Clawbacks to Ontario MDs: The absurdity of it all

There is a laundry list of things that concern Ontario doctors about the unilateral cuts made by the Ontario government. The 2.65% cut to all individual fees (on top of cuts imposed in 2012) will drive physicians out of the province, and cuts directed at new grads will detract them from even starting practice in Ontario. Physicians know that our patients will feel these cuts with increased wait times and decreased access, despite the best efforts of physicians.

But it’s the clawbacks coming in 2015-2016 that will confuse the public, and truly scares physicians.

For those who don’t understand how physicians are compensated, here’s a Coles Notes version. Some physicians are paid fee-for-service based on a fee schedule set out by the government. Do a specific service, get paid a specific amount. Simple. Some physicians get paid based on the number of patients on their roster that they are responsible for. Again, the government has agreed on a specific amount to pay them per patient. Simple. Depending on the patients seen, or the roster size, the government pays physicians once a month the owed amount. Simple again.

Except the Ontario government is in a lot of fiscal trouble, much of which is of their own doing through failed programs. So in their infinite wisdom, they have decided to cut all of the individual physician visit fees, as well as setting a cap on total billings by all physicians. If total physician billings province-wide for a fiscal year go above this capricious upper limit, the province will clawback that amount of money from all physicians. Remember those monthly payments to physicians? The clawback will mean that all physicians will literally be paid ZERO dollars for an unspecified number of months. Can you imagine being paid zero dollars for services that you provide in any profession? My patients will need to be seen in January 2016, February 2016, and March 2016, and there is a good chance I won’t be paid for months of clinics.

Let that sink in for a second. The government has set specific fees that they pay physicians for certain tasks or responsibilities. But if demand from patients over the next year (aging population, immigrants, outbreaks, etc.) exceeds the cap, then the province will not pay for that extra care. Patient demand for care is largely out of the control of physicians, yet the government is dictating that any demand above their arbitrary cap won’t be paid for.

There is no maximum claw back. 5%? 10%? With an aging population requiring more care than ever before, we can’t possibly fathom how high demand may go. If the government decides that they want to fund more surgeries, or new clinics, or new nursing homes, or any new program, total physician billings will increase, and they won’t have to pay a penny more than the cap they have set. More physicians providing more services, and far less pie to share.

How would this type of clawback play out in other areas of the public sector?

Imagine if nursing wages were agreed to at a certain fee, and the government decides to hire more nurses to meet increasing demand. But at the end of the year they realize that the overall nursing budget went over their “nursing cap”. So they claw back the overage from all nurses by not paying any of them for a few months.

Imaging if the government decides to hire extra teachers to finally curb increasing class sizes. At the end of the year, they tell teachers that they set a total cap and don’t have the extra money to pay, and that all teachers will not be paid for a few months to make up for the extra hired teachers.

Imagine your local police department requires extra officers because of a crime spree. At the end of the year, the police services board tells the officers that they went over their labour costs, and that all of the officers will have to be unpaid for a few months.

Those scenarios are just as ridiculous as what is being imposed on doctors. I say imposed, because we have no choice in the matter. The government has decided that these cuts and caps will be their policy moving forward, with no further negotiation. The public is usually quite surprised to hear that physicians and the government don’t have a true negotiation. If the government decides to impose certain payments on physicians, we have no recourse. It’s a one-way street. No other profession would stand for this type of policy, and the government is taking advantage of the fact they know that physicians cannot legally strike.

These unlimited clawbacks are questionable policy, if not illegal, and I hope that the citizens of Ontario make it clear to their MPPs that at the very least, physicians deserve to be compensated for the services they provide, at the fees agreed to by the government.

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20 thoughts on “Clawbacks to Ontario MDs: The absurdity of it all

  1. Paul Conte

    Hi Mario,
    It is a great article…but I think that the clawbacks are coming in 2016.
    Stuff like this needs to find it’s way into major daily papers. The OMA has done a lousy job of publicizing what would be seen by the public as the most offensive action against doctors.

