Initial thoughts on Blue Ribbon Panel report

September 4, 2019

Dr. Alison Clarke, AMA President

Dear Members:

Yesterday you will have heard about the release of the Report and Recommendations of the Blue Ribbon Panel on Alberta’s Finances. The report details government’s concerns over the growth and level of health expenditures, i.e., the issue of affordability. It conveys many of the same messages contained in the government’s election platform, although the focus there was more on value for patients and included creating a medical home for each Albertan, as well as issues related to seniors’ care, mental health and addiction.

As I noted in a recent President’s Letter, these issues of affordability and value must be considered together. The problem of managing the health budget – affordability – is intertwined with maximizing value from the system. Historically, approaches to managing budget alone have simply driven costs to new places and have had unintended consequences for Albertans. Likewise, dealing only with value ignores the real budget issues and fails to create the economic imperative to maximize benefit to Albertans. The AMA is prepared to discuss any options to help strike that balance.

Meeting the health care needs of Albertans must remain the primary focus. The AMA, government and other providers need to listen to the issues that mean the most to patients. This means finding meaningful ways to understand their concerns and allow them to have real input into the system. For example, through albertapatients.ca – an online community of 9,500 members strong and growing – we have heard loud and clear that they do have issues. They have concerns about the health care system being there for them when they need it, particularly in their senior years. They worry about being able to afford the care they need or having sufficient support to be caregivers for their loved ones. Patients must be included in planning for the future of our health care system.

In many ways, the content of the report is not too surprising. It is consistent with an earlier report written by the chair of the Blue Ribbon Panel, Janice MacKinnon. Boiling it down to the minimal bottom line, the panel finds that Alberta’s finances are in an unsustainable state and decisive action is needed sooner rather than later. Health care costs, particularly physician expenditures, are highlighted in the report (other than union labor costs, the report does not deal with Alberta Health Services expenditures in light of an AHS review currently underway by Ernst & Young).

At the bottom of this email, I have included four recommendations from the Report and Recommendations of the Blue Ribbon Panel on Alberta’s Finances that relate directly to physicians.

There is a lot of content in the report, but here are my comments on some of the aspects that are most significant to physicians:

Expenditures: There are always different ways in which physician payment data can be presented. We will look carefully at how the report’s statistical arguments are laid out and offer countering perspective appropriately. I won’t dwell on this element today, but I wanted you to know it won’t be forgotten as we move into negotiations this fall. We will also make sure that the financial contributions physicians have made in recent years receive due consideration.

AMA Agreement and negotiations: Government recently sent the necessary notice to initiate negotiations. We will be consulting our physician leaders at the upcoming Representative Forum on our approach and will likely be at the table with government in early-to-mid October. The Blue Ribbon Panel states that the parties should do everything possible to reach a negotiated agreement. They also go on to state that should a negotiated deal prove unreachable, then government should consider “legislative options”. The AMA Agreement itself is characterized as a barrier to government’s ability to manage costs. While there is always room for improvement, I do not agree with this view.

Negotiated AMA agreements have been some of the most flexible mechanisms in the health care system that have delivered real value for patients and taxpayers. Primary care networks and the pervasive use of electronic medical records are two excellent examples, as are physician-led savings initiatives that reduced the growth rate of physician expenditures.

The panel report indicates that a negotiated agreement is the preferred option. I fully agree. The AMA has never failed to reach an agreement with any government over many decades. I am confident that one can be achieved now too, and in a timely fashion. We understand government’s urgency. We have been preparing for negotiations over the past year and will be ready and able to commence following a discufssion with the Representative Forum later this month. In my conversations with the Minister, I have been offering collaboration and a chance to establish some shared interests before formally sitting down at the table. We need to get these discussions off to a running start.

Legislation: As for legislative options, government has always had that great power. It should not be used lightly and I do not think the panel is suggesting it should be. In all environments, collaboration is the best option. The Board believes that in building on the strengths of our current agreement, there is significant opportunity for increased value for patients and an affordable and financially sustainable health care system.

Alberta physicians have a strong track record of innovation and accountability. We have what the panel report calls a “reform culture”. While I fully expect very tough negotiations, I also have confidence in the capability and willingness of physicians to be partners in delivering value and affordability. Common ground can be found in what’s best for patients and I think there are plenty of examples of such things in this Blue Ribbon Panel report. We can keep people in the community and out of hospital as much as possible. We can set measurable targets for improving outcomes and work toward them. We are more than open to (and are already working toward) new ways to fund services and create incentives for doing things differently. Accessible, high-quality health care for all Albertans in a patient-centric system is achievable by working together.

