,046 in 2007 and 1,188 in 2006.

The Yukon Hospital Corporation got into the construction business over the last year, at the request of Premier Dennis Fentie. Doing so allows both pricey projects to be built with $67 million of borrowed money, thereby pushing the cost off the government’s budget. (The debt will appear in the consolidated financial statements.)

Ironically, if the projects are political sops for constituents in two Yukon Party ridings, they don’t appear to have had the desired effect.

Nurses in Watson Lake have protested the new hospital design, arguing that their community needs intensive programs aimed at helping alcoholics and drug addicts, rather than a 24-hour hospital.

And Dawsonites have howled at the hospital’s proposed downtown location, which may end up displacing the annual summer music festival.

Fentie has defended the plans, saying these health facilities will be required to attract new residents. But hospitals may not be enough. It could be difficult to attract more doctors and nurses to staff Watson Lake Hospital when the community lacks a daycare, consultants note.

Watson Lake’s hospital should be done by the end of 2011, while Dawson’s hospital is slated to be complete by the summer of 2012.

Contact John Thompson at

johnt@yukon-news.com.

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