This is a very very complex topic and certainly too complex to explain all the details. However, if you live in Ontario, pay taxes, vote, and see a doctor, you may want to know how the system works. It isn't perfect but many smart people between physicians and government officials are constantly trying to make it better at the provincial level.
The two most common ways for family doctors to get paid are fee for service (FFS) and capitation.
Fee for service is exactly what it sounds like. Your doctor does a specific thing like see your for your chest pain, orders lab work, and writes a referral letter to a cardiologist. Your doctors gets a single fee for that visit. Your doctor would probably bill an "intermediate assessment A007" to your "health insurance company", which in our case is the Ontario Health Insurance Plan (OHIP). If your doctor sees you for 3 other things and you spend four times as much time in the office, he or she gets paid for the first thing and the rest are free.
This is one of the reasons you doctor might want to limit the number of issues discussed. If you worked 10 hours per day and only got paid for 5 of them, it would make you sad. This is one of the big limitations of the FFS system. Most patients have lots of things they want to talk about so the patient's interest and their doctor's interest don't always align exactly.
The other big model used in Ontario is capitation. This is where doctors are paid a set fee based on your age to be your doctor. If they see you one time in a year or 20 times, they get paid the same amount of money. The idea was that it created an incentive for your doctor to keep you healthy and to not generate extra visits for things that are not needed. The fee is of course set by the Ministry of Health like all fees doctors charge. The limitation of this model is that doctors can sometimes take on more patients than they can comfortably see to increase their income, or they have a full practice that simply gets older, sicker and more time consuming, or the doctor has a baby and doesn't get any maternity leave but cuts back her hours to care for her child etc. The end result it that it can take a really long time to see your family doctor and that isn't cool.
One of the consequences of having to wait weeks to see your family doctor is that patients start going to walk-in clinics for their care. Walk in clinics are good for quick issues but not very good at managing or investigating things over time. You may see a different doctor each time you go who may not have access to your previous records.
One of the ways that the Ministry tries to keep doctors in check regarding the size of their practice and their availability is by tying some of that capitation funding to your doctor's availability. What this means is that if you have to wait three weeks to see your family doctor, you might instead decide go to a walk in clinic. The walk-in doctor gets paid from the ministry to see you and that amount is clawed back from your family doctor as part of that yearly amount of "capitation" funding he got. The math and calculations are considerably more complicated since doctors who work in capitation models often work in groups and are penalized as a group but the general idea is what is stated above.
Often family doctors will have a blend of fee-for-service and capitation depending what types of services they offer.
So where does this money go?
Well it goes to your doctor who then pays expenses. For example, our clinic employees three staff in addition to your doctor. The billings that come in are use to pay the salaries of the other staff in the clinic, pay the rent, pay for the electronic medical record software, purchase and maintain the computers, buy the autoclave to sterilize the equipment used to biopsy that worrying lesion on your back etc. The ministry of health doesn't pay for any of these things directly. This is why as doctors we sometimes get upset when the government publishes how much we make. There is no context. In addition, if one doctor works twice as many hours and does twice as many services, they bill twice as much in a fee for service system. Is that a bad thing? That doctor doesn't really "cost the healthcare system" double. The healthcare system gets the equivalent of two full time doctors.
We get paid well for the responsibility and training that it takes to be a doctor but that number you read in the paper has to pay for multiple employees, insurance, rent and equipment so it is a tricky number to interpret on its own. Honda charges me 100 dollars per hour for labor on my Civic. The mechanic doesn't get paid 100 dollars per hour. That money runs the whole maintenance department. Most people know that but if they don't know how their doctor gets paid it is hard to be an informed taxpayer.
Ultimately it is up to you as a voting taxpayer to determine if you are getting good value for your money when it comes to healthcare. You will hear one thing from doctors and another from the government. The truth is often hard to determine. There has been a fairly bitter battle between doctors and government over the past year. It is getting worse and starting to spill over into the media. You will hear things and read things that might make you outraged.
There are only so many tax dollars to pay your doctor, get the mail delivered on time or teach your child math and there will always be a public battle for public funds.
Be critical of any statement that seems outrageous, no matter which side it comes from. Read, become informed, ask questions and demand long answers because the truth is complicated. Your opinion and favor will be courted by doctors and by your government in soundbites meant to scare you; meant to make you angry. Don't let that happen. Let it be a starting point to becoming an informed taxpayer.
-Brad White