Saturday, May 14, 2016

Rebuttal - Yes, doctors run private businesses

A fellow blogging physician with a much larger following, Dr. Shawn Whatley, posted a provocative piece on his own blog arguing against the notion that doctors are private business owners.

Though there are quite a few points in what Dr. Whatley argues, the post isn't all that long to read. I would strongly urge readers to check out the original article, as this is a rebuttal I've been invited to provide.

The aim of the piece is to challenge to the oft-stated notion that community doctors are independent contractors and/or private business owners. The crux of the argument is as follows:

  • Medicare covers all necessary care provided by doctors
  • Most provinces prohibit doctors from opting out of the provincial health plan, and those that do are generally restricted in what they can bill anyways
  • Government and regulators (such as the College) dictate standards and licensing for most aspects of medical practice
  • Government sets the number of doctors to be trained, and will frequently place restrictions on where they may practice
  • Government sets rules around how many doctors can practice under certain models (such as Family Health Teams in Ontario), and often dictates the minimum requirements for hours of opening, after-hours care and other services like house calls
  • Government sets the price at which services are reimbursed, and may unilaterally change that price at its discretion
Given the amount of control government and quasi-government regulators have over medical practice, and the fact that doctors can only work under the government regime, it is therefore erroneous to label the practice of medicine as a private enterprise

The flaw in Dr. Whatley's logic is what's known in argumentation as a "heap", or continuum fallacy. The degree to which a business might be labeled private or public is not an either/or proposition, but lies on a spectrum. Yes, medicine is regulated up the yin-yang, from education to licensing to limits on income streams and (to a degree) price-setting. However, much the same could be said for many other industries.

Look at milk producers. They are subject to countless standards of operation, licensing requirements, and routine inspection by government ministries. Operators have both production quotas and pricing tightly controlled by government. Would anyone consider a dairy plant a public enterprise?

Restaurants have multiple pieces of legislation governing their operation. The building has to meet construction standards, and (in Ontario) has to be accessible to disabled persons. Food handlers are increasingly expected to be certified, and public health spot inspections for cooking, food storage, and cleaning practices are part of the deal. Licensing is required to serve alcohol. Would a restaurant be considered a public enterprise?

Doctors in independent practice, by and large, are not paid by salary. They do not have EI, CPP, or taxes deducted from their pay at source. They have deductible expenses that cannot be claimed by salaried persons (including salaried doctors). Despite many restrictions, obligations, and standards to be adhered to, there is no firm "job description". Doctors retain a good deal of autonomy in how they practice, though that has certainly been decreasing over time. They are not public employees.

Admittedly, examining Dr. Whatley's argument strictly from this angle could be construed as facile. I'll go a little further, then, and look at the assertion of a "state monopoly/control" that is often repeated as an argument that doctors are de facto public servants.

From the point of view of the public, the government is a monopoly provider of health insurance. We have mandatory, legally-enforced single-payer universal health care, full stop. No argument here.

From the point of view of the doctor, however, the government represents a monopsony, not a monopoly. It would be no different for a dentist in a one-factory town, for example, where everyone has insurance from the same company. 

As a monopsony, the government naturally wields a great deal of power over its "suppliers", i.e. doctors. However, the same holds true for other industries with singular government customers, such as the arms industry. An arms manufacturer has one customer, the government. The specifications and prices for its products are negotiated in advance (though they seem to overrun like mad). If an arms maker tries to expand its "customer base" by selling weapons to other states (or mercenary firms), those deals are subject to approval or veto by the government, despite the government having no financial stake in the enterprise.

Why shouldn't the government set rules of medical practice if it's paying the bills (from the government's point of view - my opinion is not relevant)? He Who Pays the Piper and all that, as the saying goes. That's before considering the driving force behind many regulations, such as public safety or professional misconduct. One can argue for private insurance, but that's an entirely different issue, albeit one that the Canadian public appears to have little, if any, interest in debating.

It's also worth noting again that doctors are not at all powerless in their negotiations with government, and have done well by universal health insurance. Doctors should be mindful of that before advocating strongly against single-payer health care, notwithstanding the present conflicts with provincial governments across Canada.

If it seems like I'm a some kind of socialist cheerleader for government control of health care, I'm not. I have nothing but contempt for the way political agendas and bureaucratic meddling erode the practice of medicine. (In truth, I don't have much love for practicing medicine at all these days, but I needed a book to tell that story).

The point of this rebuttal isn't to disrespect a more accomplished colleague, and I hope neither Dr. Whatley nor anyone reading this takes it that way. However, doctors wield tremendous moral authority in the eyes of the public, especially in comparison with politicians. If the goal is to maintain that authority, it is vital to make arguments around public policy based in fact, with every assumption scrutinized to the limit. The notion that doctors don't run private businesses does not stand up to that scrutiny.


  1. Frank, you make a lot of good points but I do not think they are a rebuttal to Shawn's blog. Maybe I am not getting it but I believe that Shawn's point is that Physicians' offices (FFS anyway) in Canada are paid for by the physician but what and how care is delivered is controlled by government and regulators.

    The analogy to a dairy is not the same as in that case the government does not control the price to the consumer of the milk and cheese. The amount that the restaurant charges the consumer is also not regulated.

    I don't believe that Shawn said that the government or regulatory agencies should not be setting the rules. I think his point is that doctors have the financial risk and regulatory constraints that do not let allow them to be considered Private in the sense that some people attempt to paint things for their own ideological purposes.

    There is nothing that I see here that makes me see you as a "socialist cheerleader" but neither is there anything in Shawn's piece about private insurance.

    I suspect that my rebuttal of your rebuttal comes from your editorializing about other facets of the healthcare argument than what I think was Shawn’s point. ;-)

    1. The point in the restaurant and dairy analogies wasn't to equate a doctor's office with either. It was to point out that what determines a business as being private or not is not black-or-white. By my own admission, that was the "facile" approach to the argument.

      I might have misinterpreted Shawn's rationale for the post. The "doctors are private contractors" was floating around the Twitterverse in the context of whether docs are eligible for arbitration the way unions are.

      Appreciate the comments!