On February 18, BC Finance Minister Brenda Bailey will unveil the provincial budget. The government has signalled that it will be an austerity budget, although health care may be spared.
Health care is the province’s largest single program expenditure, comprising just over 40 per cent of total operating expenses. So while the government may be tempted to cut health care spending to address the deficit, that would be the wrong move at a time when health services are under tremendous strain. There are many opportunities for the government to spend smarter and invest in services that can both help contain health care spending while also improving access and outcomes.
Primary health care needs structural reform, not more money in doctors’ pockets
“Primary care” refers to the first point of contact between users and the health care system—where the majority of health problems are identified, treated and where other health and social care services can be mobilized and coordinated to prevent illness and support wellness. In BC, most primary care services are delivered in the clinics of family doctors who work as independent contractors running small businesses.
“Primary health care,” on the other hand, refers to a broader system-wide approach to designing health services— one based on primary care as the first point of contact. Good policy design focuses on addressing the socio-economic determinants of health and reducing avoidable disparities between different groups in society.
A large body of evidence demonstrates that primary care is the foundation of an effective, efficient and high-performing health care system. A growing body of evidence in BC and Canada shows that the dominant primary care model of doctors working as as small business owners is no longer delivering the access that Canadians need – a structural overhaul is required.
In 2023, the BC government established a new way to pay family doctors called the Longitudinal Family Physician (LFP) payment model. This payment model combines payment for time and volume of services performed and was created in response to concerns over fee-for-service payment. When it was established, the LFP model was estimated to increase family doctor compensation by at least 50 per cent, despite the fact that physicians in BC and Canada are among the most generously compensated in the OECD. In 2023, average payments to BC family physicians totaled $322,000.
At the time, researchers expressed concerns that while the LFP would increase the income of family doctors, it could actually reduce access to primary care services. With sudden increases in pay, doctors typically maintain or increase their income while working less. In economic terms, this is called the target income hypothesis.
New data suggests that the significant increase in provincial spending on physicians in the first year of the LFP—up 17 per cent from $5.7 billion to $6.7 billion—is contributing to declining primary care access in the province (Figure 1). This includes spending on all physician payments, not only for family physicians. In the year after LFP implementation (2022 to 2023), the share of BC residents with a regular family doctor declined from 75 to 69 per cent, according to the Statistics Canada’s Canadian Community Health Survey.
The rapid growth of provincial spending on physicians risks crowding out other health care spending priorities. According to data from the Canadian Institute for Health Information, provincial spending growth on physicians in 2023 outpaced spending growth in long-term care (nine per cent), hospitals (15 per cent), and home and community care (16 per cent). This comes as BC reports more family physicians per capita between 2020 and 2024—increasing from 133 to 138 per 100,000 people.
Advocates of the LFP model, including the provincial government, argue that it has helped revitalize primary care and attract new interest in family medicine practice. This is not in dispute. However, the unintended consequences of such a rapid increase in physician pay need to be evaluated in policy terms: Is such a significant increase in physician pay justified by a commensurate increase in access?
The evidence says no. Despite the growing number of family physicians per capita, the proportion of British Columbians with access to a family doctor is actually shrinking, as Figure 1 below makes clear.
While it will be important to analyze additional years of data to validate this trend, the available data already suggest that the provincial government needs to rethink its approach to primary care reform. Simply increasing physician pay, absent structural changes to primary care organization, isn’t delivering results for British Columbians—and it comes at a hefty cost.
Expand evidence-based primary care models to increase access
From the standpoint of public finances, it is not fiscally prudent for the provincial government to continue such large spending increases on physician services while receiving less access to primary care in return. The LFP payment model needs to be redesigned to better meet the health care needs of the province—and in a fiscally responsible manner.
The LFP maintains the current business model of primary care delivery: doctors working as independent contractors expected to run small businesses. As long as BC continues to put its chips in that pot, the province risks declining access and corporatization of primary care. Survey evidence shows that a new generation of family physicians—an increasingly feminized workforce—want what most workers expect in their employment relationship: the ability to take parental leave, have sick leave and a pension, and an organizational structure that reduces administrative burden and facilitates team-based care.
Based on a large body of previous research, the BC government needs to expand non-profit primary care models, like Community Health Centres, that address the socio-economic determinants of health and provide better access for patients to a multiprofessional team. It’s also the model that British Columbians want. In a context of fiscal pressure, it would be prudent for the provincial government to expand non-profit primary care models that offer multiprofessional team-based care and attractive workplaces for physicians and health professionals.
