Health Minister Eric Hoskins has locked horns with Ontario’s physicians. His government is out of cash. The overworked doctors are protecting their paycheques. And neither side will budge. Inside the bloodthirsty battles over the province’s health care

Health Minister Eric Hoskins has locked horns with Ontario’s physicians. His government is out of cash. The overworked doctors are protecting their paycheques. And neither side will budge. Inside the bloodthirsty battles over the province’s health care

ONTARIO DOCTORS ARE ENGAGED IN CIVIL WAR

When Eric Hoskins took over as Ontario’s minister of health in June 2014, he walked right into a fight. The day he started on the job, his new ministry was already embroiled in failing contract negotiations with the Ontario Medical Association, which represents the province’s more than 28,000 practising physicians. Hoskins was the long-standing MPP from the midtown Toronto riding of St. Paul’s, with a PhD from Oxford and a history of humanitarian work in some of the world’s most war-ravaged regions. He was also a doctor himself. He seemed like the ideal person to broker a new peace.

The key issue was the money that was being spent on physicians. Doctors’ billings had surged over the past decade, and in 2013, OHIP had paid them a total of $11.4 billion, the single largest line item in the provincial budget. One of every four dollars spent on Ontario health care was going to doctors. Hoskins’ marching orders were clear and simple: keep a lid on it. He needed to improve the system without increasing costs, and that meant paying physicians less—in some cases, a lot less.

Five months after Hoskins became health minister, still with no agreement in sight, the two sides appointed former Ontario chief justice Warren Winkler as their conciliator. Winkler surveyed the situation and quickly realized it was a dumpster fire. The government wanted to cap the amount it would pay its physicians at roughly $11.4 billion, with a small annual increase. The OMA was concerned about the effects of Ontario’s ballooning aging population and the fact that, with up to 700 more doctors joining its ranks every year, that money would be spread ever thinner.

These positions, Winkler later wrote in his final report, were “irreconcilable.” Forebodingly, he concluded that “absent some rationalization, the system may not be sustainable.” He told both sides that, unless they overhauled how health care is delivered, the day would soon come when they would never be able to get a deal again. Both parties agreed that his doomsday assessment was correct.

When the province tabled its final offer on December 11, the OMA balked. Winkler told them that the deal was as good as they were going to get. The OMA refused to reconsider—and Hoskins went on the offensive. He imposed that final offer unilaterally, which capped physician payments at $11.4 billion. A few months later, when billings busted through the cap, Hoskins started clawing back doctors’ earnings. All physicians in Ontario now have 4.45 per cent of their income withheld from their monthly OHIP cheques. The government keeps that money, forever, in its efforts to balance its budget.

Many physicians believed the Liberals were charging them a “doctor tax” and using it to pay for billion-dollar gas plant and eHealth scandals. In 2016, after trying for more than 15 months to get the OMA back to the bargaining table, Hoskins changed his tactic. At a press conference in April, he declared that Ontario’s doctors, with average billings of $368,000 per year, were among the highest-paid in Canada. A total of 506 physicians invoiced OHIP for more than $1 million in 2014, and three types of specialists made up more than half of them: radiologists, ophthalmologists and cardiologists. If Hoskins could not cajole the OMA back to the table, he’d shame them back.

No doctor was more sensitive to the negotiating position than Virginia Walley, the OMA’s president. Walley, a pathologist by training, has been a teacher, a department chief and a hospital administrator, so she understood the government’s concern about rising health care costs. But she wasn’t inclined to let the government unilaterally decide doctors’ future without input from doctors themselves.

So she sat down with the devil. During a few days in late May, the OMA and the ministry hammered out a four-year contract. The discussions began secretively, with official negotiating teams called in only midway through, when the broad strokes of a deal were already in place. When Hoskins and Walley announced they’d reached a tentative agreement on July 11, the news came as a surprise.

