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News Release
A Brief from the Medical Reform
Group of Ontario
to the Legislature Standing Committee on Social Development on Bill
94
March 4, 1986
Introduction
The Medical Reform Group was constituted in the fall of 1979 to
provide a voice for physicians who believe:
1. Health care is a right that must be guaranteed without financial
or other deterrents.
2. Social, economic, environmental, and occupational conditions
mast be recognized as causes of ill health.
3. The health care system must be changed to provide a more significant
decision-making role for other health care workers and the public.
Voting membership in the Medical Reform Group is open to any physician
or medical student who agrees with the organization's statement
of principles. Since its establishment, the group has actively campaigned
to preserve and improve medicare. It has lobbied the federal and
provincial governments for a ban on extra-billing. The group has
made presentations to the Hall Review of Medicare, the Parliamentary
Task Force on the Established Program Financing Act, and the House
of Commons Committee on Health and Welfare.
The Need for the Health Care Accessibility Act
Most of the members of the Medical Reform Group are family physicians.
We are reminded on a regular basis of the need for a ban on extra-billing.
While we recognize that some of our opted-out colleagues have been
conscientious in their billing practices, there have been far too
many instances where people have been hurt. We have seen patients
on welfare extra-billed. We have seen senior citizens on fixed incomes
who have been extra-billed. There are also surveys that show indiscriminate
billing practices. Professors Chris Woodward and Greg Stoddart of
McMaster University conducted a study for the Hall Review in 1980
in counties of Ontario where there were high rates of opting-out.
They found that over one-third of poor people had been extra-billed.
They also discovered that nearly 20% of people had reduced their
use of medical services because of fear of an extra bill and that
nearly 5% of people said they had not sought medical attention for
a sick child because of such concerns.
There are more comprehensive data from Alberta which show the same
trend. The Alberta medicare plan has data on the dollar amounts
of extra-billing by medicare registration category. Professor Richard
Plain of the University of Alberta found that poor people (those
receiving full or partial subsidy for their medicare premiums) paid
nearly the same in extra-billing as those receiving no subsidy.
Senior citizens were charged more than those receiving no subsidy.
This may reflect the fact that the poor and elderly have more needs
for medical services.
It must be admitted that it is very rare for a physician to refuse
to see a patient who will not pay an extra-bill. More commonly an
opted-out physician will refer such a patient to his or her outpatient
clinic. Since 1978 all Ontario physicians have been permitted to
be opted-out in their private offices while billing CHIP directly
from hospital outpatient departments. This enables them to reduce
their bad debts by so-called "practice streaming". Economists
refer to this as price discrimination. It should be added at this
point that this partly explains why only 5 or 6% of services are
billed to patients directly even though 12% of physicians are opted-out.
It is acknowledged that the care in some outpatient clinics is indistinguishable
from the care in a physicians private office. However, in many teaching
hospitals this is not the case. The patient is seen by a clinical
clerk (fourth year medical student) or intern under the direct supervision
of a resident (specialist in training). The staff doctor may or
may not see the patient and his or her involvement may be quite
minimal. The housestaff
turn over frequently so there is poor continuity of care. This may
be the most ominous aspect of extra-billing. It leads naturally
to the two-tiered system of medicine Canadians rejected with the
adoption of medicare.
Political and economic rationale for the legislation
The Ontario Medical Association and the Association of Independent
Physicians have raised a number of objections to the proposed Health
Care Accessibility Act. Many of them seem plausible at first glance
but do not hold up to closer examination. Some of the criticisms
levelled at the proposed legislation include:
1. The OHIP fee schedule provides no bonus for experience or expertise
with junior doctors billing the same for particular services as
their more senior colleagues.
2. Opted-out doctors are better doctors.
3. Opted-out doctors can provide a better service to their clientele
by spending more time with than and having shorter waiting times
for appointments.
4. Many of Ontario's doctors will leave the province if they are
forbidden to extra-bill.
5. Ontario's doctors will became civil servants and lose the freedom
to practice medicine as they see fit.
6. Public opinion supports a continuation of extra-billing.
7. Legislation on extra-billing will inevitably lead to capping
of incomes, restrictions of OHIP billing numbers, and other curbs
on the traditional privileges of the medical profession.
8. Physicians will lose a "bargaining lever" for fee negotiations.
We should like to deal with these arguments in their turn.
