Doctors told to mend ailing health system

Physician income, which has risen dramatically, is a big reason Ontario’s health-care system is becoming unsustainable, report says

Ontario doctors need to step up and earn their keep, says the former dean of the University of Toronto’s Rotman School of Management.

Even though the province “has invested massively in physicians” over the past decade — with earnings (before overhead costs) averaging $375,500 in 2011-12 — reforms needed to keep the province’s health system from crashing haven’t materialized, said Roger Martin, who now serves as chair of the Institute for Competitiveness & Prosperity.

“I’m interested in the idea of physicians showing more leadership, to say, ‘We’ve got a problem . . . it ain’t working, it ain’t sustainable, no way, and so how do we make it not crash?’ ” he told a Wednesday audience of health-care executives at the speakers series Breakfast with the Chiefs, sponsored by Longwoods Publishing.

At the same time, Martin released a report from the institute — Building Better Health Care: Policy Opportunities for Ontario — that says one of the biggest drivers of Ontario’s unsustainable healthcare spending is physician compensation.

Martin said Ontario needs to get “more bang for its buck in health care,” pointing out that the province is one of the highest-spending jurisdictions in the developed world when it comes to health care, but ranks lower in quality of care.

Health-care spending in Ontario is expected to have reached an all-time high last year of $80 billion, with $51 billion of that coming from the public purse. It’s the biggest item in the province’s budget, accounting for 42 per cent of every dollar.

If major changes aren’t made immediately, rising costs could lead to rationing of care, higher taxes, a bigger deficit and less spending on education, infrastructure and other social needs, the report warns.

Research from the institute shows doctors’ earnings (before paying out overhead costs) jumped 51 per cent between 2002 and 2012, compared with only 29 per cent for all other occupations, including those in health care.

“Lots of people took it in the teeth. Not physicians. Physician incomes are going up dramatically higher than anybody else in the province,” Martin said. “If we don’t take advantage of that and make our system more efficient, more effective, we have wasted that money,” he warned.

Negotiations between the provincial government and the Ontario Medical Association, which represents the province’s 25,000 doctors, began early in the new year.

The doctors’ last contract — reached after a rancorous set of talks two years ago — expired March 31.

Martin said that if he was at the negotiating table for this round of talks, he would show the doctors two graphics — one showing their soaring wages and another showing the poor performance of Ontario’s health system compared with other countries measured by the Organization for Economic Cooperation and Development.

He said he would tell the doctors: “That doesn’t work, sorry. Let’s try to figure out how to solve that. I’m not interested in hearing how much more money you want.”

Martin said that if doctors don’t play ball, the province could always cut back on its largesse.

“The alternative is to say we’re going to get it back to (the level of ) all occupations,” he said, referring to doctors’ wage increases. “There is no reason why you are particularly exemplary.”

The institute recommends a change in the way physicians are paid, to boost incentives to be accountable, deliver costefficient care and take ownership of improvements.

It is critical of the fee-for-service method of payment, in which doctors get paid for each service performed, describing it as “a blank cheque written out to providers with few accountability measures in place.” It says physicians are the “central power structure” in the health system and can indirectly influence spending on drugs, diagnostic tests and treatments, and hospital use.

Heidi Singer, spokeswoman for the Ontario Medical Assocation, said the organization had no response to the institute’s report.