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Canada's doctors are paid more than $20-billion overall a year, making physicians' services the third largest component of health-care spending after hospitals and drugs, a report released Tuesday says.

The report by the Canadian Institute for Health Information (CIHI) shows gross compensation for doctors' services rose by six per cent in 2010–11, but that's down from a growth rate of eight per cent the previous year and almost 10 per cent in 2008–09.

CIHI found the average Canadian doctor was paid $307,000 in 2010-11, although provincially the averages ranged from lows of $236,000 in Prince Edward Island and $250,000 in Nova Scotia to highs of $340,000 in Ontario and $350,000 in Alberta.

Geoff Ballinger, manager of Health Human Resources for CIHI, said the figures represent averages and vary significantly depending on a doctor's specialty. For instance, the average family practitioner would earn less than a neurosurgeon or cardiologist.

Ballinger also said it's important to realize the figures are gross amounts, and don't include the expenses paid by many doctors to run their practices.

"What we're reporting on is just the gross amount that would go to a physician, but based on other information – and it's really hard to get at these actual numbers – a physician will have to pay their overhead out of that," he explained from Ottawa.

"So that means they'll be paying for their rent, taxes, salaries of a receptionist or nurses, a certain amount for practice insurance and those kind of overhead amounts."

Ballinger said the average overhead cost typically quoted, which he said CIHI data can't confirm, is about 35 to 40 per cent of gross remuneration.

"You have to be careful about how you look at these numbers because they are averages and it's the average payment per physician across the country," he said. "It doesn't necessarily reflect their actual compensation and certainly doesn't reflect their net compensation."

About 70 per cent of payments to doctors are fee-for-service billings, with the average payment per doctor calculated at $54. For family practitioners, the average fee-for-service billing was $40, while the average for specialists came in at $74.

Country-wide, doctors were paid about $13.2-billion for delivering more than 245 million services – from annual physicals and diagnostic tests to surgical procedures – paid through fee-for-service billings. Consultations and visits made up two-thirds of total fee-for-service payments to doctors.

The other roughly 30 per cent of compensation came in the form of alternative payments, such as salaries, sessional payments for psychiatrists, or capitation fees for practices with primary-care teams with a certain number of patients.

However, the split between the two is changing, Ballinger said. In 1999–2000, alternative forms of payment made up less than 11 per cent of total payments to doctors.

"And I would expect that in the future we should continue to see that kind of a shift."

In 2010-2011, the proportion of payments made through alternative clinical payment programs varied significantly across the country, ranging from 15 per cent in Alberta, about 30 per cent in Quebec, almost 50 per cent in Ontario and 94 per cent in the Northwest Territories.

"In many provinces, within the past, there has been some concern about fee-for-service because it's sort of volume-driven," Ballinger said. "If a physician wants to increase their income, they can certainly provide more services.

"And I think there has been some concern in the past that that kind of payment method may not serve patients as well in all situations.

"So many provinces have been moving to a more non-fee-for-service basis for paying their physicians, and that's why we're seeing a lot of these family health groups, for example in Ontario, where they're paid in a different way with the intention that physicians will be more inclined to spend more time with patients."