The details, at first glance, were scandalous to many OMA members. Walley agreed to abide by a cap of $11.9 billion on total OHIP billings. The earnings clawback would remain in place. While the deal included a 2.5 per cent annual increase to the cap, both parties agreed that most of those new funds would be eaten up by new doctors entering practice and aging patients needing more care. In other words, the deal would likely amount, at best, to a pay freeze for four years. The one upside for the doctors was that the deal enshrined the OMA as “co-managers” of the health care system, which meant that the government would no longer be able to make budget decisions without them. Hoskins would have to work with the doctors on every change.

The day after the deal was announced, Concerned Ontario Doctors, a Facebook group with 20,000 members, launched the Twitter hashtag #IVoteNo. The next week, the group called for the resignations of Hoskins, deputy health minister Bob Bell and Walley, as well as the OMA board of directors and its negotiating team. The #IVoteNo hashtag exploded with comments, ranging from reasoned debate to pure histrionics. “I remember when I used to trust OMA implicitly,” tweeted Nadia Alam, one of the founders of Concerned Ontario Doctors and its most prolific tweeter. “I used to trust Govt’s benevolence. Now I question both.”

In the end, 63 per cent of the province’s physicians voted against the deal, overwhelmingly rejecting Hoskins’ and Walley’s gambit. They claimed they were defending the best interest of patients. If this were truly about patients, it would have been settled long ago.

OHIP is the biggest line item in the provincial budget, and Kathleen Wynne is determined to cut costs (Photograph by Getty Images)

HOW WE GOT INTO THIS MESS

The way Ontario pays its doctors is utterly anachronistic. It goes all the way back to Tommy Douglas and the founding of Canadian medicare. Back then, doctors didn’t want to become salaried government employees. Instead, they accepted the role of independent contractors who bill the ministry for their services. In Ontario, physicians track every procedure and consultation they perform, and send a detailed invoice to OHIP every month, which for the average Ontario doctor is for just over $30,000. From those funds they pay the salaries of their secretaries and assistants, their office rent and utilities, business taxes, and all other expenses—typically around $13,000 or so. They keep the rest for themselves.

This system, known as fee-for-service, preserves physician independence. Doctors decide what care the patient needs and the government doesn’t ask questions. But in the past few years, the fee-for-service system has become unwieldy and voraciously expensive. The OHIP schedule of benefits, which lists fee rates for the services doctors perform, is bloated beyond utility. As new medical procedures emerge—in-vitro fertilization, for instance—OHIP adds new codes to the schedule but rarely removes any old ones. There are now more than 7,300 different codes in the schedule of benefits, some of which haven’t been used in a decade or more. Alberta, by contrast, lists just 3,200 codes in its schedule of benefits.

Other procedures don’t even make it into the OHIP fee schedule. I spoke to Ian McGilvray, a Toronto General Hospital hepatobiliary surgeon and one of the few doctors in the world who have successfully removed a section of the vena cava, the large vein that carries blood back to the heart. “There is nothing in the fee schedule for a caval reconstruction,” McGilvray explains. “So I’ll bill for an arterial reconstruction, and it will be denied.” Then he negotiates with OHIP to sort out a fee, a process that can take months to resolve—and if they can’t resolve it within a year, McGilvray’s claim expires and he is left unpaid. At one point, OHIP owed him hundreds of thousands of dollars. “OHIP will often substitute a less expensive fee code than the one I’ve claimed and pay me for that,” he says. “It’s wildly complicated. I’ve burnt out five secretaries trying to figure it out.” He now has a billing agent whose job is to handle his OHIP filings for him.

The biggest problem with the fee-for-service system is the fact that we can’t afford the number of procedures doctors perform. Ontario’s population is growing by more than 160,000 people per year. It’s also aging. Last year there were 2.2 million seniors over age 65 in Ontario. Their ranks are projected to swell by more than 100,000 per year for the next 15 years. And the burden they place on the health care system is growing exponentially. The average 40-year-old costs the system $2,290 per year. An average 65-year-old, meanwhile, costs $6,298; a 75-year-old costs $11,557; and an 85-year-old costs $24,387.

