Dr. Sean Peterson's Review of the tPSA

Photo 2016-07-22, 14 32 36.jpg

Download the PDF version of this letter here.

** This letter was sent to the OMA President, Dr. Virginia Walley.  The Italicized text is a response from the OMA Negotiations and Implementation, and Economics, Research and Analytics groups **

Dear Fellow Physician,

I am a Family Physician, Emergency Medicine Physician, and Coroner in Sarnia.  I wish to provide you with some of my thoughts in regards to our current debate over whether or not to accept the Tentative Physician Services Agreement proposed by the OMA and MOH.  But, first I wish to provide a broader context.

I realize that Healthcare delivery in its current state is not sustainable.  I realize that there is duplication, inefficiency, and lack of fiscal accountability on the part of physicians.  That said, there is equally lack of accountability on the part of each of us as a user of the healthcare system.  Instead of presuming that demand can not be changed, we need to think broader than physician payments, broader than simply the deliver of healthcare, and start to address the drivers of healthcare utilization.  Examining the social determinants of health reveals the need for our government, physicians, and patients to engage in a revolution in regards to how we value our health.  We must believe that our health and treatment through the health system has a value.  Currently, if you were to ask many of my patients as to the cost of their healthcare, they would tell me, “it cost me nothing.”  We must work together patients-government-physicians to put a value on our health.  Then, we can properly debate which services are offered and to whom, public-private sharing of costs, proper taxation, access costs, and most importantly accountability. 

Coming back to our current debate – whether or not to ratify the Tentative Physician Services Agreement – I believe the current offering fails on the following grounds:

1)    Agreements are designed to share risk and this agreement heavily places the risk of cost-overrun on physicians where physicians do not drive the majority of the demand.  I know that the OMA has stated that through efficiencies and schedule of benefits modernization costs can be contained, but we don’t know the true drivers of utilization. 

a.    What percentage of “over-utilization” is driven by physicians repeating unnecessary tests, providing unneeded re-assessments, or simply billing inappropriately? 

b.    Conversely, what percentage is driven by patients attending “the wrong” healthcare setting for their given concern? 

c.     What percentage is driven by patient “demand” for access to a given resource? 

d.    What percentage is driven by “patient satisfaction” as is one of the government’s most recent metrics of interest?

e.    What percentage is driven by patient lifestyle choices – risk taking, eating choices, exercise decisions, or activities that lead to disease?

All of these are important questions, but it is hard to come up with the exact percentage for each factor you mentioned above.  Further studies are needed to understand these complex issues.  The current estimate of the utilization growth due to the population growth and aging is about 1.9%, based on a recent study published by ICES (attached). Above that, some of the historical growth of 3.1% could be attributed to patient acuity, changing technology, and physician behaviour, but the exact shares of each have not been studied in detail yet.

2)    This agreement is “more of a framework” as told to me at an OMA presentation

a.    A framework does not provide safeguards when there is a disagreement or difference of interpretation between the OMA and the government.  It does not contain the level of detail to be able to appropriately resolve conflict.  And at the end of the day, the government has the last word.

The agreement calls for the appointment of a permanent facilitator, who is expert in health care system issues and dispute resolution processes, to advise and assist the Parties to achieve agreement under the co-management process.

b.    There are no definitions as to the terms used in the agreement, i.e. modernization of Schedule of Benefits and other payments to physicians, co-management, principle of relativity, principle of appropriateness, principle of value for money, etc.

Other payments to physicians include, APPs, AFPs, capitated payments and physician payment programs such as on-call… all these are part of the Physician Services Budget.  Relativity, appropriateness and value for money are principles that will guide the MSPC process and will need to define how to apply these

c.     The terms of reference for the all important Permanent Facilitator are not included in this agreement

The Parties will agree on the terms of reference for the expert facilitator which will include:
a) Principles of evidence-based decision-making;
b) Principles of relativity, appropriateness and value for money to support health care priorities for patients; and
c) Encouraging the Parties to consider all possible options for resolution.

d.    An exit clause is not included for physicians to end this agreement in 1 or 2 years if the OMA and the government can not achieve the stated goals of the fixed Physician Services Budget within the agreement


The agreement does not include a re-opener or an exit clause.  It is important to note that such clause could also potentially be used by the ministry should fiscal situation of the government decline.

3)    The OMA has not provided details to its members as to how the co-management process will determine how to modernize the Schedule of Benefits and other payments to physicians, what review process will be followed, the terms of reference for the decision-making committee, or the appeal process should a section disagree with the results.  Simply ask Dr. Allan Garbutt, former President of the Alberta Medical Association, his experience with the Physician Compensation Committee, a joint Medical Association – Provincial government initiative to “modernize” their schedule of benefits.  He would categorically provide an opinion that the committee was unable to achieve its stated goals yet consumed great amounts of human capital.

MSPC and PSC committees existed previously and were part of previous PSAs.  The terms of reference for these committees will need to be revised.  This will likely occur quickly after ratification.

4)    A fixed Physician Services Budget, an agreement to make more readily available family physicians, and the complete lack of patient accountability within this agreement will lead to a reduction in quality of care provided.  I can make my office accessible within 24 hours but I can not work anymore hours.  Hence, the quality of care will drop as I attend to a variety of patient-determined urgent visits.  There will be no time for chronic disease management or preventative care.  The alternative is to reduce my number of patients, but with revenue declining and overhead climbing this would make my office financially unviable leading to the complete loss of a family physician to my patients.  Repeat this across the Province and there will be no more Family Physicians providing quality care.  And this is why we are here – to provide quality care!

Much of this is point is speculation that we would not necessarily agree with.  However, I would like to point out that as part of the co-management process, for the first time, the ministry agreed to discuss Patient Accountability (see section 3c of the proposed PSA).  We do not know where these discussions will lead but the willingness of the ministry to discuss these issues in a context of a long term sustainability of the health care system is significant. 

So, what is the way forward?  I suggest that the OMA decline the current agreement.  That said, I suggest that the OMA provide a counter-agreement that agrees to a fixed PSB that recognizes mutually-agreed upon forecast growth of physician expenditure of 3.1% - 3.5% per year.  I suggest that the agreement be only one or two years in length.  Furthermore, the government and the OMA work to develop a strategy to address the true drivers of healthcare utilization, improve system efficiencies, reduce duplication of services, and address inappropriate billings.  The development of a universal health record that is accessible to all providers is an integral component to this solution.  Furthermore, the OMA and the government work towards the next agreement through a process that is transparent and accessible to all Ontario physicians that places a more balanced risk-sharing between patients, physicians, and the government.

Thank you for your suggestions.  The term of the agreement is always highly debated issue, the OMA Board has reviewed various options and agreed to a 4 year term (ministry was interested in even a longer term agreement).  Looking for strategies to address utilization drivers will certainly be part of the co-management process and these will no doubt be very difficult conversations.  

Kind regards,

Dr. Sean Peterson