Robert HA. Haslam MD, FRCPC*

SummaryThe flISt alternative funding plan (AFP) involving a large

academic department in Canada was negotiated in 1990 by thedepartment of pediatrics, University of Toronto, the Hospital forSick Children and the OntaIio Ministry of Health. During theintervening six years, there have been changes in the Canadianhealth-care system due to economic and environmental issuesthat threaten the livelihood of faculties of medicine.This article explores an AFP's impact on academic produc-

tivity, and the trends in patient-care that have resulted since itsintroduction. The AFP's strengths and weaknesses are high-lighted from a departmental chairman's perspective.

ResumeLe premier plan de financement optionnel (PFO) d'un gros

departement universitaire a ete negocie au Canada en 1990 par

Ie departement de pediatrie de 1'Universite de Toronto, 1'-

Hospital for Sick Children et le.~stre de la Sante de l' Ontario.

Toutefois, durant les six annees qui ant suivi, les regimes

d' assurance-maladie du Canada ont subi de profonds boulever-

sements, qui sont attribuables a des facteurs tant economiques

que sociologiques et qui menacent la vitalite des facultes de

medecine.

Le present article fait etat de l'incidence de ce PFO sur la

productivite intellectuelle ainsi que des tendances qui ontresulte

de sa mise en place sur les soins aux malades. Les bODS cOtes et

les faiblesses du PFO sont examines ici par Ie directeur du

departement qui en a fait l' experience.

credited by The Royal College of Physicians and Surgeons ofCanada.

An account of the negotiations leading to the department's AFPand its subsequent organization has been published! This reportwill highlight the department's experiences with an AFP duringthe past six years, and will try to identify the strengths andweaknesses of the plan in an academic setting.

Has the AFP Provided Financial Stability?At th~ tim~ of th~ agreement, the contract stipulated an annual

cost-of-living adjustment according to the fonnula ¥sxA+'l/sxB,where A represents the percentage by which the amountsprescribed in the schedule of benefits for pediatric servicesrendered in the previous fiscal year are increased for the fiscalyear in which the monthly payments are made, and B representsthe percentage by which the hospital's global budgets for theprevious fiscal year are increased by the Ministry for the fiscalyear in which the monthly payments are made. During 1991-1992 and 1992-1993, the department was given a modest in-crease in funding as per the negotiated agreement with theMinistry of Health. In 1993-1994, however, the government ofOntario introduced the "social contract," reducing the AFPdepartmental budget by 4.4 per cent, which was passed on to allfaculty members. Thus, salaries have remained static since thesigning of the AFP agreement in 1990, and there may be morecuts in the future.

IntroductionOn April 1, 1990, the department of pediatrics signed an

altem~tive funding plan (AFP) agreement with the Ontario Min-istry of Health, the University of Toronto and the Hospital forSick Children. Before the agreement, the department relied onfunding sources such as the University of Toronto, the Hospitalfor Sick Children's global budget and the Research Institute,external funding agencies and billing from the Ontario HealthInsurance Plan (OIllP). The latter accounted for 63 per cent ofthe department's total budget before AFP negotiations.The department of pediatrics has focused on the development

of academic programs to enrich teaching and research. Accord-ingly, faculty members devoted approximately 50 per cent oftime to patient-care and the remainder to research (30 per cent)and teaching (20 per cent). Before the AFP, earnings from 01flPbilling supported a significant proportion of the department'steaching and research activities, in a situation similar to that ofother academic departments in Canada. Furthermore, the salariesof faculty members had ceilings that were among the lowestwhen compared with other departments of pediatrics across the

country.To add to its financial dilemma, the department was receiving

decreased funding from the university and the Hospital for SickChildren and the Research Institute's budgets. In addition, thecapability to increase patient-billing to OJ;ilP was limited, as thediscipline of pediatrics is among the lower earning specialties.The department of pediatrics is composed of III geographic

full-time (GFr) faculty members organized into 21 divisions.Many of the 117 part-time (PT) pediatricians and 24 PhD ap-pointees contribute to patient-care and teaching. The generalpediatric program and 13 subspecialty programs are fully ac-

