Ontario Needs Physician Payment Reform-So Do Doctors

Ontario is a national leader in Primary Care Reform. Since the late 1990’s the Ontario Medical Association has worked with the Ministry of Health and with the advice of the Ontario College of Family Practice and the academic community and has negotiated new models of primary care. This has necessitated reform of payment models and the changes in payment models has facilitated a change in models of care. Several new payment models were developed. They all had a blended payment model. Some were more heavily weighted to capitation, which is a fee per patient for a fixed period of time and some were more heavily weighted to Fee for Service. but the Capitated models had FFS and the FFS models had capitation and both had payments designed to encourage certain clinical activity.

When we look back at family practice in the year 2000 and compare it to today, enormous improvements have been made. When primary care reform commenced, family doctors in Ontario were being paid about 55% of what the average specialist was being paid. Whether one looks at gross billings or after expense, pre-tax income, the same sorry tale was being told. Needless to say morale was poor, residency uptake was well below historic levels and many physicians were attracted to walk-in clinics and focused practice.

After changes were made in the agreements between the Ministry of Health and the Ontario Medical Association in 2004 and 2008, family practice became much more attractive. Team based care became common, physicians formed groups and average net daily income approached 80% of the specialist average net daily income (ANDI). Implementation of Electronic Medical Records (first negotiated in 2000) became common. These changes resulted in a happier family practice community, a commitment to a defined roster of patients by physicians and full uptake of residency positions. And people who completed family practice residencies actually developed family practices.

In 2000 it was not certain that family practice would survive in Ontario. The fact that it not only survived but is flourishing is a testament to the hard work of many people.

That is not to say that all the problems of primary care and family practice have been solved. They have not. Distribution of family doctors in northern and rural areas is a problem. We have done an excellent job at attaching patients to family physicians but a poor job at getting same day, next day or day of choice appointments. Many payment incentives are out of date and need to be modernized. But I submit that the bulk of the heavy lifting has been done and if the MOH and OMA act cooperatively and in good faith, the problems can be sorted out in short order.

We have spent so much time and energy reforming primary care payment and delivery models that many people feel we have neglected taking a careful look at specialist payment and practice reform.

In 2009, I was Co-Chair of a bilateral MOH-OMA committee with a very senior Ministry official. We had responsibilities for implementing the 2008 Physician Services Agreement (PSA). We were approached by the leadership of the OMA Section on Sleep Medicine. These doctors brought suggestions for limiting growth in sleep study beds and tightening up rules about frequency of sleep studies.

On the surface it looked like they were putting their own members at a disadvantage. By tightening the rules, they were limiting revenue streams for themselves. The reality is that they were taking a longer term view. They realized that if they did not act responsibly, someone might come along and make changes anyway. And changes done by someone else would not necessarily be informed by evidence and clinical experience. Changes other than the ones they suggested might hurt their patients and prevent them from getting the care they needed.

Their inspiring leadership foreshadowed the excellent work done by dozens of physicians under the leadership of Dr. Wendy Levinson of Choosing Wisely Canada.

Which gets us to the key theme. Ontario needs physician payment reform.

The annual Ontario budget is $132 billion dollars. Out of that total spend 38.5% is spent on health and a whooping 8.7%, or $11.4 billion is spent on physician services. When a jurisdiction with as large a budgetary deficit as Ontario’s goes looking for cost savings, those numbers are impossible to ignore.

Ontario’s approach has been to put a hard cap on the amount of money they will spend on physicians each year. They have promised to claw back any amount over this spend so as to keep in budget. It doesn’t matter if the spend is within physicians’ control or not. Clawbacks, clawbacks, clawbacks.

Like the sleep medicine leaders who proactively rationalized care, we are in a position to make positive changes now, to avoid irrational cuts made by a government desperate for money.

We need to justify our use of resources. That’s reason #1 for reform.

Physicians have another reason to advocate for reform. Relativity

We pay specialists with similar education, training, hours of work and responsibility vastly different amounts. Those at the high-end of the payment grid usually have a procedure that they perform in high volumes. Those at the low-end rely on direct patient encounters with no procedures. There is a great divide in financial reward between the ‘doers’ and the ‘thinkers’. (Of course the doers are very good at thinking too).

In other words, it is much more lucrative to do cataract surgery and colonoscopies, to read imaging studies and to supervise hemodialysis than it is to do complex medical assessments of the frail elderly, those with serious mental health problems and complicated pediatric problems.

Neurologists looks after some of our sickest patients and are amongst the most poorly paid. And yet they care for folks with ALS, MS, stroke and Parkinson’s without complaint. They should complain. It’s outrageous.

