Published in the The Ottawa Citizen on June 13, 2012
By Ake Blomqvist and Colin Busby
Changes to the fee structure of Ontario’s docs are stoking a fiery dispute between the Ontario government and physicians. But the current standoff takes the momentum out of physician-centred reforms with durable opportunities for cost savings in the health sector — such as having doctors commission care on behalf of their patients.
Getting better value for money in health care means that we need to produce better health outcomes with the same resources. Doctors — especially those in primary care — are well-positioned to play a leading role by: 1) caring for patients and ensuring that they have access to necessary resources; and, 2) using available resources in the most efficient manner. Ontario’s doctors currently take on the first of these duties, but have little motivation to act on behalf of the community’s scarce resources.
In charting a patient’s care path, physicians have no reason to consider secondary costs, or cost-effective treatments for various illnesses. For example, writing a referral for an MRI, or a prescription for an expensive drug, does not directly affect physicians financially, even though it does affect overall health system costs.
The dilemma for doctors is that in the eyes of the patient, more tests, more drugs, and more specialists are normally associated with better care. But often the same quality of care may be possible with fewer interventions, basic screening tests, and perhaps cheaper drugs.
Physician compensation in Ontario — at about $12 billion in 2011 — makes up about 23 per cent of the Ontario government’s overall health budget. But physicians are indirectly responsible for the lion’s share of all health spending, both public and private, because most health spending depends on physicians’ decisions (i.e. referrals, prescriptions, etc.).
What if — putting aside a reduction in physician fees — doctors were given a greater share of the health budget in exchange for additional responsibilities? What would this look like?
Take current reforms in the U.K. as an example. Proposed reforms there would see groups of primary-care physicians — commonly referred to as commissioning consortia — take control of a large share of the overall health budget to commission care on behalf of their patients. These doctors would have to assess patients’ needs, decide the appropriate paths of care, then set up — or purchase — the best care for their patients with limited available funds. The cost of patient care paths would then come directly out of the group’s annual budget.
In Ontario, many primary-care docs work in family health teams — where they have support from other primary-care health professionals — and many are paid on a per-patient basis (capitation). So doctor commissioning in Ontario could be an extension of this system: physicians working in family health teams would receive a larger transfer for each patient on the team’s roster. In return, they would have to pay a share of patients’ care costs.
Giving doctors control over a larger share of the health budget could give existing family health teams incentives to contain the overall cost of patients’ care from all sources. By keeping track of the cost of patient care following referrals by primary-care providers, a year-end bonus can be offered for providers to be more prudent in their decisions.
Instead of sending patients to hospitals and specialists, skills within a family health team might be better applied to deal with some health problems. Providers would have an incentive to not prescribe expensive experimental procedures, and to reduce the likelihood of repeat hospital admissions and other wasteful spending.
As with all reforms, however, implementation plans are critical.
Evidence from past experience with physician commissioning is mixed. In the early 1990s, the United Kingdom put in place a voluntary plan that saw some efficiency gains, but little improvements in curbing costs.
Physician commissioning in the United States demonstrated that building up the expertise to manage a larger share of the health budget takes time — benefits don’t arrive overnight.
If Ontario were to try primary-care physician commissioning, it would be best to introduce changes gradually. For instance, the province could begin by giving family health teams a budget for diagnostic tests, and then add drug or hospital budgets later.
Opponents to this reform will claim that doctors cannot take on additional responsibilities. They will say that doctors are trained to care, not to budget, and that any new responsibilities will take away from physicians’ time with patients.
But within the health system, there is no group of individuals better able to decide the right paths of care for patients, while ensuring value for money, than doctors. Their advocacy for patients is critical, but so is their responsibility to make best use of the limited resources in our health system.
Giving physicians a larger share of the overall health budget, in exchange for making them sensitive to total health costs, might be a more pragmatic long-term reform to reduce costs than targeting fees. This would empower doctors within the health system, and must further make doctors accountable — in terms of finances and quality — for their medical choices.
Ake Blomqvist is an adjunct research professor at Carleton University and a health policy scholar at the C.D. Howe Institute. Colin Busby is a senior policy analyst at the C.D. Howe Institute.