Lead image by alexis84 / iStock
By Ruolz Ariste
This article is republished from The Conversation under a Creative Commons licence. All photos provided by The Conversation from various sources.
Ruolz Ariste is an adjunct professor in the School of Public Policy & Administration at Carleton University.
Access to physician services remains a challenge in Canada, particularly in primary care. Though this reality has been often eclipsed by the tariffs issue during the 2025 federal election, it continues to be a fundamental concern for Canadians.
In 2023, Canada ranked last in access to primary health care among 10 high-income countries. Yet, Canada ranked among the highest for health spending as a percentage of GDP, significantly outranked only by the United States.
Moreover, public spending on physicians has systematically risen during the first quarter of this century. The two most common proposals to improve this access are: increasing the number of physicians and/or the payment per service to physicians.
As a health economist researcher, my focus is on health workforce planning and efficiency. Given limited resources and budget constraints, what is the best way for policymakers to improve access to heath care: Paying our physicians more, or increasing their numbers?
Minding physician spending
Total spending on physicians increased to $47.5 billion in 2023, from $13.2 billion in 2000, growing an average of 5.7 per cent per year (known as the average annual growth rate (AAGR)). This includes physicians on fee-for-service (FFS) plan — those who bill for each individual service or procedure they provide to a patient — and non-FFS plan, such as salary or capitation (payment per each enrolled patient) in which physicians don’t have to bill for each individual service or procedure to get paid.
The key policy question is whether this additional spending was used to buy more services (medical consultations, visits and procedures). It is important to understand if Canada paid more for the same number of medical services or if Canadians are getting more bang for their buck.
Using an accounting approach, this increase in spending can be broken down into increase in number of services, and increase in unit cost of service.
In the 2022-23 fiscal year, physicians provided a total of 359.1 million services versus 263.8 million in 2000 (assuming that physicians on non-FFS plans have similar productivity to those on FFS plans). This translates to an average growth rate of 1.4 per cent per year.
Meanwhile, cost per service increased to $90.42 in 2023 compared to $36.66 in 2000 — an average increase of four per cent per year. This suggests that most of the increase in spending (70 per cent) was used to cover increasing costs per service.
It should be noted that average annual growth in unit cost represents sector-specific inflation. As such, it includes two components: general inflation and a “health premium” defined as inflation above and beyond general inflation. Considering that general inflation for the period (as measured by the CPI-all items) was on average 2.2 per cent per year, growth in inflation-adjusted unit cost for physicians was 1.8 per cent per year. That would be the “health premium” for physicians.
Still, some of the increase in spending was used to buy more services throughout this period. How could the access issue be explained? That’s where one needs to factor in population growth and aging: two demographic factors responsible for increases in number of services.
During this period spanning over two decades, Canada’s population grew at 1.1 per cent per year; this results in a mere 0.3 per cent growth in number of services per person per year (9.16 in 2023 from 8.65 in 2000).
Because aging impact is estimated to be at least 0.8 per cent annually, factoring it in a full demographic adjustment would result in a decline of 0.5 per cent in number of services per capita over this period; which would explain a poorer access to medical services in Canada.
Does the number of doctors affect the equation?
We consistently learn that the number of physicians has been increasing. In fact, there were 82,184 physicians providing clinical services in 2023 as opposed to 49,281 in 2000, which represents average growth of 2.2 per cent per year.
However, possibly due to shifts in the demographic composition of the workforce and better work-life balance, each of these physicians provides fewer services. For example, the number of services per physician per year in 2023 was 4,370 compared to 5,353 in 2000, a decline of 0.9 per cent per year.
Other sources have reported that trends in weekly worked hours of Canadian physicians has declined from about 53 hours before 2000 to 46 hours in recent years.
Why access seems more challenging for primary care services
Family physicians are the gatekeepers and first point of contact of the Canadian health-care system. Over the 2000-2023 period, their numbers have increased less than specialists (AAGR of 2.1 per cent and 2.4 per cent respectively). In other words, while in 2000, slightly more than half of physicians were family physicians, in 2023 the situation reversed, and slightly more than half of physicians were specialists.
Nurse practitioners emerged in the primary care setting in the last decade. This workforce grew from 3,768 in 2014 to 8,302 in 2023, increasing by an average of 9.2 per cent per year. Still, they are not enough to fully make up for the deficit.
An important consideration is that family physicians tend to benefit less from medical technological improvement than specialists. A few specific specialties, for example ophthalmology, profit the most from the huge productivity gains in the medical field. They could work fewer hours and still increase the number of services they provide and their income, which family physicians can do to a lesser extent.
In fact, for physicians who received at least $100,000 in fee-for-service payments per year, average gross FFS payments per ophthalmologist have grown almost three times more than that for a family physician between 2013 and 2023.
Implications for decision makers
Simply throwing more money into the system will not be enough to address the primary care access issue. It is important to ensure this additional money will buy mostly additional services, contrary to what we have shown in the past.
On the supply side, projections for the number of required physicians will need to account for the reduced number of hours worked. That means that more family physicians are needed just to provide the same number of services, let alone increase it.
On the demand side, the aging population translates into more services used per capita, but also increased severity of cases. The medical workforce itself is also aging, impacting both the supply and the demand sides. Policymakers need to work with institutions involved in physicians planning and training such as the Association of Faculties of Medicine of Canada, the Medical Council of Canada to ramp up training of family physicians. Extending training and scope of practice of nurse practitioners would also help.
Finally, the family physician category could be made more attractive by offering a more balanced payment scheme between family physicians and specialists.
Thursday, April 24, 2025 in The Conversation
Share: Twitter, Facebook
