FROM THE ARCHIVES

DEMOGRAPHICS AND ’S SUPPLY by Nadeem Esmail

n late October, the Canadian significant addition of foreign-trained Institute for Health Information doctors (Esmail, 2006a). (CIHI) released a report on the Understanding this dynamic and Iphysician workforce in Canada which found, among other things, that dealing with it proactively will be Canada’s are ageing, and essential if Canadians are to avoid an that women now make up a larger even greater shortage of physicians 1 share of the physician workforce in the future. than in years past (CIHI, 2007). These Age, Sex, and Supply changes may make the shortage of physicians in Canada more acute In 2006, 33.3% of Canada’s physician over time even if the physician-to- workforce was female, up from population ratio remains constant 30.9% in 2002. In addition, 48.6% of or grows slightly. In fact, despite physicians under the age of 40 were recent increases in medical school female, which suggests that females admissions, Canada’s physician-to- will make up an even larger portion of population ratio is poised to fall in the physician workforce in the future the coming decade unless there is a (CIHI, 2007).

CANADIAN STUDENT REVIEW SPRING 2017 15 THIS ARTICLE APPEARED IN THE FRASER FORUM IN DECEMBER 2007

This conclusion is supported by the in the future, just to maintain the fact that females made up more than current level of services delivered, let half of all first year medical students alone expand them. and medical graduates in Canada in the early part of this decade (Buske, 2005). In 2006, 33.3% of Canada’s physician workforce was female, up To be clear, there is nothing wrong from 30.9% in 2002. with a greater representation of females in the physician workforce. Indeed, women in Canada may see this as a positive development as Female physicians, in comparison it will give them greater access to to their male counterparts, tend to a female caregiver. However, from provide fewer services per week a physician supply perspective, to patients and tend to work fewer the feminization of the physician hours per week as well. According to workforce in Canada will mean that the 2004 National Physician Survey2, more physicians may be required female physicians spent an average

16 FRASERINSTITUTE.ORG of seven fewer hours per week on in 2001 than their peers in the same- professional activities in comparison age groups did in 1992.4 The same to male physicians. That difference was true for work hours: GPs aged 54 was less pronounced among and younger worked fewer hours per specialists (~4 hours) than it was week than their counterparts in 1993. among family physicians As Buske (2005) notes, (8 hours) (Buske, 2005). Similarly, “[b]oth national and provincial Watson et al. (2006) found that, on studies have shown that younger average, female general practitioners physicians today do not work the (GPs) held workloads equivalent to same hours or bill the same volume 68% of their male counterparts’ in of services as did the same group 2001, while Slade and Busing (2002) 20 years ago...” (2005: 7). However, found that female GPs worked fewer thus far, the decreased work hours hours and delivered fewer clinical and volume of services performed procedures per week than their male by younger physicians has been counterparts in 1997/98. mitigated to some extent by the fact that older physicians in Canada are working longer hours and providing Family physicians younger than 54 more services than their peers did 10 provided fewer office assessments years ago (Watson et al., 2006).5 in 2001 than their peers in the same This increased work effort of older age groups did in 1992. physiciansmay have important additional consequences when these individuals decide to retire. In 1992, a GP nearing retirement The fact that physicians in Canada carried a workload slightly smaller are ageing in concert with the than that of a new physician (under general population will also have age 35), while in 2001, a GP nearing important implications for the future retirement (aged 65 or older) physician supply. In 2006, 19.2% carried a workload 1.6 times that of Canada’s physicians were 60 or of new physicians. That difference older, and 47.3% were 50 or older grew to 2.1 times when potential (CIHI, 2007).3 In light of this fact, two early retirees (aged 55-64) were issues must be considered: first, older compared with new physicians in individuals tend to work less than 2001 (Watson et al., 2006). Watson when they were younger, and second, et al. conclude that “the coming younger physicians are working less wave of physician retirements than physicians in the past did when could cause unprecedented annual they were younger. rates of shrinkage in [General Watson et al. (2006) found that Practitioner/ Family Practitioner] family physicians younger than 54 service volumes” (2006: 1626). provided fewer office assessments Similarly, Buske (2005) predicts

