Friday, May 28, 2010

McGuinty Plans Surgical Castration

“The Ontario government is warning doctors that it plans to radically overhaul how they are compensated by paying more of them salaries – the latest salvo in its efforts to rein in the biggest contributors to ballooning health-care costs.”

Sounds like the McGuinty government wants to cut Doctors wages. What does that mean for those of us on the streets. What is that “savings” going to mean at the end of the line (our health care) vice at the start line (the bloated provincial budget)? You can choose from three doors. Behind Door #1 we have fewer people decide to become doctors in Ontario because they will have no control over what they are paid. Door #2 = Doctors stop working as hard because no matter how many patients they see or how many procedures they do they get paid the same amount. Door #3 leads us to an accelerated “brain drain” as more Doctors upon finishing medical school run to the US where they can still (for now) get paid more for what they do than in Canada.

If you guess all three then you are probably correct.

“The McGuinty government has already targeted generic prescription drugs and hospitals as part of a plan to get a bigger bang for its investment in health care. Now it is zeroing in on doctors and a fee-for-service compensation system that has been in place for more than four decades.”

Whoa! Wait a second… “fee-for-service compensation system”? What a ham-fisted attempt to drop the context of the entire issue here. It’s called PAY! Compensation makes it sound like some sort of government run welfare system not a persons honest work and effort.

Would you expect the mechanic at your local garage to fix 10 cars in a day and only charge for 5 of them? Would you trust your car to a mechanic that has been told (forced) that he will fix your car for a certain $value regardless of what is wrong with it?

“I think we’ve got some work to do when it comes to appropriately compensating physicians and others in health care for that matter,” Health Minister Deb Matthews told reporters on Thursday."

No. Government intervention and arbitrary establishment of pay based on political and budgetary concerns rather than value, skill and complexity is about as far removed from “appropriate compensation” as one can get.

“The majority of Ontario’s approximately 24,000 doctors are paid on a fee-for-service basis, meaning they bill the provincial health plan for each service they provide to a patient. But in recent years, some hospitals, particularly those in smaller, rural communities, have switched to a salary system for doctors in their emergency departments. As well, the 1,900 doctors who work in clinics as part of family health teams created by the McGuinty government are also paid a salary.”

Fee for service means if the Doctor works harder he is paid more.
What will the alternative mean?
No incentive.

Ha! These people are actually holding up rural Canada as a model that they are trying to emulate? Didn’t I hear something about a shortage of Doctors in Rural Ontario/ the rest of the country? Yes, yes I did.

“Ms. Matthews said she would like to see that compensation model expanded to include more doctors. She was responding to a report released this week by Toronto-Dominion Bank, which made eight proposals to wring more efficiencies out of the health-care system, including moving doctors away from the fee-for-service compensation model.

In a system where doctors are paid for each service, the report says, there is no incentive for them to measure the cost-effectiveness of their treatment decisions against the potential benefits.”

$5.00 for anyone who can make rational sense out of the last sentence. Are they really trying to tell us that a set wage will make Doctors think about the cost effectiveness of their work? Or is it that they are saying that Doctors will ration their services more? Pick and choose who gets their limited services from their limited pay.

“Robert Bell, chief executive officer of University Health Network, Ontario’s largest hospital, said the government has to examine the rapid rise in doctors’ compensation, which has far outstripped the increase in hospital budgets.”

Finally a sentence that gets (in an off hand way) to the root of the problem. It’s not that Doctors aren’t worth the money they are paid. Just ask anyone who has undergone a life saving operation. It is the arbitrary allotment of funds by a government who is trying to nickel and dime a system that has never worked properly.

There is no personal incentive in a government run system to innovate or to reduce costs. If hospitals were privately run each would be competing for customers and each would be trying to innovate to reduce costs and take more customers from the other hospitals. Yes, they might even reduce the amount they are willing to pay Doctors, but then the Doctors would be free at least to search for better pay.

Compensation divorced of effort, skill and quantity is a good way to castrate a system that is already suffering from financial erectile dysfunction.


Clarence Dember said...

While I think it is most necessary to pay skilled workers for the level of skill and services they provide, it can't be done if runaway immigration is bankrupting hospitals by forcing those with out coverage to treat their conditions at the most chronic level of care in the emergency room. This is the down side exacerbated by failed immigration controls bankrupting hospital service management in a given area, in particular the USA.

Zip said...

Clarence it's not the immigration that is the problem it is the health care system.

Get rid of collectivized health care and return to a free market system and you will simultaneously increase productivity, spur innovation, encourage investment, lower prices and wipe out the problem of free riders gaming the system.

salma hayek said...
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