03/14/2013 02:18 EDT | Updated 05/14/2013 05:12 EDT

Alberta Budget 2013: Pay Frozen, Budgets Cut, Hiring Reduced By AHS

EDMONTON - Alberta's health leaders say they will slash budgets, freeze salaries, and reduce hiring in the wake of last week's provincial budget.

Alberta Health Services, the delivery arm of the system, announced Thursday it plans to cut administrative expenses by 10 per cent to save $35 million over the next three years.

"We have a significant financial problem ahead of us in terms of how do we get our administrative savings underway," Dr. Chris Eagle, the CEO of Alberta Health Services, said in Lethbridge while announcing the changes.

Eagle announced a three-year freeze on salaries for executives, physician leaders and other related employees, representing about 10 per cent of the 100,000 AHS staff members.

Bonuses for executives will be eliminated as of the end of the month, and there will be a review of executive pay and management with an eye to becoming leaner and more efficient.

Eagle also announced a hiring freeze for all jobs not considered critical to front-line care.

AHS board Chairman Stephen Lockwood said everything is on the table.

"Let's look at the whole thing and make sure that we have the right people in the right positions reporting to the right people and get it so that it's effective and efficient on decision-making," said Lockwood.

AHS plans to cut back on hiring consultants, and staff travel will be restricted except where absolutely necessary. The AHS was criticized by auditor general Merwan Saher last month for lax oversight on staff spending.

Saher reported that in a 17-month period ending last summer, AHS filed $100 million worth of travelling, spending and hosting expenses.

Saher said some of the claims were questionable, including one employee who was allowed to charge taxpayers for using his or her own personal plane to fly to a meeting.

The auditor also found that one hospital ferried patients around in $300 cab rides.

Wildrose Leader Danielle Smith said the layers of management need to be peeled away.

Smith said front-line workers "talk (to us) about the frustration about having to deal with seven layers of managers, of having managers report to VPs, who are reporting to senior VPs, who are reporting to executive VPs. That is what's causing the frustration and is diverting resources away from the front line."

Liberal Leader Raj Sherman, an emergency room doctor, said he's skeptical that the changes will get resources to where they're needed.

"They've been focused on shuffling the deck chairs on the Titanic called management. What we need to do is focus on front-line staff and access to front-line care for Albertans," said Sherman.

NDP Leader Brian Mason said, "Cutting back on wasteful spending on expensive meals, travel and so on is a very important thing to do and would have to be done — or should have been done — whether we're in budget constraints or not."

Alberta Health Services has a $10.5-billion budget.

It was to have received a 4.5 per cent increase to its base operating grant this year and in 2014-15, but that has instead been reduced to three per cent in each of the next two budgets.

However, an additional $393 million has been allocated in each of the next three years to run two new facilities: the South Calgary Health Campus and the Kaye Edmonton Clinic.

— With files from CJOC

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