Bluffs Advocate

Doctor's Office

How Your Family Doctor Is Paid

Ontario has adopted a payment plan linked to worse health outcomes

By Robert Bernstein, MD

            People are often interested in how their family doctor gets paid and, just as often, are confused. The press and the Ministry of Health have a simplistic view, referring to doctors' salaries as if they were paid like public servants or auto workers.

They aren't, and here is how it goes in reality.

Let's look at payment models for your family doc as a spectrum on which, at one end, are the walk-in clinics. Here, doctors are paid fee-for-service. They get paid only when they see a patient, or do a procedure. In the garment manufacturing world, this is called piecework. 

At the other end of the spectrum are the community health centres which pay their doctors a true salary. These centres usually see the most complex and vulnerable patients, those who require so much more time and resources that it's not cost effective to look after them by keeping track of each visit.

In between are the majority of Ontario doctors like me. We get paid in some sort of comprehensive care group practice scheme. In this model, I get paid for the number of patients in my practice—per head or "capitation." The amount is adjusted for different age groups and genders. The Ministry pays docs more for elderly patients than for teenagers, and the average is about $150 per patient per year. This is quite a reasonable way to work since primary care has more to do with long-term comprehensive care, and less to do with one-time episodes of an illness.

I also get a little bit extra (about $5.70) for every visit, and a bonus for doing good preventive care. If 80% of my eligible patients get their flu shots on time I get a bonus of a couple of thousand dollars a year. PAPs, mammograms, childhood immunizations, and colon cancer screening are rewarded in the following way:

The patient agrees to get all his/her primary care from the group practice, and the group agrees to provide all his/her primary care needs, including after-hours clinics and telephone calls. 

Family Health Teams are a combination of doctors and other healthcare providers such as nurses, nurse practitioners, dieticians, and social workers. In addition to the per patient payment to doctors, the Ministry provides a global budget to cover these other personnel. This way the team can be more effective when dealing with complex patients, and doctors are freed up from easier care (such as well-baby visits and flu shots) to take care of the more difficult medical issues.

In the capitation model, I get paid whether or not I see the patient. Some patients come in once every two or three years, and others come in 18 times a year! Yet it balances out. Say I have a 45-year-old healthy man who ventures in once every 3 years. I get paid about $150 a year to provide his care. But if I have a 45-year-old with kidney and heart failure who comes in 18 times a year I get the same $150. In the fee-for-service model, each visit is about $38, so I would have made $620 in a year!

Sometimes I get a bargain, and sometimes OHIP does.

The doctor in all of these models must still pay for overhead (anywhere from 20 to 40 per cent of gross billings), and bear in mind that doctors do not have benefits—no vacation pay, no pension, no sick days. Saving for retirement is the responsibility of each doctor, and eats up a significant chunk of his/her earnings. So when you see doctors' salaries being reported in the press, pause to consider: 25% off for overhead, 35% of the net for taxes, and 30% for "benefits." A $300,000 yearly gross drops quickly to a take home pay of $78,750. And this for a 70-hour week, with occasional weekends, holidays, and late-night call!

Interestingly though, what researchers have revealed is that nearly every developed country (except the US) pays its primary care doctors by capitation, and real outcomes of care are related to the strength of a country's primary care system, and whether doctors are paid on capitation. In other words, countries that rely on fee-for-service (e.g.: the US) fare far worse in health outcomes.

Given this evidence, Ontario made a concerted effort 15 years ago to improve the primary care system, and introduced the comprehensive care capitation payment models.

And what's going on today? Recently the Minister of Health imposed a new contract on doctors. The most egregious part of it is that it is now forbidden for any doctor to join any of the comprehensive care plans! All new doctors are forced to work in a fee-for-service practice.

It's just like saying, "Look at McDonalds...see how efficient they are, how fast people are served, how many are served each day! All restaurants should operate like McDonalds." Maybe, but we all know you can't survive on a steady diet of it. And, while you may be in and out faster—you may get a problem solved for the moment—walk-in clinics cannot provide quality comprehensive medical care either.

In the end, family doctors are the foundation of good healthcare for everyone, and though we can argue about the amount they are paid, their payment system must recognize comprehensive quality care. Tell Eric Hoskins our health minister.

Doctor Bob Bernstein works as part of the Bridgepoint Family Health team.