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Livio Di Matteo from Lakehead UnivesityRecent negotiations between the Ontario Medical Association and the Ontario government highlight the complex relationship between physicians and health spending.

As important and trusted gatekeepers to the healthcare system, physicians are nevertheless a crucial component of health costs, as the total number of physicians, the volume of health services they provide and the cost per service come together.

While governments such as Ontario have focused on reducing or holding physician fees steady as a cost control measure, healthcare spending is also affected by the number of physicians and the number of services each provides to patients.

Provinces are trying to rein in their healthcare spending and rising costs for doctors remains a key concern.

Is it the right emphasis?

Yes – and no.

The Canadian Institute for Health Information (CIHI) has released data that shows physicians in Canada received $25 billion in gross clinical payments in 2015 – up from $24.1 billion the previous year, an increase of 3.7 percent. This rate of growth is down from nearly six percent the year before, suggesting some restraint.

That’s good news from a cost control perspective.

We also seem to have more doctors than ever. For Canadians waiting for care, that sounds like good news, too.

For the ninth year in a row, the number of Canadian physicians per capita has grown. We had 82,000 doctors in 2015 – up from 79,905 in 2014. Canada has had yearly physician increases of more than two percent since 2007, with hikes of more than four percent in 2009 and 2011 and a rise of about 2.6 percent in 2015.

We have gone from an era of perceived physician shortages to one of relatively more abundance. Total physicians per 100,000 population went from 192 in 2007 to 228 in 2015. At the same time, the average gross payment per physician in 2015 remained virtually unchanged at $339,000 nationally.

But looking deeper, there is a worrisome trend.

A C.D. Howe ]report similarly notes that while there has been a recent decline in real per capita provincial government health spending, total physician costs have continued to rise.

But the report points out that spending is also affected by physician composition – particularly specialists. Adding one specialist per 1,000 persons was associated with an additional $720 in real per capita provincial health spending – no small amount.

The number of specialists per Canadian has almost doubled since 1981.

In 1981, the average number of specialist physicians per 1,000 persons across Canada was 0.6 and grew to 1.1 by 2013 – an increase of nearly one-half a specialist per 1,000 persons. This near doubling is therefore associated with a $295 increase in real per capita provincial health spending (1997 dollars), which grew from $1,415 per person in 1981 to a 2015 forecast of $2,447 per person. Again, that’s no insignificant cost.

Specialist physician numbers are expected to grow more, given increased medical school enrolment.

Is this such a bad thing?

More health specialists per person should mean better healthcare, even if we have to spend more.

The problem is, we don’t have measures to evaluate whether increasing the specialist workforce is always the best investment of our healthcare dollars.

Public debate highlights spending and the political tug of war between medical associations and health ministries. Missing is any discussion of effectiveness of services and how that can be measured.

For example, a national, clinician-led campaign in partnership with the Canadian Medical Association, called Choosing Wisely Canada, suggests a number of diagnostic tests and services may be unnecessary and even cause unnecessary harm.

If spending more on physicians provides greater value as measured by improvements in health outcomes, then that is a good thing. But if we are spending more money on diagnostic tests and procedures that don’t improve health, then that is not such a good thing.

Without appropriate measurement of healthcare outcomes, we can’t know if cost control measures affect the quality of care. Provincial governments and physicians must work together on evidence-based evaluation of the effectiveness of healthcare services. Only then can we know if our money is well spent.

Livio Di Matteo is professor of Economics at Lakehead University He is co-author with Colin Busby of the recently released C.D. Howe Institute report Hold the Applause.

Livio is a Troy Media contributor. Why aren’t you?

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