With the rejection of the tPSA by OMA members, we're back to square one in the negotiation with the Ontario government regarding physician compensation. It will likely be a long, ugly battle, just as it was before the tPSA came to light. Still, it's a good opportunity to delve into the discussion about what a reasonable adjustment to physician compensation could look like. After all, while I was strongly opposed to the tPSA, I'm not at all opposed to sensible efforts to save money on physician compensation, and I believe there are ways to do it which are in the best interests of patients and taxpayers which wouldn't unduly burden physicians themselves.
1) Implement Relativity
This came up frequently in the "Yes" side of the tPSA arguments and, despite being a "No" voter, I support this approach. Relativity in the context of physician payment negotiations in Ontario essentially means that physicians should be paid comparable amounts for the work that they do. More specifically, the argument is that if cuts are to occur, they should fall on those who are paid more than their counterparts with similar training and working conditions.
There are some specialties where physicians clearly earn more than is justified, in relative terms at least. I could name several specialties or subspecialties here, but I'll single out Ophthalmology, as it's one of the more commonly cited examples. Ophthalmologists have extremely high gross billings on average. Their high overhead reduces this number considerably, but their take-home income is still quite high. Their patients are generally low acuity with threats to morbidity rather than mortality, and their working hours are on the lower end, particularly for a surgical specialty. Importantly, there is no shortage of individuals wanting to work in Ophthalmology in Ontario - both job openings and residency positions are extremely competitive - so we could cut Ophthalmology compensation without significantly affecting our ability to fill available positions. Ophthalmology does involve complex, technical work with an important impact on quality of life for their patients and their pay should reflect that expertise. However, with outsized incomes, the overall Ophthalmology compensation could be cut without significant ill-effects on patient care, as could the income for a number of other specialties or subspecialties.
One point to mention here - in no way would I argue for equal pay for all practitioners, or even equal hourly pay. I'm going into Family Medicine (if I have any say) and expect to earn on the lower end of things for a physician. That's fair to me - I'm actively choosing to avoid long training times and long work hours with high acuity patients (outside of some ER shifts potentially). Some inequality in pay is justified.
2) Eliminate Cash Cows
Overpay between specialties is worth addressing, but so is overpay within specialties. Each specialty tends to have its own cash cows, procedures or practice arrangements that overpay relative to other activities. These cash cows skew practice patterns. The economics of healthcare do not work the same way they do for other products, but many of the same principles apply. In this case, if you pay doctors more for doing something, they'll do that something more often, even if that something isn't the best use of time or resources. It also produces some inequality within specialties, as practitioners who establish themselves with a certain high-pay procedure, or control the infrastructure necessary to perform it, end up with higher incomes than those without the privilege. Eliminating cash cows by pricing high-pay activities more modestly could provide some savings with a neutral or possibly even beneficial effect on patient health.
There are a few caveats here, however. In some cases, cash cows are actually a case of good incentives. Some activities are inherently undesirable for practitioners, yet necessary for patients. High compensation in these situations may be required to provide patient access. Another consideration is that cash cows can compensate for low-paying or even net negative activities. Our billing system is bad enough that some activities actually cost practitioners money, or pay so little that they aren't economically feasible on their own. Physicians often still provide these procedures or services because they're valuable for their patients, while making up for the lost time and money through higher-yield services. Taking away those overpaid activities means fewer practitioners can realistically afford to provide underpaid activities.
Bottom line is that adjustments to billing codes have a significant potential to save money on healthcare costs, but require careful consideration. There are a lot of secondary effects to changing billing codes that aren't immediately apparent to an outsider.
3) Strengthen Primary Care
Reducing physician costs in the provincial budget really can only be done one of two ways - reduce the cost per service provided by physicians, or reduce the number of services provided. The first two items discussed deal with the former. The rest of this piece will focus on the latter.
Primary care is the gateway to healthcare services, whether through Family Physicians or through Emergency Rooms. We rely on these practitioners to restrict access to specialists only to those who truly need them. The more that primary care providers can manage without calling on specialists, the less specialty services will be used. By strengthening the capabilities of Family Physicians, we might be able to save money on more expensive specialists, reducing how often patients require their care.
This is obviously easier said than done and in many cases, not a good idea. Primary care physicians don't see some conditions often enough to develop sufficient expertise and they shouldn't hesitate to get experts involved in these situations. Likewise, other expensive elements to healthcare, such as some diagnostics or interventions, are restricted to specialists to release, limiting their use and arguably saving the overall system a fair bit of money. Opening these resources up to Family Physicians would not be beneficial to patients or taxpayers.
Nevertheless, with reasonably wide variation in referral practices between Family Physicians, especially between locations, we do have room to cut back on referrals without sacrificing quality of care or adding costs to other parts of medicine. Emphasizing (and ideally compensating) continuing medical education, while strengthening the training for primary care providers (particularly in medical school!) would be my favoured initial methods. Incentive schemes to keep referrals to a minimum may be worth considering, if they can be carefully constructed not to punish necessary referrals.
4) Train Fewer Doctors
Ok, this is a can of worms, but let's open it just a little bit. Canada tried this approach and it largely didn't work. Back in the 90's, Canada's medical schools didn't keep up with population growth and in some cases, medical school enrollment was actively curtailed. Of course, physician services were still necessary, and ultimately, healthcare costs continued to rise unimpeded. Physicians, now scarce, saw their salaries rise, while non-physician providers like Nurse Practitioners and Physician Assistants slowly grew in number. Eventually, the deficit in physicians was too high and Canada reversed course, massively expanding medical school enrollment while opening up new residency opportunities for foreign-trained physicians. The idea that restricting physician numbers could save money was fairly clearly wrong.
Well, sort of. The problem in the 90's was that Canada restricted physician numbers so much that baseline demand for services couldn't be met. That led to compensatory spending to make up that deficit. Now, however, physician numbers are much closer to the OCED average and still on the rise. We're starting to see some first signs of physician oversupply, with unemployment and underemployment on the rise, but this has been largely concentrated in resource intensive, hospital-based specialties where jobs can be restricted by constraining the availability of those supporting resources. This speaks to an inherent problem in funding physicians to meet patient demand - demand for healthcare services often expand with supply and physicians can create their own demand. Specialties that can finance their own infrastructure tend to have great job markets regardless of the local supply of physicians.
The example I always mention is Psychiatrists in Toronto. They are in far greater supply there than in smaller cities and rural areas, yet do not seem to have trouble getting work and make salaries comparable with national averages. They just take care of far fewer patients than their counterparts elsewhere, seeing them more often or for longer. This isn't necessarily a bad thing, but it clearly a more expensive arrangement for the province. This is hardly a unique situation. Most specialties, including Family Practitioners, could easily double (or more) the number of people in their clinics or procedure rooms if they had the time and resources to do so. As we start to see the number of physicians rise, and especially as we see more students going into fields like Family Medicine, Psychiatry, and Geriatrics, we could see physician billings substantially increase, as these new practitioners will not be nearly as constrained by public resources, and can cause - rather than simply respond to - increasing demand for healthcare. I do think we need to shift more physicians towards these specialties, which are likely still undersupplied relative to other specialties, but we are likely overshooting on overall physician supply. Cutting back on this oversupply would likely help the bottom line in the long run.
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