A Better Way to Pay Specialist Doctors: C.D. Howe Institute

TORONTO, Oct. 23, 2013 /CNW/ - Specialist physicians should be paid by the hospitals where they carry out their procedures, rather than by provincial insurance plans as they are now, according to a report released today by the C.D. Howe Institute. In "Paying Hospital-Based Doctors: Fee for Whose Service?" authors Ake Blomqvist and Colin Busby argue hospitals could then manage their personnel and resource needs more efficiently, reducing waiting lists and costs.

"Most hospital-based specialist doctors are paid via fee-for-service by provincial insurance plans, but most hospital funding comes through a separate pipe, in the form of lump-sum amounts not linked to the services provided," noted Ake Blomqvist. "The result is a system in which neither specialists' time nor hospital resources are efficiently used, contributing to high costs and long waiting lists."

Nationwide, more than 80 percent of surgical specialists' income comes from fee-for-service payments that are negotiated collectively with provincial health ministries, note the authors. Surgical specialists make up about 20 percent of all full-time equivalent physicians, and fee-for-service payments to them accounted for close to $4 billion nationwide in 2011/12.

"Because physicians' decisions are major drivers for most healthcare costs, getting the incentives right is critical to ensuring Canadians receive good value for money," said Colin Busby.

One contributing factor to waiting lists, and one reason why many recently graduated specialists in Canada are unemployed or underemployed, is a lack of complementary facilities, such as operating rooms, and the lack of complementary professionals, such as anaesthesiologists, nurses and so on.

"When a medical procedure requires hospital facilities as well as specialist time, the fee should be shared between hospitals and specialists in ways that give both a stake in producing high-quality care at low costs," said Blomqvist.

The authors propose that hospital-based physicians be paid directly from hospital budgets. Hospitals would then engage doctors and pay them appropriately - either by salary, fee-for-service, or a blend of methods.

Alternatively, specialist physicians could become the conduit for a part of government's funding of hospitals, and be required to pay hospitals when using their facilities. This could appeal to specialists who want to remain independent, and also promote competition among hospitals, and between hospitals and independent clinics, in providing cost-effective care.

For the report go to: http://www.cdhowe.org/paying-hospital-based-doctors-fee-for-whose-service/23271

SOURCE: C.D. Howe Institute

contact: Ake (pronounced "Okie") Blomqvist, Health Policy Scholar, or Colin Busby, Senior Policy Analyst, C.D. Howe Institute, 416-865-1904; email: [email protected]