Physician Compensation Explained

Canadian doctors get compensated in a variety of different ways. Depending on how you practice medicine (and where), your income may be variable and complex.

About 70% of doctors in Canada work under a fee-for-service (FFS) model. Some may receive a salary, while others get reimbursed under new alternative plans. 

These models can also differ between provinces and territories.

Knowing how you'll be paid as a physician is important as you weigh your career and practice options. 

Below we cover four common payment models for healthcare services:

Fee-for-service (FFS)

In a traditional fee-for-service model, a doctor is essentially a small business. They operate as a self-employed professional and submit 'invoices' of who they saw and what they did for payment. 

A province's ministry of health then reimburses them through the provincial health insurance plan. Worker's compensation boards and federal government departments pay for their related insured services.

While fee-for-service works in a similar way across the country, each province has a different list of fees for services. The services and procedures that doctors may provide are outlined in these documents.

Enhanced fee-for-service

Most provinces and territories offer bonuses to the existing fee-for-service fee schedule.  These enhancements include extra incentives for services like complex and chronic disease management, work in rural areas and providing care to special-needs populations. 

In British Columbia for example, the Family Practice Incentive Program is designed to:

"encourage coordinated, longitudinal care by supporting and providing guideline-informed care in such areas as chronic disease management, maternity care, mental health, and care for the frail and elderly."

Alternative payment plans (APP)

Some provinces are now using other ways to compensate physicians. Increasingly popular are the various alternative payment plan (APP) models. They may also be referred to as “alternative funding plans” or “new payment models”.

While they vary widely, APPs are generally made up of a combination of:

  • Fees for clinical services
  • Time-based payments
  • Rewards for participation in specific clinical initiatives
  • Population or capitation funding
  • Payment for admin costs
  • Bonuses for achieving specific targets

Salary

Some doctors also receive a regular salary, which is usually paid in 'time-based payments'. These can vary from simple annual salaries to shift stipends, sessional payments or hourly rates.

Physicians at academic institutions, community health centres or hospitals may work under this model. Although in general, only a small number of physicians work under a fixed salary.