July 20, 2016
As you know, the government and OMA surprised many of us with their announcement on Monday about a new tentative Physician Services Agreement. While there aren’t many details about the specifics just yet, we thought we should provide a quick review in case you’re interested.
FIRST, ABOUT THE MONEY:
- There will be no reconciliation for prior years, this is good news as a retroactive policy change could have been very disruptive and costly for docs.
- The current discounts that are applied to your billings and itemized in your monthly RA will continue (4.25% of total billings). While this isn’t a new cut, it really adds up over the course of a year and many we speak with don’t even know what an impact this is having to their bottom line.
- Going forward, the government will have a fixed annual budget to pay doctors. The amount will be based on the 2015-2016 actual expenditure and will increase by 2.5% in each year of the agreement. NOTE: There may be additional funding added to the budget in the event of new MOH programs or a pandemic episode.
- There are one-time payments available for physicians in each year of the contact for $50M, $100M, $120M and $100M respectively. This sounds good but there is a reconciliation measure in place that is a bit unclear. After 2016-2017, if actual expenditure (i.e. OHIP billings) exceeds the budget, it will eat into these bonuses. What’s unclear at this stage is what happens if the bonuses aren’t enough to cover billings in excess of the budget. The announcements talk a fair bit about a “co-management” process where the OMA and MOH will work together to figure out the way forward. Our guess is that it will get reconciled back against individual billings but that’s based on limited discussions with people around our network.
- There is a commitment to $100 million in permanent reductions in fees of physician payments in each of 2017-2018 and 2018-2019. There is no indication of where these reductions will be found or how they will be implemented. This is one that we will have to keep a close eye on.
NOW, LET’S TALK ABOUT GROUPS
For years, the MOH has been unhappy with the broad inconsistencies in how different groups cover for each other and provide after hours care. As part of this new agreement, physician groups will be asked (i.e. required) to make changes in how they support patient access in three main categories. The details will be negotiated by November 1, 2016 but the focus is on:
- Improvements to evening, weekend and holiday coverage;
- 24 to 48 hours access for urgent conditions; and
- Reporting upon physician resource and access issues.
While this doesn’t sound like great news, it comes with some important changes to Bill 210 (The Patients First Act), which is currently with government. In Bill 210 there were several provisions that would require GPs to report on a number of metrics to the LHIN. We will send out a note on Bill 210 at another time.
FHO REGISTRATION IS BACK OPEN!
For all of you FHO docs looking to bring new members into your group, and for all FFS docs out there who have been looking to get into a FHO, the wait is [almost] over. The new PSA restores managed entry of 40 physicians per month into FHNs and FHOs. Please let us know if you’d like to get your application in the queue, we’d be happy to help.
SOME CONTEXT ON THE NUMBERS
We have had many conversations about the limited information available on this new PSA. Some are happy that the stalemate is broken. Many are sceptical of how this new deal will impact them.
The government is looking for a predictable budget for physician payments. Unfortunately, the only way for this to be predictable is for a hard limit to be set. And when a hard limit is set doctors either have to work for free or stop working. We saw this back when FFS billing was capped. So while a predictable budget is a useful thing for government and taxpayers, patients won’t be happy if this predictability comes at the expense of their access to physician care when they need it.
The Government’s Financial Accountability Office (FAO) has said that health care is facing 5.2% cost pressures: 2.2% due to population growth and aging and 3% due to growing wealth and inflation. As such, groups like Concerned Ontario Doctors have suggested that the 2.5% increase in budget is effectively a cut in fees.