Take Yes for an Answer
July 16, 2020
Real Proposals, Real Savings:
Setting the Record Straight
Minister Shandro claims:
(i) That the AMA has not tabled any proposals in negotiations
(ii) That the AMA has not offered any meaningful savings
It’s time to set the record straight and we hope you will find the information below helpful. It provides an overview of our July offer, the latest of six proposals for savings.
1 WHAT DOES THE AMA’S OFFER MEAN FOR ALBERTA’S PHYSICIANS?
At every opportunity, Minister Shandro has said that his objective is to hold physician expenditures at $5.4 billion per year. At our last meeting, the government’s demand was that we accept $4.571 billion for the Physician Services Budget for the next three years.
Let’s be clear. In accepting this budget for three years, physicians would be making a significant contribution to savings for Alberta from our own bottom lines. Like any small business, our revenues need to keep up with costs or the amount remaining for the business (net income) shrinks. Even before government made its demands, physicians had not had a fee increase since 2018, while our business costs have steadily increased. Business costs include staff, equipment, rent, utilities, etc.
Alberta doctors know that all businesses in the province are struggling. We are willing to do our part by holding the physician service budget figure steady for the next three years. We want to contribute to Alberta’s fiscal sustainability – but it must be done in ways that add value for patients.
In exchange, we hope to see some much-needed stability in Alberta’s health care system. We want government and the AMA to work together toward system improvement. We want to take first steps toward healing the severely damaged relationship between the government and Alberta’s physicians.
2 AMA PROPOSALS TO GOVERNMENT
Government claims the AMA hasn’t made any credible proposals, is this true?
The AMA has made multiple, meaningful proposals to government since negotiations began in November 2019: four in 2020 alone (January, February, March and July).
From the first day of negotiations in November 2019, the AMA has received no financial proposal from government. Government has simply repeated its budgetary mandate of $5.4 billion.
3 AMA’S LATEST OFFER TO GOVERNMENT
What term is the AMA proposing?
The AMA offered a three-year term (April 2020 – March 2023) under a capped budget, with an additional bridging year to allow time to negotiate a successor agreement.
What is the budget amount?
The AMA has agreed to government’s budget amount of $4.571 billion per year for each year of the three-year term.
Isn’t the amount $5.4 billion?
Government’s Physician Services Budget 2020-21 $4.571 billion.
The $5.4 billion overstates that mutually agreed Physician Services Budget total by nearly $830 million per year. The difference includes items that are outside our agreement such as:
- Staff salaries and supplies for an entire division of Alberta Health
- A grant amount that Alberta Health provides to Alberta Health Services for various items
- Other health care contracts that do not involve the AMA agreement nor do they involve the AMA
- Non-clinical items (which are outside the scope of the AMA Agreement)
- Grants to the universities for things like post-graduate medical education
- Grants to universities to pay for non-clinical services
- Intergovernmental payments to British Columbia that have nothing to do with clinical services provided to Albertans
What are the AMA’s responsibilities around this budget?
As of April 1, 2020 for the term of the agreement and within the government’s budget (stated above), the AMA commits to manage the budget and cover the health service utilization from existing physicians.
What happens in the event of an over-expenditure?
Our proposal commits the AMA to be responsible for meeting the agreed-to budget. If actual costs run over the budget, then the AMA would implement a fee reduction to ensure the budget is met.
What happens in the event of an under-expenditure?
In a year when actual costs were below budget, the funds would be placed in a reserve account to be used to cover any possible future over-expenditure.
What would government’s responsibilities be under the agreement?
The government will need to pay for new physicians entering Alberta.
The government will need to restore our right to binding arbitration and continue to fund the programs that are still unsecured at this time (see below), along with the administration returned to the AMA, where necessary.
Why does responsibility for physician supply matter?
The AMA has no control over the recruitment of new physicians to Alberta and, as such, should not be financially responsible for them.
The vast majority of physicians entering Alberta are recruited by AHS. As the funder of AHS, government currently has significant control already on the number of physicians above the current amount (“net new”). Given that they have this control, government needs to take responsibility to pay for net new physicians.
