Up for discussion: physician compensation models

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With Michael Ducie as VPSA’s Breakfast with Leaders guest earlier this month, there was no doubt there would be frank discussion about physician compensation models. Ducie, who heads our health authority’s physician engagement and contract strategies portfolio, fielded a wide range of questions regarding VCH’s plans for innovative contracts. The session was facilitated by Dr. York Hsiang, VPSA’s new managing director.

“We’re aware that physicians at high-functioning health care organizations like the Mayo Clinic and Kaiser are more integrated into their organizations,” said Ducie. “We’re interested in developing models that best support our physicians and their renumeration as well as what’s best for patients. There are times when a non-fee-for-service compensation model can enable a greater team-based approach or other desired outcomes and times when fee-for-service is able to achieve other goals especially related to volume. We want to build in accountability at all levels so that what we’re achieving matches the goals we have for our patient outcomes.”

A better structure is required. He recalled that in Alberta (where he previously worked) contracted physicians in the largest centres practiced in a more collective manner while still maintaining their independent contractor status rather than the more soloed practice that we see in many parts of BC.

“This enabled them to participate in opportunities when they came up,” he said. “They could adjust their activity profiles annually between clinical, leadership, administration, research and teaching work as opportunities arose. This was possible because the deliverables were assigned to the group, which then had the flexibility to address changing needs across the full scope of physician activities. We need to demonstrate to our external stakeholders that this other physician work can be just as valuable and contribute to positive outcomes for patients and our organization as clinical work.”

It is well known that there are profound differences in compensation within the medical profession and some physicians believe this affects quality improvement. And, emphasized Ducie, “Quality is a strong focus on where our institution is going; it’s embedded in our work and in our organization.”

It was also noted that the current fee-for-service model of compensation makes physician engagement more difficult: it does not support providing physicians the time to participate in these activities. At the same time, the physician leadership pay structure does not compensate physicians at the same rate as clinical work; therefore, physicians can feel penalized financially for taking on physician leadership roles that are of key importance.

Psychiatrists attending the session were interested in hearing Ducie’s thoughts on a mixed-billing model: fee-for-service and sessional that allows for varying volumes of patients based on complexity. 

“There are a number of approaches that can be utilized to support psychiatrists to be able to provide services to these types of patients,” replied Ducie. “Work on this type of model is going to be starting soon in collaboration with physicians.”

Attendees also wanted to know how VCH will work with academic physicians who have UBC appointments and are compensated by different ministries for the broad scope of their activities. It’s a problematic area, acknowledged Ducie, given that the faculty union agreement supports individuals rather than groups and that a physician’s clinical demands do not necessarily drop when they are engaged in academic activities.

“We’ve met once with the Dean [of Medicine] and there is interest from the university in some sort of compensation structure that enables physicians to participate in the academic mission more broadly,” he said. “Again, it’s a matter of talking to the provincial government and our stakeholders and demonstrating the value of a new model.”

Collaborating versus negotiating

Ducie suggested that the organization would be stronger if VCH and physicians collaborated on the development of new models of compensation. That would enable us collectively to take these proposals to the Ministry and demonstrate how these models would (1) improve the care that is provided to patients and (2) enable physicians to be compensated fairly.

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