Insights (Essays) December 2011

What Ontarians (and their Auditor General) Should be Asking About Physician Pay

Steven Lewis

Ontario Auditor General  Jim McCarter’s foray into the issue of how much the province is paying family doctors, and for what, begins a long overdue conversation. It is important to examine what we get from healthcare spending, and folly to assume that every dollar is well spent. But the issue is complex, and we should not rush to judgment about either pay levels or what constitutes productivity.

The central question is what we pay family doctors (and increasingly, primary healthcare teams) to do. The short answer is that we pay them to provide services, but the short answer is not always the right answer. McCarter strongly implies that paying doctors an annual stipend for rostered patients whom they have not seen during the year is an unearned windfall. Not so fast: Under a system that pays a flat fee per patient per year, it is inevitable that some patients will require more visits than their peers and others will require fewer. Yes, the doctor gets paid for the patient with no visits, but she is not paid extra for the unexpectedly high user. It is supposed to balance out. Whether it does is an empirical question that cannot be answered by partial evidence.

But the analysis misses a larger point. Are we paying doctors to do things, or accomplish goals? It’s not the same thing. Suppose we evaluated doctors on the basis of how successfully they kept patients healthy or equipped them to self-manage their conditions. Here the absence of a visit to the doctor may be evidence of the highest possible achievement. By contrast, a large number of visits may mean that patients are over-dependent on their doctors, or that the doctors aren’t very good at patient education and motivation. We need to be clear about what we’re after, and if it’s not service volumes, forget about volumes as indicators of productivity.

McCarter notes that family doctors who have left fee-for-service for alternate funding plans earn more money than before. This is hardly surprising in a system where governments assume (wrongly in my view) that physicians will neither improve their performance nor jump off the fee-for-service treadmill without huge financial inducements. Moreover, one would expect that many who move to capitation will have larger rosters of patients, which generally implies seniority (a doctor’s practice tends to grow over time). One might reasonably take the government to task for using carrots but never sticks in negotiating with its doctors. But In this respect Ontario is like every other province; it is a national disease to stuff doctors’ pockets with cash in the faint hope of better and more effective service.

But it is wrong to focus exclusively on doctors’ incomes. The cost of a medical practice is not just what the doctor gets paid; it is the entire “footprint” of that doctor’s patients on the system – their lab tests and MRI scans, prescriptions, hospitalizations, home care, nursing homes, etc. Suppose two doctors have identical patient rosters: same number of patients, same age and sex structure, same health status. Doctor Smith, on a capitation plan, gets $375,000 a year and the total costs of all services to his patients are $1.5 million. Doctor Jones, on fee-for-service, gets $275,000 but total system costs are $2 million. From whom are we getting better value for money? Is Doctor Smith overpaid and inattentive to his patients’ needs, or highly effective in keeping his patients healthy? Is Doctor Jones efficient and a master of early detection, or an ineffective communicator and too quick with the prescription pad? 

Another important issue is how much family doctors earn compared to specialists. In Canada, medical associations are primarily responsible for dividing up the pie among categories of doctors. Over time they have decided that procedural specialists (ophthalmologists, surgeons) and diagnosticians (radiologists, pathologists) are worth more than cognitive specialists (geriatricians, psychiatrists), and specialists are worth more than family doctors. This hierarchy is not a law of nature; it is the result of internal medical power and politics.

The result has been a drift away from family medicine and the “high touch” specialties on whom people with multiple chronic diseases, mental health problems, and the frail elderly depend. Increasing family doctors’ pay sends a signal that society values their contribution and wants to expand primary care capacity. It is of course important to evaluate whether the extra money results in better care for these often neglected patient groups. But it is also important to assess value-for-money among the highly paid specialists as well.

Productivity in healthcare is not the same as productivity in a television factory. Sometimes more healthcare is better; sometimes it is wasteful and sometimes it is harmful. Doctors who prevent health breakdown and empower patients to maintain their health and manage their conditions are more productive in a deeper sense than those who don’t. Working harder and longer is not necessarily a sign of higher productivity. Providing high quality, responsive healthcare is a physician’s obligation. Not needing that care is the patient’s goal, and needing less service overall is – should be – the system’s goal.

Ontario’s current fiscal challenges present an opportunity – one might say an imperative – to rethink the collective agreement with the OMA. Any honest examination will identify a host of misalignments between the stated goals for the system and how doctors are paid. This is unsustainable, not because it is unaffordable, but because it doesn’t work, either for doctors or their patients. The Family Health Team approach and capitated payment are steps in the right direction, but they are not panaceas. They are essential steps towards cultural change but they do not guarantee that cultural change will occur. They cure many of the long-documented ills inherent in fee-for-service but create other risks that warrant vigilance.

All of these issues deserve Mr. McCarter’s close examination, and the entire system should be his purview. Fairness is important: if you’re going to put the goose under the microscope, don’t exempt the gander. Always remember that healthcare is not an intrinsic good and doing and achieving are different things. In auditing as in medicine, first do no harm.

About the Author

Steven Lewis is a health policy consultant based in Saskatoon and Adjunct Professor of Health Policy at Simon Fraser University.



Michael Ballard wrote:

Posted 2011/12/20 at 01:57 PM EST

Health Care in Ontario is driven far to often by medical professionals who have a very narrow view of health care and healing. It's time for a broader outcomes based health care system.


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