Compensation agreement rejected by Alberta doctors was flawed

This column is an opinion from Lorian Hardcastle,an associate professor in the faculty of law and Cumming School of Medicine at the University of Calgary, andUbaka Ogbogu,an associate professor in the faculties of law and pharmacy & pharmaceutical sciences at the University of Alberta. For more information aboutCBC's Opinion section, please see theFAQ.

After a year and a half of acrimony with the minister of health, Alberta physicians have voted not to ratify the tentative compensation agreement between the Alberta Medical Association (AMA) and the government.

Background to the agreement

Tensions between Health Minister Tyler Shandro and physicians began in the fall of 2019 when, amidst compensation negotiations with the AMA, the government passed legislation providing for the unilateral termination of physician compensation agreements.

The legislation also empowered the government to limit where new physicians can practise or what specialty they can pursue, a policy that has been rejected as ineffective by several other provinces.

Then, as negotiations continued, the government introduced 11 changes to the fees that physicians can bill for providing health services.

For example, the government proposed changing the amount of time physicians had to spend with complex patients before they could bill a higher fee, which would disproportionately affect those caring for patients with complex medical needs and could incentivize some physicians to limit each appointment to one medical issue.

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Despite the impact of these fee changes on patients and physicians, particularly those with family and rural practices, the government did not allow sufficient time for consultation with the AMA and its members.

These contentious negotiations continued into 2020. Following a failed attempt at mediation and the government's refusal to participate in binding arbitration, the AMA filed a legal claim alleging that the refusal to arbitrate contravened the right to freedom of assembly guaranteed by the Charter of Rights and Freedoms.

In February 2020, the government took the unprecedented step of terminating the existing agreement with physicians prior to its expiry and imposing the 11 proposed fee changes. Due to significant pushback, Minister Shandro later backpedalled on some of the fee changes.

To garner public support for its aggressive efforts to contain health-system costs and heavy-handed negotiating approach, the government publicly announced that Alberta physicians were paid significantly more than their peers in other provinces, relying on datathe AMA labelled as "flawed" and "misleading." In what appeared to be a punitive policy move intended to inflame public sentiment about physician pay, the minister passed legislation to create a sunshine list for physicians, making public their compensation.

Following the government's termination of the compensation agreement, its relationship with physicians further deteriorated due to incidents such as the minister of health berating a physician on his driveway and blocking dozens of physicians on Twitter (thereby impeding their access to official policy announcements).

Reports of physicians leaving the province due, in part, to their treatment by the government were denied by the minister, even as he issued a directive to the College of Physicians and Surgeons to make it more onerous for physicians to leave. In a July 2020 poll, 98 per cent of physicians who responded said that they had lost confidence in the minister.

Despite the toxic relationship between physicians and the health minister, the AMA and the government returned to the bargaining table and, on Feb.26, reached a tentative agreement that the AMA took to its members for a ratification vote.

During the voting period, Minister Shandro acknowledged his error in unilaterally changing the fee code affecting patients with complex needs, and expressed regret for diminishing physicians' frustrations by claiming there had been "no fight" between the parties.

These actions felt like a disingenuous attempt to influence the ratification vote and were too little, too late. Ultimately, despite Shandro's efforts to appear contrite, physicians voted not to ratify the agreement.

Terms of the agreement

The proposed agreement granted the minister considerable discretion over physician compensation.

Although ministerial discretion is not unique to the agreement and, indeed, some of that discretion is enshrined in health insurance legislation, phrases like "nothing in this Agreement fetters the Minister's authority or discretion" raised alarm bells for some, given the climate of mistrust and concerns over how he may exercise these powers.

Without an agreement in place, the minister still retains control over the physician services budget (PSB). However, the lack of an agreement may allow room to criticize and push back on budgetary and policy decisions unilaterally imposed by the minister.

On the other hand, had physicians ratified the agreement, the minister could have suppressed criticism by pointing out that physicians had agreed to those terms and he was merely acting within the agreement.

Of particular concern was the agreement's relatively hard cap on the PSB, with only limited ability to increase the budget to account for contingencies. The minister also retained some discretion to reduce the budget.

There was also a concern that physicians who bill the government for each service they provide to patients, such as family doctors, draw from the same finite pot of money as those working for corporate-run, virtual platforms, which engage in behaviour such as advertising that may drive up unnecessary utilization and thus unnecessary costs.

The agreement contemplated the government taking steps to manage budgetary overages including, most controversially, withholding amounts from physician payments. These withholdings could apply to a particular geographic area, category of physician, or type of service.

Notably, when the Ontario government and Ontario Medical Association went to arbitration over their compensation agreement, the arbitrator stated that "[n]o other Canadian jurisdiction enforces a hard cap" and concluded that Ontario's health minister could not limit the services that patients receive by "requiring Ontario physicians to subsidize public services" as this would "be the direct result of the imposition of a hard cap."

The proposed Alberta agreement provided for non-binding mediation rather than binding arbitration to resolve disputes, with the mediator's recommendations becoming a matter of public record.

A ratification vote would have also meant discontinuing the AMA's charter claim against the government. Given the decision not to ratify the agreement, the AMA can still pursue this claim to seek binding arbitration.

Although the benefits to physicians in the agreement were minimal, it did contemplate them having a seat at the table for budget management and an increased voice in physician compensation discussions. However, it is unclear whether the minister would have approached these discussions in a collaborative manner.

Physicians also would have received a one-time, $200-million payment for programs such as virtual codes. This represents the amount that the government reports saving due to reduced billings over the past year.

Given the significant income reductions that many family physicians experienced during COVID-19, it may not reflect the full budgetary savings.

Next steps

Minister Shandro is likely to return to the bargaining table, given that the failed agreement may affect his already poor approval ratings.

The government may also want an agreement with physicians finalized as it embarks on what are already challenging negotiations with the nurses' union. Tensions are likely to grow if the government adopts a similar approach to negotiations with nurses as it adopted with physicians.

Although physicians appear divided, with only 53 per cent voting against ratification, this does not necessarily signal a lack of unity. For example, there is likely a collective desire to see the minister act more collaboratively and for medical professionals to have more of a voice in health policy.

It is also likely that, even for those who voted yes, there are common concerns with the agreement, such as the capped budget and non-binding dispute resolution. The AMA can focus on these points of commonality in rallying its members and returning to the bargaining table.

Although Minister Shandro is undoubtedly disappointed with the result, it is hoped he will not allow this defeat to fuel further acrimony with physicians. Instead, it is important that he does what is best for patients and honours his commitment to "leave the rhetoric behind and rebuild public trust."

He can start with a show of good faith by leaving the $200 million in physician programming in place despite the no vote. He can also ensure that he is treating physicians as partners in health-system reform by increasing transparency and collaborating with them around his vision for the health-care system.

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