Tentative agreement would allow Alberta to withhold doctor pay to balance physician budget

A tentative agreement between Alberta's doctors and the provincial government would set the current physician services budget at the 2018-19 level and allow the government to withhold payments from doctors if overspending is expected.

Deal would set doctors' pay budget at 2018-19 level

A tentative agreement between Alberta's doctors and the provincial government makes clear that Health Minister Tyler Shandro has the final authority over the amounts paid to doctors. (Manuel Carrillos/CBC)

A tentative agreement between Alberta's doctors and the provincial government would set the current physician services budget at the 2018-19 level and allow the government to withhold payments from doctors if overspending is expected.

The agreement also appears to signal that the Alberta Medical Association (AMA) has abandoned its attempt to secure binding arbitration, which has been used in other provinces to resolve disagreements. 

A letter signed by both Health Minister Tyler Shandro and AMA president Dr. Paul Boucher says a condition of the agreement would be the AMA discontinuing its $250 million lawsuit against the province that sought binding arbitration.

CBC News has obtained a leaked copy of the agreement, which members of the AMA are now reviewing for potential ratification.

The agreement, dated Feb. 26, outlines the proposed physician services budget for the next three years:

  • $4.571 billion for 2020-21 through 2021-22, the same amount as the actual physician services cost for 2018-19.
  • $4.621 billion for 2022-23.
  • $4.671 billion for 2023-24.

The tentative agreement comes after a bitter public fight between the two parties that began in February 2020 when Shandro unilaterally ended the AMA master agreement and imposed a new physician compensation framework.

That sparked a public outcry from the AMA and many of the province's doctors.

The new agreement makes it clear Shandro has ultimate authority over the amounts paid to doctors.

"The AMA acknowledges that the physician services budget is established by the minister in the minister's sole discretion," it states.

"The AMA further acknowledges that nothing in this agreement fetters the minister's authority or discretion with respect to the physician services budget."

CBC News has reached out to Shandro for comment. An AMA spokesperson said doctors are declining comment during the ratification period.

The agreement appears "quite favourable" to the government, according to University of Calgary health law professor Lorian Hardcastle.

"I think that the government kept most things that they probably wanted to keep in this agreement, for example, the cap on the budget. And I think that the government kept the things that they wanted to keep out of this agreement, namely any guarantees around binding mediation or binding arbitration," Hardcastle said.

She said the AMA's negotiators likely decided to offer the agreement to their members now because they feel there is nothing more they can get from the government. 

Province could withhold payments 

The agreement says Alberta Health will monitor the expenditures under the physician services budget every month and, if the actual costs are expected to exceed those budgeted, "a determination will be made if strategies and measures to reduce the expenditures are to be implemented."

This won't occur for overspending in 2021-22 through 2023-24 attributed to physician growth exceeding population growth.

It states that the ministry will consult with the AMA as it develops those strategies to prevent overspending. But one of those possible methods will likely prove contentious with the province's doctors.

"The strategies may include withholding amounts from physician payments," it says.

If withholding payments is used as a strategy, any amounts left over at the end of the year that aren't necessary to balance the budget "will be returned to physicians proportionate to their original contribution" to the amount withheld.

Hardcastle said she suspects most of the province's doctors will be concerned about their pay being reduced to cover the cost of any budget overspending. And she said the public also may have concerns in the future. 

"Patients may be concerned that their doctors may see fewer patients if they are in a situation where certain visits are being capped or certain services aren't being billed at the full rate," she said. 

If the AMA does not agree with those budget-balancing strategies, or the government refuses an AMA request to adjust the physician services budget, it can take the matter to a mediator.

The agreement lists four lawyers who can act as mediators.

But any recommendations from the mediator would be non-binding.

If the mediation report is not accepted by both parties, Alberta Health "agrees to consider the mediation report before making its final decision on the issue mediated," the agreement states.

The agreement would expire March 31, 2024.

Alberta Health, in the agreement, has committed to tabling legislation by Dec. 31, 2021 that would exempt the agreement from legislation that allows the government to terminate the master agreement with the AMA.

"I think that certainly this is going to be a tough sell to the members of the AMA," Hardcastle said. "What we are seeing on social media already is that some doctors are quite opposed to this."


Jennie Russell, Charles Rusnell

Former investigative reporters

Charles Rusnell and Jennie Russell were reporters with CBC Investigates, the investigative unit of CBC Edmonton. They left CBC in 2021. Their journalism in the public interest is widely credited with forcing accountability, transparency and democratic change in Alberta.