Does unilateral government action threaten the future of medicare?

Three years ago, I commented on the then new (2012) OMA and Government agreement. I expressed scepticism at the time that the Agreement would truly result in the freeze (and indeed savings) the Government asserted that it would, especially without a hard or soft cap on utilization growth.

As it turns out, at least according to the Government, the savings did not materialize. Hence, the Government proposed, and is now purporting to impose a cap on overall expenditures (given that the tentative agreement providing for such a cap has now been rejected by the OMA).

But another feature of that 2012 agreement was a separate agreement in which the Government and the OMA agreed to a process for negotiating future Physician Services. Under this process, which applied for the first time to this most recent round of negotiations, there is a period of bilateral negotiation, followed by assistance from a “Facilitator” who can make confidential recommendations to the parties. Then, 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.

However, the 2012 agreement did not contain a mechanism for resolving any remaining impasse, should the parties not be able to reach agreement following facilitation and conciliation. Rather, the parties agreed that the Government could move to unilateral implementation of its proposals once the facilitation and conciliation phases (including any public report and recommendations) were concluded.

This is precisely what the Government has now announced it intends to do at this stage, including implementation of a hard cap on overall expenditures on physician services.

I am not going to comment on the merits of the respective positions advanced by the OMA and by the Government. I appreciate the Government’s fiscal concerns as well as its focus on eliminating payments that it believes do not bring about desired reforms or results. But I also recognize the legitimacy of the profession’s objection to another three or four years of fee freezes, and to the government’s apparent unwillingness to fund increased utilization resulting from demographic and other pressures.

What I do want to bring attention to is whether the Government’s right to unilaterally implement compensation changes, including hard or soft expenditure caps and fee reductions, might ultimately undermine physician support for our single-tier publicly funded health care system.

One of the key features of Ontario’s publicly funded single payer system is that physicians delivering essential health care do not have an exit option; they can’t simply decide, as individuals or collectively, that if they are not being fairly compensated, they will charge more, or practice elsewhere, i.e. outside the publicly funded system. As both a legal and practical matter, if physicians are going to practice medicine in Ontario, they have no choice but to practice within medicare, and to do so at rates paid by medicare. Indeed, in this sense, physicians are relatively unique. Most other professionals, indeed most employees have the legal right, both individually and collectively, to offer their services elsewhere if they cannot agree on appropriate compensation arrangements.

Now, in the normal workplace collective bargaining context, once the parties have reached an impasse at the bargaining table, an employer is free to unilaterally impose its final offer, but in response, employees have the right to collectively engage in some form of withdrawal of services — for example, work slowdowns, targeted or rotating job actions or outright strikes.

And, in theory, the OMA could seek to have its physician members engage in various types of job action to contest the most recent unilateral Government actions. However, given the perceived essential nature of the services provided by most physicians, there are no doubt various degrees of political, professional, ethical and legal constraints on the effectiveness of any attempt by physicians to engage in withdrawal of services. Indeed, the OMA itself appears to have recognized this in its most recent public pronouncements.

It is precisely because of the essential nature of the services they provide that, when it comes to other workers providing essential services (e.g. nurses and other hospital and nursing home workers, and firefighters and police), the right to strike is legally prohibited. However, for essential service workers who do not have a right to strike, there is a process of independent, impartial, binding arbitration.

Indeed, as I pointed out in an earlier posting, it is at least arguable that the Canada Health Act itself contemplates that, because physicians are prohibited from extra-billing and from practicing outside the publicly funded system, they should be entitled to some independent process to determine their fees or compensation.

Admittedly and understandably, governments of all political stripes are very reluctant to allow an independent third party arbitrator to make important compensation decisions, having significant fiscal implications. But at the same time, it is not at all clear that it is fair or appropriate for Government to have the unilateral authority to fix physician compensation when medicare is the only game in town.

Ironically, had the Government accepted that the third party conciliator’s decision would be binding in the current dispute with the OMA (rather than its just providing for non-binding recommendations), the Government’s position would have prevailed. In his reasons and recommendations, the conciliator appears to have adopted the Government’s position and proposals.

But at least the parties would have gone into the exercise with a balanced and fair process, one which would allowed both parties the opportunity to make their case before a binding arbitrator or arbitration board, and which would have offered either party the opportunity to have its proposals prevail (rather than one side – the Government – having the right to do what it wants to do regardless of the outcome of the process). While no doubt there are risks to Government of a binding process, at least the outcome would have been perceived as legitimate by both sides.

However, perhaps the most important implication of allowing unilateral Government imposition in the physician compensation context is the corrosive impact this may have on the support of physicians for a single payer system for funding physician services. While our health care system is far from perfect, many if not most physicians believe that it results in more equitable, efficient and healthier outcomes overall than a system where physicians could extra-bill or charge patients extra for providing health care.

Yet, the health care system is now dealing with both legal/constitutional and political challenges questioning its “sustainability”. On the legal front, Dr. Brian Day’s court case claiming a constitutional right for patients to pay and for physicians to charge extra for health care outside of our publicly funded system is scheduled to begin in the courts in B.C. in early March.

And, on the political front and much closer to home, in an overlooked part of the conciliation recommendations, the conciliator recommended (and the parties appear to have tentatively agreed to) establishing a Committee or Task Force on the Future of Physician Services in Ontario, whose mandate would have explicitly included the sustainability of the manner in which physician services are delivered, together with alternatives to the present funding model for physician services. Certainly one reading of this is that alternatives to Ontario’s single-payer health care system would be put on the table (a course that would seem to contradict the Ontario Government’s professed commitment to medicare).

In this overall context, it seems legitimate to raise the concern that, if physicians increasingly feel that there is not a fair process for determining their compensation within medicare, more of them will begin to advocate for the right to practice and bill outside of medicare. And this should concern anyone who believes that physician support for the principles of medicare is very important to its survival.