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Spending on Canadian doctors’ pay jumps despite efforts to curb costs

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Public payments to Canadian doctors totalled $24.1-billion last year, a 6-per-cent jump that comes despite efforts by some provinces to curb increased spending on physician compensation.

An annual snapshot of the country's physician work force released Tuesday shows the higher payments were driven by two factors: more doctors and higher payout levels. Canada had a record number of doctors – almost 80,000 – in 2014. Their average earnings before expenses hit $336,000, a 2.4-per-cent increase from the previous year.

The new numbers are of special interest because they come one year after the annual report found average physician earnings had hardly budged in 2013, and the total national payout to doctors was growing at the slowest pace since the late 1990s.

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These latest figures, compiled by the Canadian Institute for Health Information (CIHI), mean the spending slowdown experienced in 2013 is looking like a blip, rather than the beginning of a trend caused by provincial efforts to rein in spending.

"We seem to be creeping up again," said Geoff Ballinger, CIHI's manager of physician information. "One of the reasons for that is we have more physicians in the country, so we are paying more physicians for more services."

The timing of provincial agreements with doctors could also account for some of the fluctuation, he said.

Given that Canada has a growing and aging population, it stands to reason that costs and the number of doctors are going up, some argue, but others say the data point to larger issues in the way the country has chosen to pay for health care.

Public medicare covers the services of the highest-cost professional, and that means people may go to doctors because there is no cost at point of access when others, such as physiotherapists or dieticians, might be more appropriate, said Ivy Bourgeault, who holds a chair in health human resources at the University of Ottawa's Telfer School of Management. "We covered the most expensive forms of care in the system. We shouldn't be surprised that the costs are going up," she said.

The rising tally of payments to doctors also may be influenced by changes to how care is delivered, said Raisa Deber, a professor of health policy at the University of Toronto.

As more care moves from the hospital to outpatient services, Prof. Deber notes that some costs for staff and overhead expenses may be shifted into physician fees.

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These latest spending numbers are for the 12 months that ended March, 2014, and do not take into account recent moves to control physician pay in Ontario – one of a handful of provinces, including Alberta, that have taken a hard line in negotiations with doctors.

Later this week, Ontario will impose the second across-the-board cut to doctors' fees this year. The CIHI report shows that as of 18 months ago, the country's most populous province had the highest average physician payout at $368,000, although that figure fell slightly for the second year in a row.

Nova Scotia had the lowest average payout, at $263,000, but had the highest number of doctors as a percentage of population in the country.

Quebec posted the largest increase in total doctor compensation, with a 12.3-per-cent jump from the previous year, followed by Manitoba at 9.6 per cent and Alberta at 6.5 per cent. New Brunswick was the only province to see the total payout to doctors decline – from $484-million to $471-million, a 2.7-per-cent drop.

Physician compensation is just one component of health-care spending, but Mr. Ballinger of the CIHI said that in recent years, its significance has grown, becoming the second-largest expenditure, behind hospitals.

Not only did doctors' ranks swell last year, but so did their numbers compared with growth in the general population. There were 224 doctors for every 100,000 Canadians in 2014, the eighth-straight year of growth for that ratio.

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It's a trend that is being fed by a growing number of graduates from medical schools and by changes that help foreign-trained doctors seek accreditation in Canada, Mr. Ballinger said.

While there has been a steady increase in the number of doctors per Canadian, there are still regions and specialties where access remains a problem.

Rick Glazier, a family doctor at Toronto's St. Michael's Hospital and a scientist with the Institute for Clinical Evaluative Sciences, said even with recent increases, Canada still lags the average of other OECD countries, particularly in some specialties.

A trend among younger doctors to work fewer hours compared with past decades means more new doctors are needed to replace those that are retiring, he said, and rural and Northern communities continue to be under-serviced.

Other findings include:

  • The number of female doctors continues to rise, accounting for 44 per cent of family physicians and 34 per cent of specialists.
  • All provinces and territories reported an increase in doctors, except Prince Edward Island, Nova Scotia and Manitoba.
  • Canadian universities awarded 2,804 medical degrees in 2014, 14.5 per cent more than in 2010.
  • About one-quarter of Canadian doctors received their medical degree outside Canada.
  • Canada gained more doctors than it lost to other countries in 2014 by a slim margin of 10.
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