On Oct. 1, Ontario’s Ministry of Health and Long Term Care cut 1.3 per cent from funding for physician services in the province. This is the third cut of the year and it equates to $235 million being cut from the fees paid to doctors. In total, the Ontario government has trimmed over $800 million from health-care spending in 2015.
This restraint in health spending is all part of a push by the provincial government to erase the $8.5 billion deficit over the next two years. The Ontario Medical Association had been in contract negotiations with the government but those have been stalled since January when the OMA rejected an offer from the government. Unfortunately for doctors, the OMA agreed to a framework in 2012 that allowed for the government to act unilaterally in the event of a negotiation breakdown.
“Through their ongoing cuts, the government is seriously threatening access to the quality, patient-focused care Ontarians rightly expect from their doctor,” said Dr. Mike Toth, president of the OMA.
Ontario Health Minister Eric Hoskins has called the decrease in spending “modest” and said that patient care will not be affected by these cuts. “We’re continuing to pay physicians for every service they provide. We’re just paying them slightly less,” Hoskins told the Canadian Press earlier this month.
Dr. Zahra Bardai said that is absolutely not true.
“It’s a smoke and mirrors game. The government is saying ‘We’ve been funding, we’ve been funding,’ but the reality is numbers are terribly skewed,” said Bardai, who works at a family clinic in Woodbridge.
Bardai believes a mass exodus of doctors from the province is possible, with some opting not to postpone retirement and others just leaving Ontario for other parts of Canada.
This is because doctors in Ontario receive payments on a fee-for-service basis billed through OHIP or through capitation (a set amount of money for each patient rostered). This means that while Ontario’s doctors are the best paid in the country—receiving an average annual compensation of around $350,000—their pay reflects the massive and growing needs of patients in Ontario.
“If you actually look at the schedule of benefits for other provinces we don’t fare better. If you have a higher and older population then you end up doing more,” said Bardai.
According to the OMA, as the population of Ontario increases and ages, the number of patients in the province goes up by 140,000 each year. Additionally, an estimated 800,000 Ontarians are still without a family doctor. In this light, the oft-cited jump in doctor’s compensation of 61 per cent between 2003 and 2013 seems commensurate with the increased patient demand for healthcare.
In addition to the reduced fees for services, doctors now face a strict cap in the amount they are allowed to bill OHIP for a fiscal year. This means that once patients’ demand for care exceeds the allocated $12 billion, the doctors themselves will be responsible for subsidizing the difference through a claw-back. According to Dr. Scott Wooder, a family physician in Stoney Creek, this places Ontario doctors in a classic prisoner’s dilemma scenario which may actually result in the opposite effect—increased spending.
“In 1992-1996 we faced the same situation, there were cuts made and physician incomes were affected,” said Wooder. “We started working longer hours and performing more services in order to maintain revenue. Payroll expenses don’t go away. If everybody does that the use of medical services keeps escalating.”
Wooder has written about the issue in a blog post entitled Game Theory, The Prisoner’s Dilemma and OHIP Clawbacks. As he describes it, Ontario doctors as a whole would be better off keeping spending down in order to come in under budget for the fiscal year. However, individual doctors—who are already facing a fee cut—are financially motivated to increase their services to maintain current revenue levels. Compounding this issue is that fact that doctors have no idea what each other are doing (hence the dilemma). If a doctor keeps billings down but the overall cap is reached, they must endure claw-backs in addition to fee reductions. If, however, a doctor operates under the assumption that the budget will be exceeded, they face motivation to work even harder so as not to be too adversely affected.