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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.

Steven Barrett is a practicing labour and constitutional lawyer with Sack Goldblatt Mitchell.

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9 comments

  1. James Pookay MD CCFP

    Yes, unilateral government action does threaten the future of medicare.

    The Ontario government and it seems governments of all stripes have no stomach to have adult conversations with the public about how our cherished universal system is not the best in the world, eating up increasing share of budgets and is showing more and more cracks every year.

    This is the second time in 3 years that Queen’s Park decided to blame “greedy doctors” for escalating costs as a scapegoat rather than making any hard choices, such as what medical services we can and can’t afford.

    It just puts more and more emphasis on assembly-line medicine, which hurts my soul to be a part of.

    I’ve definitely gone from being a supporter of the Ontario Liberals and a believer in universal medicare, to supporting their opponents and wishing their was a private-option so I can actually do a decent job taking care of my patients.

  2. Merrilee Fullerton

    It is entirely possible to have universal care without a single payer system for medically necessary care. Other better performing health care systems in most other developed countries have hybrid systems.

    Physicians and the public need to move on from simply wishing for the “universality” they thought they had but don’t. Large sums of tax dollars are being spent to manage wait times and limit care options and many vulnerable people are denied care based on costs to government.

    We must move toward a Hybrid system that can truly provide care for the vulnerable, provide more timely access to care AND improved pharmaceutical coverage while allowing quality care for all.

    • KW

      please provide your evidence for your statements. there are Zombies in the room.
      primary care in Ontario, in particular needs to ascribe to the more effective practise models, remove those that have proven less effective and less efficient yet more risky to patients in maintaining practice guidelines, thereby reducing the Provincial adminisrative burden and freeing up care improvement bottlenecks.

  3. Pamela Velos MD FRCSC

    ” 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.”

    This is your opinion. It is not supported by facts or research. A combination public/private health system as in Australia for example, works best.

  4. Jonathan Gravel

    Great piece. But I largely disagree with the following:

    …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.

    Our perpetual fear of making any major changes to our current single-payer system is part of the reason we currently find ourself in this situation. Multiple-payer systems exist all over the world – most of them not forgetting to include the eyes, the mouth and psychology within basic coverage.

    Medicare in this country is not just imperfect, from a value for dollar standpoint and when compared internationally (http://www.commonwealthfund.org/publications/press-releases/2014/jun/us-health-system-ranks-last), we are really just bad.

    We need to move away from our cultural identify with single-payer Medicare and look for better healthcare for the $$ we are putting into the system.

    • Merrilee Fullerton

      Well said.

      Let’s not forget that the multi payer hybrid systems of other countries with better performances than our single payer often include Pharmacare in some capacity as well.

    • Yan Xu

      Hi Jonathan,
      Interesting comment! I agree with you that our system, as Jeffrey Simpson calls it, is a Chevrolet system at Cadillac costs. I wonder, though, if the public-private mix is the element we need to focus on from the myriad of differences between higher-performing health systems and ours, and whether moving to a multi-payer system in elements of health care protected in the Canada Health Act will necessarily solve the inefficient delivery and suboptimal outcomes currently plaguing our system.

      Physician autonomy and separation of MD reimbursement from other elements of health care budget in which they work (eg, hospital budget) may be a bigger issue affecting the misaligned incentives in the current delivery model – this was suggested in Steven Lewis’ NEJM perspective recently (http://www.nejm.org/doi/full/10.1056/NEJMp1414409) and in CD Howe’s commentary on the issue of specialist unemployment (https://www.cdhowe.org/how-to-fix-canadas-unemployed-doctor-problem/28649)

      Would be interested in your thoughts.

  5. Paul Conte

    “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”

    Don’t agree with this simplification that assumes that the outcome of two very different processes would be the same. Conciliation and arbitration are very different and one could assume that both the government and the OMA would not approach one process in exactly the same way as another.

    Conciliation is an alternate dispute resolution process whereby both parties agree to the conciliator and the job of the conciliator is to try to bridge the gap between the two positions and help bring them to a mutually acceptable agreement. The results of the process are non binding, one side is not chosen over the other, decisions are not rendered and awards are not given.

    In arbitration, the parties do not choose the arbitrator, the case for each argument is reviewed and a decision is rendered as to which of the two parties is correct. One side is chosen over the other and decisions are made and awards given to one of the two parties. The results can be binding or non binding. IMHO, there is very little point to non binding arbitration…

  6. William Russell

    We have now reached the inevitable situation, where as a result of unrestricted access by the public to medical services, governments willingness to continue to pay the bills is over.One has to see this situation against a background of economic slowdown Canada wide and Ontario in particular.Their ability to fund other programmes, especially infrastructure renewall,and education is being threatened by the ever increasing Medicare bills
    The response where they limit expenditure at the expense of the physicians is obviously a desperate measure,and one which the ministry knows has no long term future.It is then a choice for all of us ,whether we accept a system which is financially oppressive to its physicians,and eventually becomes unacceptable to patients in terms of poor quality service,or we look to a supplementary source of funding from the private sector.This decision will not be easy for either the physicians or the public,but it will have to be made in the relatively near term.

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