Physician Remuneration in Canada: Fee for Service vs. AFP Explained

If you’re a resident or fellow about to start practice in Canada, you’ve probably heard attendings throw around “fee for service” or “AFP” … without anyone actually explaining what they mean. But since it’ll be your income, it’s kinda critical to understand.

Understanding physician remuneration in Canada won’t just help you ask better questions during job interviews, it’ll shape how you think about your practice set up, your schedule, and yes, your income.

The Two Main Models for physician renumeration in Canada

In Canada, there are two primary publicly funded remuneration models (not getting into private income in this one): fee for service and the alternative funding plan (AFP), sometimes loosely called a salary model (FYI – some provinces have slightly different names for this).

The vast majority of us will land in one of these two. The model usually belongs to the group you’re joining – not something you pick yourself.

So the goal here isn’t to help you choose; it’s to help you understand what you’re walking into.

Fee for Service (FFS)

Fee for service is the most common model, especially for specialist physicians – though plenty of family docs work this way too.

The concept is straightforward: you bill the provincial system for each clinical activity you perform. Consultations, follow-ups, procedures – each has a standard rate for the province you work in. You submit codes through your EMR or directly through the provincial billing system, and that’s how you get paid.

The big upside? Your income is directly tied to how much you work. Want to earn more? See more patients. It gives you real flexibility to dial your practice up or down based on your goals.

The downside is the flip side of that same coin. When you don’t work, you don’t earn. Vacation weeks, holidays, slower case mixes – your income will fluctuate. For some physicians, that variability is stressful. For others, the control is worth it.

Alternative Funding Plans (AFP)

AFP models are more common in academic centres (for family physicians, the terminology is often longitudinal funding model or similar), and they work differently. Instead of billing directly for every encounter, you’re paid a set amount as long as you’re meeting clinical deliverables (typically a minimum threshold of clinical work).

Most physicians in AFP models still shadow bill (ie you still submit billing codes for each clinical visit/procedure), but there’re used to track activity rather than directly generate income.

A big appeal here is predictability and stability. You know what you’re earning. Vacation weeks don’t change your pay cheque.

The trade-off is (potentially) less income flexibility. If you want to ramp up earnings by seeing more patients, you may not be able to – depending on the contract.

And what happens if you shadow bill above your threshold? That’s a critical question to ask any AFP group before you sign. There is variability and it is usually in the contract with the provincial health insurer – in some groups you keep billings above the threshold, in others it’s pooled and split among colleagues. You aren’t likely going to change how the group does this , but it’s worth knowing what happens.

So which model is better for physician renumeration in Canada?

Neither. Genuinely.

For physician remuneration in Canada there isn’t one “best” model. You may inherently lean one way or another based on your lifestyle, financial goals, and how you want to practice, but your job will likely either be set up as FFS or AFP.

What matters is that you understand the model before you accept the job – so you work most effectively within that model to set up your practice, your finances, and your life accordingly.