Alberta’s doctor pay agreement dilemma explained

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It was planned in a memorandum of understanding a year ago, agreed on in principle in the spring, shuffled over to the rate review folks, and back to Alberta Health Minister Adriana LaGrange’s desk.

When doctors leave the province, their thousands of patients are added to the ever-lengthening roster of Albertans without a primary-care home. The new primary-care compensation model (PCCM) deal awaits a walkover to the Treasury Board for approval.

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While frustration at the clinic and organization level over perceived government foot-dragging is simmering to a boil, committing to a new algebraic equation is not without trepidation for the province.

“We want to make sure that this model is successful, that, in fact, it will do what we want it to do,” LaGrange said this week.

“There’s roughly about 5,000 physicians who are family practitioners, we would like to see the majority of them sign on to it. So we want to make sure it’s successful.”

Blended cap — not a gourmet latte

Take the quirky blended capitation model introduced in November 2016 and not widely adopted. Not a fancy coffee but a project that cost millions, LaGrange said, it failed to find a foothold almost anywhere in the province.

In blended cap, doctor pay is in large part (85 per cent) based on the size of their patient panel — prorated for age, gender, and complexity.

The remaining 15 per cent is based on a fraction of the fee-for-service value.

Blended cap is modeled on Ontario’s system. Payment is to the clinic, and the clinic sorts out how payments are distributed to doctors, explained Allan Florizone, senior adviser for policy and economics with the Alberta Medical Association.

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“After that was set up, when we had spent millions to set it up, only 18 doctors … actually signed on to it,” LaGrange said of blended cap Tuesday.

There are currently six clinics enrolled in this compensation model with 62 family physicians actively participating, her office said Wednesday.

While “considerable work” has been done by Alberta Health in collaboration with the Alberta Medical Association to support physicians transitioning to the blended cap, the model involves considerable change.

Awkward to get into, the system combines a “fee for service” and a “basket” concept that calculates payment based on the number of patients on a family doctor’s roster.

With a number of clinics still patiently waiting in a queue to move to the blended cap, it has its fans, Alberta Medical Association president Shelley Duggan noted.

“That clinic model is a bit complex … There is a significant amount of change management that we go through with the docs in order for them to go on this model,” Duggan said.

“I think the groups that have gone on the model are quite happy with it.”

Fee-for-service dominates

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The current fee-for-service model of family doctor payment takes a nickel-and-dime approach most other provinces have abandoned.

There’s an hourly rate component — currently, $39.49 for a visit under 15 minutes, $19.19 for the next 10 minutes after that, Florizone said.

Then there’s a fee-for-service: a simple mole removal, not on the face, earns $35.53 in Alberta. It’s a Code 98-12, one of the thousands of ways an Alberta family doctor bills.

The fee-for-service model is old as the hills, pre-dating when Alberta became a province, back to when an old-time “saw-bones” might get paid in chickens for a house call to an impoverished sod farmer.

Fee-for-service incentivizes volume, Florizone said, but is considered less than great for managing complex patients with chronic illness in a burgeoning population.

A flat capitation system would pay for average use, based on patient load, and doctors are penalized if patients are treated elsewhere, Florizone said.

PCCM needed now: AMA

The AMA is pinning its hopes on the PCCM model on LaGange’s desk, a hybrid of fee-for-service and physicians reimbursed for panels of patients.

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The PCCM is a hybrid model that blends three elements.

Encounter fees are a percentage of the fee for service, based on fee codes, incenting volume.

Time-based fees are a set amount per hour for direct and indirect care. Indirect care examples include charting, lab results, referrals, after-hours service, and practice management — all helping doctors spend time on what needs to be done.

Panel fees are calculated individually per patient, prorated by complexity. This helps doctors take on more patients, Florizone said.

“I was talking to one physician a couple months ago who’s in the queue to go through blended capitation, but he was saying that he would rather go to the PCCM model,” Duggan said.

“This will be an easier model to scale up quickly and get a whole bunch of clinics into than the blended capitation.”

Clinics will still face a significant amount of change management to adapt to the new system and its incumbent IT.  

“It will be easier to do with the PCCM model, particularly because our sister provinces — we’ve got B.C., Saskatchewan, Manitoba, who’ve all adopted something like this,” Duggan said.

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Smith sees need for switch-up

Near the beginning of 2024 on her radio call-in show, Premier Danielle Smith acknowledged the fee-for-service flaws.

“As I’ve been thinking about it, when we do a fee-for-service model, we’re essentially asking doctors to run a $400,000 business by charging out $36 at a time,” she said.

On Nov. 1, Smith’s UCP government will roll out Primary Care Alberta, one of four agencies (plus a monitoring agency) to emerge from the deconstructed Alberta Health Services.

Quizzed recently about forming the new agency without a physician payment model in place, LaGrange pointed out that the existing agreement inked with AMA two years ago was expected to last four years, saying current AMA negotiations over the PCCM are “off the regular cycle of negotiations.”

She reminded everyone of November’s announcement of $257 million in stabilization funds — $200 million from the federal government and $57 million from the MAPS budget — over two years.  

Duggan acknowledges the current deal.  

“Yes, we are currently in an agreement that has not kept up with inflation and population growth, and, as we all know, the health-care system is in crisis,” Duggan said.

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By 2025, the number of Albertans without primary-care doctors is expected to be near a million.

In the meantime, the clock’s ticking, and recruiters face some sizeable objections from doctors they’d like to see settling in Alberta clinics, in communities large and small, the AMA said.

“You know they’re going to say, ‘OK, well, I can come to Alberta where nobody can keep the doors open or I can move to a province where clearly they’ve put some effort in and value stabilizing these clinics,’” Duggan said.

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