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.
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.
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.
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.
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.”