You Can’t Always Get What You Want: An Assessment of the Tentative 2016 Physician Services Agreement
When they meet on August 14, Ontario doctors will have a significant choice to make. Do they vote in support of the tentative physician services agreement, concluding that relative to the risk of further adverse unilateral government action in the absence of an agreement, the deal contains a larger measure of stability, a greater degree of financial protection, and a formal role for the OMA in co-management of the physician services budget?
Or do they vote against the agreement, in the hope that court action will eventually result in binding arbitration (something that – as I have pointed out in an earlier post – will likely take years to litigate and whose outcome is far from certain), or because they believe that the profession or elements within it will be willing to engage in job action to resist further unilateral government measures and achieve greater gains and protection than those set out in the tentative agreement?
Given the unusually contentious nature of the response to the tentative agreement , what is one to make of the merits of the new deal?
In terms of its financial terms only, while the tentative agreement leaves in place the previous 2015 across the board discounts and targeted fee cuts, it also guarantees a 2.5% annual increases to the physician services budget over each of the next four years, with the possibility of additional one-time only payments adding up to $370 million over the four years of the agreement.
In addition, it commits both parties to find $100 million in permanent reductions to fees or physician payments in each of 2017-18 and 2019-20, with the government in turn committing that the savings resulting from those changes will not reduce the guaranteed 2.5% annual increases to the maximum physician service expenditure budget, i.e. the dollars saved can in turn be used for other unaffected physician services.
The financial details notwithstanding, and stripped of their somewhat overblown rhetoric, those opposed to the tentative agreement raise two primary concerns:
- The OMA has abandoned its core promise that it would not reach a new agreement without securing binding arbitration; and
- The tentative agreement accepts a hard cap on the physician services budget which will result in under funding of patient care and downloading of fiscal responsibility for health care onto doctors.
Obviously, these concerns have resonance with some segments of the medical profession. However, there is another, perhaps more pragmatic perspective, which may be more closely attuned to the actual text of the tentative agreement and to the history of OMA/Government negotiations since the early 1990s.
With respect to binding arbitration, while the new agreement does not achieve binding arbitration on a go forward basis, it also does not abandon the OMA’s claim that physicians are constitutionally entitled to binding arbitration, leaving the issue very much alive. This is because the new agreement preserves the OMA’s right to continue its court case seeking binding arbitration. As a result, the OMA will continue to have the right to pursue its argument in the courts that physicians are constitutionally entitled to a process of binding arbitration.
Moreover, with respect to at least some issues, the OMA has achieved a binding process of arbitration (even though the agreement does not use those terms). The agreement provides for a binding third party decision if the OMA and government cannot reach agreement on the measures to be taken if the budget is exceeded, or on modernization changes to the schedule of benefits. It seems fair to view this as a significant improvement over the unilateralism of the last two years (and the prospect of several more years of unilateral government action in the absence of an agreement).
With respect to concerns relating to the establishment of a capped physician services budget – and apart from the observation that it not as clear as opponents of the agreement claim that capping physician expenditures necessarily or readily equates to restrictions on patient care – the fact is that the terms of this agreement are more favourable to physicians than the non-binding but independent third party recommendations of David Naylor and former Chief Justice Winkler, both of whom accepted the government’s view that future growth to the physician services budget should be in the range of 1.2% annually. By contrast, the tentative agreement provides for more than double that growth at 2.5% a year (and forgives any further budget overruns for both 2015-2016 and 2016-2017). As a result, and given the apparent unwillingness or inability on the part of the OMA and most physicians to take job action, it is far from certain that even if there were binding third party arbitration, the outcome would be significantly better, and indeed it could be worse.
Moreover, the agreement creatively includes both carrots and sticks aimed at physician expenditures staying within the overall budget. In each year of the agreement, there is the commitment to a not insubstantial one-time only lump sum payment to physicians if expenditures stay within budget, with this amount also serving as an initial credit against any budget overruns. As well, if the parties meet their commitment to find further savings of $200 million, these too would provide a cushion against any budget overrun.
Much of the opposition to the agreement seemingly stems from those groups or specialties who perceive themselves as being most at risk of having their fees adjusted downwards. However, they might wish to consider that, without an agreement covering the next four years, the government would be able to unilaterally impose an even more restrictive physician services budget and even deeper targeted cuts.
Presumably, the government has entered into the tentative agreement because it recognizes that without the participation of the OMA and physicians, the process of health care reform will be all the more difficult if not impossible. For its part, it is likely that the OMA has concluded that even if its court challenge were ultimately successful (in the at least four of five years it will take for the litigation to be concluded), in the interim period, without an agreement, there would be even less funding for physician services, no protection against government unilateralism and a limited if any role for the organized profession.
Finally, those opposed to the agreement – on the basis that it lacks a guarantee of binding arbitration – should be reminded that, when the Government and OMA last agreed to binding arbitration (from 1991 to 1995), the compensation arrangements provided not only for a cap on overall physician expenditures, but also on individual physician incomes ($400,000 a year). And, while under those agreements, physicians and government shared responsibility for expenditures over the cap on a 50/50 basis, there was no provision (as there is under the tentative agreement) requiring the government to bear the full cost of any additional expenditures resulting from “new or expanded services or program to Ontarians” or from an “unforeseeable event that materially impacts the PSB to increase overall expenditures.”
Ultimately, amid all of the debate over the merits of the tentative agreement, there is one thing that seems relatively clear: if the vote on August 14 is no, we will see a splintered profession and a neutered OMA, casting serious doubt on its ability – or for that matter the capacity of any physician organization – to credibly and effectively represent physicians collectively in dealings with government on compensation and other matters affecting health policy.
Steven Barrett is a labour and constitutional lawyer, and managing partner of Goldblatt Partners. He and his law firm acted for the OMA in the early 1990s until 1995 (negotiating the first Framework Agreement providing for binding arbitration in 1991, and the social contract agreement covering 1993 to 1996), and continue to act as counsel to the Professional Association of Residents of Ontario.
 While the Rolling Stones – whose song serves as the inspiration for this comment’s title – were not likely focused on the tentative PSA Agreement, their sentiment seem particularly apposite to the degree of fervor the debate over ratification has provoked:
“… I went down to the demonstration to get your fair share of abuse
Singing, “We’re gonna vent our frustration if we don’t we’re gonna blow a fifty-amp fuse”
You can’t always get what you want. You can’t always get what you want
You can’t always get what you want. But if you try sometimes well you just might find
You get what you need.”
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 agreement, read Ahmed Bayoumi’s piece, The Tentative 2016 Physician Services Agreement: Beyond the rhetoric