Both the Ministry of Health and the OMA have long known that OHIP will buckle under the pressure of the aging population. Yet they’ve been unable to reorganize the system to deal with it. The province will need better support for home care, and more chronic care and mental health physicians. And that’s one reason why Eric Hoskins curbed doctor billing.

From a budgetary perspective, the clawback makes sense. From the perspective of individual physicians, it’s much harder to reconcile. My wife, Lynn, is a general surgeon in Peterborough. She performs a variety of procedures, including appendectomies, gall bladder removals, colonoscopies and lots of cancer surgeries: breast lumpectomies and mastectomies, and colon resections. Her clinical work involves counselling patients through the intensely emotional path toward surgical intervention. She assesses them, devises a plan for their care and then executes it, co-ordinating with radiologists and anesthesiologists and oncologists and family doctors and nurses and hospital administrators.

In addition to her work in the clinic and the OR, every sixth night Lynn is on call—available to examine any patient who shows up in the emergency ward with a condition that might require surgery. During these nights I notice the growing medical needs of baby boomers. Five years ago, when Lynn first started practice, there were often nights on call when no patients would show up, when we’d stay home and binge-watch episodes of The Wire and her phone would not ring. That never happens anymore. Time on call is now spent mostly at the hospital. Amid the emergency appendectomies, the breast cancer lumpectomies and the aging-boomer colon surgeries, the work is relentless and exhausting.

As a result of the clawbacks, Lynn is paid less every year for every procedure she performs. We try to look at it from a business perspective: her revenues are down four per cent. It happens to all small firms, and for now it’s manageable. But when other businesses are faced with a drop in revenues, it’s usually because they’ve lost customers. Not so for doctors; the ailing patients just keep coming. Lynn responds by trying to see more of them: extending her clinic days with extra appointments and asking the hospital for additional time in the OR. Partly it’s to make up the revenue shortfall, because there are annual cost increases on her lease and utilities, and raises to pay her staff. Mostly it’s because the demand for her services is endless: there are too many people with cancer who need surgery.

The more patients she sees, and the more patients all her colleagues see, the more they bill to OHIP. The more they bill OHIP, the more they risk exceeding the cap on physician payments. And if they bust through the cap again—which is entirely likely—the province will increase the clawback and reduce their earnings again. The system has gone haywire. Overtime is supposed to be paid at a premium, not at a discount.

The crumbling system is taking a heavy toll on physician morale. Concerned Ontario Doctors claims that, as medical practice becomes too onerous, older physicians are retiring and others in mid-career are moving elsewhere to practice. None of this worries Hoskins or the ministry: for years now, Ontario has had a glut of recently graduated, underemployed physicians, and they are happy to fill the void. They are the only happy doctors in Ontario right now.

ERIC HOSKINS HAS A MASTER PLAN

Eric Hoskins is a doctor by training, but medicine was never his true calling. After receiving his MD from McMaster, he ended up in Sudan in the late 1980s, working at the University of Khartoum’s School of Medicine. “I was the only white guy out of a student population of 25,000,” he recalls. Hoskins witnessed the military coup d’état that installed the brutal Islamist regime of General Omar al-Bashir. When the med students protested the dictatorship, al-Bashir’s men arrested dozens of them, including Hoskins’ officemate. His lifeless body was returned a week later, with his fingernails pulled out and burn marks on the corpse.

Watching such horrors gave him a stoic character, which serves him well in his dealings with outraged physicians. Hoskins is the most hated doctor in Ontario. When he was appointed health minister, a rumour immediately circulated about him in hospital hallways—and persists to this day—that he’s never practised a day of medicine in Ontario. When I asked him about it, he debunked the myth: since the 1990s, Hoskins has practised part-time at a family clinic in Toronto that serves east African refugees and immigrants. (He still does occasional shifts there without charging OHIP, to avoid any conflict of interest.)

