The recent negotiations between the Ontario Medical Association and the Ontario Government highlight the complex relationship between physicians and health spending. As important and trusted gatekeepers to the health care system, physicians are nevertheless a crucial component of health care costs as the total number of physicians, the volume of health services they provide and the cost per service come together. While governments such as Ontario have been focusing on reducing or holding physician fees steady as a cost control measure, healthcare spending is also affected by the overall number of physicians we have and the number of services each provides to their patients.
Across the country, provinces are trying to rein in their health care spending and rising costs for doctors remains a key concern. Is it the right emphasis? Yes – and no.
The Canadian Institute for Health Information (CIHI) released data this week that shows physicians in Canada were paid a total of $25 billion in gross clinical payments in 2015 – up from $24.1 billion last year, for an increase of 3.7 percent. This rate of growth is down from nearly six percent the year before, suggesting that there is some restraint underway.
That’s good news from a cost control perspective.
We also seem to have more doctors than ever. For Canadians waiting for care, that surely sounds like good news too.
For the ninth year in a row, the number of Canadian physicians per capita has grown. We had 82,000 doctors in 2015 – up from 79,905 in 2014. Indeed, Canada has sustained yearly physician increases of more than two percent since 2007, with increases of more than 4 percent in 2009 and 2011 and an increase of about 2.6 percent in 2015.
We have gone from an era of perceived physician shortages to one of relatively more abundance. Put another way, total physicians per 100,000 of population have grown from 192 in 2007 to 228 in 2015. At the same time, the average gross payment per physician in 2015 remained virtually unchanged at $339,000 nationally.
But looking deeper, there is a worrisome trend.
A recent CD Howe Report similarly notes that while there has been a recent decline in real per capita provincial government health spending, total physician costs have continued to rise.
But the CD Howe Report points out that spending is also affected by physician composition – particularly specialists. Adding one specialist physician per 1,000 persons was associated with an additional $720 in real per capita provincial health spending – no small amount.
Just how big is the increase in the number of specialists? The number of specialists per Canadian has almost doubled since 1981.
In 1981, the average number of specialist physicians per 1,000 persons across Canada’s provinces was 0.6 and grew to 1.1 by 2013 – an increase of nearly one-half a specialist physician per 1,000 persons. This near doubling is therefore associated with a $295 increase in real per capita provincial health spending (1997 dollars) which grew from $1,415 per person in 1981 to a 2015 forecast of $2,447 per person. Again, no insignificant cost.
Specialist physician numbers are expected to grow in the future, given increased medical school enrolment.
Is this such a bad thing? More health specialists per person should mean better healthcare, right, even if we have to spend more?
The problem is, we don’t really know the answer. We don’t have measures in place to evaluate whether increasing the specialist health workforce is always the best investment of our health care dollars.
Public debate highlights spending and the political tug of war between medical associations and health ministries but missing is any discussion of effectiveness of services and how that can be measured.
For example, a campaign from the Canadian Medical Association, Choosing Wisely, suggests there are a number of specialist diagnostic tests and services that may be unnecessary and may even cause unnecessary harm.
If spending more on physicians provides greater value for money as measured by improvements in health outcomes, then that is a good thing. On the other hand, if we are spending more money on diagnostic tests and procedures that don’t improve health, then that is not such a good thing.
Without appropriate measurement of health care outcomes, we cannot know if cost control measures affect the quality of care. It is incumbent on both provincial governments and physicians to work together on evidence based evaluation of the effectiveness of health care services. Only then can we know if our money is well spent.
Livio Di Matteo is Professor of Economics at Lakehead University and an expert advisor with Evidence Network. He is co-author (with Colin Busby) of the recently released CD Howe Institute Report, Hold the Applause.
