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REVIEWING MODELS FOR PHYSICIAN COMPENSATION

CANADA AND ABROAD

WILLIAM L. OROVANCAROLYN TUOHY

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METHODS OF PHYSICIAN COMPENSATION

• FEE FOR SERVICE• CAPITATION• SALARY• MIXED MODELS• AFP/APP’S

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ISSUES ARISING

• PRIMARY VERSUS SPECIALTY CARE

• MD PREFERENCES (AGE,GENDER, SPECIALTY)

• FUNDER PERSPECTIVES (BUDGETS, OUTCOMES)

• INCENTIVES/ETHICS/CLINICAL JUDGEMENT

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FEE FOR SERVICE:THE DEBATE

MD PERSPECTIVE

• PHYSICIAN AUTONOMY• VOLUME DRIVEN• TARGET INCOMES• INCENTIVE FOR COMPLETENESS OF

CARE• FREEDOM OF MOVEMENT FOR

PATIENTS

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FEE FOR SERVICE:THE DEBATE

FUNDER PERSPECTIVE

• INCENTIVES TO OVER SERVICING• UNPREDICTABLE BUDGET• IMPEDES ACADEMIC OUTPUT• ‘AVERAGE’ ACUITY REMUNERATED• RELATIVITY AN ISSUE• ACADEMIC DISAPPROBATION

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CAPITATION

MD PERSPECTIVE

• LESS AUTONOMY• BURDENSOME (ROSTERING)• INCREASED RISK (COMORBIDITY)• NEED LARGE(R) PATIENT

POPULATIONS• OUTCOMES VERSUS EFFORT BASED

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CAPITATION

FUNDER PERSPECTIVE

• ENCOURAGES EFFICIENCY (N.P’s)• INCENTIVE TO LIMIT SERVICES

(LAB, HOSP)• ‘SKIMMING’ IN ROSTERING• BUDGET CERTAINTY IMPROVED• CARVEOUTS/BONUSES AS NEEDED

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SALARY

MD PERSPECTIVE

• REDUCED AUTONOMY• REDUCED CLINICAL/PROFESSIONAL

SCOPE• NO PRODUCTIVITY INCENTIVE• NET LOSS OF INCOME• NO INCENTIVE TO CONTINUITY OF

CARE

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SALARY

FUNDER PERSPECTIVE

• INCREASED BUDGET CERTAINTY• NO INCENTIVE TO OVER SERVICING• ADMINISTRATIVELY SIMPLE• ENCOURAGES CME & PREVENTION• TEAM BASED CARE• REWARD SENIORITY, EFFICIENCY• UNDERSERVICED AREAS ATTRACTIVE

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MIXED MODELS

• IN ONTARIO FHN, FHG, HSO’s

• DECADE LONG EFFORT TO MOVE MD’s

• APP’s (RURAL, E.R.,GERIATRICS)

• AFP’s (AHSC’s)

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PATIENT ATTITUDES TOWARD PHYSICIAN REMUNERATION

• ALL METHODS LEAD TO SOME CONCERN

• ADULT SURVEY STUDY- Salary 16%- FFS 25%- Capitation53%

• HIGHEST IN ‘BEST EDUCATED’ GROUP (Pereira et al Arch Int Med ’01)

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IMPACT OF PAYMENT METHODS ON DECISIONS

• PHYSICIAN SURVEY/CLINICAL SCENARIOS• CAPITATION VS FFS

FFS CAPITATIONDRUG 75.9% 55%TEST 46.7% 33.1%REFERRAL 77.5% 66.6%TRANSPLANT 91.6% 92.0%• “BOTHER” INDEX HIGHER FOR

CAPITATION(SHEN ET AL MEDICAL CARE 2004)

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ALTERNATE PAYMENT(ONTARIO)

• NUMBER OF CONTRACTS 315

• NUMBER OF PHYSICIANS4508

• VALUE $637.6 mm

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CANADIAN NON FFS BY PROVINCE (2002)

#’s %

PEI 57 30%

QUEBEC 7896 54%

SASK 260 16%

ALBERTA 227 4.4%

ONTARIO 3013 14%

BC 2337 28%

N.S. 1287 64%

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TOTAL NON FFS ONTARIONOVEMBER 2004 (G.P.’s)

• FHN• FHN/FHG• FHG• PCN• SEAMON(FHN)• HSO

TOTAL

• 374• 48• 2610• 161• 17• 150

3360

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AFP (AHSC)

LOCATION # ACTIVE PHYSCIANS

TORONTO 1409

HAMILTON 492

KINGSTON 138

OTTAWA 570

LONDON 436

TOTAL 3045

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FHNONTARIO

MONTH SITES DOCS PATIENTS

JAN 04 16 235 123,645

APRIL 04

27 245 255,966

AUG O4 38 331 373,855

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FHGONTARIO

MONTH SITES DOCS PATIENTS

JAN 04 152 1742 222,092

APRIL 04

176 1995 767,653

AUG O4 916 2307 1,043,834

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PCNONTARIO

MONTH SITES DOCS PATIENTS

JAN 04 12 157 275,604

APRIL 04

12 158 275,437

AUG O4 12 162 276,163

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UNITED KINGDOM I

• SPECIALISTS (NHS)-SALARIED (BY SESSIONS)-UP TO 10% ADDITIONAL FFS-“MERIT” BONUSES-“REVIEW BODY ON

DOCTORS REMUNERATION”

-PRIVATE OPTION AVAILABLE

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UNITED KINGDOM II• GP’s

- PRIMARY CARE TRUSTS- TERMS OF SERVICE CONTRACTS- 1800 PTS/MD (declining/negotiated)- ‘MIXED’ REMUNERATION

-FFS 15% OF INCOME-CAPITATION 40%-SALARY 30%-CAPITAL 15%

- INCENTIVE/QUALITY INDICATORS/POINTSYSTEM

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UNITED STATES

• FFS (MODIFIED BY RBRVS)• CAPITATION MODALITIES

DECLINING• EMPHASIS ON ADAPTING FFS

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AUSTRALIA• HOSPITAL/SPECIALISTS

SALARYFFSSESSIONAL

• GP’SFFS -BULK BILLNG

(80%) -BILL DIRECT

(20%)

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NEW ZEALAND

• HOSPITAL/SPECIALISTS- MAJORITY SALARIED

• GP’S-FFS 85% OF MD’S-CAPITATION 15% OF MD’S

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SWEDEN

• GP’S- 86% SALARIED- 12% FFS- 7% PRIVATE

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CONCLUSIONS

• REVIEW CURSORY/COMPLEX SITUATION

• DYNAMICS OBSCURE/FFS VS OTHER

• REFORM OF FFS REMAINS POSSIBLE

• GRADUALISM/VOLUNTEERISM