One interesting aspect to come out of the Ontario tPSA debate is suggestions coming out from all corners about how to reform our healthcare system to address current funding shortfalls. Some ideas are new and innovative. Others have been around for some time and return to the surface when the debate about funding returns to prominence. This post is about the latter.
1) User fees paid to the government
One often-discussed option for easing the burden of healthcare on the public pocket is the idea of user fees. This represents money paid by patients for each interaction with the healthcare system, typically a small amount like $10. The idea is partially to help cover healthcare costs, but mostly to discourage patients from visiting physicians and thereby reducing demand for healthcare. Anyone truly sick will often happily fork over $10 for the service, but the hope is that unnecessary visits will be less frequent.
The problem here is that patients often don't know the difference between a necessary visit and an unnecessary one. We go through a lot of training to figure out that difference and it can still be a subjective call. Missed visits that are necessary can not only reduce health outcomes, but can increase costs in the long run as cheaper preventative or maintenance care is replaced with expensive interventions on illnesses that arise or progress that might not have otherwise. Reducing low-cost interactions but increasing high-cost interactions with the healthcare system are not a great way to save money.
User fees also represent a tax on the sick and disproportionally hurts the poor. So, for both moral and practical reasons, Canada has generally fought to avoid user fees paid to the government.
2) User fees paid to physicians
A bit of a twist on #1, with fees going to physicians themselves rather than the government. The notion here is that if physician incomes must fall, we should be able to supplement incomes with user fees. This idea has many of the same drawbacks as with user fees paid to the government, but with some caveats. Importantly, individual physicians presumably understand their patients' situations better than the government and can adjust the user fees accordingly. That might comprise forgiving fees for poorer or sicker patients, or perhaps increasing them for those clearly abusing the system. User fees might be thus better tailored to their original intent of reducing unnecessary visits.
The added downside to this set-up is that it creates a conflict of interest for physicians. Physicians would benefit financially regardless of whether the user fee they charge is helpful. User fees could be used as a means to punish patients who have real medical needs but are perceived as troublesome. The fees could even be used as a way to try to push patients out of a physician's practice by making it financially burdensome for the patient to see that physician.
3) Parallel private care
I could (and probably should) do an entire post about introducing privately-funded healthcare into Ontario. The argument for private care in the current setting is that it activates unemployed or underemployed physicians to ease the financial burden on public institutions while shortening wait times for important but non-emergent conditions such as hip replacements. I have no doubt that private healthcare would be good for physician employment prospects. By providing a mechanism for increased funding into healthcare, I also don't doubt that wait times would come down on average, though some people would benefit more than others.
However, I don't think there would be any relief on the public coffers. Fully-public healthcare is remarkably efficient, saving significantly relative to private care by minimizing administrative costs, advertising costs, and profits. Countries that allow significant private care (as opposed to private insurance that, with subsidies and regulations, functions very similarly to publicly-funded care) tend to have equally high public funding of healthcare. The US government spends about as much on healthcare as Canada's government. Private care tends to increase overall spending on heatlhcare without decreasing public spending or making significant gains in health outcome measures, albeit potentially better on some process measures. Notably, a lot of that extra money goes directly to physicians. Private clinics compete for the best physicians and are able to afford them at higher prices, which in turn puts pressure to increase physician salaries in the public sector. It's a win for us, but likely not a win for the economic or physical health of Ontario or Canada.
4) Salaried physicians
The government's objection to the current set-up is that they really don't have any final control on physician supply or utilization. They have some power, but ultimately any qualified physician can set up practice in Ontario and work as hard as they want, billing as much as they want, provided they can demonstrate their billings are legitimate. This leaves a lot of uncertainty for the government's finances with only some indirect methods - such as reduced residency positions - to influence physician billings. One solution to this dilemma is to simply replace the current model of physicians as independent consultants, to one where all physicians are employees, purposefully hired and placed on a salary. This eliminates any uncertainty in physician numbers or cost per physician, while providing guarantees for physicians themselves in terms of compensation.
I'm sympathetic to this approach, especially with the side-benefits that would undoubtedly be included for physicians. Working conditions would come under higher scrutiny, while pensions and benefits would be on the table, something not really possible in the current set-up.
There are some major downsides, however. Salaried physicians are not nearly as productive as non-salaried employees. There's far less of an incentive to push patients through when you get paid the same for seeing 15 patients a day as you do seeing 25. Making up that productivity gap would be extremely expensive, though some patients would undoubtedly benefit from the increased attention. Salaried physicians would also be difficult to administer. Physicians do a lot of ground-level management of their practices, whether it's paying for staff or arranging clinic space or ordering supplies. That's difficult to fit in a salaried model where physicians are more directly governmental employees and not independent consultants. The Ontario government could (and may want to) take over individual clinics, but that means a lot more administrative work to pay for, essentially taking on what physicians normally pay in overhead costs. This could be worked around depending on how a salary model is set up, but it wouldn't likely be a simple process.
Conclusion
Funding physicians is hard. The economics of healthcare are complex and don't behave like other services or commodities. Any arrangement will come with some trade-offs. When faced with the dual priorities of optimal care for minimal dollar, balancing these trade-offs is no small feat and there are no simple answers. Unfortunately, simple answers always rise to the surface when the current system shows signs of weakness, as any healthcare funding system inevitably will. These approaches could have a place as one component to a broader plan, but likely aren't feasible on their own. A careful consideration of all policy options is necessary, understanding that no individual approach will likely be sufficient in isolation.
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