Have you ever wondered how much your family doctor is paid? Are not all doctors driving fancy cars, sipping fine wines and taking afternoons off to golf?
Most people are surprised to learn how little family doctors are paid for all of the services they provide.
How much do you think a family doctor is paid?
Would $32 per visit be fair? Would a flat rate of $16 per patient each month be fair?
Too much? Too little?
In 2015, Dr. Shawn Whatley wrote a pair of excellent blog posts that detail how much family doctors are paid. The following blog demonstrates two different examples of how family doctors are currently paid in Ontario.
Example 1: Fee for service billing
For decades, "fee for service" has been the traditional way that doctors bill OHIP for their services. Under this model, a doctor is paid a specific amount of money for a specific type of visit or procedure. For example, for a "minor assessment" such as a simple rash or skin spot, the physician would submit a bill to OHIP with the code A001 attached to it. They would then be paid the corresponding $21.70 in return. If a doctor stitches up someone's cut arm, she submits a bill for a code Z176 to OHIP, which pays the doctor $20.00 in addition to the assessment payment. A full list of services and payments can be found in this document from the Ministry of Health and Long Term Care.
There have been some further reductions since Dr. Whatley's blogs in 2015, though, and the payment figures in the link above aren't the most current numbers. The Ontario government unilaterally imposed cuts to physicians' payments a few years back — so, for instance, instead of being paid $33.70 for a typical visit (code A007 for an "intermediate assessment"), a family doctor is now paid $32.64.
Let us explore this further. Imagine a patient visits her family doctor for belly pain (for which the family physician would bill the most common code, A007, as noted above). Here are all the steps that are involved in such an assessment:
- Patient calls the doctor's office to book an appointment. (Remember: telephone lines and reception staff cost time and money, all paid by the doctor.)
- Patient visits the office, checks in with reception staff, is taken to exam room and prepared for the visit. (Again, staff are all paid by the doctor. Clinic rent, electricity, medical tools, equipment, etc. are all paid for by the doctor.)
- The doctor assesses the patient. (Remember: the doctor went to school for 10 or more years of education and training after high school in order to earn the expertise to care for her patients, not to mention the years of experience she has gained since.)
- The doctor orders blood work and an ultrasound in order to help diagnose the cause the of patient's belly pain. (To do this, the doctor needs to complete the appropriate paperwork to order the tests. All of this takes time, computer costs, faxing and/or telephone costs and more staff time.)
- The doctor may need to write a prescription for medications for the patient. (This takes time and expense of either paper or fax for the prescription.)
- The doctor needs to write a detailed note in the patient's chart to document the visit. (This takes more time and computer costs.)
- When the test results come back for the blood work, the doctor's staff receives them and puts them in the patient's chart, and then the doctor reviews them. (This takes staff time and doctor time.)
- When the ultrasound result is received, the staff puts the report in the patient's chart and then the doctor reviews the results. (This takes staff and doctor time.)
- The doctor then either calls the patient with the results or has her staff call the patient with results. (Again, this all takes doctor time, staff time and telephone costs, all paid by the doctor.)
For all of this time, cost and expertise, the family doctor is paid a total of $32.62 (but not quite, as she still has to pay taxes on income earned. Once corporate tax (if applicable) and personal income taxes are applied, the doctor only takes home as little as 54 per cent of the remaining profit).
Furthermore, the family doctor can only bill OHIP for one issue per day. So, if the patient also asks about an unrelated rash, or blood pressure control, or any other issue in that same visit, the doctor can still only bill that same $32.62.
Example 2: Capitated billing
In recent years, most family doctors are now paid for their services via "capitated" payment models. In a family health organization (FHO) model, a family doctor is basically paid a flat rate for looking after a patient for a year. This flat rate includes a specific list of services as well as some additional bonuses and incentives.
The amount of the flat rate varies depending on the age and sex of the patient. In my experience, a doctor is paid about $80 per year to look after a 20-year-old male patient, whereas she is paid about $440 per year to look after an 80-year-old female. On average, for the entire population, this works out to about $200 per year ($16.67 per month) per patient. This is a flat rate payment regardless of whether a patient visits the doctor twice — versus 10, 20 or even more times per year.
Sounds like a bargain — not to mention unsustainably undervalued.
In return for this total flat rate payment of $200 per average patient per year, the family doctor agrees to provide a list of 130 services. The extensive list these services can be found here in "Appendix A" (page 37 of 54).
Every single one of these visits, procedures and services requires staff time, doctor time and overhead costs, including the costs to buy all of the medical supplies and equipment. (Just as one example, it is worth noting that the supplies, nursing time and staff time required to perform a skin biopsy amounts to a total cost of $20 each).
In addition to the flat rate payment, the doctor may also earn an additional 15 per cent of the traditional fee for service payment. This is also known as "shadow billing." Using the most common example of a general assessment by a family doctor, the doctor would be paid a mere additional $4.90 (15 per cent of $32.64) for the visit.
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Given all of the above, and considering all of the education, training, skill, experience, responsibility, time overhead costs and taxes required to provide care for a patient, do you feel a family doctor deserves to be paid:
How's $32.64 per visit?
Perhaps just $16.67 per month?
Sounds like a bargain — not to mention unsustainably undervalued.
From now on, when you hear of a physician billing $300,000 (or more) per year, just imagine how many patients are being treated and how much care is being provided. Imagine the hours, the responsibility and the overhead costs that are required to provide such service.
And imagine just how busy and hard-working that doctor must be.
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