A Toronto Star journalist has been gunning to expose the highest billing doctors‘ incomes in Ontario for a few years.
She champions transparency. Voters have rights.
Doctors get paid with tax dollars; ergo, voters have a right to know.
But is this really about transparency?
Transparency cannot explain a hunt for the top 100 billers. Transparency might fuel a drive to go after all doctors, but not the 100.
Other than envy, or inciting envy to sell papers, what can explain the Toronto Star spending years on lawyers to expose the top 100?
Obsession with incomes fits with a particular political vision. It cares less about bad care than care being equally bad.
Fees Drive Service, Incomes Drive Envy
I saw a businessman with high blood pressure. Great guy. He blamed his job. “Everyone wants everything right away these days. They want more for less money. I need to retire. This is gonna kill me.”
Everyone wants more for the same price or less, including government.
Economists teach us that raw material has limits. It is scarce. And raw material has alternate uses.
We must choose how to use limited resources for different ends.
We each make choices based on the costs and benefits of pursuing a particular choice. Every choice carries a cost.
As economists say,
“Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternate uses.”
This also applies to Medicare. Just because government artificially sets a low price on a medical visit in Canada, does not mean that the public gets something for nothing.
Patients get exactly the service, at a particular price, for effort spent to deliver that service had the effort been used to pursue something else.
For example, the fee for a general visit to your family doctor for pneumonia is around $33 minus cuts.
Most people know that a doctor must spend $13 of the fee on ‘overhead’: staff, supplies, equipment, etc., which consumes 35-40% of total billings.
But government and many doctors forget about the cost to manage overhead. Office managers earn $62k/yr., or 25% of an average family doctor’s billing. Most family doctors cannot afford it.
So for a $33 fee, overhead eats up $13, and management of the overhead uses another $8.25 of effort, whether or not the doc does the management herself.
That means a doctor will expend $11.75 of effort to actually see the patient. If she expends more than $11.75 worth of effort, she pays for the privilege of providing care.
In other words, if the doctor were on salary, she would be using up $11.75 of her salary to see her patient. If she spent more than $11.75, then her employer would have less to spend on other patients.
People will argue about $11.75. They will deny 35-40% overhead. The point is not about the exact number. The point is that fees and overhead matters. We cannot hide from economics.
Remember, economics is the study of human behaviour about different ends that can be accomplished with scarce resources, which have alternate uses. So, how else could a doctor expend $11.75 of effort besides seeing someone with pneumonia?
Trauma patients require more effort and carry higher fees. If the doctor chooses to see patients with pneumonia, how many patients must the physician see to justify the choice versus seeing a trauma patient?
All patients need to be seen. Many are often equally sick. There is limited time to see them.
People think that doctors will just see every single patient that needs care regardless of the effort to do so. If that were the case, complex patients would have no more trouble finding a family doctor than anyone else.
No journalist at the Toronto Star, or perhaps in all of Canada, writes about fees. Journalists are bright. Anyone can find doctors’ fees in The Ontario Schedule of Benefits.
How much care can any professional provide for $11.75?
What should patients expect?
If some patients require more than $11.75 of care/effort for even the simplest complaints, how can we make sure those patients can access all the care they need?
Reform
Ontario tried to fix the fee dilemma by replacing fee for service (FFS) with Primary Care Reform (PCR).
PCR brought piles of new money for new models of primary care. Everyone cheered. PCR pays a set rate to care for a patient for a whole year.
But PCR cannot escape scarce resources that have alternate uses. If anything, it makes the issue worse: Without the right differences in capitation rates, complex patients still struggle with access.
Discussing fees drives a discussion about patient service and quality. Discussing incomes inflames envy and discussions about equality and social justice.
Socialized medicine is not magic. It cannot conjure service and quality out of thin air without paying for it.
When government sets a low price on a medical service, it does not follow that patients can get the same medical service that they might have had the price been different.
If we force bakers to sell bread for $1, they will bake shorter loaves. They cannot afford to do otherwise.
If doctors cannot afford to provide all the care they would like to for $11.75, then doctors will adjust. They will shorten visits and refer more often, or choose to see different patients.
Fees do not sell newspapers, but fees matter to patient care. The Toronto Star salivates over publishing the top 100 doctors’ income in Ontario.
It aligns with the Star’s mission: advance radical levelling; attack groups who work or produce more than average; inequality proves that society is made of victims and oppressors.
Senator Ogilvie asked, “So why is health care delivery in Canada on the verge of catastrophic meltdown?” at the CMA Health Summit in Winnipeg this week (gated).
Meltdown comes from ignoring basic rules of economics, among other things.
It seems media would rather inflame envy than discuss system change. When will social leaders change the conversation and focus on things that impact patient care?
