Severance payments at health authority pushing $5 million

The former chief executive of the Saskatoon Health Region took home almost $1 million last year, more than half of which came in the form of a severance cheque worth $529,723.

Dan Florizone and three other health region heads who lost their jobs when the regions were officially amalgamated on December 4 collectively drew severances worth $2.2 million last year.

That brought the total severances paid by the new Saskatchewan Health Authority to 12 former health region executives to $4.6 million as of Dec. 4 — $500,000 more than its previous estimate.

In an interview, Saskatchewan Health Authority CEO Scott Livingstone said the total has since risen to $4.96 million, paid to 13 former health region executives, for the full fiscal year ended March 31, 2018. “What caused it to climb is we actually negotiated the severance for others under the same principles. The numbers were just off. We used an estimate (in December),” Livingstone said.

According to the health authority’s annual report, Florizone — who worked for about nine months of the fiscal year — also earned $373,377 in base salary payments, plus $5,724 in benefits.

Former Five Hills Health Region CEO Cheryl Craig, meanwhile, earned $834,227 over the fiscal year, the bulk of which was made up by a $569,376 severance package.

David Fan, who ran the Prairie North Health Region, also took home a $569,376 severance cheque which, when combined with his salary and benefits, brought his fiscal 2018 earnings to $854,501.

On top of her $293,481 salary, former Prince Albert Parkland Health Region head Cecile Hunt received $6,958 in benefits and a severance package valued at $518,544, for a total of $818,983.

In the roughly nine months ended Dec. 4, eight former vice-presidents from five separate health regions received severance packages ranging in value from $131,745 to $478,033, according to the annual report.

The Saskatchewan Health Authority began operations on Dec. 4. It was clear months earlier, however, that the amalgamated authority would need fewer than 12 CEOS and 62 vice-presidents employed by the health regions.

Livingstone said the four former health region heads who received the $500,000-plus severance payments had decades of experience in the health system and high-paying jobs, and were entitled to the payments.

Any lawsuit over unfair severance could prove to be more expensive for the health authority, he said.

“Our current estimate is $9.7 million in overall savings in the administrative positions … Those savings will be ongoing and incremental; the ($4.6 million) is a one-time severance cost.”

According to the annual report, for the year ended March 31 — effectively four months of operations — the Saskatchewan Health Authority’s 16 executives earned a total of $1.5 million in salaries and benefits.

The provincial government announced health region amalgamation just before its 2017-18 austerity budget, but said the decision was based on eliminating administrative boundaries and improving patient care. Amalgamation is expected to save taxpayers between $10 and $20 million annually, beginning this year.

Health is by far the government’s largest expense, for which it budgeted $5.77 billion this year. About $3.5 billion of that is expected to fund the Saskatchewan Health Authority.