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Restructuring Alberta’s health system


Alberta Health Services has had a tumultuous summer.

There have been major changes at the highest levels of administration and governance of the province’s health system. A review of the recent history of restructuring in Alberta’s health system might be helpful to understand the recent changes.

Moving towards health regions

Alberta was part of the first wave of Canadian provinces to develop regional structures for the governance and administration of health care services and organizations.

Regionalization took place across Canada during the 1990s, transforming the way health care was governed and operated.

Different regions have varying health services needs. It was hoped that regional systems would be more responsive to local priorities and would be able to manage the complex, costly health care system at the regional level.

Regionalization also offered the promise of savings through economies of scale and larger purchasing power as well as better planning and distribution of resources throughout a region.

Rather than having hundreds of hospitals and health care providers dealing with the Ministry of Health directly, and negotiating separately with vendors for technology and services, such work would be done through the various health regions.

Regionalization was also seen as a way to do away with “local health empires” – developed by political favoritism and interaction between individual hospital boards and decision makers and provincial governments.

Alberta’s health regions

Alberta’s experience with health regions has been marked by tensions. The need for regional decision-making has clashed with political pressures to centralize control of health care.

In 1994, Ralph Klein’s Conservative government abolished over 250 local hospital, long-term care and public health boards of directors, replacing them with 17 health authorities assigned to geographic regions in the province, and provincial health authorities for cancer, mental health and addiction services.

These health system changes were part of efforts across Alberta to “slay the debt”. This included reducing health care spending in the province significantly – from $1393 per capita in 1993 to $1156 in 1995. These aggressive cuts reduced the number of hospital beds, and led to layoffs for many health care workers.

A tumultuous decade followed. Since physician payment was outside the control of the health regions, doctors and other health care providers were not allowed to participate in the health region boards, and many protested the new structures and governance arrangements.

There was ongoing discussion about the right number of health regions, with some regions experiencing major financial deficits.

Set up to fail?

In 2004, a decade after health regions were introduced, the 17 boards were reduced to 9, with the cancer, mental health and addiction boards continuing.

This was also an era of  increased wait times – and much public discontent about health care.

Political observers have noted that health regions can serve the purpose of deflecting criticism from government when there is an unpopular decision or crisis in the health system.

However, following the shift to 9 regions, tensions remained between government and the regions. There were concerns about financial mismanagement with some regions still running major deficits, overspending their annual budgets.

It was found that there were significant variations in the rate of certain procedures, such as diagnostic cardiac catheterization, across the province during this time.

Another challenge for the health regions was a bitter rivalry between the two regions with the largest urban centers in Alberta – Calgary and Edmonton. The two regions were in competition for funding and services, led by two prominent CEOs. There was poor communication between organizations, providers and decision-makers in the two regions and little sharing of information or best practices.

This rivalry was highlighted by the case of a Calgary woman, Karen Jepp, who delivered quadruplets at a Montana hospital in August 2007. Jepp was transferred to Montana due a lack of capacity in Calgary’s neonatal ICUs for four babies. However, it was later revealed that there was space for the newborns at an Edmonton hospital.

A failure of communications between the regions meant that Alberta’s rare and celebrated quadruplets were born in the United States.

The Alberta Health Services ‘Experiment’

With high levels of public discontent around the existing regional structures, it was announced by Premier Ed Stelmach in May 2008 that the regional health authorities would be dissolved into one provincial health authority, Alberta Health Services (AHS).

The goals of this move were to reduce bureaucracy, improve access to services and reduce regional inequalities as well as competition. It was also intended to centralize political accountability for health care.

The structure of AHS, with a CEO reporting to a board of directors offered the separation of political pressures from the day to day challenges of running a health care system.

Ron Liepert, the Minister of Health at the time emphasized “we didn’t want it [AHS] to be like a department of government.”

“It was felt that this was a $13 billion corporation and it needed to function more like a corporate model, even though it was government funded,” he said in an interview with Healthy Debate.

