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A doctor holds a stethoscope.Getty Images/iStockphoto

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This week, every full-time physician in Alberta will receive a cheque from the government of Alberta for $7,800. (Those who earn less than $80,000 will receive a pro rata amount.)

This lump sum payment – $68-million in total – was the last little carrot that was dangled by the government back in the spring to bring an end to the protracted contract negotiations with the province's doctors.

But what exactly is it for?

In the formal memorandum of understanding between the province and the Alberta Medical Association, the money was meant to "address various financial challenges faced by physician practices."

We could all be so lucky to get help with the "various financial challenges" of modern life.

Truth be told, it was hush money, a way to allow both parties to bring an end to a nasty, brutish and lengthy contract dispute and save face.

In the end, doctors signed a seven-year deal. It included a three-year pay "freeze" – though two of those years were retroactive and, in the third year, doctors receive a bonus, which is equivalent to about a 2-per-cent pay hike.

Over the next two years, doctors will receive increases of 2.5 per cent annually, then two more years with a cost-of-living adjustment tied to inflation.

But bear in mind too that these numbers are misleading because very few doctors actually get a straight salary to which a pay increase can be tacked on.

Most physicians in Canada – and Alberta – are still paid on a fee-for-service basis. The fees are spelled out in a schedule of medical benefits. Alberta's is 749 pages long, despite the very small print. When governments try to adjust those fees, usually to account for efficiencies or technological advances, specialty groups (which tend to dominate medical associations) flip out. In their new contract, the AMA won the right to arbitration on any fee changes, a major victory that received little attention.

Doctors are well paid – in Alberta the average gross income is $350,000, the highest in the country. (And before the angry e-mails start flying, yes, that is not take-home pay; many physicians have overhead to run their offices, but take-home pay is still nothing to sneeze at, especially for specialists.) That doctors are well paid is not a problem. What should concern taxpayers is how they are paid and what they are paid for.

The stark truth is that the way we pay doctors is severely flawed and the way their pay increases are negotiated is downright idiotic.

The "bonus" cheques that went out to Alberta doctors this week are emblematic of the problem. Does this payout provide any value to the health system?

More than $30-billion of Canada's $200-billion-a-year health bill goes to physician compensation and what we pay doctors, while significant, is just a fraction of their impact on the bottom line. Physicians control access to hospitals, to prescription drugs and to tests. Yet we place virtually no responsibility on them for controlling these enormous costs.

The way we pay physicians have to change fundamentally. Doing so is essential to reforming health delivery.

We need to stop paying doctors for volume, for performing as many procedures, ordering as many tests and seeing as many patients as possible.

Physicians should be rewarded (and, yes, handsomely) for helping keep people well, not just for treating them when they are sick. They – in conjunction with other health professionals – should be doing a lot more primary care and less secondary and tertiary care.

Physicians have to play a bigger gatekeeper function, to ensure the tests and procedures that are done and drugs that are prescribed are the appropriate ones – meaning they are necessary, effective and cost-efficient. They should be paid for results, not volume.

In short, negotiations with doctors have to be a lot less about what we pay doctors and a lot more about the value provided by doctors in exchange for what they are paid. We don't just need labour contracts, we need to articulate a social contract.

The labour contract negotiated in Alberta – and similar ones like it in other provinces – has put off that necessary discussion by several more years.

The bonus paid to Alberta docs is a homage to the status quo. For the public, it's a bonus that sticks in our craw.

André Picard is The Globe's health columnist.