-
01 December 2025 | Policy Analysis
Quebec’s new capitation model to improve access to care -
01 February 2023 | Policy Analysis
New physician payment model in British Columbia
3.7. Payment mechanisms
On 25 October 2025, Quebec enacted Bill 2: An Act mainly to establish collective responsibility with respect to improvement of access to medical services and to ensure continuity of provision of those services. The legislation introduces a fundamental shift in how physicians are remunerated, marking a move away from the traditional fee-for-service model toward a capitation model. The reform aims to improve access to primary care, reduce wait times and enhance accountability within the province’s publicly funded health system.
Under Bill 2, family physicians will receive a fixed, prospective payment per patient assigned to their practice, rather than being reimbursed per visit or service delivered. This payment will be risk-adjusted based on patient vulnerability, using four categories: healthy, minor chronic condition, moderate chronic condition, and major chronic condition. Physicians caring for patients with higher health needs will therefore receive higher capitation rates. The legislation also introduces performance-based targets tied to clinical outcomes and access measures, including the percentage of surgeries completed within prescribed timelines. A portion of physician compensation will depend on collective success in meeting these government-defined objectives.
The bill further establishes mechanisms for monitoring compliance and imposes penalties on any concerted actions that disrupt the provision of medical services, such as coordinated slowdowns or refusals to take on patients. These provisions seek to discourage physician migration to the private sector or other provinces, a growing concern amid workforce shortages.
Criticism and concerns from physicians and associations
According to Professor Olivier Jacques of the Université de Montréal’s Department of Health Policy, Management and Evaluation, the Bill’s attention to patient vulnerability represents an important advancement. However, he cautions that capitation alone may not sufficiently incentivize physicians to see more patients or increase their availability, underscoring the need for complementary measures that address practice organization and resource support.
La Fédération des médecins omnipraticiens du Québec (FMOQ), representing the province’s general practitioners, has strongly criticized the legislation. The FMOQ argues that performance-based remuneration cannot resolve the systemic issues driving inequitable access to care, including the administrative burden on physicians, regional disparities and inadequate primary care infrastructure. The federation warns that the new accountability model risks worsening the physician shortage, noting that more than 100 doctors have reportedly begun the process of applying for licensure in other provinces, including Ontario and New Brunswick. Critics also contend that by focusing heavily on numerical targets, the reform may inadvertently prioritize quantity of care over quality and continuity, while further eroding physician morale and well-being.
Opponents have also expressed concern that Bill 2 disregards physicians’ broader professional contributions, such as teaching, mentoring, research and leadership within health institutions. Both the federations representing general practitioners and medical specialists have signalled their intent to legally challenge the legislation, arguing it infringes on professional autonomy and individual liberties.
Implementation challenges and future outlook
The provisions of Bill 2 are scheduled to take effect on 1 January 2026. As implementation approaches, its success will depend not only on the financial mechanics of capitation but also on the system’s capacity to support primary care teams, manage performance fairly and sustain physician engagement amid a strained health workforce.
Authors
In British Columbia, a new physician payment model launched on 1 February 2023. Currently, more than 80% of physicians in the province are paid through fee-for-service (FFS) payments, which is one of the highest shares of FFS among primary care doctors in Canada (Canadian Institute for Health Information, 2022). The new model, referred to as the longitudinal family physician (LFP) payment model, provides an alternative to the current FFS scheme and incorporates:
- time spent with a patient;
- number of patients a doctor sees in a day;
- number of patients doctor supports in their office;
- complexity of patient issues;
- and administrative costs (Doctors of BC, 2022b).
The LFP payment model is intended to improve timely access to care in part by reducing the administrative burden on physicians (Government of British Columbia, 2023). Prior to the roll-out, physicians were not paid for additional time spent on activities such as reviewing results, paperwork, or updating patient records. The new model is also part of the broader Health Human Resources Strategy that focuses on recruiting, training, and retaining health care workers in the province (Government of British Columbia, 2023).
Through the LFP payment model, doctors will receive C$130 hourly rate and a C$25 per patient visit regardless of the time spent with a patient. For patients with medical complexities, doctors will now receive an annual one time-payment of at least C$34 per patient per year (Lavergne 2022). Time modifiers for patient complexity have been previously introduced in another province (Alberta), where physicians can bill an extra fee if a visit exceeded 15 minutes. However, the complex (time) payment modifier in Alberta received some backlash when the government proposed halving the rates for 15 minute visits from C$18 to C$9 (Government of Alberta, 2020). While the LFP payment model in BC aims to address access, there have been other concerns that the model would be unlikely to address major access to care problems such as the large number of patients who are unattached. To further address these issues, the Government of BC also announced the introduction of a digitized patient rostering system to be rolled out in Summer 2023 with the aim of identifying opportunities to attach patients to clinics and providers (Government of British Columbia, 2023).
The LFP payment model and the Physician Master Agreement between Doctors of BC and the BC Government’s Medical Services Commission received 94% acceptance from voting physicians in autumn 2022 (Doctors of BC, 2022b). The new model is consistent with recommendations made as part of member engagement with Doctors of BC, where the resulting report suggested a “blended model of salary and fee for service with time modifiers and incentives rewarding hard work” (Doctors of BC, 2022a).