CANADIAN STUDENT REVIEW SPRING 2017 17 that younger physicians may build to-population ratio will be required smaller practices—in terms of the in the future in order to deliver number of patients they take—than the same volume of services that their older counterparts. As a result Canadians enjoy today. And the of the ageing physician population, volume of services being delivered physician retirements are likely to today in Canada is already insufficient increase in the coming years (for to meet demand (for example, see example, see Kermode-Scott, 2004). Esmail, 2006a; Statistics Canada, 2004; and Statistics Canada, 2006). It is clear that the shifting demographics of the physician Where To From Here? workforce will have important What is the solution to this problem? consequences for future physician First, it should be recognized that supply. Indeed, it is entirely the current and looming shortages possible that a greater physician- of physician services in Canada are

18 FRASERINSTITUTE.ORG not the result of a market failure Canada’s provinces6—should be or the result of happenstance. shelved. The current fee-for-service Rather, they are the direct result regime, where physicians are paid for of government intervention in the each service or treatment delivered, marketplace. Without gives physicians the incentive to restrictions on extra billing (allowing provide a higher volume of services physicians to charge patients a than if they were paid an annual price above the standard fee set by salary or paid on a capitation basis the provincial health program or to (an annual fee for each patient require payments in addition to those registered with their practice). set out or provided by the provincial Moving away from fee-for-service health program), physician activity funding for physician services will (such as annual activity limits, and necessarily mean fewer services are billing caps and restrictions), and delivered per physician (Esmail and the training of medical practitioners, Walker, 2007), which is the opposite and without the prohibition of cost of what is required today and will be sharing for medically necessary required in the future. services (where patients are required by the provincial health program to pay a fee or portion of the charge for Removing all restrictions on the the service consumed), a shortage volume of services that are publicly would not have occurred (Esmail, funded would increase the number 2006a). Removing these restrictions of services that are available to and implementing cost sharing for Canadians today. publicly insured services, as well as increasing private competition in the delivery and financing of health In the short term, it is critical to care, should be the ultimate goal of understand what economists call governments as these changes would the “labour-leisure tradeoff” in order improve access to health care in to mitigate the reduction in supply Canada (Esmail, 2006a; Esmail and that may result from these changes Walker, 2007). in demographics. Put simply, the However, there are beneficial labour-leisure tradeoff is the balance solutions that can be implemented between time for labour and time for even within the current policy all other activities, as determined by regime. First, the government must each individual based on the value do no more policy harm. Specifically, of their labour and the value of the current discussions on changes to time they have to do all other things. the core structure of how physician If the relative value of their labour services are remunerated— which rises, they are likely to commit more often accompany proposals for time to work rather than non-labour primary health care reform in activities and vice versa. Recognizing

CANADIAN STUDENT REVIEW SPRING 2017 19 this basic economic concept leads to children; conversely, male physicians two important short-term solutions. with no children place a higher value on non-labour time than their Incomes of both general practitioners colleagues with children (Martin, and specialists are currently 2003). The work patterns discussed restricted in a number of ways. above also suggest that younger For example, there are limits on and female physicians place a higher the number of patients who can value on non-labour time. be treated in certain time periods, and on the total annual billings of physicians. Such restrictions reduce the supply of services delivered by Doctor shortages would be active physicians by reducing their mitigated over the long-run as earning potential or the value of students could expect sufficient their labour beyond a certain limit. returns on their education by Removing all restrictions on the attracting patients with unmet volume of services that are publicly health needs. funded would increase the number of services available to Canadians today from the current stock of physicians, and would encourage physicians to Obviously, increasing the earning deliver more services in the future. potential of physicians will have some impact on the labour/non-labour At the same time, the value of non- tradeoff these younger and female labour time appears to be higher physicians are making. However, for younger physicians and female these physicians’ desire to practice physicians than for their older, less than current physicians suggests male counterparts. Indeed, medical that annual activity limits may be students appear to be gravitating less of a barrier to work for the increasingly towards specialties next generation of physicians than that offer more regular work previously. Increases in the value schedules, more leisure time, and of fees billed for services may be higher earnings, which may reflect another monetary tool that could be their desire to choose a different employed to the benefit of patients.8 balance between professional Additionally, a reduction in the rate of and personal commitments than taxation for middle and upper income previous cohorts (Simoens and Hurst, earners would have a similar effect on 7 2006; CIHI, 2006). Similarly, the physician work effort. relationship between work hours and the presence and age of children Of course, as the amount of time suggests that female physicians committed to non-labour activities with younger children place greater decreases, the value of the remaining value on non-labour time than their time rises, and, as a result, there colleagues with older children or no will be some point beyond which

