Leaked report offers window into the medical one percenters and ‘growing concern’ over MD pay inequity

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Even among doctors, it seems, there is the one per cent and the rest.

Inequity in physician income is a growing concern that could fuel a “breakdown in collegiality,” over-delivery of certain services and unwanted intervention by governments, warns an internal Alberta Medical Association document.

The issue of “relativity” in doctors’ pay has percolated quietly for years throughout Canada, but the leaked report lays out the MD pay divide — and its potential fallout — with unusual frankness and detail.

More than 400 of the province’s physicians bill over $1 million a year including overhead — while 4,000 doctors are billing $250,000 or less, notes the background paper, obtained by the National Post.

The highest-paid doctor charged over $5.5 million before deducting expenses.

The disparity between specialties is also stark, even when varying overhead costs are subtracted from the total.  The average respiratory medicine specialist – the top of the heap – earns $800,000 a year after expenses, the average GP just over $200,000, the paper says.

“Equity (is) a growing concern among physicians,” says the document. “Inequity negatively impacts social cohesion. In a medical association context, this can lead to disunity, a breakdown in collegiality, an ‘us-versus-them’ attitude and, in extreme cases, a splitting off of certain groups.”

The document was prepared in advance of a meeting earlier this year of the association’s “representative forum,” or governing council. It came after the AMA’s most recent fee agreement with the province gave it greater “stewardship” over health spending.

The forum decided the profession should achieve income equity within five years through fairer allocation of fees among specialties, and is meeting again in June to hammer out a plan, says Dr. Padraic Carr, the association president.

Ed Kaiser/Postmedia

“There was widespread support for addressing these issues,” he said in an interview. “There really have been long-standing concerns for many of our members.”

But a spokesman for Alberta radiologists — the specialty pegged by the AMA report as earning the most in gross billings and third-most in net pay (in excess of $700,000) — says the document paints a misleading picture.

Diagnostic radiologists’ overhead is not 55 per cent as it states but more like 70 per cent, which would put their after-expenses income around the middle of the pack, says Dr. Rob Davies, president of the Alberta Society of Radiologists.

Plus, a six per cent cut in radiologists’ gross fees — translating to a 20 per cent cut in net income — is already set to be implemented Friday, he said.

Like other high-billers such as respiratory specialists, dermatologists, cardiologists and ophthalmologists, their overhead includes paying for sophisticated equipment in non-hospital clinics and the technical staff to operate it, said Davies.

“We actually have 15 to 20 employees working for the radiologist in the community on any given day,” he said. “It’s an incredibly high ratio and very different than other doctors’ practices.”

Previous studies have found, however, that disparate incomes often do not reflect the value, intensity and cost of doctors’ services, with fees failing, for instance, to keep up with changes in technology or how procedures are carried out.

Services that are over-valued are often over-delivered

But attempts to more fairly divvy up the pie have tended to falter amid strife among specialists. The Ontario government spent almost $5 million on a commission to determine which groups should get more and which less; its 2002 report was effectively shelved after widespread outcry.

Still, Ontario, Manitoba, Saskatchewan and B.C. do have systems in place to try to right the balance. Radiologists in Ontario have also seen cutbacks recently — which they call unjust.

As well as breeding enmity among doctors, inequitable payments can lead to unwelcome intervention by governments and send out skewed “price signals,” the Alberta report says.

“Services that are over-valued are often over-delivered,” it says. “Physicians are attracted to these services … as they provide a higher level of compensation for the cost and effort of providing them. Similarly, under-valued services can lead to under delivery.”

The report says 404 Alberta doctors billed the province more than $1 million in 2015-16, and almost 90 of them $2 million or more.

That compares to just over 500 $1-million-plus billers in Ontario, a province with nearly three times the number of physicians.

When the report factored in what it said were the average overhead costs for each specialty, the differences were only somewhat smaller.

At the top were respiratory medicine, dermatology, diagnostic radiology and nephrology — all netting over $700,000. At the bottom were psychiatrists, pediatricians and general practitioners, making an average of $200,000 to less than $300,000 after overhead.

While family physicians or GPs usually undergo a two-year residency after finishing medical school, all other specialties have a minimum five-year post-graduate training period.

The report also factored in the number of days doctors worked. The differences flattened somewhat again, but still ranged from GPs netting an average $1,000 a day to radiologists’ $4,000 a day.

National Post

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