Alberta doctors are putting some skin in the game when it comes to keeping health care spending down.
On Friday, Alberta Health, Alberta Health Services and Alberta Medical Association signed an amending agreement that will potentially save up to $500 million in tax dollars over the next two years.
The amendments to the current agreement, set to expire in March 2018, are being undertaken to address the burden of health care spending on the province’s current fiscal situation, and have physicians putting $148 million of retention benefits on the line.
The amending agreement introduces a shared-responsibility model, where Alberta Health and the AMA each accept responsibility for certain drivers of the budget.
This model identifies a targeted spending amount for each year. Funding for new doctors and contingencies, such as responding to an epidemic or the introduction of a new program by Alberta Health or AHS, will increase the targeted spending amount.
To ensure cost-saving targets are met, physicians’ retention benefits for 2016-17 and 2017-18 and cost-of-living-allowance (COLA) increase for 2017-18 will be held until a newly established reconciliation committee reviews the year’s expenditures.
If there are any overages, part of the retention benefit and/or the COLA will go towards making up the difference.
“The physicians have done really great work on coming up with recommendations on how to best use resources,” said Health Minister Sarah Hoffman, “but there weren’t a lot of mechanisms to hold each other to account on following that advice that is patient-centred, but also focuses on sustainability. Through the agreement the doctors have put some money on the line.”
For the first year retention benefits will range from $5,184 to $12,852 per physician depending on years of service, for a total projected amount of $73 million.
The retention benefit amount is projected at $75 million in 2017-18. The COLA increase is determined by the Consumer Price Index.
Health consumes 39.8 per cent of the total provincial budget and continues to climb – surpassing both the growth of the general economy and total government spending.
Though the NDP government has promised not to slash positions in health care, it also made the commitment to reduce the rate of health care related spending during their time in office.
The amending agreement is expected to reduce health spending by three per cent, without affecting the quality of care received by patients.
“Members of the AMA certainly recognize the fiscal challenges facing Alberta. We’ve also been acutely aware of the contributions of health care costs to that situation,” said Dr. Padraic Carr, president of AMA.
Alberta Health, AHS and the AMA will also work towards a list of savings initiatives based on new fee schedule rules. The list is intended to save the province $100 million over two years.
Details about the needs-based Physician Resource Plan and new compensation models will be released in the coming months.
