Two-year doctor pay freeze to save health system $95M

EDMONTON Alberta doctors will receive no fee increases over the next two years as a part of a new funding agreement with the provincial government that is touted to save $95 million in health costs.

Details of the compensation deal reached more than a month ago were finally revealed Wednesday by Alberta Health and the Alberta Medical Association, which also announced the pact received 89 per cent support from doctors in a recent AMA ratification vote.

“We recognized government had no ability to increase things and we watched it happen with all the other public-sector unions, so I think people were realistic going

into this one,” AMA president Dr. Neil Cooper said.

“But we were able to get a lot of things we had been (seeking) for many years as far as program stability. And that makes a big difference.”

Cooper said about 30 per cent of AMA members participated in the ratification vote, about the same as votes on past deals.

The agreement means the deficit-plagued NDP government now has the vast majority of the province’s health workforce under contract for the next two years with no pay hikes.

In addition to the AMA pact, recent deals with United Nurses of Alberta and the Health Sciences Association of Alberta also included two years of pay freezes, while new frameworks for dentists and pharmacists featured fee deceases.

Health Minister Sarah Hoffman acknowledged the strategy means the province will be back at the bargaining table with most of the groups in 18 months, but suggested it was a small price to pay to get affordable contracts.

“We are not in a position to be making agreements for long periods of time,” she said. “Being at the table is not a problem for us.”

Cooper said his association was initially seeking a much longer agreement, but recognized the province wasn’t going to budge.

“I think a two-year deal was good considering we were taking zeros,” he said. “Our expenses are going up one to two per cent a year, so taking zeros is really a cut for us. We hope the government recognizes that we have given a lot here.”

The deal will expire on March 31, 2020.

Five months of negotiations and the use of a facilitator were required to reach the agreement. Sticking points included the fate of support programs that provide compensation beyond fees and salaries.

Included was the Rural Remote Northern program that provides up to $60,000 a year to doctors to serve in small communities, as well as the Business Costs initiative that provides a maximum of $146 per day to community physicians to help with overhead.

Cooper said the new agreement calls for the programs to continue at essentially the same funding levels, and the government agreed to guarantee the programs for an extra year — until spring 2021 — while negotiations are underway for the next deal.

The one exception is the retention benefit, which will not continue. Depending on years of service, the benefit paid doctors between $5,000 and $12,000 each year as an incentive to stay in the province.

Cooper said the government felt a retention benefit was no longer necessary considering many parts of the province arguably now have too many doctors.

Of the $95 million in savings the government says will result from the deal, the vast majority will come from the end of the retention benefit. Tweaks to other programs is touted to save about $10 million.

The government has been adamant about the need to better control physicianbased costs, which had been growing at around nine per cent annually.

The latest provincial budget calls for $5.3 billion in total spending on physicians this year. Even though there will be no fee hikes, that figure still represents an increase of $167 million or 3.5 per cent to accommodate higher patient volumes.