AHS review eyes $1.9B in savings
NDP and unions predict job cuts and a move toward privatization
A review of Alberta Health Services has identified long-term strategies that could help the province save up to $1.9 billion annually, Health Minister Tyler Shandro announced Monday.
The UCP government says these savings would allow further funding to be directed to patients and front line care, freeing up funds for surgeries and cutting wait times for patients.
The $2-million review was conducted by Ernst & Young, which gathered feedback from around 1,200 physicians and 27,000 front line staff.
Its report contains 57 recommendations and more than 70 ways to achieve savings.
Although the report contains a range of options that could save upwards of $1.5 billion to $1.9 billion each year, Ernst & Young cautioned those figures don’t represent expected, or even achievable, actual savings.
Those figures don’t consider necessary costs to implement changes, said Shandro, who indicated he doesn’t expect to achieve all recommendations.
Calling the need for reforms “overdue,” Shandro said the government plans to implement various suggestions over the long term.
But first, AHS will develop a plan in the next 100 days outlining recommendations that should be prioritized and adopted.
The plan is due back to Shandro by May 13.
The recommendations span four key areas, which include potential for savings within the AHS workforce and management ($600 million to $800 million in estimated spending cuts), clinical services ($500 million to $650 million), non-clinical services ($350 million to $500 million), and governance.
The report states that of Alberta’s 83 community hospital sites, 36 don’t currently meet the threshold for viability and five could even close.
But Shandro vowed there would be no hospital closures or consolidation of urban trauma centres on his watch.
Instead, AHS would “reconfigure” small and medium hospitals along with emergency departments within communities to “better align with patient needs and provide better quality.”
“We’re going to encourage AHS to look at the reconfiguration,” Shandro said. But asked to define what a reconfiguration could look like, he said that’s “for AHS to determine.”
Asked if health-care job losses could be possible as a result of the reconfiguration, Shandro said that will be determined once AHS has completed its implementation plan.
OTHER POTENTIAL REFORMS
Among other recommendations, the report states that use of non-hospital surgical facilities and emergency departments should be expanded to better align with patient needs. It adds that the government should maximize the outsourcing of laboratory services.
Ernst & Young also recommended the province adjust physician compensation to align with other provinces, work with unions to adjust collective agreements and review management positions.
“Albertans spend more on health care on a per-capita basis than almost all other Canadian provinces and significantly more than peer provinces like Ontario, British Columbia and Quebec,” said John Bethel, partner with Ernst & Young.
Shandro stressed the report “is not an indictment of AHS,” but a challenge for it to modernize.
But NDP health critic David Shepherd said he took issue with recommendations that presumed outcomes of collective bargaining negotiations and others that used language surrounding “optimized staffing levels” and alternative delivery models within the healthcare system.
Shepherd warned of job losses and wage cuts that would hurt rural Alberta if certain ideas from the report are adopted.
“It’s clear they want to move to more American style, private profit in our public health-care system,” he said.
Shepherd said that although statistics show Alberta is spending more per capita on health care than comparable provinces, the current government has chosen to “spin” the context of those figures.
UNIONS, HEALTH-CARE ADVOCACY GROUPS REACT
In a statement, the Health Quality Council of Alberta said it was reviewing Monday’s report “and look forward to learning more about the implementation plan.”
Friends of Medicare called it “ideological fodder for this government to start the process of privatizing our health-care system.”
“We don’t know how much contracting out our public health care will ultimately cost to the citizens of this province, nor were we provided any comparators of how much it would cost to increase in-hospital capacity or build public infrastructure in the interest of the public good,” stated executive director Sandra Azocar.
The Alberta Union of Provincial Employees slammed the report, warning AHS planned to cut thousands of front line health-care workers.
Alberta Federation of Labour president Gil Mcgowan called it an “ideological attack” on public health care by Premier Jason Kenney.
In its first budget released last October, the UCP increased health-care funding by $200 million, bringing overall operating spending to $20.6 billion per year. The increase of one per cent was one-third of what the NDP budgeted per year; critics argued it effectively amounts to a cut when population growth and inflation are considered.
AHS has 102,000 employees and a budget of $15.4 billion.