Since its election, Alberta’s government has taken steps to aggressively contain healthcare costs, including imposing changes to physician pay that doctors had asked to delay until COVID-19 was better contained. Although these changes have been in effect for less than a month, numerous doctors have already resigned from rural hospitals, which will undoubtedly adversely affect patients in those communities.
Provincial governments enter into multi-year agreements with provincial medical associations on the terms of physician compensation. This has sometimes lead to acrimonious negotiations. For example, Ontario’s negotiation with its medical association lasted several years before finally reaching a resolution via arbitration in early 2019. Similarly, while Saskatchewan’s compensation agreement with doctors expired in 2017, negotiations are still ongoing. In December 2019, the Newfoundland and Labrador Medical Association’s president released a letter criticizing the government for its “irresponsible delay” in beginning contractual negotiations given the time these discussions can take.
In Alberta, failed negotiations culminated in the Alberta Medical Association (AMA) launching a $250-million lawsuit against the government on April 9.
The Alberta government and the AMA began negotiations last November in anticipation of the compensation agreement expiring on March 31. The government’s approach was to aggressively contain costs, claiming that Alberta doctors are paid significantly more than those in comparable provinces to achieve similar outcomes. The AMA vehemently disagreed, calling the data “flawed,” and said doctors are projected to make only 5.7 per cent more than counterparts in other provinces.
The AMA says it negotiated in good faith and proposed several cost-savings measures but alleges the government did not reciprocate. Instead, on December 4 the government passed Bill 21, permitting it to unilaterally terminate any agreement respecting compensation matters with the AMA. The power to terminate a negotiated agreement for any reason and with no consultation or dispute-resolution process creates an environment that makes meaningful negotiation impossible.
Nevertheless, at the end of January, the government and the AMA began mediation. The process, however, lasted for only a few weeks before the government unilaterally terminated its contract with physicians, effectively ending negotiations. The government then imposed controversial conditions on physician pay that took effect on March 31.
These measures will negatively affect access to care, particularly that provided by family doctors and those practicing in rural areas. Some rural doctors have reported that they are now unable to deliver obstetrical services due to changes in the government’s contribution to liability insurance premiums. Others say that changes in the way their overhead is paid make it unfeasible to both run their community offices and provide care to patients in hospital. Doctors in several towns have already given notice that they will no longer provide care at rural hospitals or plan to leave those communities entirely.
The AMA’s lawsuit alleges that by terminating the AMA agreement, negotiating in bad faith, and removing the AMA’s right to arbitration, the government has infringed on its Charter right to freedom of association.
The AMA has favorable caselaw to bolster its claim. In 2015, the Supreme Court of Canada affirmed that freedom of association encompasses the right to strike. The court found that Saskatchewan legislation denying essential workers the right to strike was unconstitutional because of the lack of an alternative mechanism to resolve bargaining impasses. Drawing on this case, Alberta physicians persuasively argue that because of their legal and ethical inability to walk off the job, the meaningful exercise of their constitutional rights requires an alternative dispute resolution process (in this case, arbitration).
Although it is not directly binding in this type of dispute, the AMA’s claim is also supported by the Canada Health Act. According to this legislation, a province’s healthcare system must meet certain criteria to attract federal funding, including “accessibility,” which requires “reasonable compensation for all insured services rendered by medical practitioners.” The Act specifies that this requirement is met if the province has entered into an agreement with doctors that provides for negotiations and the settlement of disputes through conciliation or binding arbitration, which has not occurred in this case.
Given Alberta’s current fiscal climate, the optics of a lawsuit that seeks more than $250 million may be poor. However, the AMA is not focused on monetary damages. Instead, it has said “[t]he best-case scenario would be for the AMA and government to reach a negotiated agreement while this legal case proceeds.” Failing that, the AMA wants a court to conclude that it is constitutionally entitled to arbitration and that the government cannot unilaterally change compensation agreements.
While some critics point to the poor timing of the lawsuit given the COVID-19 outbreak, the AMA and more than 800 doctors requested that the government delay implementing the compensation arrangement to allow them to focus on the pandemic. The government’s only concession has been to delay new rules around complex modifiers that allow doctors to bill more for patients who require longer consults.
It is in the public interest that doctors and the government are partners in the healthcare system and have access to a reasonable dispute resolution mechanism when negotiations fail. In both Ontario and Alberta, the government failed to treat this relationship as a partnership, instead choosing to unilaterally impose compensation terms.
By fighting the AMA’s legal claim, the Alberta government is risking the resignation of additional rural doctors who are particularly difficult to recruit. Instead, the government should be devoting the time and legal resources that will be wasted in litigation to responding to COVID-19 and its aftermath.