20 FRASERINSTITUTE.ORG mechanisms other than increasing unmet health needs and patients the value of labour will be more cost- who may be willing to change effective. Reducing the cost of labour doctors, for example.10 time—the cost of spending time at work—may be yet another avenue by which the impact of changing If the decision on whether or not demographics could be mitigated. to become doctors had been left Options for policy makers in this area to Canadians, it is likely that there include providing compensation for would be more doctors serving daycare services for female physicians Canadians. with children, and finding ways to provide better access to locum tenens (temporary substitute) coverage for physicians desiring a vacation. Of course, if governments had not Over the long term, the simplest intervened in physician training in solution to the problem of a reduced the first place, this article would have supply of physicians and physician been one of general interest, rather services is to gain additional than concern for future physician physicians. But the number of supply. Training would have already additional physicians, or indeed the begun adjusting automatically to number of physicians, period, should reflect changing conditions in the not be determined by governments workforce. If the decision on whether and their funding decisions. Rather, or not to become doctors had been the number of physicians should be left to Canadians, it is likely that determined by patients’ needs and there would be more doctors serving students’ decisions. For provincial Canadians (Simoens and Hurst, 2006; governments, this would mean Esmail, 2006a). fully deregulating tuition levels Conclusion and admissions requirements for postgraduate training, thus The shifting demographics of freeing medical schools and Canada’s physician workforce may teaching to determine mean that, in the future, more their own admission levels.9 Such physicians will be required to a change would allow students to deliver the same volume of services decide whether or not a career in being provided today. Dealing with is worthwhile, given that this dynamic requires removing their earning potential would not governmental restrictions on income be artificially restricted. Doctor so as to encourage a greater supply shortages would be mitigated over of services from the current and the long-run as students could future stock of physicians. It may expect sufficient returns on their also require increasing physicians’ education by attracting patients with earnings and fees, and reducing the

CANADIAN STUDENT REVIEW SPRING 2017 21 costs of working. As well, over the Notes long-term, removing governmental 1 Shortages can only occur when prices are restrictions on the training of not permitted to adjust. Prices will naturally physicians will result in a more rise in any functioning market where goods dynamic physician supply that is or services are in short supply relative to better able to respond to changes demand, thus encouraging new supply in patient demand and and reducing demand simultaneously. the labour-leisure tradeoffs of The outcome is equilibrium of supply individual physicians. and demand (no shortage or excess). In the Canadian health care marketplace, When it comes to physician training such adjustment is impossible because and services, governments must of restrictions on both the prices and the supply of medical services. allow the market to work, rather than Without restrictions on extra billing, trying to manage it to the detriment physician activity, the training of medical of patients and taxpayers alike. practitioners, and the prohibition of cost sharing for medically necessary services, a shortage would not have occurred.

2 The 2004 National Physician Survey was a survey of all Canadian physicians Nadeem Esmail is a practicing in early 2004. The survey was Senior Fellow with the undertaken by the Canadian Medical Fraser Institute. Association, the College of Family Physicians of Canada, and the Royal College of Physicians and of Canada (CIHI, 2006).

3 According to the National Physician Survey, 16.2% of family practitioners were 60 or older compared to 22.4% of specialists (CIHI, 2007). This suggests that retirements in the coming years may be felt more in the specialist supply than in the supply of family doctors. At the same time, female medical graduates tend to gravitate towards , , and / , while male graduates gravitate towards surgical specialties (Buske, 2005). This also suggests that the future supply of specialist physicians may be of particular concern.