Photo credit: www.heraldsun.au.com
As the saying goes, don’t quarrel with a man who buys ink by the barrel. It’s pointless to make this about the Toronto Star and whatever its editorial stance might be, just as it’s disingenuous to say the paper would rather inflame than talk about system reform…how many op-eds a year does the Star devote to health care system issues, including pieces written by OMA leaders? Moreover, once the Andre Picards of the media world argue successfully that publishing billings is appropriate, the battle is over.
If we want to talk reform and get the conversation to move beyond fees, then *doctors* have to quit haggling over slices of the pie and abandon the idea that FFS remuneration in self-funded office practices (group or otherwise) is still viable. It’s not. Medicine has changed irrevocably…episodic, transactional care simply doesn’t reflect what doctors need to do to manage the care of an aging population with an increasing burden of chronic disease. That doesn’t mean doctors should all be salaried (some sort of blended pay model with sticks and carrots work best), but we need a functioning job market with reimbursed overhead and a clarification around the limits of professional autonomy. To paraphrase Jean Chretien’s line on trade, our continued reliance on FFS isn’t left wing or right wing, it’s simply passe.
Hey Frank!
Thanks for posting a comment and for coming to the defence of the Toronto Star! I agree. The Star writes a tonne about healthcare. They just never write about how fees relate to care. I say ‘fees’ in the largest possible sense. Regardless of whether docs are paid fees, a salary, a blend, capitation, or some other form (fund-holding?), we cannot escape that fact that economics matters to individual patient care. That’s all I’m trying to say.
Medicare cannot escape economics.
Thanks again for sharing such a thoughtful comment!
Cheers
All alternatives payment systems are beyond the governments ability to pay. Salary methods would make the government responsible for overhead, markedly reduce productivity and create a pension and benefit system presumably comaoarable to that of civil sercants. Blended personal and private insurance would but he government is philosophical a opposed to even considering aspects of privatization. The present system is collapsing rapidly as any primary care doc will tell you.
John,
You make a very solid argument. I suspect that the next will be for the government to try something like they did in the NHS (fundholding) or at Kaiser (shareholders). Fundholding pits doctors’ self interest against patients’. Heinous. Kaiser only works if Kaiser exists in a competitive environment where a material risk exists for Kaiser to go out of business. Not a real option in Canada at this point.
The impending collapse of the system can be avoided. Will government have the courage to loosen its grip on a failed ideology and consider solutions used around the world?
Thanks for posting a comment!!
Cheers
Shawn, I loved this article you wrote. Thank you for writing it. You know, here in Sudbury, we have a brand new invention: a tele-doctor sitting in Etobicoke seeing Sudbury patients by means of a computer screen in their home. Such service, such convenience. He just saw a 94 year old lady with gross hematuria, no symptoms of infection and treated her for over 10 days with two different systemic antibiotics for a UTI. She has a previous history of bladder tumours (2), and has calcium oxalate in her urinalysis.Guess his differential is very small and his time in Etobicoke is worthy of fillage by more interesting pursuits and proper care. Wonder how much he billed? I just spent 40 minutes this morning explaining to the family the repercussions of such care and re-directing the course of her investigations and care.
Hey Julie,
Thanks for sharing this…although it was painful to read. Yikes! I hope your patient is doing well now. These stories remind me of why I’m a big believer in localism. When local communities of docs get to know each other, no one can get away with this kind of thing. Local docs spread the word. They tell each other who gives great care. They tell each other when they made a bad clinical judgement. They keep each other accountable. Of course, you can get a band of people who support poor behaviour, but I find that is less common.
Thanks again for sharing this story. I hope it remains an uncommon tale! And thanks for taking time to read and post a comment!!
Cheers
Another law of Economics is the law of supply and demand. It is an undeniable fact that the current fiscal Health environment will cause any current provincial government budgetary bankruptcy as the wave of Boomers moves through their golden years towards their various terminal conclusions.
But with our single pay system, supply and demand laws go out the window. Market forces cannot find equilibrium. So human behavior will need to change to reallocate resources.
Let’s not worry about what the Toronto Star wants to do. We know that their motivation is simply to sell more newspapers. And if they have to do it by presenting peeping Tom, oo la la, sensationalistic non news, so be it.
The reality of all this economic theory, is that the costing model for delivering Healthcare needs to change. That is the real discussion that needs to happen. Until politicians and policymakers acknowledge that reality, we’re stuck with non-news and head in the sand policies that we know won’t work.
So well said, Rob, as always.
As consumers, we get excited about prices because of how they impact our wallet. But prices mean far more. They provide information to producers and consumers. They tell producers to make more of something that is dear and to stop producing something that is plentiful. Fixed prices destroy all that information. In fact, they do worse. Fixed prices send perverse signals and drive producers to offer services that have high prices set by government even if the service is already plentiful.
