The 2000 Agreement between the Ontario Medical Association (OMA) and the Ministry of Health and Long-Term Care (MOHLTC) provided for the creation of Alternate Funding Plans (AFPs) for Academic Health Science Centre (AHSC) physicians in Toronto, London, Ottawa and Hamilton. $75M in new annual base funding was invested as part of the 2000 Agreement to stabilize access to physicians in these AHSCs. Kingston had already established an AFP under the governance of the South Eastern Academic Medical Organization (SEAMO). AHSCs are an alliance between hospitals, university and medical staff that are both referral centres and centres of excellence in specialized clinical services; they teach medical students and they conduct medical research.

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.

The 2002 Report of the Provincial Working Group : Alternative Funding Plans for Academic Health Science Centres provides historical context on Alternate Funding Plans and articulates the rationale for creating special arrangements for AHSCs, including :

• AHSCs are facing recruitment and retention challenges for increasingly scarce academic physicians;
• Changes in the Ontario Health Insurance Plan and hospital restructuring have altered the range of services that academic physicians provide in teaching hospitals and consequently have altered the potential for generating revenue; and
• Ontario's AHSCs compete in an international market for highly skilled and educated academic physicians.

A three-phased implementation approach was determined to be the most reasonable way to move the AHSC AFP initiative forward. By late Fall 2003 and early Spring 2004, all thirteen participating sites had signed Phase I AHSC AFP Agreements, covering nearly 3000 AHSC physicians in Toronto, London, Ottawa and Hamilton. For more information on Phase I of the AHSC AFP project, please refer to the Phase I Archives.

Through the 2004 Physician Services Agreement, the OMA and MOHLTC agreed to make $150M ("New Investment") in additional new funding available to the AHSC AFPs. The funding will be made available beginning in 2006/07, following the development of an appropriate allocation methodology and a common AHSC AFP template.

The Evaluation of Ontario Academic Health Science Centres Alternative Funding Program (Phase I) report released in March 2004 revealed an overwhelming interest on the part of the clinical leadership, the Universities and the Hospitals in moving to a full AFP rather than moving through the intermediate step of a 50% conversion that had been recommended for Phase II. The primary objective of Phase I was to begin the process of stabilization. While Phase I was only an introductory plan, with partial funding, it succeeded in moving towards this objective. Governance structures were established, the special needs of AHSCs were recognized, AHSC clinicians began receiving compensation for their academic and special clinical activities and an environment conducive to further negotiations that could lead to a mature AFP was created. A commitment was made by the OMA and MOHLTC to move forward with Phase III.

In December 2004, the AHSC AFP Task Force was established to advise on the development of a common AHSC AFP Template and the allocation methodology for the New Investment. The Task Force is chaired by Mr. Graham W.S. Scott, C.M., Q.C., and comprised of members representing academic physicians, teaching hospitals, universities, the Ontario Medical Association and the Ministry of Health and Long-Term Care.

The AHSC AFP Task Force meets monthly and will work with Expert Panels and ad hoc working groups to develop recommendations for a final AHSC AFP Agreement.

June 2006

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