Tuesday, April 4, 2017

A Theory of Relativity, Part II

First principles to address doctor income relativity.

The last post touched on some of the major problems with deciding how much doctors should be earning relative to one another. As a brief recap, the major barriers, apart from tribal squabbles, are:

1. Exclusion of overhead considerations in the fee schedule
2. The need to translate policy (government priorities, practice incentives) into the fee schedule
3. Determining who makes the decisions

Though it's been in the dustbin for 15 years now, the Ontario Medical Association once convened the (clumsily named) Resource Based Relative Value Schedule Commission to try and fix the issue in the past, using a pretty rigorous survey of individual specialty sections, and comparisons with the U.S. and Australia. The final document is worth a read if that sort of thing interests you, if nothing else because the algorithm the Commission developed was a good one.

Naturally, this begs the question of why the new fee schedule was never implemented. As it was well before my time, I can only speculate as to the real-time politics at play. Still, there is one thing that springs to mind: while it created a viable formula for determining what each medical service - a house call, a colonoscopy, or a heart transplant - is worth relative to other services, the report left out the reality of what doctors might actually do most days in practice.

For example, the algorithm determined that a repeat liver transplant was the most time/skill intensive medical service, deserving of the highest overall fee. No argument, but how often will a surgeon perform a repeat liver transplant? And is there room in the formula for government/public health priorities? For negotiated incentives and "win-wins", as opposed to unilateral action and laying the ground for "gaming" the billing schedule? Possibly. As I see it, though, there must be agreement around a few core principles if this exercise can end in success.

Doctors with roughly the same training, doing roughly the same intensity of work, for roughly the same amount of time, should earn roughly the same net income.

This can't be stressed enough. If doctors as a community can't agree on this as a fundamental principle - that doctors who train and work as hard as one another should earn the same pay after expenses - a medical association is not capable of representing its entire membership, and might as well be broken up.

In practical terms, it means that reaching a more equitable fee schedule involves not just the "forward" assignment of fees using an algorithm such as that developed by the Commission, but a "backwards" check against the net incomes of the typical doctors in that specialty. An example will help illustrate what I'm getting at.

Imagine a community hospital with a Respirologist and Gastroenterologist on staff. They have the same office hours, take the same share of call and hospital consults, book the same amount of vacation, and have the same number of scope days (bronchoscopy and gastroscopy/colonoscopy, respectively). Whatever math is used to determine the appropriate fees for their respective services - consults, scopes, and so on - I hope everyone doctor can agree that their net incomes should be the same within a reasonable variance (say 10-15% in a given year).

If the figures don't roughly match for a typical practitioner in each specialty, that's a signal of a lingering problem: either one specialty really does work harder than the other; some codes need further adjustment in one specialty; or, less likely, something in the fee schedule is creating a questionable incentive i.e. something about the fee schedule is susceptible to gaming. While taking advantage of quirks in the fee schedule to maximize income makes sense in the short run, it should be discouraged. It gives the bargaining adversary (i.e. government) free ammunition, both in the fight for public opinion, and for divide-and-conquer negotiating tactics.

Doctors must agree to the process, and accept the results of a relativity initiative, before entering negotiations with the government over the revised fee schedule.

As was the case with the first principle, consensus needs to be reached within the medical community, with a priori commitment to the results, before engaging with government. It's either a true medical association, or a collection of tribes with the association as a little more than a government-sanctioned mouthpiece. There will necessarily be winners and losers, but strength will only come from a unified voice. If the government wants to make investments in certain areas over others? Not if it breaks a hard-reached internal consensus. Government wants to cut fees for one specialty and reallocate the money like Robin Hood? Not gonna happen, because doctors have agreed this is what their work is worth.

The revised fee schedule must be opened for periodic review.

It's in everybody's long-term interests to make doctors' fees reflect the ever-changing realities of medical practice, new evidence, and shifts in public health needs. Moreover, changes in what doctors are paid for and how much will always leave the door open for the wrong kinds of incentives. Professional cohesion must come before short-sighted financial gain, and the good faith of the taxpayer must be respected. Thinking practically, every 8 years seems like a reasonable time frame, given the slow lead time for changes in practice to gain traction.

Can doctors put aside (admittedly decades-old) squabbles and get on the same page? Time will tell.

Next time: relativity between non-comparable specialties


  1. Thanks Frank for a very insightful and thought-provoking analysis. You make a sage observation that Medical Associations might as well be broken up if they can't ensure that "doctors with roughly the same training, doing roughly the same intensity of work, for roughly the same amount of time, should earn roughly the same income".

    That seems like indisputable logic, but every PTMA (including the OMA) has been thwarted in their effort to achieve this by the powerful sections of our profession and individuals who have enjoyed inflated incomes for decades and believe they are entitled to retain that level of earning.

    If PTMA's fail to achieve this goal, and we fracture into myriad small islands of self-interest, the public negotiating blood bath that will ensue will expose the dirty laundry we have hidden from the public to date. A former PTMA CEO who I deeply respected described our internal battles for money as akin to "pigs at the swill". If that behavior becomes fully transparent to the public, I fear our profession will lose a great deal of public respect.

    1. Thanks for the comment Dennis! And indeed, in the era of (anti?) social media, it will be impossible for these internecine squabbles to be kept from the public.