“Re-chartering” The OMA/government relationship

An Assessment Of The New Agreement On Negotiation And Representation Rights 

As readers know, the OMA and Government have now, subject to OMA ratification, resolved their differences over fees and money, entering into a new two year Physician Services Agreement.

I will leave to others the task of assessing whether the Agreement will truly result in the freeze (and indeed savings) the Government asserts, especially without a hard or soft cap on utilization growth. As well, only time will tell whether the specifically agreed changes to the fee schedule, and processes for arriving at future changes, make for good public policy.

Instead, I want to focus on what to date has been a less noticed feature of the new OMA/Government accord, albeit one that may well be of more lasting significance – namely, the separate Agreement on “OMA Representation Rights and Joint Negotiation and Dispute Resolution”.

As readers may recall, after negotiations between Government and the OMA broke off last Spring, the OMA launched a constitutional challenge. The OMA argued that the Government had interfered with the constitutional guarantee of freedom of association in two ways. First, according to the OMA, the Government had failed to recognize, and threatened, the OMA’s right to represent physicians in fee negotiations with the province. Second, the Government had unilaterally altered the fee schedule without engaging in a process of good faith bargaining with the OMA.

I wrote about that constitutional challenge, predicting that pressure on both OMA (including its need to avoid being marginalized) and government (including its need get OMA buy-in for needed reforms) would drive the parties back to the table. I also suggested that the parties needed to bring in a skilled conciliator to the negotiating process — despite the government’s apparent resistance to doing so at the time.

As it turns out, the parties did agree to use a third party neutral process to assist them in their bargaining. This seemingly not only helped them to resolve their fee differences for 2012-13 and 2013-14, but it also has led to a separate Agreement recognizing the role of the OMA in representing physicians and setting out a binding process for future negotiations.

The New Agreement

Unlike the two-year Physician Services Agreement, this Agreement does not have a termination date. Rather, it appears that it is intended to provide a permanent framework governing OMA representation and negotiation rights.

What does this new Agreement provide? First, it confirms Government recognition of the OMA as the “exclusive representative” of Ontario physicians for the purpose of “negotiation of physician compensation… funded in whole or in part, directly or indirectly, by the Minister”. The only exception is for residents represented by PAIRO, and for physicians directly employed by the Government itself (who are also separately represented by their own association).

Second, both parties also agree to “consult and negotiate in good faith” not only over compensation (a key OMA objective), but also (meeting a government objective) over “related accountability in the publicly funded health care system” based on “shared objectives including a patient-centered sustainable health care system”.

Third, the parties have agreed on a process for negotiating future Physician Services Agreements. This includes, after a period of bilateral negotiation each round, assistance from a “Facilitator” who if no agreement is reached can make confidential recommendations to the parties. If the parties are still unable to resolve their differences, the process provides for a second step – a “neutral conciliator” – who, if the parties can still not reach agreement, is empowered to issue a written report with non-binding public recommendations for resolving any outstanding issues.

Fourth, and significantly given what occurred in the current round of negotiations, the Government has agreed that the Minister will not “advise the Government of Ontario to unilaterally implement proposals” until after both the facilitation and conciliation phases (including any public report and recommendations) have been concluded.

Fifth, the Agreement provides that the Government will negotiate with the OMA over all non fee-for-service or blended compensation template agreements. This includes the Government’s commitment not to  “deal directly” with individual physician groups, so long as a majority of the group elects to have the OMA acts as its negotiating representative.

Sixth, under the Agreement, the Minister acknowledges the OMA’s role in providing the government with “advice about health care policy and system issues affecting physicians”, and agrees to “consult” with the OMA over such matters. To this end, the joint Government/OMA Physician Services Committee is continued to “provide a broad and structured process for regular liaison and communication”. However, the OMA’s role is subject to the explicit proviso that the Government is not restricted from seeking advice from others, or perhaps more significantly from “setting its budget” for funding physician services.

Practical Implications

What are the practical implications of this Agreement?

First, from the OMA’s perspective, the Agreement reinforces the OMA’s institutional status as trade union or bargaining agent for Ontario physicians, by securing its exclusive right to negotiate not only the fee-for-service schedule but also non fee-for-service templates. This status was seen by many as having been threatened by the unilateral changes the Government had made to the fee schedule.

Second, as reflected in the preamble to the Agreement, the government accepts that “physicians in Ontario exercise their right to freedom of association under section 2(d) of the Charter through the OMA” – resolving in the OMA’s favour one of the key issues arising from its constitutional challenge (its right to act as bargaining represent for physicians). Indeed, on the basis of the specific protections set out in the Agreement, the OMA has agreed to withdraw its constitutional challenge.

Third, the Agreement acknowledges the role of the OMA on broader health care policy and system issues, at least as they affect physicians. This is an important gain for the OMA, which no doubt was especially concerned about the risk of its being bypassed altogether on these broader policy issues if it could not reach an agreement with government. At the same time, one would think that this also reflects the Government’s recognition that, while it may not be impossible to go it alone without the OMA, health system reform requires both the participation of and buy-in from the medical profession. Whether the government likes it or not, the OMA is regarded by most physicians as their spokesperson and representative on those policy issues, and does bring considerable expertise and influence to any reform process.