.Professor and chairmil1l, department ofpedialrics, University of Toronto .Addressfor reprints: R.H.A. Haslam, Pediarrician-in-chiej; Hospiralfor Sick Children,

555 University Ave., Toronto ON M5G lX8.

Annals RCPSC. Vol. 29. No.4. June 1996 219

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FigIIn 2. PatieIIl-day.r for the pedj(ltric progrwns Jaaw ~from 1988-1989 levels. 11Iir trend ~ the .rhilt t1wardr am.bulatory care.F;,un 1. 77ae number of hospital aIlmissions by the department of

pediatrics has nmained constant since the introdJICdon of 1M AFP. decrease in emergency visits (Figure 3), there bas been a 20 percent ~ in subspecialty clinic visits since the ~entered the AFP agreement (Figure 4). These data indicate d1atthe department of pediatrics bas mainmined a commitment to ~care of patients with continuously increasing acuity, whileIOOmg to greaIer participation in ambulatory ~ a directionin ~ with the hospital's strategic plan.

In the recent past, the departments of pediatrics at DalhousieaOO Ottawa have negotiated AFP plans, aOO die cJinical facul~membezs at Queen's University have organized a similar plan.In ~h case, the motive for agreement to an AFP was toencourage finaJx:ial stability and to develop new methods of~ medicine in an aca~.mic setting. Unfortunately, thecurrent economic climate has not allowed ~w plans to increased1eir funding base from OFnP billing, so several &paI1IDents anduniversities have been reticent to enter an AFP'

Patient-BillingTable 1 shows that there bas been a 14 per cent iDCIease in

billiD& (with a coIx:Omi taut six per cent decrease in faculty) since1989. which parallels the ~h3Dced patient-activity.

What About the Department's Productivity?Some critics of AFPs predicted that the deparbDent of

pediatrics's "productivity" would be compromised; and thatpalient-care might be si':rificed in favcr of teaCtIiDg and research.Because the department of pediabics is required to "shadow bill"(die recording of ea(:b palient-cootact as if it were to be billed toOInP) by the AFP agreement, we can provide data on ~ annualOHIP billing before 1990 and shadow billing infom1atioo sub-sequent to d1e initiation of the plan.

Patient-ActivityFigure 1 shows the ~t of pediatrics's total OOspital

admissions starting in 1991. Except for a decrease in 1992, thetotal nUIDbeI' of admissions bas oot si&nificantly changed ~die AFP's iDCeption. Figure 2 indicates that tbcre bas been a dropin patient-days from 68,(XX) in 1989-1990 to S2,(XX) in 1994 duemainly to a significant decrease in 1enath of stay and a shift to~ ambu1atory setting. During most of this period, !be acuitylevel of pediatric patients h!S risen as compared with otherHospital for Sick Cbildre~ patients (for example, critical care,psychiatric and surgical patients). Although there bas been a

EducationDuring the past five years, the <kpaltment of pediatrics bas

become more involved in undergraduate eaucation. A new cur-riculum was introduced by the faculty of Inedicine in 1992. aMthe department played an important role in the desiill of severalnew multidisciplinary courses. Also in 1992, the clinicalclerkship in pediatrics was extended from four to six weeks,which has pennitted the introduction of se'Yeral unique learningexperiences, all highly rated by medical students. Ten years ago,ooly a few University of Toronto stlMJents awlied for a pediatricresidency position. In 1991, there were 32 University of TorontosnIdeDts who awlied (13 per cent of die class), but in 1994, dienumber bad risen to 52 students or 20 per cent of the graduatiniclass. The AFP enables faculty members to devote m<Xe time 10undergraduate education, which might ~lain the increased~ in pediatrics by University of Toronto graduateS.

