How a physician's wage is determined

By Sheri Monk
http://www.maplecreeknews.com

At the doctor shortage meeting Aug. 25, several questions posed expressed concern or confusion over how much and how physicians are compensated. Late last year, the compensation structure for Maple Creek physicians changed. Previously, doctors operated under a fee for service payment structure. Under the new primary health care model, physicians are paid a fixed amount.

Under fee for service compensation, doctors bill the provincial Ministry of Health for each patient they see.  There are different fees for different services. Full physical examinations fetch a higher price than a simpler visit for an illness such as a sore throat.

When physicians switch to the fixed amount payment structure, the compensation is determined by examining three or more years of billing history to calculate an average.

Monies paid to physicians are still paid out directly by the Ministry of Health, but the local health regions administrate the agreements on behalf of the provincial  government.

Physicians are locked into the fixed payment for a maximum of three months. The health region and the physician can review the fixed sum every quarter to adjust for increased volume or changing patient visits.

Jim Hornell, CEO of Cypress Health Region says outgoing physician Dr. Kobus le Roux was in favour of switching to a fixed sum system and emphasized all doctors have a choice as to which method they would prefer to bill the government.

Physicians are treated by the government as independent contractors. The fees physicians are paid by the government for services are negotiated between the Ministry of Health and the Saskatchewan Medical Association every three years. Health regions do not participate in the negotiation process between the parties, but they are aware of the fee schedule in order to facilitate with doctor recruitment.

Fees paid for physician services at a hospital work differently. Hospitals are placed into different categories, which determines how much money is made available to compensate on-call physicians.

Maple Creek has a “category A� hospital and approximately $128,000 is made available annually to pay on-call physicians. Leader has a “category B� hospital and has an annual on-call physician budget of approximately $80,000.

Maple Creek Hospital is considered a pivotally important piece of the health care map in southwest Saskatchewan due to its proximity to the Trans-Canada Highway. Physicians on duty in Maple Creek deal with serious trauma resulting from highway wrecks and will see a higher volume of patients.

Physicians split the available pool of hospital on-call money based on how the on-call time is split. If one doctor manned all the on-call hours in a year at the Maple Creek, he would receive the entire $128,000. If on-call duty was split between four physicians equally, each would receive $32,000. On-call physicians are compensated for on-call service fully, regardless of patient volume at the hospital.

In total, the Saskatchewan government provides $1.1 million for physician compensation in Maple Creek. There are four full-time physician positions in Maple Creek and when fully staffed, each doctor would receive approximately $275,000 in annual earnings.

The average salary of a Saskatchewan man in 2006 was $29,589 and the average salary of a female $19,873, a far cry from $275,000. Physicians in the U.S. frequently earn hundreds of thousands more than Canadian physicians, often in areas less than a two-hour drive from the border. However, physicians carry a high burden of overhead costs. They must hire office staff, purchase or rent a building to practice out of, purchase expensive medical supplies, attend to business accounting and carry expensive insurance.

Hornell says a fixed amount is often an attractive compensation structure, particularly for newly recruited physicians unsure what to expect after moving to a foreign country.

see original