He says he sympathizes with the physicians—his wife, Samantha Nutt, is on staff at Women’s College Hospital—but his job is to defend the interests of taxpayers, who want a publicly funded health care system but can’t afford its runaway costs. And from a big-picture perspective, what he’s asking doctors to do isn’t that bad. Every comparative ranking of health care systems rates Canada among the worst in the developed world. One recent study by the Commonwealth Fund listed Canada second-last among 11 wealthy nations. It beat out only the United States, and got low marks for timeliness of care, safety and efficiency.

The fact that doctors bill more than $11 billion annually makes them something like a corporation—their revenues are roughly the same as Air Canada’s or Canadian Tire’s. When companies of that size have to deal with revenue freezes or shortfalls, they respond by finding efficiencies, eliminating duplication and waste, lowering wages or prices, squeezing suppliers for discounts. They take a hard look at how they run their business, and they usually become better companies as a result. Doctors refuse to do this work. Hoskins is determined to force them.

He has made it clear that only some doctors are overpaid, and that it’s time to update the fee codes to rebalance things. Among physicians, this disparity is called “relativity,” and it has grown out of proportion as a result of technological advances. Some medical images used to require extensive study to reach a diagnosis. Today, software can take those images and construct a three-dimensional model of your innards in minutes, and radiologists can read them from home on their computers. The work is much faster than it used to be and has become disproportionately lucrative.

Twenty years ago, cataract surgery took a full hour to complete. Now it takes 20 minutes. The OHIP fee code values the procedure at $397.50, which means that ophthalmologists can earn $1,000 per hour. Meanwhile, as one emergency room physician told me, “If you come into the ER dead and I resuscitate you, that takes as much time as cataract surgery, and I get $70.”

Every doctor knows relativity is a problem, but they cannot find a way to fix it because the wealthiest specialties, which hold a lot of sway within the OMA, will always aggressively defend their sweet deal. The last time the OMA agreed to curb relativity, in the late ’90s, in part by capping a number of radiologist fees, they were sued by the Ontario Association of Radiologists, who tried, unsuccessfully, to break away completely from OMA representation.

Another way to save money is to eliminate unnecessary treatments and procedures. Patients aren’t supposed to get every X-ray, CT scan, MRI or minor surgery they think they’re entitled to based on their WebMD search. Their doctor is supposed to decide what’s appropriate. There are hundreds of procedures that doctors routinely do but shouldn’t. There’s no point in ordering screening chest X-rays and ECGs for patients at low risk of heart disease; in fact, a false positive on such a test can lead to additional unnecessary procedures for arterial stents. Depending on a patient’s age, surgery to repair a torn meniscus in the knee actually does nothing to alleviate pain, yet the procedure is still performed.

When I spoke to Hoskins, he raised the example of methadone treatment. Some doctors who prescribe the drug bill OHIP for their patients’ urine tests, which are used to make sure they are taking their dose. “It’s a urine dipstick test that I could teach you to do in 14 seconds,” says Hoskins. There are two dozen methadone-prescribing doctors in Ontario, who billed OHIP for over $1 million last year, and they derive most of their income from that test. Methadone is both overcompensated and overprescribed in Ontario, costing OHIP more than $150 million annually.

By and large, doctors don’t do unnecessary procedures to bilk the system. They order the extra X-rays to make sure they haven’t missed anything; they do the knee surgery because the patient is in pain; they prescribe the methadone so an addict doesn’t relapse. That doesn’t make it any cheaper. Researchers are only just beginning to quantify the cost of inappropriate care, but a 2012 study by the Dartmouth Institute for Health Policy and Clinical Practice found that 30 per cent of all procedures ordered by physicians are wasteful.

The government is unwilling to decide what kind of pay cut some specialists should get, nor will it decide alone which procedures it won’t pay for anymore—and nor should it. Doctors need to make those calls, because they are the care experts. Certainly no doctor wants bureaucrats making these decisions for them. The U.S. tried that back in the 1990s, when insurance companies started telling doctors what they could and couldn’t do for patients, and it provoked a flood of anger, frustration and resentment from all involved.