However, the OMA’s achievements should not be exaggerated.  True, the Government has committed to negotiate in good faith, up to and including receiving non-binding recommendations from a third party conciliator, and to forbear from implementing any unilateral changes until that stage is reached. While these process gains are meaningful, the Agreement also implicitly confirms the Government’s right to act unilaterally once that process has been completed. Conceivably, the OMA could seek to have its physician members engage in various types of job action to contest any such unilateral Government actions. However, there may well be various degrees of political, professional, ethical and legal constraints on the effectiveness of any attempt by physicians to engage in withdrawal of services, particularly given the perceived essential nature of the services they provide.

Indeed, that is why, when it comes to health care workers providing essential services (e.g. nurses and other hospital and nursing home workers), the right to strike is legally prohibited, but in its place a process of independent, impartial, binding arbitration is substituted. As a practical matter, most labour relations observers agree that, without an effective right to strike, or in the case of essential service workers a binding arbitration process, there cannot be a truly meaningful collective bargaining process. Against this standard, the new OMA Agreement falls short.

Fourth, the OMA’s success in obtaining confirmation as exclusive bargaining agent for negotiating physician compensation concerned is now explicitly tied, for the first time, to the need for physician accountability and health care system sustainability. These are, presumably, criteria the government insisted on as a quid pro quo. They may also well be criteria which a future conciliator would take into account in making his or her recommendations.

Fifth, while the OMA has also legally restored its role in broader health care policy and system reform issues, the Agreement also acknowledges that this is merely a consultative role, that many other stakeholders will also be consulted, and that, ultimately, policy and budgetary decisions are the preserve of government.

Lasting Peace?

One interesting question arising from the new Agreement concerns whether its limited dispute resolution process for negotiating physician compensation is consistent with what is contemplated by the Canada Health Act. Section 12(1) of that Act provides that, in order to satisfy the accessibility criterion, the health care insurance plan of a province “must provide for reasonable compensation for all insured health services rendered by medical practitioners or dentists”.  Section 12(2) then provides that where, as in Ontario, physician extra-billing is prohibited, the requirement for reasonable physician compensation is “deemed to be complied with” where there is an agreement with a provincial medical association providing:

a)  for “negotiations relating to compensation”;

b) that “the settlement of disputes relating to compensation through…  conciliation or binding arbitration by a panel that is equally representative of the provincial organizations and the province and that has an independent chairman; and

c) that a decision of a panel referred to in paragraph (b) may not be altered except by an Act of the legislature of the province.

The rationale for the Canada Health Act’s insistence on reasonable physician compensation where extra billing is prohibited is relatively straightforward: if physicians are not to be allowed to be bill for insured medical services outside of the publicly funded system, it seemed only fair that there should be some requirement that they be reasonably compensated.  However, it is important not to overstate the scope of the protection offered by the Canada Health Act. While the reasonable compensation requirement is deemed to be met if the dispute resolution mechanism outlined in section 12(2) of the Act is in place, so long as physicians are otherwise reasonably compensated, a dispute resolution mechanism is not required. Put another way, so long as physicians are reasonably compensated (however that is to be measured), the Canada Health Act does not per se require any particular dispute resolution mechanism.

Nonetheless, against the measure of what the Canada Health Act suggests as a reasonable dispute resolution procedure for ensuring reasonable physician compensation, it is not at all clear that the non-binding recommendations of a neutral conciliator would meet the principles underlying the dispute resolution protections contemplated by section 12(2). This is particularly the case given that the Agreement does not provide that a conciliator’s recommendations must be implemented unless overridden by the Ontario Legislature.

Finally, for those with a sense of history, there is some considerable irony to the situation Ontario physicians now find themselves in when it comes to negotiating with Government.  Throughout the 1970s and into the 1980s, including following the disastrous 1986 strike over extra-billing, the dispute resolution process for determining adjustments to the fee for service schedule culminated in non-binding recommendations from a neutral “fact-finder”.  Over time, the OMA expressed increasing frustration with the non-binding nature of the recommendations, as the provincial government increasingly ignored the recommendations and proceeded to act unilaterally. In the early 1990s, the OMA succeeded in negotiating a binding dispute resolution mechanism, but this was legislatively extinguished by the Harris government when it came to power in the mid-1990s.

After a period of considerable instability, for the period 2000 to 2012, the OMA successfully negotiated three successive four-year agreements, providing for generous compensation adjustments for physicians.  Notably, these agreements, and the cooperative relationship between government and the OMA they fostered, were negotiated without any formal dispute resolution mechanism. However, it must be recognized that much of this was accomplished in a climate of relatively stable fiscal and economic conditions, perceived physician shortages, and since 2003 a Liberal government eager to make labour peace.  This favourable economic and political climate provided the OMA with sufficient leverage to advance the interests of physicians.

However, what works in good times may be insufficient when times turn bad. Now that Ontario faces a serious fiscal and economic challenge, and in the absence of being bound by any dispute resolution process, the temptation for the Government to act unilaterally proved irresistible.  After much heat and acrimony, the compromise recently worked out by the parties has been to bring back the very non-binding recommendation dispute resolution process — good faith bargaining coupled with non-binding recommendations from a neutral — that proved to be so inadequate for physicians some thirty years earlier. In this context, it is difficult not to be reminded of George Santayana’s dictum that “those who cannot remember the past are condemned to repeat it.”