Authors
References
Canadian Institute for Health Information (2022). Overview of physician payment and cost per service. https://www.cihi.ca/en/health-workforce-in-canada-in-focus-including-nurses-and-physicians/an-overview-of-physician
Doctors of BC (2022a). The Future of Primary Care: Doctors of BC Member Engagement 2022 – Member Feedback Report. https://www.doctorsofbc.ca/sites/default/files/primary_care_engagement_2022_-_final_report.pdf
Doctors of BC (2022b, December 6). Physician Master Agreement ratified by BC doctors. https://www.doctorsofbc.ca/news/physician-master-agreement-ratified-bc-doctors
Government of Alberta (2020). Complex modifier changes cancelled. https://www.alberta.ca/release.cfm?xID=69829247CBEE5-A8EE-5F97-CE8E11ADFF84FF4C
Government of British Columbia (2023). New payment model for physicians means better care for patients. https://news.gov.bc.ca/releases/2023HLTH0011-000127
Lavergne R., McCracken R., Hedden L., Contandriopoulos D., Longhurst A. (2022). Opinion: Increasing doctor pay in BC could help the shortage, but history suggests otherwise. https://www.theglobeandmail.com/opinion/article-increasing-doctor-pay-in-bc-could-help-the-shortage-but-history
3.7.1. Paying for health services
To the extent that hospitals are owned and operated by health authorities in Canada, there is no purchaser–provider split. In case of those hospitals that contract with health authorities – for example, all hospitals in Ontario and Catholic hospitals in Western Canada – most payments are generally made on the basis of the previous year’s allocation adjusted for inflation and budget growth. Thus, most hospitals’ operating costs are funded through global budgets, either directly (by ministries of health), or indirectly through budget allocations to health authorities. However, in recent years some jurisdictions in Canada have begun to experiment with alternative forms of funding mechanisms for hospital care. These include activity-based funding, with British Columbia being the first province to adopt an activity-based funding approach for hospitals (Sutherland et al., 2011) but this pilot was not scaled up, and the province subsequently reverted to global budgets. This funding reform in British Columbia led to a slight increase in the volume of inpatient surgeries performed with no impact on day surgeries or quality of care (Sutherland et al., 2016). Ontario has also experimented with activity-based funding for hospitals since 2012, but this has not been subject to a comprehensive evaluation to date. With regard to capital expenditures, such as the purchase and installation of diagnostics equipment, hospitals rely on a mix of funding sources including government and charitable donations (CIHI, 2019a).
LTC facilities are also paid on the basis of historical global budgets in most provinces, although in Alberta and Ontario there has been a move towards activity-based funding that adjusts per diem payments based on estimates of the complexity of the residents (Sutherland & Hellsten, 2017).
3.7.2. Paying health workers
Most non-physician health care personnel are paid a salary to work within hierarchically directed health organizations. Within this group, regulated nurses are the most numerous. Most nurse remuneration and conditions of work are negotiated through collective bargaining by nurses’ unions and province-wide employer organizations, often with provincial governments setting broad fiscal parameters. Nurse dissatisfaction with working conditions and stagnant remuneration during the provincial health reforms of the early to mid-1990s led to labour strife and rising sick leave by the latter part of the 1990s. Since that time, staffing levels climbed and nurse remuneration improved considerably as governments and health organizations attempted to recruit nurses in a tight labour market (CIHI, 2011). Health sector jobs (other than physicians) generally include comprehensive benefits (e.g. sick leave, pension) and extended health insurance (for prescription drugs, dental care) as a part of the compensation package.
The majority of physicians continue to be remunerated on the basis of FFS although it is important to distinguish between specialists and GPs, because payments for GPs have been gradually moving away from FFS to alternative payment methods. Specialists are mostly paid on a FFS basis, although there is some variation across provinces. For example, in Quebec, alternative payment structures made up about 20% of total payments to specialists in 2017–2018, compared with 19.5% in British Columbia and 37% in Saskatchewan (CIHI, 2019b). Alternative payments to FFS for specialists are still the exception to the rule, and may include hospital-based specialists who receive salaries.
Since GPs continue to provide the majority of primary care services in Canada, primary care reform has involved some shifts in payment systems. Provincial ministries of health have considered the advantages and disadvantages of FFS, capitation, salary and mixed payment systems. In addition, some ministries have also begun to implement pay for performance (P4P) incentives, group-based profit sharing and capitation payment systems (Léger, 2011; Peckham, Ho & Marchildon, 2018). However, these “alternative payment systems”, so-called in Canada because they pose an alternative to FFS systems, should not be seen as synonymous with primary care reform (Hutchison et al., 2011).
While most provinces have adopted some alternative forms of payment for GPs (e.g. through incentive-based bonuses to retain physicians in rural areas or compensate them for after-hours care), only in Ontario has funding reform been used as a lever for changing the role of GPs in primary care with capitation as the dominant payment model. Thus, while there appears to be some use of blended payment models across the country, there has not been a major shift away from FFS as the base payment models for GPs outside of Ontario (Marchildon & Hutchison, 2016). In 2017–2018, FFS payments made up 44.4% of GP payments in Ontario compared with 72.3% in Quebec and 81.8% in British Columbia (CIHI, 2019b).