Starting in 1984, the University of Tcxonto's grad~ng stu-dents did not ~ well in die pediatric compooent of die MedicalComx:il of Canada qualifying eXaminAtions (MCCQE) as com-pared with d1e national average. Starlin, in 1990, mere bas beenan improvement in the perfOrmaIx:e of University of Toronto

FiKIIn 3. 11Ien has been a decrease bI eme,.,ency virit.r to 1MHospital for Sick Children, due to 1M utabli.rhmelll of oNveialpediatric ~-in clinics in the city.

TABLE 1DEPARTMENT OF PEDIATRICS'S PATIENT-BILLINGNumber of pediatricians

Geographic full-time Part-time Total104 139 243109 144 253103 144 247104 142 246105 130 235105 124 229111 117 228

Year Amount billed $

1989199019911992199319941995

8,405,829.558,727,877.109,448,202.28

10,031,861.51

9,696,996.709,633,513.979,594,640.77

The AFP was introduced in April, 1990~

funding is accounted for by a significant increase in the numberof awards per investigator (198 to 298), which may be due toincreasing collaboration by principal investigators and to amilieu conducive to producti\le research. Another reason for thegreater number of awards p:er investigator is the fact that toprotect against budget cuts, researchers are forced to seek addi-tional grants. Figure 7 highlights the department of pediatrics'sfunding profile over a nine-year period.

studentS:..in part one of the MCCQE (Figure 5), and from 1991 to1994, the mean scores have exceeded the Canadian mean. Al-though performance may be indirectly related to improved teach-ing, renewed faculty interest may have played a role.The department of pediatrics was surveyed by The Royal

College of Physicians and Surgeons in April 1995. Thepostgraduate program was given full approval with high ratingsfor resident teaching, counselling and support. The fellowshipand subspecialty programs continue to flourish, attractingtrainees from around the world.

PublicationsFigure 6 is a summary of peer-reviewed publications by faculty

members of the department of pediatrics. Multi-authored paperswere not tabulated, except for the senior author. There has beenan increase in publications since 1986-1987, with an average of4.8 peer-reviewed publications per faculty member in 1994-1995. In addition, several faculty members were authors ofhighly respected books and guest editorials during this time, andespecially since the introduction of the AFP in 199£).

Research FundingTable 2 provides an overview of research funding by the

department of pediatrics for the past nine years. Indirect costs,such as overhead, are excluded, and the research funding infor-mation relates to principal investigators only. Grants for servicecontracts or specific research "donations" to individual inves-tigators are excluded. The level of research funding has con-tinued to increase since the AFP's introduction. The enhanced

Academic ProductivityTo gauge academic productivity, an institutional citation study

was conducted comparing the department of pediatrics, Univer-sity of Toronto with a U.s. department of a similar size,Washington University at St Louis. On contacting the researchdepartment at the Institute for Scientific Information in Philadel-phia, it was found that the cost to conduct such a study wasprohibitive. Thus, a "miniature study" was done to comparecitation counts of published papers by the two departments ofpediatrics. WashiDgton was chosen as it has a highly regardeddepartment of pediatrics, iIild is consi*ntIy ranked among thetop academic programs in the U.S. Furthermore, its departmentof pediatrics does not participate in an AFP, but relies on tradi-tional methods for budget support, including funds den ved fromexternal granting agencies and fee-for-service billing.

It was arbitrarily decided to limit the citation search to .thecalendar year 1992. This decision was based mainly on tworequirements; enough time after the AFP's introduction toToronto's department of pediatrics, balanced by an acceptabletime-frame for a publication to be cited. Because of the workinvolved, the review was confined to the first author of eachpublication. It was assumed that each institution would tend toorganize the order of authors in a similar fashion, recognizingthat senior authors are often listed last All full-time faculty,

5405T 530

I ~I ~ 5Z0

I ~ 510

S 500C

~ 490E

480

470

YEAR OF EXAMINATION

~

94

-Toronto

-AU Can2da

Figure 5. Medical Council of Canada qualifying examinations(MCCQE)part 1 pediatric results: 1980-1994 UniversiryofTorontoand all Canadian mean scores.

Figure 6. The department of pediatrics publication productivity hasnot been adversely affected by the AFP.

