Southeastern Ontario Academic Medical Organization

SEAMO Backgrounder

(This FAQ is also available for downloading as a PDF.)


What is the Alternative Funding Plan for academic medicine at Queen's University?

In July 1994, Queen's University, its principal teaching hospitals (Kingston General Hospital, Hotel Dieu Hospital and Providence Care) and the Clinical Teachers' Association of Queen's University entered into a funding agreement with the Ontario Ministry of Health and the Ontario Medical Association. Under this agreement funding is provided for physicians' services to include the full mission of an academic health sciences centre: clinical services, education of health professionals, and research into health and health care.

Alternative funding replaced funds from a wide variety of government sources. These included: fee-for-service billings, the Clinical Education Budget support for faculty, existing alternative payment plans, t-fees, and other sources of funding.

The original contract was for five years. On July 1st 1999, the contract was amended and extended for a further eighteen months. A further three month extension allowed for completion of negotiations for a new multiyear agreement. On March 8th 2001, the five SEAMO member organizations, the Ontario Ministry of Health, and the Ontario Medical Association ratified a new four year Agreement.

Effective April 1st 2005, SEAMO entered into a new funding agreement with the Ontario Ministry of Health and Long-Term Care and the Ontario Medical Association. This new agreement introduced fundamental changes to how SEAMO was funded. In particular, the new Agreement blurs the distinction between Alternative Payment and Alternative Funding.

How does an Alternative Funding Plan differ from an Alternative Payment Plan?

An Alternative Funding Plan (AFP) and an Alternative Payment Plan (APP) are not the same thing. An Alternative Payment Plan is another mechanism for paying physicians. Generally speaking, alternative payment buys physicians' services either as FTE's, numbers of hours, or sessional payments. That is, funding under an alternative payment plan pays for physician inputs.

An Alternative Funding Plan provides funds for the purchase of deliverables. These could include care for a defined number of persons (capitation), defined quality of care, population health, or other measures of health system output.

The new funding agreement provides significant base funding for the organization. This base was set at 102% of the previous year’s funding level. Significant additional funds are available and are tied to “shadow billing”. By introducing payment tied to fee-for-service, a hybrid of Alternative Funding and Alternative Payment was created.