In the previous post, I talked about how healthcare administration, by controlling the training opportunities, facilities, hiring and activities of physicians, psychologists and other mental health practitioners can restrict the amount and type of access to mental health care.

In this post, I want to take a closer look at another mechanism that is used, the physician fee schedule. Most physicians, in part or in whole, generate income by billing governments for specific services they provide. Exactly what services they can bill for, and how much they can bill, are determined by agreements negotiated between payers (i.e. provincial governments) and doctors (via provincial medical associations). This is known as “fee for service”.

So important to note, fee for service physicians aren’t paid for their time, and everything they do isn’t billable, which is why so many will charge you for things like letters, doctors notes, missed appointments, etc. (Try finding a lawyer who will do work for free). Also important to note, not all billable services pay the same or take the same amount of time. Other things being equal, most doctors will probably try to maximize the amount of their billings. This makes the structure, regulations and restrictions of the fee schedule extremely important, not only for provincial government health budgets, but also for the type of care that will be delivered.

A Study in Contrasts: Alberta and British Columbia

While you’d think that there wouldn’t be much more to say about different fee schedules than one province overall paying more or less than another (depending on the bargaining strength of the respective doctor’s association), surprisingly there are some big differences that significantly impact care.

I’ll illustrate this by comparing geographical, if not always ideological, neighbours, Alberta and British Columbia.

Yes, in general Alberta pays a fair bit more (25%, give or take) for many equivalent psychiatric services, which perhaps makes it easier to attract and retain more psychiatrists to Alberta, but there’s a lot more to it than that.

One interesting thing that BC’s psychiatry fee schedule does is make explicit that the schedule explicitly recognizes the shortage of psychiatrists as compared with the need for care, and is designed to influence the amount of care offered and how it is distributed:

Due to the unmet demand for psychiatric services, prolonged time-intensive psychiatric treatment must be provided only to the extent that it is justified and cost-effective in the context of limited psychiatric treatment resources and waiting lists.

Where Care is Delivered

In Alberta, psychiatrists who provide 15 minutes of patient care in a hospital would get reimbursed the same amount if they provided the same care in an outpatient clinic or a private office.

In BC, services provided in hospital get reimbursed at approximately a 15% higher rate.

Other things being equal, this would push more psychiatrists in BC towards practices where they can do inpatient work. Which, in an age where you’re pushing care away from hospitals and into the community, is a bit puzzling.

But, the BC healthcare bureaucracy can control how many inpatient psychiatrists they hire, as well as the number of inpatient psychiatric beds. When it comes to outpatient care, there’s nothing to stop any number of psychiatrists from opening up their own private practice. That’s an amount of care (and a cost) that can’t be as easily controlled. Better to encourage psychiatrists to take inpatient jobs.

But is 15% really that big a deal? Enough to have an impact, but here’s also where the much lower fees in BC compared with Alberta can make a difference. If you’re running your own private practice, you’ve got a lot of overhead to pay for (office rent, administrative support, supplies, etc.). That comes straight out of your pocket.

Another option is for psychiatrists to find a job working in a government run outpatient mental health clinic. You still bill the same as if you were in private practice, but usually most of your overhead is covered by the clinic, rather than it coming out of your pocket. Plus there are certain mysterious yet scarce extra incentive payments called “sessionals” to help cover non-billable work, not available if you’re in private practice. All of a sudden you’re back to clearing a pretty reasonable amount of money.

Did I mention the number of psychiatrists, their scope of practice, and the type of work they do in government run outpatient mental health clinics is controlled by the healthcare bureaucracy?

In contrast, Alberta psychiatrists bill the same whether they’re doing outpatient or inpatient care. Those running private practice still have overhead, but with the higher amount of billings (and as it turns out, more things that are billable) you can still make a pretty respectable amount of money.

This is purely an approximation (though based on a real scenario), but an outpatient psychiatrist in private practice in Alberta might bill $300,000 per year, pay overhead of $75,000, and so bring home $225,000 before taxes.

In BC, the same private practice outpatient psychiatrist would likely bill only about $225,000, yet have the same $75,000 overhead, yielding $150,000. That’s 1/3 less than in Alberta, which is quite a bit. The same BC psychiatrist working inpatients or in a government outpatient clinic would bring home pretty close to $225,000.

Needless to say, there are a pretty reasonable number of psychiatrists in private practice in Alberta. But in BC, the vast majority work in government-run clinics or hospitals, where the amount and type of care provided can be controlled.

Consultations

That was a lot of detail, but it illustrates how the fee schedule can drastically impact the type of practices that psychiatrists will work in.

Here’s something a bit simpler, that illustrates how the type of care provided can vary.

