The Tentative 2016 Physician Services Agreement: Beyond the rhetoric
Are physicians responsible for only their individual patients, or do they also have a responsibility to help ensure that the health care system functions well?
To me, this is the question at the heart of the debate over the tentative Physician Services Agreement (PSA) that has been negotiated by the Ontario Ministry of Health and Long-Term Care and the Ontario Medical Association (OMA). The agreement has provoked a tremendous amount of discussion on social media and an extremely high level of rhetoric. There have also been challenges to the voting process. The OMA has been forced, by its own rules and by court judgments, to hold a general meeting and to amend the questions that are being asked of physicians. It seems like people are shouting a whole lot more than with previous agreements, which is unfortunate, because it can detract from the kind of careful deliberation that is needed to assess a nuanced and complex proposal.
Others have discussed whether the proposed increases in spending are what can be realistically expected (I think they are given the province’s financial situation) and whether the process was transparent (I think this is where the OMA has performed badly; they reportedly did not fully involve their own Negotiations Advisory Committee and their messages and online voting system have been accused of being biased). These are essential questions, but I would like to discuss two important points that I think are being lost amid the heated discussion.
First, I think the PSA represents a significant shift towards a system-level perspective, primarily by setting a limit on total physician expenditures – how much the government spends on doctors in aggregate – rather than focusing on the fees that physicians bill for specific procedures or placing caps on how much an individual physician can bill in a year. Fee negotiations, caps, and other mechanisms will be used to control total expenditures. These will be negotiated throughout the four-year term of the agreement by the Ministry and the OMA as part of a process to meet system-level targets. Importantly, these are tools to meet a larger objective, rather than the focus of the PSA as in previous agreements. That is, the agreement starts with a specified outcome (limited growth in total physician expenditures) and establishes a process to reach that goal rather than starting with fees and caps and hoping for a reduction in total expenditures, an approach that has not worked very well.
Focusing on cutting fee codes (as the Ministry has done, sometimes with and, more recently, without the OMA’s agreement) doesn’t seem to work to limit physician billings. The fee schedule is complicated and, perhaps to an extent not widely appreciated, somewhat discretionary. Some doctors respond to cuts in fees by working more; others by billing aggressively, for example by defining more patients as complex and thus billing higher rates. A cap on individual physicians’ salaries might result in some high-billing doctors taking long extended vacations once they reach their cap. Billings may fall but so will access to care. And while the 2012 PSA agreement established mechanisms to encourage evidence-based approaches to spend less on low-value care, my impression is that the impact from those initiatives has been limited, perhaps in part because that agreement was announced in December 2012 and expired in March 2014 – too short a time to realize significant change (the new PSA covers four years).
Some say that managing the health care budget is not the job of physicians. I disagree and so does the Royal College of Physicians and Surgeons of Canada, which states that a core competency of physicians is to “engage in the stewardship of health care resources.” The PSA explicitly says that physicians should “co-manage,” with the Ministry, how much is spent from the public purse on physician billings. A very large argument in favour of this agreement is that it offers the best framework to date to fulfill physicians’ stewardship role and to shift thinking to perspectives broader than those that focus solely on individual doctors’ billings.
Second, the PSA includes an innovative incentive structure that deserves to be tested. In essence, physicians will get bonuses (what the agreement calls “One-time payment increases”) if total physician expenditures remain within target ranges. If actual expenditures exceed the targets, the one-time payment for that fiscal year will be reduced by the excess amount. Starting in 2017, further excesses would be addressed by reducing future payments and other mechanisms to limit fees.
Behavioural economists and cognitive psychologists have studied how behaviour is influenced by the design and delivery of incentives. For example, “mental accounting” is the principle that incentives are stronger if they are given separately from regular payments. “Loss aversion” suggests that once a bonus has been given, people will work hard to keep that bonus in subsequent years. It is important to note that “for Fiscal Year 2016-2017, there will be no reconciliation of the overage [amount in excess] past the one-time payment reduction [withholding the bonus].” In plain English, physicians’ fees are protected from clawbacks in the first year, which behavioural economics predicts will motivate them to avoid such losses in subsequent years. I don’t think incorporating such incentives should be seen as duplicitous or underhanded. The point of such structures is to capitalize on human psychology to bring about desired changes. However, such incentives are complex and do not always work – they may conflict with other motivations or may be too small to lead to behaviour change. The one-time payment model should be rigorously evaluated to see if it works. But it nevertheless represents a novel approach to changing physician behaviour and deserves to be tried.
The OMA has a mandate to advocate for physicians but now, more clearly than ever, it will also have a mandate to ensure that physicians are partners in working towards a sustainable health care system. The PSA is hardly revolutionary. Still, it contains significant shifts in thinking about the roles of physicians as a group and innovative methods to try to control costs that make it well worth supporting.
Ahmed Bayoumi is a general internist and health services researcher at the Centre for Research on Inner City Health in the Li Ka Shing Knowledge Institute of St. Michael’s Hospital. Follow Ahmed on twitter @AMBayoumi
Read more about this issue.
Rajiv Singal, a urologic surgeon at Michael Garron Hospital and professor at the University of Toronto, writes It’s about funding, not income: Why Ontario’s doctors should vote no
For another perspective on the deal, labour lawyer Steven Barrett writes, You Can’t Always Get What You Want: An Assessment of the Tentative 2016 Physician Services Agreement