Standoff with Ontario’s docs may hold back broader health reforms

Changes to the fee structure of Ontario’s Docs are stoking a fiery dispute between the Ontario government and physicians. But the current standoff takes the momentum out of physician-centred reforms with durable opportunities for cost savings in the health sector – such as having doctors commission care on behalf of their patients.

Getting better value for money in healthcare means that we need to produce better health outcomes with the same resources. Doctors – especially those in primary care – are well-positioned to play a leading role by: 1) caring for patients and ensuring that they have access to necessary resources; and, 2) using available resources in the most efficient manner. Ontario’s doctors currently take on the first of these duties, but have little motivation to act on behalf of the community’s scarce resources.

In charting a patient’s care path, physicians have no reason to consider secondary costs, or cost-effective treatments for various illnesses. For example, writing a referral for an MRI, or a prescription for an expensive drug, does not directly affect physicians financially, even though it does affect overall health system costs.

The dilemma for doctors is that in the eyes of the patient, more tests, more drugs, and more specialists are normally associated with better care. But often the same quality of care may be possible with fewer interventions, basic screening tests, and perhaps cheaper drugs.

Physician compensation in Ontario – at about $12 billion in 2011 – makes up about 23 percent of the Ontario government’s overall health budget. But physicians are indirectly responsible for the lion’s share of all health spending, both public and private, because most health spending depends on physicians’ decisions (i.e. referrals, prescriptions, etc.).

What if – putting aside a reduction in physician fees – doctors were given a greater share of the health budget in exchange for additional responsibilities? What would this look like?

Take current reforms in the UK as an example. Proposed reforms there would see groups of primary-care physicians – commonly referred to as commissioning consortia – take control of a large share of the overall health budget to commission care on behalf of their patients. These doctors would have to assess patients’ needs, decide the appropriate paths of care, then set up – or purchase – the best care for their patients with limited available funds. The cost of patient care paths would then come directly out of the group’s annual budget.

In Ontario, many primary-care docs work in family health teams – where they have support from other primary-care health professionals – and many are paid on a per-patient basis (capitation).  So doctor commissioning in Ontario could be an extension of this system: physicians working in family health teams would receive a larger transfer for each patient on the team’s roster. In return, they would have to pay a share of patients’ care costs.

Giving doctors control over a larger share of the health budget could give existing family health teams incentives to contain the overall cost of patients’ care from all sources. By keeping track of the cost of patient care following referrals by primary-care providers, a year-end bonus can be offered for providers to be more prudent in their decisions.

Instead of sending patients to hospitals and specialists, skills within a family health team might be better applied to deal with certain health problems.

As with all reforms, however, implementation plans are critical.

Evidence from past experience with physician commissioning is mixed. In the early 90s, the United Kingdom put in place a voluntary plan that saw some efficiency gains, but little improvements in curbing costs.

Physician commissioning in the United States demonstrated that building up the expertise to manage a larger share of the health budget takes time.

If Ontario were to try primary-care physician commissioning, it would be best to introduce changes gradually. For instance, the province could begin by giving family health teams a budget for diagnostic tests, and then add drug or hospital budgets later.

Opponents to this reform will claim that doctors cannot take on additional responsibilities. They will say that doctors are trained to care, not to budget, and that any new responsibilities will take away from physicians’ time with patients.

But within the health system, there is no group of individuals better able to decide the right paths of care for patients, while ensuring value for money, than doctors. Their advocacy for patients is critical, but so is their responsibility to make best use of the limited resources in our health system.

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1 Comment
  • Elizabeth Rankin BScN says:

    I am relatively new to this group and just viewed your submission. Your ideas have some merit but I believe they fall short on only recognizing physicians as “the only group of individuals who are better able to decide the right paths of care for patients.” This thinking process has historically been a constant bias and your taking this kind of stance [paid? or otherwise] will impede progress rather than improve patient outcomes which ultimately saves money for the health care system. Research shows that patients, first and foremost, along with their “interdisciplinary team” of professionals can and will choose the “right path” to get the them moving in the direction for best outcomes. We need a health care driven model, not a medical care driven one. We need a model of care that recognizes everyone on the team is at the table to “listen to the patient” with the family physician & that team as the one that provides the continuity of care since they are the one who is the constant cog in the wheel. We need this model and concept, not just for patient safety factors, but to provide a better patient experience and a level of accountability that is sadly lacking.

    Cost cutting and lowering health costs are important but they won’t begin until we have a model in place that sets up and addresses the need for only having interdisciplinary family health teams, rotating schedules for office hours so patients take ill during the evening or after midnight are able to be seen when ill, [not urgent care] at their family team practice centre so hospitals are not burdened during off-hours such as late evenings and depending on the population served,and open through the night with a reduced staff requirement.

    The “Commissioning” concept of which you speak, is an interesting one. It is this concept where having a team approach could actually save $$$’s because it’s entirely likely and certainly possible that many tests such as CT &, MRI’s will be avoided when the Dr. and the Physiotherapist, for example, can examine the patient and then discuss with the patient what limitations the patient has, for example,and that, with another team member’s added opinion, a hand’s on PT assessment may suggest, let’s wait, for the response to A&B and see if we get C before we order a test. Not only are tests expensive it has been proven many are not needed. Further, they are a risk to patients from CT radiation exposure and some MRI’s also require contrast [chemicals injected IV] so tests should be resorted to when an examination and other therapies are tried first. There are always exceptions. But I think, not only patients, but doctors too, feel if you get the test out of the way then you can start to look at what else is going on. This is not the way it used to be BUT..it’s one of the negative trade-offs, if you build it into the fee schedule…they will come!

    It is true that using the family health team’s range of skills to keep the patient as free as possible from using the hospital for small suture repairs, and other minor surgeries or treatments that can be done in-house will cut the hospital expense and the burden to their budget [staff etc] and it’s going to make for a better patient experience rather than having to go from one place to another to get care. It is also an inefficient practice for practitioners and patients to be going to hospital out-patient departments when they could do more “in house.”

    If each physician could see how much they cost the health care system, beyond their salary [fee for service etc.] by ordering tests and prescriptions whether needed or not, it would be an eye-opener for them. Computer algorithm programs should be able to do a print out monthly to see where and who has cost the system the most among their clientele and comparatively among other docs in the same practice and comparatively by patient population, by province and so on.

    I could imagine that teams working together to make a better patient experience will cut costs because doctors who say,” patients request too many drugs, tests and specialists,” are often left to feel this is needed because they don’t feel their doctor has given them enough time or considered their problem in a way that has satisfied them. When patients are listened to and felt understood they will listen more to their “team of consultants, whomever that might be.

    Overall satisfaction will be the outcome when both the patient and their team enjoy a rewarding experience working together. It only seems possible to have reduced costs ot he system when patients can feel they’ve got a team that helps them to achieve the best level of expected outcomes thus reducing burdens on the system.


Åke Blomqvist


Åke Blomqvist is an Adjunct Research Professor at Carleton University and a Health Policy Scholar at the C.D. Howe Institute.

Colin Busby


Colin Busby is a Senior Policy Analyst at the C.D. Howe Institute.

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