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Why financial incentives aren’t enough to deal with health-care staffing shortages


As many provinces and territories deal with health-care worker shortages and overcrowded emergency departments, politicians are turning to financial incentives to keep or recruit staff. 

In the last seven months, at least five provinces have announced retention bonuses of tens of thousands or other recruitment perks to keep or attract doctors and nurses.

But is financial compensation the right recruitment tool?

Some researchers and recruiters say based on studies and their own experience, one-time financial incentives aren’t effective enough at keeping health-care workers in their jobs. 

“Financial incentives have always been, and will continue to be, Band-Aid solutions,” said Maria Mathews, a professor in the family medicine department at Western University in London, Ont.

Nurses’ unions and national health leaders have said that financial incentives are just one piece of the puzzle needed to fix the ongoing strain on health care.

Working conditions, wages and the long hours are all things that need to be addressed, they’ve said

“What’s important for these physicians and nurses? In 2022, it’s quality of life,” said David Este, professor emeritus of social work at University of Calgary, who has studied the issue.

“If they are working in hospitals that are chronically understaffed … and those working conditions are sustained over a long period, I don’t think that financial incentives have the ability to deal with the nature of a work environment.”

Why financial incentives are the go-to

Provincial and territorial governments have relied on financial incentives for decades, according to a 2015 study which Mathews co-authored. These incentives vary from province to province, and they also vary based on the specific role and the need in the area. 

Ontario, Alberta, Newfoundland, Nova Scotia and P.E.I. are the most recent provinces to announce some type of financial compensation for new or existing family doctors or nurses.

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It’s a move Mathews has seen many times before, adding that politicians turn to financial incentives because it can be given relatively quickly.

“The problem isn’t going to be solved just by giving people financial incentives. Because if that was the case, we wouldn’t be losing nurses,” added Este. 

And there are marked differences across the compensation initiatives recently announced by provincial governments and funded by taxpayers. 

Earlier this month, Registered Nurses’ Union N.L. president Yvette Coffey and Newfoundland and Labrador Premier Andrew Furey announced new measures aimed at retaining nurses. (Ted Dillon/CBC)

Ontario and Newfoundland and Labrador’s retention bonuses for nurses were announced to keep existing staff. That differs from the new money for family doctors who set up in rural communities recently announced in Alberta, P.E.I. and Nova Scotia

“I think the governments, both provincially and federally, are looking for an immediate solution because the need is immediate,” said Dr. Vesta Michelle Warren, president of the Alberta Medical Association and a family doctor in Sundre, Alta.

Can financial incentives help?

There are many reasons why hospitals are feeling an additional strain, causing them to shut down or forcing patients to wait for hours. Experts have said one of those reasons is that those without a family doctor are adding to the long waits at hospitals across the country. 

Last month, about 25 per cent of patients who went to the emergency rooms of Richmond Hill and Cortellucci Vaughan hospitals north of Toronto did not have a family doctor, according to Dr. David Rauchwerger, medical director of the Mackenzie Health emergency department.

That’s vastly higher than the five per cent figure pre-pandemic, he said. 

Offering better work-life balance and helping employees feel connected to communities often rank higher for health professionals in deciding whether to stay or leave, studies across Canada have shown. (Nathan Denette/The Canadian Press)

Politicians in Alberta and Nova Scotia are hoping their newly announced bonuses and other recruitment efforts will entice doctors and specialists to work in predominantly rural or underserved areas. P.E.I. officials broadened their incentives to include family doctors or some specialists who take jobs anywhere in the province. 

In studies done in Canada since the 1990s, recruitment bonuses are often cited as being not as important as other areas – like workplace conditions and community amenities – to physicians.

Researchers who conducted a 2019 study into retention interviewed 91 Alberta doctors, administrators, community members and spouses — and they found that health-care professionals ranked financial incentives as only “moderately important” for recruitment and not at all important for keeping a doctor in a community.   

Almost five million Canadians are without a family doctor. That’s one of the factors contributing to the strain on emergency rooms. (David Donnelly/Radio-Canada)

In contrast, community members ranked incentives a high rating for attracting doctors. 

That echoes the findings of a 1999 study, which said that despite “widespread deployment,” there is little evidence that financial-based approaches are particularly effective.

Another common practice in many provinces and territories is what is known as a return-of-service agreement or grant, typically offered to new grads or internationally trained doctors to help offset some of their training or other costs, experts said. 

That’s often when an individual signs an agreement to go and work in a community for anywhere from one to three years in most provinces, Mathews said. 

She’s looked at Newfoundland and Labrador’s return-of-service agreement data and says those agreements may get people to under-served areas, but the agreements don’t “keep people in those communities.”

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In some cases, doctors paid out of their contracts to leave the community. That’s what another team of researchers found happened in 1999 in other provinces like Saskatchewan and Quebec.

“Financial incentives will only go so far in recruiting and retaining people,” Mathews said.

Getting doctors and other health-care workers to stay in the community is something Cold Lake, Alta., Mayor Craig Copeland knows well. 

Since he was elected in 2007, the community northeast of Edmonton has struggled to recruit doctors to the area. The area has needed about five to six doctors for several years now, he said. 

To get them to the community, the city currently offers $20,000 and pays the interest on a $50,000 line of credit for doctors if they agree to work in Cold Lake.

“You got to pay to play, unfortunately,” Copeland said.

Access to data on financial incentives and retention programs should be better shared with academics and those studying the issue, said Mathews, as it’s quite limited. 

Bryan MacLean, who recruits doctors for Northern Medical Services at University of Saskatchewan and has been a recruiter for years, said he and colleagues are trying to gather that “siloed” information on recruitment and retention programs so the data can be better accessed.

But based on what he’s seen, doctors will work in a community, fulfil their service commitment and then move on. 

“There needs to be more emphasis on the retention issues from the government,” he said. 

Dr. Vesta Michelle Warren is the president of the Alberta Medical Association. She says it wasn’t the signing bonus that kept her in Sundre, Alta., but the community lifestyle and working conditions. (Alberta Medical Association)

Warren said bonuses can help. But the president of the Alberta Medical Association said she and other colleagues often value other factors more — like community fit, whether their spouse can find a job and whether they have a good work environment and team. 

“I stayed in a centre not because of that three-year bonus, but because it was a really good fit for my family, for my children, for me on a professional basis,” Warren said of her return-of-service contract signed in 1999. 

Nurses in Ontario echoed a similar statement after the $5,000 pay bonus was announced by the Ford government earlier this year. Many nurses and union representatives said it won’t be enough to keep them on the job. 

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“While you’re promising up to [$5,000] for nurses, what they really want is the support to do their jobs well and to do them safely,” read a joint letter filed by four unions at the time.

The other solutions

Health leaders, nurses and doctors have called for specific changes to address what’s happening in hospitals, clinics and in family doctors’ offices. 

Getting more health-care staff, whether that be family doctors, nurses or other workers, is essential, many said. 

MacLean and Warren agree that bringing in more physician assistants or nurse practitioners could create more team-based care. 

Warren also said that looking at bringing back Canadian students who trained at international medical schools is another option. 

And if governments are serious about retention bonuses, Mathews said they should offer them to other health-care workers too. 

“If we don’t have the clerks and if we don’t have good lab techs, we aren’t able to provide care,” she said.


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