1 REVIEWING MODELS FOR PHYSICIAN COMPENSATION CANADA AND ABROAD WILLIAM L. OROVAN CAROLYN TUOHY

2 METHODS OF PHYSICIAN COMPENSATION FEE FOR SERVICE CAPITATION SALARY MIXED MODELS AFP/APP’S

3 ISSUES ARISING PRIMARY VERSUS SPECIALTY CARE MD PREFERENCES (AGE,GENDER, SPECIALTY) FUNDER PERSPECTIVES (BUDGETS, OUTCOMES) INCENTIVES/ETHICS/CLINICAL JUDGEMENT

4 FEE FOR SERVICE: THE DEBATE MD PERSPECTIVE PHYSICIAN AUTONOMY VOLUME DRIVEN TARGET INCOMES INCENTIVE FOR COMPLETENESS OF CARE FREEDOM OF MOVEMENT FOR PATIENTS

5 FEE FOR SERVICE: THE DEBATE FUNDER PERSPECTIVE INCENTIVES TO OVER SERVICING UNPREDICTABLE BUDGET IMPEDES ACADEMIC OUTPUT ‘AVERAGE’ ACUITY REMUNERATED RELATIVITY AN ISSUE ACADEMIC DISAPPROBATION

6 CAPITATION MD PERSPECTIVE LESS AUTONOMY BURDENSOME (ROSTERING) INCREASED RISK (COMORBIDITY) NEED LARGE(R) PATIENT POPULATIONS OUTCOMES VERSUS EFFORT BASED

7 CAPITATION FUNDER PERSPECTIVE ENCOURAGES EFFICIENCY (N.P’s) INCENTIVE TO LIMIT SERVICES (LAB, HOSP) ‘SKIMMING’ IN ROSTERING BUDGET CERTAINTY IMPROVED CARVEOUTS/BONUSES AS NEEDED

8 SALARY MD PERSPECTIVE REDUCED AUTONOMY REDUCED CLINICAL/PROFESSIONAL SCOPE NO PRODUCTIVITY INCENTIVE NET LOSS OF INCOME NO INCENTIVE TO CONTINUITY OF CARE

9 SALARY FUNDER PERSPECTIVE INCREASED BUDGET CERTAINTY NO INCENTIVE TO OVER SERVICING ADMINISTRATIVELY SIMPLE ENCOURAGES CME & PREVENTION TEAM BASED CARE REWARD SENIORITY, EFFICIENCY UNDERSERVICED AREAS ATTRACTIVE

10 MIXED MODELS IN ONTARIO FHN, FHG, HSO’s DECADE LONG EFFORT TO MOVE MD’s APP’s (RURAL, E.R.,GERIATRICS) AFP’s (AHSC’s)

11 PATIENT ATTITUDES TOWARD PHYSICIAN REMUNERATION ALL METHODS LEAD TO SOME CONCERN ADULT SURVEY STUDY - Salary 16% - FFS25% - Capitation53% HIGHEST IN ‘BEST EDUCATED’ GROUP (Pereira et al Arch Int Med ’01)

12 IMPACT OF PAYMENT METHODS ON DECISIONS PHYSICIAN SURVEY/CLINICAL SCENARIOS CAPITATION VS FFS FFSCAPITATION DRUG75.9%55% TEST46.7%33.1% REFERRAL77.5%66.6% TRANSPLANT91.6%92.0% “BOTHER” INDEX HIGHER FOR CAPITATION (SHEN ET AL MEDICAL CARE 2004)

13 ALTERNATE PAYMENT (ONTARIO) NUMBER OF CONTRACTS315 NUMBER OF PHYSICIANS4508 VALUE$637.6 mm

14 CANADIAN NON FFS BY PROVINCE (2002) #’s% PEI5730% QUEBEC789654% SASK26016% ALBERTA2274.4% ONTARIO301314% BC233728% N.S %

15 TOTAL NON FFS ONTARIO NOVEMBER 2004 (G.P.’s) FHN FHN/FHG FHG PCN SEAMON(FHN) HSO TOTAL

16 AFP (AHSC) LOCATION# ACTIVE PHYSCIANS TORONTO 1409 HAMILTON492 KINGSTON138 OTTAWA570 LONDON436 TOTAL3045

17 FHN ONTARIO MONTHSITESDOCSPATIENTS JAN ,645 APRIL ,966 AUG O ,855

18 FHG ONTARIO MONTHSITESDOCSPATIENT S JAN ,092 APRIL ,653 AUG O ,043,83 4

19 PCN ONTARIO MONTHSITESDOCSPATIENT S JAN ,604 APRIL ,437 AUG O ,163

20 UNITED KINGDOM I SPECIALISTS (NHS) -SALARIED (BY SESSIONS) -UP TO 10% ADDITIONAL FFS -“MERIT” BONUSES -“REVIEW BODY ON DOCTORS REMUNERATION” -PRIVATE OPTION AVAILABLE

21 UNITED KINGDOM II GP’s -PRIMARY CARE TRUSTS -TERMS OF SERVICE CONTRACTS PTS/MD (declining/negotiated) -‘MIXED’ REMUNERATION -FFS15% OF INCOME -CAPITATION40% -SALARY30% -CAPITAL15% -INCENTIVE/QUALITY INDICATORS/POINT SYSTEM

22 UNITED STATES FFS (MODIFIED BY RBRVS) CAPITATION MODALITIES DECLINING EMPHASIS ON ADAPTING FFS

23 AUSTRALIA HOSPITAL/SPECIALISTS SALARY FFS SESSIONAL GP’S FFS -BULK BILLNG (80%) -BILL DIRECT (20%)

24 NEW ZEALAND HOSPITAL/SPECIALISTS - MAJORITY SALARIED GP’S -FFS 85% OF MD’S -CAPITATION 15% OF MD’S

25 SWEDEN GP’S - 86% SALARIED - 12% FFS - 7% PRIVATE

26 CONCLUSIONS REVIEW CURSORY/COMPLEX SITUATION DYNAMICS OBSCURE/FFS VS OTHER REFORM OF FFS REMAINS POSSIBLE GRADUALISM/VOLUNTEERISM