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  2. medstudentitis

    I agree with Paul’s comment, the OMA has done and is doing a really bad job of describing these cutbacks to the public and making us not seem like a bunch of greedy so and sos. The average Canadian has no idea how many employees are supported by each MD. If I don’t get paid, how do I pay my staff? Will they also have to endure a wage freeze? no, because their contract says that they will have to get paid. I’m currently considering moving to Alberta and giving up my family practice in Ontario because of these politics.

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  3. Michael williams

    After reading your article on clawbacks from doctors by Ontario provincial government I believe you will have to consider what Nfld doctors did eleven years ago to with draw your services from health care system . If you are going to be dictated by an incompetent government then harsh action may also have to be considered just a thought

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  4. Tyler

    The issue of physician pay always inspires lively debate!

    My understanding is that previous modifications to the fee schedule designed to decrease physician pay have not ever resulted in lower physician pay.

    That is to say, when the government has previously decided to decrease compensation to physicians by decreasing the amount paid for services, the overall pay going to physicians had NOT gone down.

    One can speculate on how this comes to pass, and depending on where you stand on these issues, you can think charitably of physicians ( They end up working harder to make up the difference) or not ( They provide services that are not needed/They bill more aggressive than before).

    In any case, the underlying problem faced by the government is that there does not appear to be any way to decrease physician salary.

    I think the larger debate we should be having is looking at what physicians make, and deciding as a society whether that is reasonable.

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    1. John

      Overall pay to physicians is typically presented as ALL physicians. Doesn’t take into account how many new physicians etc…..just the whole pot. With a growing and aging population, and more doctors…of course the budget has increased. Personally, my take home has plummeted the past several years.

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  5. Stephanie

    Why are not more doctors being vocal and speaking out against this? It seems not to get much media play, either. And new doctors (i.e., residents) and doctors-to-be (i.e., medical students) should also be brought into this loop and educated about the issue(s), as I do not think many are aware this is going on.

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  6. Pingback: Ontario’s Doctors in the News | Ontario’s Doctors

  7. Alastair Brown

    It doesn’t matter if it’s “reasonable” or not. It’s supply and demand. Physicians are a specifically trained, finite resource. There are still many, many locales where physicians will continue to make competitive wages for many years to come. If Ontario ceases to be a profitable practice ground, physicians (especially new ones) will move. Manitoba faced the same problem in the 1990s when their fees were not competitive. Up to 50% of graduating classes were moving south – many to Minnesota. The province increased wages and managed to retain physicians better.

    Hey, Doctors Manitoba just negotiated a healthy contract with the province. There are many places in the province that would gladly accept an ontario grad!

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  8. MJDuke

    There are also other fees that have been removed, and others that have been directly reduced, which will affect patient care.
    The government’s own actuaries calculated growth (aging and immigration) at 2.7% and has committed to only fund 1.4% of that. That makes hitting any arbitrary “number” for “saving” that much harder. It does not set anyone up for success.
    There are so many points to make on this subject, and the bottom line ultimately is how it all affects patient care. Doctors are easy targets- their gross billings reported are assumed to be their incomes, when in reality, the overhead costs of running a practice, include their employees salaries and operating costs such as rent, utilities and supplies. Take home is less than that and not reported well. There are also no Benefits. So supplemental health costs including vision, dental, Physio etc are out of pocket; there is no Pension Plan. Balancing trying to do more with less and less will hit its tipping point and everyone will lose, particularly our most vulnerable of patients. The irony of that is those patients will end up likely costing the government more in healthcare costs in the end. However, ifwe really want to be completely honest about this, then we have to consider that the subject has to have been broached by the government within themselves (within the bounds of better business management and considering all possibilities) about how if the sickest and most vulnerable patients aren’t getting the support or care they need in a timely fashion, they will die in the process and then ultimately cost the government less in healthcare costs; that may be their ultimate goal. (Who remembers the quote “Death is cheap”?) Physicians are just easy targets.