The Ontario Medical Association is itself largely responsible for
the OHIP fee schedules failure to reward excellence. The OHIP fee
schedule was adopted directly from the OMA schedule in 1971 and
set at 90% of its value. This was because both the profession and
the government estimated that 10% of doctors fees went uncollected
prior to medicare. The OMA list of fees, which has existed since
1922, has never had special bonuses for expertise or experience.
Officials within the ministry of health have said privately for
many years that they would be prepared to consider any system of
merit pay for physicians as long as the total bill for physician
services were not increased.
The evidence shows little difference in practice styles between
opted-out and opted-in doctors. Professors Alan Wolfson and Carolyn
Tuohy of the University of Toronto conducted an exhaustive survey
of opting out which was published by the Ontario Economic Council
in 1980. They found no difference between opted-out and opted-in
doctors practices in patient loads, hours of work, or waiting times
for appointments. There is no good evidence that on average opted-out
doctors spend more time with their patients.
There is no evidence that opted out doctors are more skilled than
their colleagues. Few doctors are opted out in northern or eastern
Ontario. Few general practitioners, pediatricians, or internists
are opted out. Opting out is concentrated in a few specialties (anesthesia,
obstetrics, psychiatry) and geographical locations (Toronto and
the golden horseshoe). To say that better doctors opt out is to
say few g.p.'s or northern physicians are superior.
There is little fear that doctors will flee Ontario when the Health
Care Accessibility Act is made law. All provinces except New Brunswick
and Alberta already have some prohibitions against extra-billing.
The United States has more doctors per capita than Canada and all
the desirable practice locations are occupied. It is also extremely
unlikely that many highly skilled specialists will leave. These
doctors could have left Ontario years ago and made at least three
times as much money in the United States. They are not likely to
leave Ontario now despite their protestations. They are likely to
stay for the same reasons we all live here. We have our families,
our friends, our communities, and a quality of life that is unmatched
anywhere.
Additionally, medical practice is becoming problematic for many
physicians in the United States. With the explosive development
of health maintenance organizations in the U.S. over 25% of doctors
are currently employees and an article in a recent Canadian Medical
Association Journal estimated that by the year 2000 over 50% of
doctors will be employed by others. In some of these work situations
physicians are asked to treat patients by protocol. They are told
when their patients should leave hospital and what lab tests to
order. Physicians within OHIP have nearly complete freedom to treat
their patients as they see fit.
Physicians will not become civil servants with the passage of the
Health Care Accessibility Act. Doctors within OHIP have no conditions
imposed on their work. They can set their hours, take as much or
as little vacation as they wish, and work with whom they wish. They
cannot be considered to be Employees by any definition of the word.
They may lack benfits packages but they are able to take advantage
of many income tax provisions not available to employees. When one
includes the new registered retirement savings plan limits (which
move upwards to $15,500 over the next five years) individual doctors
may well be better off as self-employed than as employees with excellent
benefits.
There is no doubt that the majority of people in Ontario support
a ban on extra-billing. Fair worded polls by Goldfarb associates,
the Kingston Whig-Standard, and the Gallup organization have shown
that 70 to 80% of Ontarioans are opposed to the practice.
Representatives of the Ontario Medical Association have pointed
to actions in other provinces which they claim will immediately
follow from a ban on extra billing. The government of British Columbia
is attempting to restrict the number of medicare billing numbers
available in that province. New graduates in the Province of Quebec
may bill that province's medicare plan for only 70% of the normal
tariff if they practice in well-doctored urban regions. The view
that these actions are either automatic complements to legislation
on extra billing or impossible without such legislation is politically
naive. In Ontario the population of physicians is increasing at
a more rapid rate than the population as a whole. There are still
severe problems in distribution with some northern and remote areas
chronically short of physicians while Toronto and other urban areas
in the south continue to see their numbers of doctors increase.
The OMA cannot prevent government action for these problems by fighting
legislation controlling extra billing. Instead physician organizations
should respond in a meaningful fashion to these problems if they
wish to prevent what they regard as infringements on their freedom.
While it is true that doctors did achieve better increases in the
OHIP fee schedule in the early 1980"s after opting out increased
in 1979, there is no particular reason to believe these two events
are causally linked. Doctors did well because the rate of inflation
fell, unexpectedly, after the 1982 settlement. This was quite a
chance event much as the high inflation and subsequent wage and
price controls of the mid-1970"s which decreased doctors relative
incomes. Doctors in Alberta have done very poorly the past 3 years
despite their ability to extra bill. Doctors still have many "bargaining
levers" without the recourse to extra billing. They provide
the most essential of services and, in public opinion surveys, are
consistently at the top in the rankings of occupations.