Remember that our proposal includes a hard-capped budget. If government decided to recruit a large number of physicians but left the budget unchanged, in effect current physicians would be paying for all incoming physicians from the existing pie.
Government has also passed legislation to control physician billing numbers as of 2022 meaning it will have direct control over the number (and location) of new doctors.
Both parties recognize that there are always issues getting physicians to all the places where they are needed. Managing physician supply, though, is a complex matter. That’s why our AMA proposal includes a provision for the AMA to work with government on their physician supply strategy. We will help to develop a needs-based plan to identify the optimal number and distribution of physicians across the province.
Does the AMA’s proposal include an arbitration mechanism?
Arbitration provisions are absolutely essential for two parties working together in a tremendously complex health care system. With the best of intentions, disputes will inevitably arise over time. Arbitration allows the parties to sit down, state their respective cases to an independent third party and agree to be bound by the results. This avoids unnecessary conflict or damage to the relationship. The work between doctors and government is too important to allow it to be derailed by intermittent disagreement.
Consider also that physicians are not able to strike, nor can we set our own prices for the services we provide. That’s why the Canada Health Act references the importance of dispute resolution as an offset for these limitations – as well as support for the rights of physicians in the public health care system.
On the first day of these negotiations, government stated that they would not participate in any arbitration although it was provided for in the agreement that existed at the time. Subsequently, government unilaterally terminated that contract and imposed their own Physician Funding Framework. Cancelling the AMA Agreement also took away contractual provisions for binding arbitration. In response, the AMA has filed a charter challenge against the government for removing the arbitration provision that all other essential service providers in Alberta enjoy.
As our advertisement states, upon ratification and signing of a new agreement, this lawsuit will be withdrawn. Binding arbitration on fees and term, at a minimum, is required as a provision of the new agreement.
What about the Programs that AMA administers?
The government has refused so far to commit to renew a grant agreement that supports physician-related programs administered through the AMA. Many of these programs reflect the indisputable fact that physicians are human, too. Programs involved include:
- The physician health program (counselling, crisis support, addictions and mental health issues, etc.)
- Maternity/paternity benefits, etc.
These programs should continue and, as they have been operated for decades, under the efficient administration of the AMA. Continuing uncertainty affects both staffing and operations of the programs.
Does the AMA support government’s health care policies?
Yes. Since the early days of the current government in 2019, the AMA has been publicly supportive of many of the policies that government laid out in its health care platform.
The AMA has stated that we would be willing to work with government on items such as:
- Reducing surgical wait times
- Implementing the Patient’s Medical Home
- Improving Senior’s Care
- Improving Mental Health Care
However, the AMA has an issue with how government intends to pay for these things. The government seems to believe that Alberta’s physicians are so grossly over-paid that they can fund all the government’s health care reform through reductions in physician compensation.
Independent analysis commissioned by the AMA (one that government has retained from time to time) shows that Alberta physician compensation is in line with that of colleagues in other provinces. You can view this analysis for more information.
Final thoughts
It’s deeply regrettable that we have arrived at this historic low-point in the relationship between the doctors and the government of Alberta. The AMA hopes that bringing our proposal before the public will help strengthen support for getting the parties back to the table, with the use of binding arbitration, if necessary, to reach a sensible accommodation on the numbers and issues.
We remain ready to do so at any time.
Please Minister Shandro, take Yes for an answer. Our proposal meets all the financial objectives you have set over the last number of months.
Albertans who would like to express support for a return to negotiations and arbitration can visit PatientsFirst.ca.
Technical briefing and press conference recording
Watch a recording, below of the July 15, 2020 technical briefing and press conference regarding the details of the AMA’s proposal to government.
Dr. Noel Grisdale, Chair, AMA Negotiating Committee and Mr. Sean Smith, AMA Senior Staff Lead, Negotiations, provide a short technical briefing, followed by a statement from AMA President, Dr. Christine Molnar.
The press conference includes Q&A with Dr. Molnar, Dr. Grisdale and Mr. Smith.