Even within some of the most poorly paid specialties there are inequities. Psychiatrists are financially much better off looking after patients with anxiety disorders and mild depressions than they are looking after people with schizophrenia, childhood behavioural disorders, bipolar disorders and addictions.

There are serious relativity problems. That’s reason #2 for reform.

There is a serious ’employment’ problem in some specialties. It’s really a resource utilization and prioritization problem. For instance in Hamilton I cannot get an appointment with a spinal surgeon for patients with debilitating pain unless there is a pending spinal chord crisis. The wait cannot be measured in day, weeks, months or years. The wait is forever.

Are they lazy? NO. Are they operating every day at full capacity and cannot possibly think of seeing another patient? NO. They don’t have OR time and don’t want to see patients languish on wait lists. They just don’t have the resources to do their job properly. They certainly don’t have the resources to bring in newly qualified surgeons to help out.

We need to do a better job of using resources. Young physicians cannot get any OR time in some specialties. They do on call work and assist at operations where they should be leading.

Physicians who don’t need hospitals have an easier time. They can set up community practices where ever they want. It doesn’t matter if their skills are needed in a city or not. There is no accountability. So if a specialist in specialty A want to practice in downtown Toronto she can. There is no barrier. Even if specialty A is very well service on Toronto and Thunder Bay is desperate for those services, Toronto it is. And there is no accountability.

We have a distribution problem in Ontario. That’s reason #3 for reform.

What would reform look like? I think that it would be a huge mistake to lock into positions at this stage of the game. These are serious problems that need the cooperation of patients, doctors, institutions and government to solve. We do need to very quickly identify a process to move forward.

A blended payment model would be reasonable. This gives physicians the financial certainty to only do clinical activity that makes sense for patient care and not for revenue generation. A FFS component provides accountability for access to care.

We could talk about what accountability agreements might look like and who should be the parties. It would be a great opportunity to make serious changes to payment models and fix relativity problems. And new physicians might have to ‘apply for jobs’ so that distribution and other physician resource issues could be tackled.

Those are my first thoughts. Real subject and policy experts should get together to come up with their own solutions to their own priorities.

Right now we cannot make progress. The MOH and the OMA are not talking. There is no agreement in place. Doctors are working without a contract.

Who in their right mind would consider reforming a system with a partner who has demonstrated that their solution to impasse is to impose cuts?

The lack of an agreement, the lack of trust, the lack of communication are all short-term problems. We need to move beyond that and start to talk about reform.

Anything else is penny-wise and pound-foolish.

Scott Douglas Wooder, MD

The above are my personal views and in no way are they meant to represent the views of any group, including the OMA


10 thoughts on “Ontario Needs Physician Payment Reform-So Do Doctors”

  1. Very thoughtful article. It’s almost tragic how few people really understand how the payment model warps the type and level of care provided. My wife is a psychiatrist, did her residency at Mac, practiced in KW and Guelph for 5 years, then 5 years in Edmonton, and now we’re in BC. All different payment schedules that have had a huge impact on the types of practices and the care she can (realistically) provide. She’s on the lower end of even psychiatric take-home given the type of care she feels is important to provide to patients, but even then there are limits.

    To be honest, I just don’t see enough trust between different sub-groups in medicine, let alone between governments and physician groups, to be hopeful for the substantial changes we need to improve and sustain our fragile and unbalanced health systems. And don’t even get me started on the ‘competition’ between jurisdictions that weigh down possibilities of significant changes anywhere.


  2. Excellent article Dr. Wooder. You have raised so many important challenges and offered realistic and fair suggestions for consideration toward meaningful and workable solutions. I only wish MOH and the powers that be would sit up and take notice. Health care is just too important for it to languish in political purgatory.


      1. Yes, I agree. It has to be a two-way street. First step is to get stakeholders to the table and start talking constructively. No doubt it will take time to come to an agreement everyone can “live with” but they need to at least start talking for anything to happen. I applaud your open mindedness in what must be a very frustrating situation.


  3. No one I know understands the complexities of the health system and its often arcane payment schemes better than Scott.
    There will be a monumental tragedy if no one on the government benches listens.
    Reality here is that doctor support for a provincially sponsored single payor health system hangs in the balance, and the clock is ticking.
    Mike Goodwin

    Liked by 1 person

    1. And that is what scares me – rumblings from some doctors and patients about the advantages of a “hybrid system”. I do not see how that could work effectively for most people (including doctors) with the way our political system works.


  4. Great blog Scott! So much thought and insight and so well put! So much to be done and the first step is to talk – and we are sadly not there yet. I sense frustration from those that see the challenges and see no movement.
    Thanks again for your leadership and wisdom.

    Liked by 1 person

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