Annals RCPSC, Vol. 29, No.4, June 1996 221

L

TABLE 2RESEARCH FUNDING

Research funding ($ per year) Number of awards per year Principal investigators with

research fundsFunds ($ perprincipalinvestigator)96,293

100,325118,145121,103125,691126,128134,269145,246167,341

1986-19871987-19881988-19891989-19901990-19911991-19921992-19931993-19941994-1995

7,510.9198,026.0478,979.0399.203,8259,552.542

10.216,37511.547,14712,055.44213,219,996

198235224223228249

295274298

788076767681868379

including PhD members with a primary appoinlment in thedeparlment of pediatrics, were included in the review (Toron-10=140; and Washington=100). Each name was entered into thescience citation index file with the Dialog system. The Univer-sity of Toronto password was used to enter the system. Eachname and initials were double-checked against those in theMedline system. In addition, the number of fIrst authors, and theinstitution and city of the author were verified. Unfortunately,the system only reported articles that had been cited so that itwas impossible to detennine the total number published byWashington authors in 1992, and to develop the degree ofimpact Table 3 presents the citation data, and shows the impactof research publications for each deparlment of pediatrics in1992. The impact of published articles by investigators in Toron-to and Washington was similar, and represents a high level ofacademic productivity. A follow-up study in five to 10 yearswould be of interest

Strengths and Weaknesses of the AFPThe AFP has given some fmancial stAbility to the department

of pediatrics. This has pemritted faculty members to estAblish

new methods of patient-care and be productive members of the

academic community.

A specified envelope of funds has encouraged the reordering

of priorities in the department of pediatrics, including the par-

ticipation by many divisions in regular consultAtions with north-

ern communities, an emphasis on day-care rather than

hospitalization, the provision o! a modest teaching stipend to PT

faculty members and the estA~lishment of an infrastructure to

support undergraduate, postgraduate and continuing medical

education. Furthermore, to date, the AFP has n~t been subjectedto "clawbacks" by the government.But there are drawbacks. The first negative, as seen by some,

is the fact that the department is subject to more government

control under an AFP. Others would argue that autonomy waslost by physicians years ago, starting with the introduction ofuniversal medical coverage, which has had such a positiveimpact on patient-care in Canada. An AFP causes a departmentto be "locked-in," as the agreement states that physicians in theplan must not bill ORJP. On the other hand, it is unlikely that thedepartment of pediatrics would have entered the plan in 19!)O, ifthe capability existed to secure adequatce funds by billing ORJP

., to support the faculty. The requirern~nt to shadow bill is time-

consuming and expensive. Although the government needs as-surance that the "job is getting'done," it is unfortunate that thefunds to support shadow billing cannot be used more productive-ly. The department of pediatrics's AFP lacks a dispute resolutionmechanism, but the agreement does include an opt-out clause.One drawback of a long-tenD AFP is the inability to reconcileshifts in patient-activity. For example, the department of

pediatrics began treating several years ago more children whoneed bone-marrow transplantation, than it did when the agree-ment was signed. The bureaucracy is slow at times; for example,the department of pediatrics has had three six-month extensionssince the initial contract expired on April 1, 1995.

There are concerns about the long-tenD consequences of doingmore, or even maintaining the status quo, with less funding fromthe provincial government. The department <;>f pediatrics's AFP ,howev~r, has been advantageous for the faculty and the patientstreated at the Hospital for Sick Children and in the community.

References -1. Haslam RHA. Walker NE. Alternative funding plans; is there a place in

academic medicine? Can Med Assoc J 1993;148(7):1141-6.2. Thome S. Queen's approves alternative funding arrangement. Can Med

AssocJ 1994;151(11):1637-8.Received December 5, 1995Revised version accepted March 26, 1996

TABLE 3IMPACT OF RESEARCH

BY DEPARTMENTCited papers Citations Impact53 340 6.42

109 739 .6.78

UniversityWashingtonToronto

Figure 7. There has been a significant increase in research fundingby the department of pediatrics, which has escalated since theintroduction of the AFP.

222 Annales CRMCC, volume 29. numero 4, juin 1996