Consultations are when typically a family physician refers a patient to see a psychiatrist. The psychiatrist sees the patient once, and usually comes up with a diagnosis and some recommendations. They then write a report which is sent back to the family physician, who (hopefully) implements the recommendations.

In BC, a psychiatrist will bill a flat fee for a consultation, currently about $215, regardless of how long the consultation may take.

In Alberta, the psychiatrist is paid a flat fee for the first half hour (currently $179), and then $50 for each additional 15 minutes spent on the consultation.

One hour is probably the minimum time you’d need to do a good consultation on a fairly straightforward patient, so again factoring in that BC generally pays lower than Alberta, the fees sort of match up.

But what if you’ve got a complex patient? In Alberta, the psychiatrist can choose to spend the time they need to do a good job. In BC, there is no way to bill for a longer consultation. So the psychiatrist can spend the extra time, but they’re not getting paid for it.

My psychiatrist wife’s private practice (in Alberta) specializes in complex patients, often those with multiple diagnoses, who have been sick for a long time, and who generally have multiple other medical problems to boot. It’s not unusual for her to spend two hours or longer to get a good handle on these patients. As a result, she’s often able to identify and solve longstanding patient problems that may have been going on for years, and missed by several other psychiatrists who never spent the time.

In BC, where longer consultations aren’t compensated, what happens to the complex patients?

Appointment Length

Another area of difference influences the length of followup appointments for those seeing a psychiatrist on an ongoing basis.

Both BC and Alberta bill followup care in 15 minute blocks called “units”. One unit of care in Alberta is $54, in BC it’s $46. Two units are double that, so $118 or $92.

Three or four units? In Alberta, it’s triple or quadruple the one unit rate. But not in BC, where it’s about 10% less. And even longer than four units (one hour)? In Alberta, you keep going up at the same rate, but in BC you can’t bill more than four units. Talk about an incentive to keep appointments short, regardless of the circumstances or need.

Interestingly, for those who really want to maximize their income at the expense of good care, Alberta wins. In Alberta you can bill one unit as long as you spend “the majority” of the time (i.e. at least 7.5 minutes). In BC, you need to spend a lot more (12.5 minutes) to bill. So the psychiatrist in Alberta who runs 8 minute appointments can see seven people per hour and bill each one for a full unit, making nearly twice as much as someone who sees them for a reasonable amount of time.

Care for the Many or the Few?

On top of that, BC places more restrictions on following patients. If you need to see a patient for more than two hours a week, you need to justify it and get it approved before you’ll be paid. If you see a patient for longer than six months, you need to have their family doctor essentially “okay” that they still need to be seen by a specialist. Again, no such restrictions in Alberta.

The rationale here is to avoid valuable psychiatric care being used on people who really don’t need it, the so-called “whiny well”. A controversially titled article in the October 21, 2014 issue of The Medical Post (a physician trade rag) called “Psychiatry: A Profession in Decline?” talked about the phenomenon of some psychiatrists seeing a small number of wealthy clients for years on end, who neither really needed the care of a psychiatrist, and could certainly afford a psychologist.

Summary

As this deep dive into fee schedules shows, these dry and bureaucratic documents can have a massive impact on the type of mental health care delivered in a province. From the number of psychiatrist, where they practice, what services they offer, and how many patients can receive care, they are an important tool in rationing mental health care in Canada.

Aside from the overall higher fees in Alberta, this discussion illustrates how that province’s fee schedule imposes fewer actual restrictions on psychiatrists and less incentives to adopt a particular practice model. It encourages more flexibility by individual practitioners by its effective absence of policy, and so reduces certain opportunities to tailor the mental health system towards a particular structure.

I actually applaud BC for being explicit that the fee schedule helps implement a policy, in particular that given there are so few psychiatrists, it’s better to have more people receive perhaps lesser care, than some people perhaps receive very good care, but others receive nothing. I’m less sure about the policy itself, but at least it puts it out in the open (to a small audience) for discussion.

I’m less excited that so many policy decisions in BC are embedded in an opaque and largely unaccountable health bureaucracy, which at best centralizes opportunities for responsiveness, excellence and innovation, and at worse stifles them.

Further Reading

You can find Alberta’s fee schedule online (both the description of services and fees for those services). It contains services for all physicians; you can search for psychiatry codes, which start with “08.”).

BC’s fee schedule for psychiatrists, including both service descriptions and fees is also available online.

A 2012 position paper by the BC Psychiatric Association had a very good discussion about BC’s fee schedule, and the impact it had on care and psychiatrist recruitment and retention. This appears to have been prepared as a planning document leading up to the recently concluded MSP negotiations, and has since been removed from the web.