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    1. Anon Ymous

      MjDuke,

      How much does the average MD gross? After all those expenses you listed, how much do they net? You identify that nobody reports net, but don’t help further the cause. I rarely see any MD state their earned net after making the argument that gross != net.

      Were an article to ever come out identifying actual net incomes for many physicians, as it seems like you’d support, I hope it also identifies how many physicians hire kids/wives/friends/parents as part of their ‘corporation’, in order to decrease their tax payments. Any article which outlined the overhead outta also outline the more shady aspects of the MD finances.

      Lastly, there are numerous self-employed individuals. Not all are MDs. None of these individuals have benefits, none have pension plans.

      I fully support MDs, and think these cuts are terrible. When you consider that most public sector employees continue to get raises, and all the mistakes leading to billions of dollars literally wasted (power plant, eHealth, Ornge), it’s quite frankly a shame that we’d consider making a cut to MDs, who help take care of the most important aspect of humanity – health.

      I just wish the argument posed by MDs was less of, “woe is me, you see my gross financials, while my net financials are gross”, and more of, “I take care of your health, and I make $x, and the investment is worth it, as evidenced by [y outcomes].

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    1. Paul Conte

      I wonder how much of that wage growth can be attributed to physicians who helped the Ontario government with their wait times strategy in doing more cancer surgery, cardiac procedures, cataract surgery, hip and knee replacement and MRI and CT scans.

      Whole profession gets a kick to the teeth for this.

      Not to worry…much longer wait times coming to Ontario. Guess the docs will be blamed for that, too.

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      1. gbkn

        From the report: “Real per capita spending growth on physicians was 116% in the last 3 decades, 2.4% per year”. That includes time before the wait times strategy.

        What other options would you propose? It is clear the funding model must change that remunerates physicians fairly without bankrupting

        The root causes of wait times need to be addressed and they not always MD-centric. For example, centralizing wait lists for specific specialists is one potential solution.

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    2. Phil

      You get a skewed view if you start from an aberrant datapoint. Stretch the curve down and start in 1992 and the trends would look quite different. Start at the initiation of medicare and you might get something really interesting

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  9. The_J

    Perhaps the role of Nurse Practitioners will be better realized. There has been an OMA lobby against the general entrance of NP’s as a solution to SOME health care bottlenecks. The MD plays an important role though we are resource limited with respect to MD demand. How can the system work more effectively? MD’s completing tasks where the skill set and capabilities of an NP can be applied is inefficient. To date, it is safe to say that Ontario has not fully appreciated the role of an NP and how it will contribute to better system flow. Watch for this to finally occur and relieve SOME of the burden.

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  10. James A

    I am very appreciative of those who post these articles and comments to shed light on this situation. The part I find most unpalatable is that doctors aren’t made aware of the amount of clawback until after the fact, thereby forcing us to work “for free”, which in fact means that we will operate at a deficit since our expenses will remain unchanged. Such cowardice on the part of our government. Instead of stating the cap upfront, and allowing doctors to decide if they want to continue to work in Ontario, or take vacation, pursue other interests or perhaps work elsewhere, they hide behind this shroud of deceit. I don’t quite understand how this is allowed, how it can be considered ethical practice, or how the OMA can standby and even allow the threat of such measures. Why aren’t all doctors, including residents, and medical students banding together to fight this? Why aren’t medical schools and university Departments of Medicine standing up for doctors? It’s almost poetic that as doctors we commit to helping others, and in so doing, are not able to help ourselves. Worse yet, no one else will come to our aid.

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    1. gbkn

      That is a valid point. The Ontario Government should provide more price transparency early on. Many health organizations I have worked at often have to work in this shroud of uncertainty as well. Doesn’t lend itself to good management of the business.

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  11. Resident

    I’m a resident in Ontario and I can tell you that while putting in my 60-80 hour work weeks, I did not know anything about this. No emails from the associations I belong to. Nothing in any newsletter or journal I subscribe to. Communication is clearly issue #1. Issue #2 for new grads is going to be the mountain of debt – I will definitely be choosing to work in a place where I know that my income will be dependable.

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