4 The differences between same-age cohorts were larger among females than they were among males.

5 Watson et al. (2006) note that the volume of services physicians are providing in

22 FRASERINSTITUTE.ORG at least two age cohorts are neither cost than fully trained physicians. He increasing nor decreasing over time: those recommends that teaching hospitals aged 45-54 in 2001 provided roughly be required to pay for all patient care the same number of services in total as provided, including the care provided those aged 35-44 in 1992. This was also by physicians (who currently bill the the case with those aged 55-64 in 2001 provincial health plan and are “free” when compared with those aged 45-54 in to hospitals, and, therefore, are used 1992. Elderly cohorts in either time period more often than postgraduates who are delivered fewer services in total than their paid by the ), giving them the younger counterparts did. responsibility of determining the allocation of service delivery between lower-cost 6 In 1997/98, GPs working in trainees and higher cost but more capable multidisciplinary , which are often teaching staff. The outcome of this shift in considered in discussions of primary care the financing of teaching hospitals would reform in Canada’s provinces, reported inevitably be more postgraduate training fewer weekly work hours on average positions at Canada’s teaching hospitals, when compared to GPs in solo or family some of which may be privately financed. practitioner group practices, and reported This author recommends a similar shift delivering fewer clinical services than in the responsibility for determining the GPs in family practitioner group practices optimal allocation of trainee resources, but (Slade and Busing, 2002). to individual teaching physicians instead of institutions. 7 According to the 2004 National Physician Survey, “the largest predictor 10 Simoens and Hurst (2006) found that of satisfaction with current professional nations that have traditionally relied life” for both family physicians and on largely unregulated markets for specialist physicians “was satisfaction with physician training or that have only the balance between professional and recently begun controlling medical personal commitments” (CIHI, 2006: 6, 8). training have experienced higher levels and growth rates of their physician-to- 8 Allowing physicians to bill extra for population ratios than nations, including services (i.e., charging patients a price Canada, that have controlled intake for above the standard fee set by the many years. provincial health program, or requiring patients to make payments in addition to those set out or provided by the provincial health program) would also be a solution. However, extra billing is prohibited by the and so is not a policy solution that could be implemented by provincial governments unless they were willing to give up all or a portion of their share of federal transfers for health and social services (Esmail, 2006b).

9 McArthur (1999) notes that postgraduate trainees can increase the number of services that a facility delivers in a cost- effective manner as they are able to deliver (in later years of training) near- physician care at a substantially lower

CANADIAN STUDENT REVIEW SPRING 2017 23 References Simoens, Steven and Jeremy Hurst (2006). “The Supply of Physician Services in Buske, Lynda (2005). Understanding the OECD Countries.” OECD Health Working Physician Labour Market: Results of the Papers No. 21. Digital document available 2004 National Physician Survey. Canadian at http://www.oecd.org. Employment Research Forum. Digital document available at http:// www. Slade, Steve and Nick Busing (2002). cerforum.org/conferences/200505/ “Weekly Work Hours and Clinical papers/buske_cerf05.pdf. Activities of Canadian Family Physicians: Results of the 1997-98 National Family Canadian Institute for Health Information Physician Survey of the College of Family [CIHI] (2006). Understanding Physician Physicians of Canada.” Canadian Medical Satisfaction at Work: Results from the Association Journal 166, 11: 1407-11. 2004 National Physician Survey. Digital document available at http://www.cihi.ca. Statistics Canada (2004). “Canadian Community Health Survey.” The Daily Canadian Institute for Health Information (June 14). Digital document available [CIHI] (2007). Supply, Distribution and at http:// www.statcan.ca/Daily/ Migration of Canadian Physicians, 2006. English/040615/ d040615b.htm. Digital document available at http:// www. cihi.ca. Statistics Canada (2006). Access to Health Care Services in Canada: January to Esmail, Nadeem (2006a). Canada’s Physician December 2005. Catalogue No. 82-575- Shortage: Effects, Projections, and XIE. Solutions. The Fraser Institute. Digital document available at http://www. Watson, Diane E., Steve Slade, Lynda fraserinstitute. org/commerce.web/ Buske, and Joshua Tepper (2006). publication_ details.aspx?pubID=3147. “Intergenerational Differences in Workloads Among Primary Care Esmail, Nadeem (2006b). “Federal Transfers Physicians: A Ten-Year, Population-Based and the Opportunity for Health Reform.” Study.” Health Affairs 25, 6: 1620-28. Fraser Forum (July/August): 16-18.

Esmail, Nadeem and Michael Walker (2007). How Good is Canadian Health Care? 2007 Report. The Fraser Institute. Digital document available at http:// www.fraserinstitute.org/commerce.web/ publication_details.aspx?pubID=5035.

Kermode-Scott, Barbara (2004). “Changes in Canada’s Medical Workforce could Affect Access to Care.” BMJ 329 (November 6): 1064.

Martin, Shelley (2003). “Family Matters.” Canadian Medical Association Journal 168, 9: 1174.

McArthur, William (1999). “The Doctor Shortage (Part 2).” Fraser Forum (July): 20-21.

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