Fifty-three years ago next month, doctors in Saskatchewan and the provincial government struck a historic compromise after a bitter 23-day strike. That compromise became part of national medicare. It remains at the heart of Canadian health care today.
What might be called the "Saskatchewan Compromise" gave each side something deemed essential. The CCF government of premier Woodrow Lloyd enshrined public financing and organization of health care. Government, through the tax system – not patients from their pockets – would pay for essential medical services. These services were, and still are, those delivered in hospitals and by doctors in or out of hospitals.
In exchange, doctors would retain their professional autonomy and be paid on a fee-for-service basis, charged to the state rather than to the patient. Doctors would thus avoid the dreaded status of becoming employees of the state, told how to practise by "bureaucrats."
The result was and still is: autonomy and fee for service for the doctors; public organization and financing for the government. Something important was left out, although it did not seem important at the time. If doctors worked in a public system then why, over time, were they not given, or did they not demand, pensions, as was done by nurses, teachers and university professors? That's because, in part, acknowledging the need for a pension would have been a tip of the hat to more government control – to doctor as a public employee, a status the profession hated. More than a half-century later, perhaps it's time to rethink the issue.
A few doctors today do receive a pension, such as those who work for community health organizations. Most do not. They must save from their own earnings, which is one reason among many why their associations, and so many individual doctors, justify physicians' remuneration.
If physicians had a basic pension, to which they and the government would contribute, they would not need as much yearly remuneration. Provincial governments could plan better for spending on physicians, which now accounts for about 15 per cent of all public spending on health care.
Doctors, in turn, would have some assurance of a regular postretirement income. They would find themselves less at the mercy of financial crises, such as the one in 2008-09 that whacked their private pensions, causing some to keep working longer than they had planned.
Canadian physicians' remuneration is high by international standards. According to a 2011 report from the Organization for Economic Co-operation and Development, the average remuneration for Canadian specialists was the third highest among OECD member countries, while self-employed (not salaried) family practitioners' income ranked in a second-place tie.
Individual physicians and their associations do not like these comparisons. Like most people in the work force, they argue either that they are fairly paid for their skills and many years of education or they assert that they deserve more. In this, doctors are no different from many other organized groups. When was the last time a union or association acknowledged publicly that their members are overpaid?
For the past several years, physicians' incomes have risen less rapidly. The Ontario government, facing an $8.5-billion deficit, is imposing a reduction of more than 2 per cent in its new fee schedule. In 2014, physician spending went up 3 per cent while overall Ontario health-care costs rose 2 per cent.
Before this recent flattening, however, physicians had done very well. According to the Canadian Institute for Health Information, spending on physicians rose at an annual rate of 6.8 per cent from 1998 to 2008. A little less than half of that increase came from seeing more patients, a little more than half (3.6 per cent) came from yearly fee increases. Physician fees went up faster than for other health workers.
Mind you, the entire health-care sector cashed in for most of the decade after the federal and provincial governments in 2004 agreed to pour $41-billion into the system, indexed at 6 per cent, over the next decade. Organized groups within the system and administrators saw new money on the table and took a disproportionate amount of it.
They all got more in real-dollar terms for doing the same things that they had always done and in the same way, the antithesis of productivity gains. Provincial differences exist, of course, with Nova Scotia physicians on average being the lowest paid and Ontario physicians the highest.
Those days are over, as economic growth slows and provincial governments face fiscal pressures including a looming cut in federal health-care transfer payments.
The share of fee-for-service doctors has been falling, too. Today, about 70 per cent of Canadian physicians still work on a fee-for-service basis. What they receive for this or that service is negotiated by their medical association with the provincial government. The result is a fee schedule that would be the size of a telephone book in a small- to medium-sized city.
As older doctors retire, they are being replaced by new entrants, many of whom are women who prefer to work on salary, or a salary adjusted for number of patients or quality outcomes.
Medicine is feminizing fast. Women outnumber men in medical schools. The share of women practising is rising, a trend reflected across the industrialized world. Almost 45 per cent of Canada's family doctors and about a third of specialists are women. Between 2009 and 2013, female physicians jumped 22.5 per cent, while the number of male physicians increased by 9.2 per cent.
Women, in medicine as in other areas, try to juggle careers and family. The fee-for-service system drives them to long hours, seeing as many patients as possible, a professional life not conducive to the balance they seek. Younger male physicians, too, are opting for something other than fee for service. Ask physicians privately about changing from the fee-for-service model to salary and pension; you'll be surprised how many are open to the idea.
Governments are searching for better integration in their health-care systems. Doctors on some form of salary system working with other professionals in clinics is the way of the future. "Teamwork," "integration" and "patient-centred" are the buzzwords.
The fee-for-service model, which can potentially process more patients, is built for the solo practitioner or the person at the top of a hierarchy. It was the model best-suited for the medicine of 50 years ago. It is no longer.
Getting to a salary-and-pension model will take time and the devil will lie in the details. It might take a decade to phase in a new system. Governments and the medical profession should start studying the next big compromise as soon as possible.