In Alberta, the Health Ministry and the Alberta Medical Association have formed a committee that has begun to tackle such spending issues. Last month it reduced some radiologist and ophthalmologist fees by more than 20 per cent. Here in Ontario, the deal the OMA and Hoskins negotiated this summer would have committed doctors to a similar process.

In the aftermath of the deal’s failure, the government’s position hasn’t changed. Health care is still broken. In a written statement released after the results of the vote, Hoskins said, “Going forward, the government will be guided by the need to secure a stable and predictable budget.” Read his lips: he is going to keep capping doctors’ payments and clawing back their earnings until they come around.



DOCTORS MUST DECIDE IF THEY ARE HEALTH CARE LEADERS OR CLOCK-PUNCHERS

The rift in Ontario’s medical community boils down to a simple question: are doctors still stewards of the health care system, or are they just a higher-paid class of rank-and-file employee? The OMA traditionally projects the image of doctors as leaders. Because they know what’s best for patients, they also have special insight on how to organize and manage everything else—clinics and hospitals and support staff and supplies and equipment.

This is the view of Virginia Walley, who insists her organization isn’t a union. Walley is soft-spoken and even-keeled, and articulates a clear view of what she thinks her profession must be. “The trust we are given by patients and the public comes with broader responsibility for the system,” she says.

Her traditional view of the profession is no longer the prevailing one. Last year, when Queen’s Park and the OMA were trying to get back to the bargaining table, the OMA asked the government to grant binding arbitration. They argued that, because doctors cannot strike, they wanted to defer to a neutral arbitrator, and both sides would have to abide by the arbitrator’s ruling. The government’s answer came swiftly and decisively: no. In response, the OMA launched a court challenge and made their position clear. Until they have binding arbitration, they won’t discuss anything else.

From the government’s perspective, binding arbitration would be a financial disaster. It is the same mechanism that has, over the last decade, granted monstrous pay increases to police and firefighters while also making it impossible to reform those services. And unlike police officers or firefighters or nurses, doctors set their own work hours. If an arbitrator awarded physicians a large pay increase, and doctors responded by increasing the number of patients they saw, they’d bankrupt the province. It nearly happened in British Columbia: back in 2002, an arbitrator there granted doctors a 20 per cent fee increase. The government promptly passed legislation to invalidate the ruling.

The demand for binding arbitration signals a deep transformation within the profession. Doctors think they’re being shafted by the man and want court protection from abuse of power. When they ask for binding arbitration, and when they refuse to discuss anything else until they get it, they are abdicating their role as stewards of the system. They no longer see themselves as management but as labour.

Walley has insisted, over and over, that most doctors want to be system leaders. The results of August’s vote do not support her claim. Of the province’s 28,000 practising physicians, there are plenty—probably a majority—whose sole ambition is to be good front-line caregivers. That is as noble an ambition as any other. Even patients don’t need their doctors to be leaders. They just need them to be good doctors.

The trouble is that, right now, governments and taxpayers need their doctors to be more. The OMA may not survive the infighting between the system-leader collaborationists and the arbitration-or-bust hardliners. Even Walley, who so willingly negotiated with the province, now says that arbitration should come before any other talks.

The OMA has a split personality and might actually be better off as two separate organizations: a union to negotiate the contracts and play politics, and a professional association of physician leaders who are interested in reforming the health care system. In late August, Hoskins even conceded that he’d be open to recognizing the OMA as a union—although that would mean they’d have to disclose their salaries and relinquish the right to incorporate.

While we all wait for the OMA to sort itself out, the budget continues to buckle. Doctors can blame the ministry all they want for underfunding it, but no government can fund an antiquated and ballooning system forever. Even Ottawa is getting involved: the feds have suggested that health care needs an overhaul, and they will not give the provinces more money if it will only be used to pay for doctors’ compensation. Health care needs fixing, and the question is who will lead the fix. If the OMA stalls the reform process for years, they may get much more than they bargained for.