Liepert describes the creation of AHS as “the largest organizational merger in Canada.” AHS currently employs over 90,000 health care professionals, physicians, support workers and administrators. The transition at the senior levels of leadership took time, with an interim CEO hired from outside the health care sector.

Stephen Duckett, a respected health economist from Australia was brought on as CEO after a six-month search. A 15-member board of directors was also put in place with the task of reporting to the Minister of Health on whether AHS was achieving it’s mandate.

Tension between health system management and politics

Duckett, however, was dismissed as CEO after less than 18 months on the job. His firing was attributed to offensive remarks made to press officials in the midst of a provincial crisis on emergency department wait times.

While many on the board remained confident in Duckett’s abilities as CEO of AHS, he had become a political liability.

Duckett’s dismissal was followed by the resignation of several board members, including Andreas Laupacis, Healthy Debate’s Editor-in-Chief who protested the provincial governments’ meddling with health system operations and management.

Dr. Chris Eagle, a senior AHS executive was appointed as interim CEO. Eagle was eventually named as the permanent CEO.

Duckett’s firing dovetailed with another high-profile crisis for AHS, with ongoing concerns from doctors about intimidation and ‘muzzling’. A review of this by the Health Quality Council of Alberta suggested that fear of political repercussions limited doctors’ abilities to advocate for patients.

The current state of AHS

In response to these crises, a Health System Governance Review Task Force was formed, with the mandate to explore how governance in AHS could be strengthened.

The Task Force made strong recommendations around removing politics from the administration of AHS.

The Task Force report was submitted to Minister Horne in December 2012. However it was not made public until eight months later, at which point it was described by the Minister of Health, Fred Horne, as being out of date.

This is because two days before the report was quietly released online, the ten-person AHS board of directors was fired over a dispute regarding executive pay with the Minister of Health.

The board held that executives should receive the pay-at-risk component of their salary contracts.

However at a time when other government-paid professionals such as nurses and teachers were in the midst of difficult labour negotiations, this was not politically palatable.

Minister Horne put an interim administrator, Janet Davidson, in place of the board, and promised to review options for governing the province’s health system.

Read Healthy Debate’s analysis on pay-at-risk for health care executives here.

Three months later, five senior AHS executives were fired. This move was justified by a report written by Davidson.

The report recommended reducing the number of AHS senior executives and doing away with a “confusing to navigate” corporate structure where “it is not unknown for staff to not know who they report to or who they can go to for assistance and support.”

It also emphasizes that AHS should focus on the clinical, rather than political aspects of health system delivery. “It is not always apparent how AHS works complementary to and in support of the Ministry of Health and other organizations involved in health care policy and service delivery” says Davidson’s report.

Despite this severe criticism, Dr. Chris Eagle has remained in place as CEO.

Important questions remain

Cathy Roozen, a former AHS board member, notes that government cannot resist interfering with the health system, “Health care is such a vital thing to most people… and government isn’t able to take the politics out of health care.”

“As soon as people start criticizing them about health care, they (government) want to be in control” says Roozen.

Today, the organizational structure of AHS has an Official Administrator in the place of a board of directors.

John Cowell was appointed as the Official Administrator last month, replacing the board of directors role, and accountable to the Minister of Health. Davidson has shifted from Interim Administrator to the Deputy Minister of Health, reporting directly to the Minister.

The most recent organizational chart of AHS does not specify who the CEO reports to. The reporting structure appears to have shifted a great deal from the 2009 AHS organizational chart, where the CEO was accountable to the board of directors, who reported to the Minister of Health.

In the current structure, the original vision of AHS appears to have been lost, with no apparent separation between politicians and those who administer and manage the health system.

As AHS continues to restructure, yet again, concerns about the impact of these changes on front line staff, and patient outcomes have also been raised.

“The cumulative effects of restructuring have left the major players in the health system stressed and confused about roles and responsibilities” noted the Health System Governance Review Task Force.

One informant who spoke with Healthy Debate anonymously says “you don’t solve systemic issues by constantly restructuring. It is very unhealthy. Restructuring requires good foresight and planning.”

