Province introduces new physician funding formula

Alberta will maintain physician funding at $5.4 billion, the highest level ever, and implement its final offer to the Alberta Medical Association (AMA) to avoid $2 billion in cost overruns.

Existing terms will remain in place until March 31, 2020. A new funding framework will then be introduced, in a multi-year process that will require consultation with the AMA at all stages. The new framework will make changes proposed during negotiations to prevent cost overruns, align benefit programs and administrative fees with those of comparable provinces, and improve services for patients.

“Our province is facing cost overruns of $2 billion in the next three years due solely to physician compensation,” said Tyler Shandro, Minister of Health Feb. 20.

“If left unaddressed, these costs would impede efforts to reduce surgical wait times, improve mental health and addiction services, and expand the number of continuing care beds. Despite repeated efforts, the AMA failed to put forward alternatives that would hold the line on physician compensation. The new framework announced today will prevent cost overruns, allow our province to improve services for patients, and still ensure that Alberta’s doctors are amongst the highest-paid physicians in all of Canada.”

The 11 consultation proposals will also be implemented on March 31. This includes phasing in changes to complex modifiers, reducing the rate physicians can charge for this billing code to $9 from $18, for a period of one year before the code is removed in 2021-22. In summer 2020, at the direction of the Minister of Health, the Government of Alberta will also introduce a new alternative relationship plan (ARP) with built-in transition benefits to encourage physicians to move from fee-for-service to a three-year contract.

The new funding framework will maintain the government’s current level of spending on physicians at $5.4 billion. The new funding framework avoids anticipated cost overruns of $2 billion over the next three years. Alberta has been spending more on physician salaries than other provinces, yet most of its health outcomes are below national averages. A doctor in Alberta earns approximately $90,000 more than a doctor in Ontario and physicians’ fees have almost tripled since 2002.

Elements of new funding framework

  • Changes to Alberta’s complex modifier billing system. The rate physicians are able to charge for complex modifiers will be reduced to $9 from $18 for a period of one year before this billing code is removed in 2021-22. Once the new framework is fully phased in, physicians will be able to bill an additional fee after spending 25 minutes with a complex patient case. Alberta remains the only province in Canada that allows for a top-up payment for complex visits.
  • Removal of the comprehensive annual care plan from the list of insured services. Currently, physicians can also bill for a similar consultation called a comprehensive annual visit. No other province in Canada compensates physicians twice for annual care consultation.
  • Implementation of a new daily cap, modelled after a cap in place in British Columbia, of 65 patients per day. Large patient loads can contribute to physician burnout and may compromise patient safety and quality of care.
  • Removing physician overhead subsidies from all hospital-based services. Physicians who work in AHS facilities should not be billing for overhead costs that their community physician colleagues face, such as leases, hiring staff and purchasing equipment.
  • Ending of clinical payments, or stipends, by AHS to physicians. This change ends duplication of payments to contracted physicians.
Timeline
  • In September 2019, the government provided notice to the AMA that it intended to begin negotiations on the AMA Agreement. The notification provided time for the AMA to prepare its proposals.
  • In November 2019, negotiations began with the AMA to reach a new agreement; the government began consultations on 11 proposed changes to the schedule of medical benefits (SOMB, or “insured services”).
  • In January 2020, negotiations and consultations proceeded with no agreement reached. Mediation, on both the negotiation and consultation proposals, began January 31 and continued into February.
  • The parties were not able to reach an agreement during mediation.
  • The government will implement its final offer from the negotiating table, including the 11 consultation proposals, on March 31.

-george@albertapressleader.ca

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