The $3B challenge: How about a Royal Commission into N.L. health system?

If Newfoundland and Labrador's cash-strapped government is serious about reducing spending, it should carry out a formal inquiry intothe health care system, says Memorial University economist Wade Locke.

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The health care sector accounts for about 36 per cent of government spending, or just over $3 billion annually.

That's twice whatthe government spends on education, and is the highest, per capita, of any Canadian province.

Locke is suggesting a special task force, or even a Royal Commission, be established to review a system that serves a rapidly aging population, spread over a wide geographic area.

"If you're going to achieve any kind of cost-savings in the overall budget, you're going to have to look at health care," Locke told CBC News Tuesday.

Local expertsshould lead the charge

Locke saidit's time to look at every aspect of the health care sector, including delivery strategies, costs, funding, and factors that influence overall health.

He saidsuch a review would help thegovernment achieve optimum efficiencies, and should be carried out by experts inside the province.

"You need to get people who have expertise and understanding of the local issues... you need to make sure it's not all driven by people with agendas," he said.

So what does Locke recommend? Closing hospitals and clinics? Rolling back doctorsalaries? Further centralizing services?

He admits he doesn't have the answers, but adds, "I'm not sure that a lot of people have at this point in time."

Locke'ssuggestion is being welcomed by the Newfoundland and Labrador Medical Association(NLMA), which represents some1,250 practising physicians in the province.

NLMA presidentDr. Jonathan Greenland said the idea of a task force into healthis similar to the association's recent request for a "role delineation review."

"The provincial government would need to appoint a group of experts to assess health facilities and services throughout the province and recommend a rational structure for the future," Greenland said in an email to CBC News.

"An existing method for health services planning exists in Australia that the Newfoundland and Labrador Medical Association believes would be appropriate for this province."

Health care a sensitive topic

Locke's proposal comes during an uneasy period as the province grapples with a punishing fiscal situation, brought on by a dramatic fall in revenues, and government spending that increased significantly in recent years.

There's already a heightened level of anger and frustration over last month's budget, which included an array of tax increases, job cuts and service reductions.

Any discussion of changes to health care is sensitive one, and Locke saidit's essential that decisions are not made solely on the basis of financial considerations.

"What's not debatableis that there is a serious fiscal problem that is not sustainable," he said.