Healthy Debate will follow this brief history of health system restructuring in Alberta with an article, to be published on October 31, on the impact of restructuring on health care providers.

Update – October 17, 2013

One week after this story was posted on Healthy Debate, there was more organizational change at AHS. Chris Eagle stepped down from his role as President & CEO of the organization. Eagle had been President & CEO for 3 years, since Stephen Duckett was fired. Eagle said in a statement “it is time for fresh eyes and fresh energy at the helm of AHS.”

Duncan Campbell, who joined AHS as the CFO in April 2013 has been announced as the interim President & CEO of AHS. An AHS news release says “an international search for a new CEO will begin immediately.”

Update – November 18, 2013

After just one month in the role of interim President & CEO, Duncan Campbell has been replaced by interim co-Chief Executive Officers.

Effective immediately, Campbell has returned to the role of Chief Financial Officer. Two senior Alberta Health Services executives, Brenda Huband and Rick Trimp, have been appointed as co-CEOs.

An Alberta Health Services news release  stated that “the decision to create a co-CEO position highlights the complexity of the role and the need for our organization to focus on clinical operations.”

The news release also states that “by the end of November, AHS will launch an international search for a new CEO. This search will move forward as quickly as possible.”

Has the "Alberta experiment" in health restructuring failed?

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13 comments

  1. Robert Bear

    %featured%No comments on this article yet. That’s OK. Silence is an important mode of communication. However, the Alberta health system is a $16-$17B/year enterprise of huge importance to each Albertan. Is this the way it should be governed and managed? If yes, why do you think so? If no, what to do?%featured%

  2. Tom Closson

    To be responsive to population and patient needs, I believe it is essential to have a structure that enables management decision making close to the people being served. I do not believe this is possible in a centralized structure like the one that has been implemented in Alberta. I also believe that skills-based boards add value to the effective functioning of a CEO. This is also not happening in Alberta. %featured%Alberta has a young population and a very expensive health system compared to the rest of Canada. At one time Alberta was viewed as a Canadian leader in health systems. Now it is viewed as a Canadian laggard.%featured%

  3. Andrew Holt

    Maybe there is need to focus efforts more on the overall functioning and outcomes of care – unfortunately structure seems to be used as a high level substitute for specific actions that are shown to reduce demand for healthcare, or, if healthcare is needed then improve and streamline a timely overall healthcare experience for patients by ensuring the efforts of those who provide care are properly supported in order to achieve clear and specific health outcomes. Alberta is not unique in this regard and has a history of taking calculated risks to make needed changes when necessary.

    %featured%Having experimented with the centralization approach maybe the next iteration will be the progressive decentralization of a more evidence based population health strategy that integrates the complete continuum of health and social services including the impacts on school and public health systems, colleges/university based professional training programs, and the systematic development of necessary infrastructures required by health professionals when providing care to those in need.%featured%

  4. John Church

    At a point in time, Alberta was seen as a Canadian leader in health reform. This was because health regions had matured to a point where they were beginning to yield positive results. This occurred largely because of strong local leadership and relatively limited political interference from the provincial government. Was it perfect, no. Was it headed in the right direction, probably yes. However, the increasing frequency of governance restructuring and political interference has undermined the progress that was made.

    Alberta Health Services might have worked if a) there were integrated information systems in place to allow the right information to get to the right decision maker at the right time b) there were effective mechanisms in place to allow various key stakeholders to have meaningful input into major decisions c) there was clarity around policy and governance roles and d) there is stability in funding and governance for an extended period of time. None of this has occurred to date.

    %featured%If Alberta is to get back on track with its health care system, it will need to address all of these issues. Oh, and it will need to start to seriously think about prevention and promotion. As long as we pay lip service to trying to keep people healthy, they will continue to flood into emergency rooms in ever greater numbers.%featured%

    • Stephen Duckett

      Although Alberta’s health authorities had a reputation as leaders, the evidence base for that was weak. Alberta was consistently the highest per capita spender on health care with no evidence of better outcomes and some evidence of worse (see my chapter in book published by UofA Press, Boom and Bust). With more money, lots of novel programs can be tried, of course, which might have been where the reputation came from. Self-promotion also helped. When I first arrived, Edmonton airport displayed posters (presumably ads paid for by Capital Health) declaring it to be the best regional health authority in Canada!