Competing Rights
The Ontario Medical Association has claimed that the proposed Health
Care Accessibility Act is an infringement on their economic rights.
We physicians within the Medical Reform Group acknowledge this point
but feel that the public also has a right to quality health care
without financial deterrents. In attempting to adjudicate between
these competing rights we should remember the following points:
* The government has given the medical profession a legislated monopoly
on the delivery of medical services.
* One cannot consider the delivery of medical services as amenable
to examination by traditional economic tools because the patient
is almost never a fully-informed consumer. She relies upon the physician
to act as her "agent" in "purchasing" various
services.
* A physicians education is almost totally paid for by taxpayers.
It is estimated that a physician's training costs well over $100,000.
Although interns and residents work excessive hours, they now earn
more than the average Canadian family.
* Physicians carry out much of their work in publicly-financed hospitals.
They are provided with expensive equipment and skilled staff to
assist with the care of their patients. This is particularly true
of specialists who constitute approximately 75% of the opted-out
group.
* The public guarantees payment to physicians through OHIP. Unlike
other "small businesses" opted-in physicians do not have
to worry about collecting bills.
* The College of Physicians and Surgeons forbids the advertising
of medical services. One cannot have a true market if information
regarding the "product" is suppressed.
* Finally, health care is not a commodity like any other. It is
an essential service. Perhaps Justice Emmett Hall said it best in
the report of the Royal Commission on Health Services (1965).
"The emphasis on the freedom to practice should not obscure
the fact that the physician is not only a professional person but
also a citizen. He has moral and social obligations, as well as
self-interest to do well in his profession. The notion held by some
that the physician has an absolute right to set his fees as he sees
fit is incorrect and unrelated to the mores of our times. This nineteenth
century laissez-faire concept has no validity in the twentieth century
in its application of medicine, dentistry, law, or to any other
organized group. Organized medicine is a statutory creation of legislatures
and parliament. When the state grants a monopoly to an exclusive
group to render an indispensable service it autcmatically becomes
involved in whether those services are available and on what terms
and conditions."
Bill 94
The government has chosen the so-called Nova Scotia model instead
of the so-called Quebec model. Since these terms have been sometimes
used rather loosely it may be advisable to clarify them.
Quebec passed legislation to eliminate extra-billing in 1970. The
law allows three options to physicians.
1. The physician may elect to participate in the plan, bill the
plan, and accept payment from the plan as payment in full.
2. The physician may elect to participate in the plan and bill the
patient directly. The medicare plan reimburses the patient and the
physician must accept this payment as payment in full.
3. The physician may elect to not participate in the plan at all
and thereby become ineligible for any plan payment either to himself
or to his patients for any of his services.
Nova Scotia passed legislation to eliminate extra-billing in 1985.
Their legislation provides for options 1 and 2 of the Quebec legislation
but not option 3. Ontario's proposed legislation is similar to Nova
Scotia's. Manitoba has already passed this type of legislation while
Saskatchewan aand British Columbia have passed legislation as in
Quebec.
The Nova Scotia Style legislation is more restrictive than the Quebec
one. We see some philosophical advantages to the Quebec "model"
but we are sympathetic to the practical considerations which may
have caused the government to abandon it. The Ontario Medical Association
has refused to discuss the style of legislation. Dr. Myers, president
of the OMA said to a television interviewer on January 20, 1986,
that he didn't want "any model". It could certainly be
anticipated that if the government passed Quebec style legislation
the OMA or its local affiliates would organize mass non-participation.
This would force the government to assess if accessibility was compromised
and if it was to somehow force some doctors to participate with
OHIP. Neither of these actions would be easy. The Medical Reform
Group would support the Quebec model only if the OMA agreed not
to use mass non-participation to defeat the intent of the legislation.
The Medical Reform Group does have some reservations about the option
for physicians to opt out in the proposed legislation. It currently
takes two to three weeks for OHIP to reimburse patients for services
for which they were directly billed. If the OMA is successful in
encouraging its membership to directly bill their patients, it may
be anticipated that this period may be extended by several weeks.