Point well taken re the Toronto Star. I used it as a springboard to talk about raw material, scarcity and alternate uses. But you are right: the Toronto Star is just noise. It’s a grubby, profit-seeking business competing to get filthy rich by publishing socialist rants (exaggeration intended).
Again, thanks so much for taking time to read and share a comment!
Cheers
Does the profession truly understand the reason WHY the respective governments in Canada unilaterally set the professional fee for say the A007 code at approximately $33? I have my theories but I would like to hear what others think. Will “reveal” my thoughts later.
Thanks Robert! I think your longer comment posted below…will respond to that one…
Excellent article and thank you for writing it, Shawn! As long as the supply is plentiful (enough), the populace is not going to speak out about our work conditions, and the Star, definitely not. Thank you for spelling out the potential consequences of MDs earning a grubby $11.75 for a significant amount of care, effort, and often, risk. Now we just need a poster for our offices 🙂
Hey Jennifer!
Thanks so much for reading and posting a comment. You make a strong point: Only docs really care about this. Patients mostly just get frustrated that they only got $11.75 of care when they were hoping for $100. Most patients deserve $100 or more, except for all but the most simple concerns. If media, even a few journalists, took this line of thinking seriously — after all, it’s just basic economics — more people would start turning their frustration towards government for only getting $11.75 worth of care instead of begrudging doctors for it.
Thanks again. I hope you are well!
Cheers
Send a comment early but it has not appeared…let’s assume I clicked on the wrong button or some kind of computer gremlin….so let’s try again….with slight modifications.
Nice article Shawn. It brings attention to an issue that is probably deliberately avoided by the OMA and the media for their own respective reasons. The real question is WHY is the fee discussed – the A007 for FP – set at approximately 40% of the erstwhile “OMA Fee Guide”. This has never been discussed at length. I have my theories but would like to hear from others what they think. I will disclose my own analysis and reasons later and see what conversation it will generate.
Hey Robert,
Thanks for asking a great question! Until we got binding arbitration last spring, the OMA has had to go with whatever ideas the government wanted to fund, if there was any hope of getting new money for doctors. Like Milton Friedman said in a talk at Mayo clinic in the 1970s, government always adds a generous sweetener to new programs. Once everyone adopts the new program, the government removes the funding and redirects it to newer, new programs in order to win votes. There’s no sense pouring money into old programs that won’t win any more kudos from the voters. Any above all, government will avoid, at all costs, funding anything that the academics hate. Fee for service has been blamed for everything from high costs, low quality, fraud, wait times, and pretty much everything that is evil in Medicare. As such, government would only attract criticism for directing money towards the A007…and politicians hate bad press more than anything.
Thanks again! By the way, your first post always needs approval before going live. After approval, they all go live.
Cheers
Great post Shawn … one of your best.
The happiest physicians I know,are those who have found a source of non ohip income.They,as have I,tend to reduce their ‘gov’t’ work to those things they enjoy,putting up with the system inefficiencies [increased bureaucracy the libs introduced over the last 15 yrs]knowing they can make their money elsewhere.Unfortunately,most docs are ‘trapped like rats’,running the spinning wheel trying to earn enough to pay for the things they feel their families deserve … a perfect business model for gov’t who just keep reducing the prices making the docs work harder to earn as much as previous years,maintaining service.
How did we allow this to happen ?
By eliminating CHOICE for physicians in the way we are paid [solely public] … with the only choice being to leave,or stay.
The only choice now is to decide if a doc will provide a service for the amount of money paid for that service … those of us that can,give up things like operating time,to do insurance work that pays 3 times more /hr than working in the OR,with no stress,exertion,or risk.Do you think that affects wait times ???
Docs are smart … they find a way.
Atleast those that aren’t what I call ‘medical clergy’ who have a feeling of ‘moral superiority’,and must sacrifice themselves for the good of their patients.Why do you think the hot topic at the CMA was physician burnout/wellness ?????
Super comment, Ramunas.
I agree. Freedom, choice and professional autonomy lead to work satisfaction. It is absurd that system planners continue to wring their hands over doctor suicide and burnout but do nothing about the over-regulation of a once-noble profession (noble in the sense of free).
You make another great point. Most doctors will work to an income level and then stop. The research I’ve seen shows this for docs stuck in a system in which they feel ‘trapped like rats’, as you say. For those who feel free to innovate and work more, docs will tend to work and work and work. They get loads of positive reinforcement from the game of seeing how much they can do overlapped with the moral reinforcement of helping patients. But this virtuous vicious cycle collapses if you force docs into it by removing choice and over-regulating clinical care.
I smiled at your ‘medical clergy’ comment. I need to think that one over. I’ve been planning a post on how moral superiority makes it impossible for someone to listen to another opinion if they assume the person holding the opinion is morally deficient in some way. But I never thought to connect it to burnout. Hmmmm
Thanks again for taking time to read and comment. Excellent thoughts all!