  5. David Walker

    I am looking forward to the next series of episodes being released

  6. You're All Having A Laugh

    Social Determinants Of Health:

    1) Income Status
    2) Nutrition/Diet
    3) Exercise
    4) Relationships/Behaviour
    5) Psychological Well Being

    20) Health Care System

    LOL!

    And you’re all talking about #20 when there’s 19 more important things to fix.

    • Andrew Holt

      Actually the discussion focuses on how do we move an expensive health care system so it embraces the determinants of health in a more meaning way in day to day decision making going forward.

      • Rachit

        I agree with Andrew, the article deals with embracing the determinants of health in a more meaningful method. You need to read the article more carefully, instead of rushing down towards the comments.

  7. Dr. D. Fan

    Will someone please call Dr. Duckett and beg him to return?

    • Stephen Duckett

      Thanks, you’ll appreciate that even the promise of experiencing the lovely Alberta winters and the so-supportive media means that it’s not an experience I’d care to repeat. (despite having made some more friends in Alberta!!)

      • David Harrigan

        Dr. Duckett: I know that in your time in Alberta you frequently claimed that Alberta consistently was the highest per capita spender. It was not true then and it is not true now. Newfoundland & Labrador, Yukon, Northwest Territories all spend more per capita. And the role of the media is not to be supportive, but to be honest.
        The role of the government is to govern, not to micro-manage, a problem that has grown even worse since your time here.
        It is nice to see you still have an interest in Alberta!

  8. Shuo Yang

    Not only has it failed in restructuring the emphasis on physical health but also on mental health, because as a former Alberta resident, now having lived in the U.S. for 13 years and becoming a citizen there, I feel glad that I am caught up, thanks to extensive therapy, counseling and support from staff, peers and family, but disgruntled from how the province of Alberta, including the city of Calgary, and Edmonton, back in the late 1990s, were unable to properly identify those who were really having some sort of mental crisis and could not learn to reason, logic or tell right from wrong in any sort of way. Staff members, Calgary Board of Education, Community Service members, those who head programs, like the Y-camps, or any summer camp activity, but also hospital staff therapists and psychiatric staff members. I am saying this because for me, methods like that did not work during the time and I believe it was lack of appropriate funding and also lack of focus on the issue of helping displaced and mentally ill children (or persons), overcome their emotions, bit by bit, whether in school, the work force, at home, or anywhere outside. That was why I sometimes encountered bad luck, and was warned if I ever got into scuffles, or any sort of fight, through no fault of my own, I should be sanctioned or disciplined. That, I believe, is a travesty of justice, and I believe no one at the time was interested in resolving matters like these in a more civilized and effective manner, which also include principals, vice-principals and staff. They should be sued, all of them, and be given suspended terms or be fired from their jobs, without pay! My future, like others, meant everything, and they took it away, by not taking my mental state into consideration, and by not carefully considering some of the facts that should have been inquired then.
    I should be forgiven by those who assume I did them wrong, but it was by reason of insanity and mental disorder, NOT through careful planning. My intentions were never bent on hurting others. Everyone of us knows it’s bad enough to do so, esp. in a more destructive way, but the best recommendation that should have been given to me was by suggesting further professional help, along with the schooling I would’ve hoped for while in Calgary, excluding outside activity that might cause interference or problems of any sort.
    So, that being said, I think Alberta should reconsider its position on mental health treatment because Ontario has done so in 2005, and the U.S. in 1990. The Andrea Yates case, in the US state of Texas, in June 2001, should tell you everything, Lee Boyd Malvo, the convicted sniper in the Washington DC sniper shootings, in 2002, in the US, along with the Schlemmer case, Elliot Rodger, Sandy Hook and the Seattle Pacific University shootings.

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