Your comments are welcome in the usual three ways:

Warm regards,

Alison M. Clarke, MD, CCFP, FCFP
President


ON HEALTH: THE BLUE RIBBON PANEL RECOMMENDS THAT THE GOVERNMENT SHOULD:

Recommendation 1:

Empower strong, strategic leadership to transform the current health system, using other provinces as models, and engaging nurses, doctors, other health professionals, stakeholders and the public where appropriate. The goal is to establish a health system that achieves better outcomes, provides more appropriate care for Albertans, and approximates the average per capita spending of British Columbia, Ontario and Quebec.

Recommendation 2:

Establish the following set of outcomes to measure Alberta’s progress in transforming its health system to reflect the needs of 21st century patients and reduce costs. An external organization, independent of government, should review and report annually on Alberta’s progress in closing the gap with comparator provinces on these outcomes (see page 32, table 12).

Recommendation 3:

Make greater use of alternative service delivery for day procedures and other services that do not have to be delivered in hospitals and could be delivered in private or not-for-profit facilities. The use of alternative service delivery should be applied to other areas beyond health.

Recommendation 4:

Limit the increasing cost of physician services by providing incentives for physicians to move to Alternative Payment Plans and by renegotiating the agreement with the Alberta Medical Association. Every effort should be made to achieve a negotiated agreement, but the government should also consider its legislative options.

5 comments

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  • #1

    This comment has been deleted.

  • #2

    Dr Greg Schmaltz

    Physician

    6:50 PM on September 04, 2019

    The problem Alberta doctors face, as do all doctors in Canada, is that the Canada Health Act handcuffs physicians to work for whatever fee the various governments decide they will pay, and even cut if they wish, without recourse by the doctors. I escaped this ridiculous system twenty years ago, and it was the best career and financial decision I ever made. Sadly, leaving Canada is the only hope for young doctors to do the same. Greener fields beckon in the US, and in other countries such as Australia (where I am) to set fees competitively and let the patients absorb the gap between the government fee and what their services are worth. The AMA and its doctors will be bent over a barrel once again with this report.

  • #3

    Noel Corser

    Physician

    9:07 PM on September 04, 2019

    The Blue Ribbon panel report clearly calls for major changes/decreases to physician payments. This makes total sense if the underlying assumptions are correct: the current Alberta expense-to-income ratio is unsustainable, high spending levels (relative to comparator provinces) are the problem (in the context of no evidence for improved results), and decreasing/altering spending is the solution. Although I'd argue with some points of the report, it's hard to argue the major premises. The AMA can either 1) dig in its heels and try to protect the status-quo for docs (the organizational default), 2) shift into high-gear to create an in-house plan for reduced compensation/alternative compensation models, or 3) sit by and watch the government decide how it wants to reduce compensation/change payment models. This is likely to be a pivotal re-set moment for the AMA, as it's unlikely that the current government will ignore the health-related recommendations (even if they might ignore the stuff on long-term fiscal accountability!). The report states average fee-for-service earnings in Alberta were 35% higher than comparator provinces, which means government will be aiming for that level of readjustment. Given history, it's near-impossible to believe the AMA will be able to make that kind of change on its own, partly because of the temptation to stick our heads in the sand and hope this "just goes away", so I predict scenario 1 and/or 3, probably resulting in legislated changes to the AMA agreement. Given the AMA's inability to self-reduce compensation, the only hope I see is for "strong leadership" at the AMA to take on the challenge of restructuring physician healthcare service delivery models in Alberta "for the 21st century", which is a mighty big challenge (especially if it's mostly sticks, not carrots). Good luck!

  • #4

    L. Torok-Both

    Physician

    10:08 AM on September 05, 2019

    The public needs "facts" -- give them the list of the last 7-8 years of negotiated agreements eg.. 0%, 0%, Cola, Cola, 0% 2%. We need public support - not cutesy, trite phrases like "innovative'. We will innovate our health care system into ruins if we continue! We should not be held accountable for ridiculous capital expenditures and administrative overload.

  • #5

    Dr. Ashton

    Physician

    12:27 AM on September 06, 2019

    The AMA needs to take a stand as Dr. Matt McIsaac was alluding to. We need to begin to dig our heels into the sand and start to educate the public on large misconceptions. The opportunity cost of becoming a physician is enormous, however, the public is swift to make physicians the scapegoat once large numbers with no account for overhead, expenses, etc are thrown out. Since the report had been announced, all public servants and unions have spoken up, however the AMA has not released a public statement, and is passively idling. Currently, we are easy targets with solid voice to defend ourselves.

    The status quo has been ongoing for far too long - with previous negotiations done in good faith for a more favourable one in the future. We need to stand strong under a firm leadership now moreso than ever.

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