If a physician insists that the patient pay the bill before OHIP
reimbursement, this could cause hardship for some patients. It may
even deter some people from seeking care. Thus, the Medical Reform
Group recommends that an amendment be made to the legislation to
forbid an opted-out physician from asking for payment until the
patient has been reimbursed from OHIP.
Other issues
The Medical Reform Group is concerned that so much attention has
been paid to the extra-billing issue at the expense of other issues
which affect the health care system. However, we would like to re-emphasize
its importance in terms of preserving medicare. Professor Robert
Evans, of the University of British Columbia has said that when
one is in a leaky boat in the middle of the ocean one must fix the
leak before one can determine in which direction to sail. We believe
that extra-billing and other user charges are the leak in the boat
of medicare. After extra-billing is banned we must decide what direction
our health care system should take.
The Ontario Medical Association has stated that the issue of extra-billing
is a "smoke screen" for the real problem facing the health
care system which is claimed to be underfunding. They have claimed
that there should be no action taken on extra-billing until the
whole health care system has been investigated. . The Canadian Medical
Association made similar claims in 1983 when the federal government
was developing the Canada Health Act. The CMA commissioned a task
force to investigate the adequacy of funding of Canada's health
care system. The formal name of the commission was The Task Force
on the Allocation of Health Care Resources. Its chair was Ms. Joan
Watson. The other members were Hon. Pauline McGibbon, Roy Rcmanow,
Dr. O'Brien Bell, and Dr. Leon Richard.
The commission held hearings across Canada and received submissions
from hundreds of individuals and organizations. The CMA paid all
the expenses which were estimated at over one-quarter of a million
dollars. The task force found Canada's institutionalization rate
for its elderly to be nearly double that of the United States or
Great Britain. They concluded:
"A major problem identified is that if we continue to put old
people in institutions at the rate we do now, the costs will not
only be prohibitive, we will perpetuate the callous practice of
'warehousing' the elderly. Old people do not want to live in institutions."
Considering that we are already so well endowed with institutional
beds for our elderly in Canada and Ontario how do we, the committee,
or the people of Ontario at large explain the fact that we continue
to see news items about how we need more nursing home beds because
acute care hospitals are "clogged" with chronic patients?
The commission found that there would be no need for new hospital
beds before 2006 if the rate of institutionalization of the elderly
in Canada were reduced from 9.45% to 6.0%. The rates in the U.K.
and the U.S. are 5.0 and 5.3% respectively.
The commission further noted that there are problems associated
with much of the highly touted new technology. Some modern technologies
can indeed achieve remarkable results, but some may be useless or
even dangerous. The commission expressed concern for the inadequacy
of present evaluation procedures.
Finally, when the task force attempted to answer their major question
of the adequacy of funding for the system they said,
"We cannot assess the extent of existing inefficiencies, and
because there is no guarantee that putting more money into the system
is necessarily the best way to improve health, the Task Force cannot
make a clear cut recommendation."
The Medical Reform Group feels it is important to consider the issues
which the task force raises. Although other inquiries into the health
system have arrived at similar conclusions, this study was financed
by the medical profession. The Ontario Medical Association claims
that the health care system is underfunded and has asked its members
for additional money to fight medicare three times in the past six
years. It has never distributed the CMA report. The CMA charges
for copies.
The Medical Reform Group does agree with the OMA that it would be
worthwhile to have a full investigation of Ontario's health care
system. There have been previous studies and some might argue that
we already have the answers. However, a quick look shows that the
public and most health care workers are poorly informed on the issues.
The time is ripe to educate the people of Ontario and involve them
in the development of their health care system.
Recommendations
1. The government and the OMA should develop a fair fee negotiation
process. This should involve a grievance procedure which would cover
all issues related to physician remuneration including income capping
and utilization restrictions. There should be provision for binding
arbitration with a ban on a legislative veto.
2. The government should establish a Royal Commisssion on financing
of the health care system. It should provide facilities and funds
for the public and non-profit organizations to become involved in
the process. The commission should investigate alternatives to traditional
delivery systems such as community health centres and health service
organizations. It should also examine the distribution of physicians
and resources.
3. The government should take some simple steps to make medical
practice easier. Plastic CHIP cards would facilitate the completion
of forms. The Province of Quebec has provided these for a number
of years. Better public information on Health Sources
would make it easier for physicians who wish to pursue this alternative.
4. Bill 94 should be amended so that patients should not have to
pay an opted out physician until he or she is reimbursed by OHIP.
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