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What are AFPs and why do we need them?


"An AFP provides an alternate approach to funding physician services other than fee-for-service. An AHSC AFP is an agreement between physicians, affiliated hospitals, the university, the Ontario Medical Association and the Ministry of Health and Long-Term Care. The scope of services, deliverables, decision-making, reporting and accountability structure are defined within the agreement."
Ontario Ministry of Health and Long-Term Care

The Alternate Funding Plan (AFP) aims to stabilize human resources at Academic Health Sciences Centres (AHSC) in Ontario. 85% of physicians working in the province, the majority of them providing care in community hospitals, were trained in AHSCs in Ontario. Because of time spent teaching medical students, residents and fellows, there may be income discrepancies between specialists working at an AHSC and physicians in the same specialty working at a community hospital. Time spent doing research, which is poorly remunerated compared to clinical work, further accentuates the difference. The Government of Ontario, recognizing this discrepancy for the first time, has allocated $225 million in new funding to promote the retention and recruitment of academic physicians. This funding includes $40 million for teaching, $20 million for research, $10 million for recruitment of new academic physicians, and $140 million to close the income gap between physicians working in academia and in the community. This latter funding is called "clinical repair" (of the gap). Recognizing also that many advances in health care commonly take place at AHSCs, especially in terms of basic research and innovations that affect health care on a large scale, the MOHLTC will provide $10 million to support the development of innovation in health care delivery. An additional $5 million will be allocated to defray the administrative costs associated with implementing the province-wide academic AFP.


The Ministry and the OMA endorsed the creation of governance at each AHSC site comprising representatives of a doctors' organization, the university and the hospitals. Each has veto power over what happens, but the board that provides day-to-day operation is heavily physician-based. Barry Rubin is Chair and CEO of the Mount Sinai Hospital - University Health Network Academic Medical Organization, which represents about 700 physicians at MSH and UHN. All save one specialty group are participating. This organization has distributed more than $100 million to physicians at MSH and UHN over the last 4 years. When the next phase of the AFP agreement is signed in 2008 it will be responsible for allocating about $125 million per year to physicians at MSH and UHN.

In total the MOHLTC has allocated $225 million plus $5 million for administrative infrastructure. Administrative costs for accounting and documentation are less than one percent of the total that has been distributed. The system at MSH - UHN is cost-effective because it is partnered with a level one bank to distribute funds and information electronically. The 700 physicians represented are organized into 57 billing groups within 24 practice plans. The governance organizations only have relationships with practice plans, not with individuals. Practice plans maintain complete, unambiguous and total autonomy with respect to allocation of funds received -- a bedrock principle of the governance organization. [see box for an alternative principle espoused by Chairman Reznick]

(Read Barry's letter about AFPs, written to Ontario's Minister of Health George Smitherman)

"I think Phase III of the AFP represents a significant step in the evolution of a physician funding system that will enable the retention and recruitment of physicians at Academic Health Science Centers in Ontario. No other jurisdiction in Canada has implemented such a comprehensive funding initiative, which recognizes the unique contributions made by academic physicians, and which adheres to the bedrock principles of transparency, accountability and strong local Governance."

Barry Rubin
Division of Vascular Surgery

When the organizing committee for MSH - UHN came together, all of the different groups of physicians recognized two things: first, it was beneficial to work in a collegial environment if every department got some "clinical repair income" out of the program; second, if every major group didn't agree, the whole deal might not go through. So one criterion was that all of the major groups -- medicine, surgery, anaesthesia, psychiatry, obstetrics, emergency, and family medicine -- had to participate to the extent that 80% of clinical activity in each department was represented. Every department would get some clinical repair. The result was that members of the organizing committee were able to come to a unanimous agreement on a methodology to allocate Phase III AFP funds. It is anticipated that every full-time equivalent participating in Phase III of the Provincial AFP at MSH and UHN will be allocated a minimum of $45,000 per year when Phase III of the AFP is implemented - likely in March or April 2008. Practice plans will determine how these funds are allocated to individual physicians. In addition, some specialties will be allocated up to an additional $75,000 per FTE per year.

Rubin Family
Chelsea, Penny, Blake, Barry and Shelby Rubin (left to right)

To agree to supply this level of funding, the MOHLTC has imposed conditions, most importantly accountability. Participants must be able to tell the MOHLTC how the money was used on a per physician basis. Practice plans can do what they want, but they must tell the Ministry who received the funds. Both the MOHLTC and the OMA want to ensure that Phase III AFP Funds are allocated to doctors, not infrastructure, debt-service or non-physician human resources. Under this agreement, a decrease of > 10% in the clinical service that a group of physicians has provided in a given year will trigger a dialogue between the MOHLTC and the AHSC governance organization about the reasons for the decrease. This can lead to financial penalties that are proportional to the clinical repair funds received by a given group, i.e. if clinical services decrease 20%, clinical repair funds could be decreased by 20%. It is important to emphasize that penalties can never affect OHIP billing. Furthermore, every physician is free to abstain from this agreement, or to withdraw from the agreement at any time.

One unforeseen challenge concerns the tension between universities and clinical practice plans. A significant amount of funding for teaching and research flows through the governance organization, but the university still maintains primary responsibility for providing teaching. The challenge is to align teaching funding with the people in practice plans who are doing the teaching. The same applies to research. The MSH - UNH organization is working with the University and the Clinical Chairs to try to implement mutually acceptable methodology for the internal redistribution of Phase III AFP teaching and research funds.

Barry is a full time academic surgeon with a full time clinical referral practice and funding for basic research from CIHR. He does "50% research, 50% clinical and 50% administration". The AFP job currently takes about two full days a week, sometimes more. He was a member of the provincial task force that developed the plan, chaired the committee that developed the definition of a full-time equivalent that is used to distribute the clinical repair funds, and was a member of the template-drafting group that wrote the actual contract. He is the provincial lead representing all the governance chairs in discussions with the MOHLTC and the OMA. He organizes a conference call among all the governance chairs in Ontario once a month to keep the group appraised of developments. This has become a very important body in dealing with the MOHLTC and the OMA. When the governance chairs speak with one voice, they represent more than 4000 academic physicians. Their highly developed infrastructure is able to disseminate information quickly to physicians and respond to their needs in an efficient and effective manner.

Recognizing that there are administrative aspects of this job for which he had little experience, Barry has taken courses at the Rotman School of Management and at the Kellogg School of Management at Northwestern University. Courses on negotiation, leading high impact teams and accountability in the boardroom have taught him a great deal about cultural diversity and how institutional culture affects the way individuals work in a team environment. Some of the techniques he has learned and applied have proven helpful to the management committee.

Barry has been married for seventeen years to Penny, who enables his success in all his different jobs. Their three children are Chelsea, 16, Blake, 13 and Shelby, 10. Barry protects weekends to spend with his family. "We try to eat together always, even if it is late." The family will vacation in Cuba this winter.



"For the first time in its history, the Government of Ontario has acknowledged the importance of including monies dedicated to supporting teaching and research as part of its AFP process. The numbers are meaningful, $60,000,000 across the province. It is imperative that academic leaders set into motion safeguards that will ensure that these monies are indeed spent to support our academic mission and that an accountability framework be established to assure that this money is well spent. In my opinion, simply spreading out this money on a per FTE basis is poor planning that will not serve our academic mission well in the long run."

Richard Reznick

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