Alberta Health budget woes trigger administrative cuts

Alberta Health Services says it plans to cut administrative costs by tens of millions of dollars to deal with a budget squeeze.

The provincial health "superboard" announced plans Thursday to cut its administrative costs by at least 10 per cent. Included in the cuts is a three-year compensation freeze for all management, which affects roughly 10,000 of their 100,000 staff members.

AHS hopes the move will save nearly $35 million over the next three years. The head of AHS says the budget cuts should not have any impact on clinical staff.

Dr. Chris Eagle says AHS has other priorities.

"Really focusing on chronic disease management and really trying to make sure that the use of hospitals is for the most essential, but not for the degree of services that we are using right now," he said.

The AHS board met Thursday in Lethbridge to plan the administrative cost savings. A full budget will be approved by the board in early April.

AHS will review executive salaries and is also in the process of reviewing the size of its senior leadership team. It says it hopes to have the leanest, most effective team possible when the review is completed later this year.

Finance minister agrees with austerity measures

There will also be a hiring freeze on all non-critical administrative positions, and all new hiring will be focused on clinical care.

AHS is also freezing all travel except in the "most exceptional, care-related and business circumstances," and cutting expenses for the use of consultants and external facilitators.

"Albertans want front-line services and they want to make sure the administration piece is as minimal as possible," said Alberta's Finance Minister Doug Horner. "I think that's just prudent business on part of AHS and listening to what Albertans told them."

Health care in Alberta got an increase in funding in the recent provincial budget of more than three per cent, moving funding up to $17.1 billion. But that falls shy of 4.5 per cent that was anticipated by health officials.

Horner said AHS made the right choice in freezing wages for top staff while facing budget pressures.

"I'm glad to see that they're following our lead," he said. "We did the same thing with our management and opted out two or three weeks ago, as you know, we froze saleries for all of the management and opted out for the next three years."

Opposition weighs in

But opposition MLAs were not as impressed with the plan.

"We calculate that there is about $2 billion spent on administrative costs, executive salaries, expense accounts and they're talking about saving $35 million over three years," said Wildrose Official Opposition Leader Danielle Smith. "I mean this is baby steps. It's nice they are paying lip service to this. We actually do need, though, to see them take some real action."

The opposition also says front-line health-care workers are very frustrated with having to deal with too many layers of management.

"We're not getting ahead of the game," said Liberal health critic David Swann. "We're not dealing with front-line issues adequately. We're still struggling it seems to me in management issues and lack of community care."