It seems comical, after years of hearing about Canada’s physician shortages, that Canada may soon see physicians on the unemployment line. The problems young physicians are having finding full-time work will have major implications on Canadian healthcare. However, it is not clear whether that impact will be profoundly negative, which it will be under the current system, or whether changing employment trends represent an opportunity for healthcare evolution. Let me explain.

Under the current system, the problem of physician employment is real. The Royal College of Physicians and Surgeons of Canada recently commissioned a study of employment trends among new graduates and found that graduates in 13 specialties in Canada were having difficulties finding jobs. A recent study published in the Annals of Thoracic Surgery found that 34% of cardiac surgery graduates were underemployed. Some surveyed had to leave the province or the country to find work. These findings support anecdotal evidence in other specialties that finding employment in Canada is becoming more difficult.

There are several factors affecting demand for physicians. Hospital budget constraints mean less capacity for physicians to operate in. Technology changes, expanded scopes of practice of non-physician specialties, and improvements in efficiency also mean fewer physicians are required to do the same volume of work. These workflow changes should be offset by increasing demand for medical services by an aging, medically complex population.

Another, less often discussed, factor is the method by which doctors in Canada get paid. Most physicians in Canada are paid on a fee for service basis, or remunerated based on how much they do. The purpose of a fee for service system is to incent physicians to do more work, especially when there is a shortage of providers and significant demand. Fee for service also creates a financial disincentive to hire other physicians, because it requires current physicians to split the fiscal pie among more providers. As provincial governments have increased fees and lifted billing caps that disincentive only grows.

As a member of the tax-paying public, does it matter that there are unemployed physicians out there? The answer to that is yes, as physician unemployment has three major downsides. The first is that medical education is still funded predominantly by the taxpayer and it is not cheap. For example, the Ministry of Health in Ontario estimates that it costs about $830 000 to train a cardiac surgeon. Taxpayers fund this education in part so that they reap the access benefits once these physicians graduate.

This leads to the second major downside: these physicians may move jurisdictions. Young surgeons, facing mounting student debt, will move anywhere they can find a job, including the US. Once moved and settled, these doctors likely will not return to Canada.

Finally, poor job prospects discourage medical students from pursuing certain specialties. This is being experienced right now in cardiac surgery, previously a highly competitive residency program, where in 2011 only 8 of 12 cardiac surgery residency spots were filled. In fact, one model of cardiac surgery health human resources published in the Annals of Thoracic Surgery found that not enough medical students will choose cardiac surgery to replace retiring surgeons, and cardiac surgery will face a significant workforce shortage by 2020. While such a modeling exercise has not been done in other specialties, one imagines that similar trends could be seen.

Therefore, this shortage has huge potential negative consequences. However, it also represents a potential opportunity for reform.  Governments across the country are going to be negotiating new contracts with provincial medical associations starting next year, knowing most must address large budget deficits. Health utilization represents the biggest challenge for provincial health budgets moving forward. Utilization is driven primarily by doctors and, more specifically, by fee for service payments.

The issue of physician underemployment could help to address the problem of increased spending due to utilization. I propose a New Physician Graduate Guarantee modeled on Ontario’s Nurse Graduate Guarantee, which ensures new nursing graduates can get employment in Ontario.

Hospitals would get funding from the government to hire new physicians. This money could be used to create space for the new physician by expanding operating rooms, increasing dialysis capacity, etc . In return, the new physician would agree to become an employee of the hospital. The new physician would forgo the fee for service system and would instead be paid a salary of the median income of her specialty plus a bonus for exceeding pre-set volume and quality targets. Bonuses would also be provided for working in underserved communities and for teaching or doing research. The physicians that sign on would get administrative support and would also get the opportunity to subscribe to the Hospital of Ontario Pension Plan (HOOPP).

The benefits for new physicians are clear. They get full-time employment doing what they were trained to do, with targeted funding so that they can use their skills right away. They also get a competitive salary, an opportunity to buy into a pension plan, and are paid to deliver high quality, not high volume care. Governments pay a lot up front but achieve cost certainty. By moving physicians, by choice, to a blended salary model as opposed to a fee for service one, payors slowly begin to remove the single largest cost driver of healthcare from their bottom line.

Older physicians could be given the choice to sign on to the deal, but most would likely stay in a fee for service model. Even so, in less than a generation the fee for service system would be a memory, replaced by a progressive payment system that values quality over volume, and removes a huge driver of costs. Young physicians, who rate providing quality care, work life balance and teamwork very highly, will enter the workforce confident they can raise their families in Canada, doing what they were trained to do, and being paid in a way that is most in line with their values.

About the Author

Sacha Bhatia is a cardiologist who is currently a clinical and research fellow at Massachusetts General Hospital and Harvard Medical School. He is former health advisor to the premier of Ontario.