06/12/2013 11:42 EDT | Updated 08/12/2013 05:12 EDT

Alberta Health Services Board Fired Over Executive Bonuses

Flickr: dave.cournoyer

LETHBRIDGE, Alta. - Alberta Health Minister Fred Horne has sacked the entire board overseeing day-to-day delivery of health care in the province and has announced he is embarking on a system-wide reboot.

"We start fresh," Horne said Wednesday at a news conference in Lethbridge where Premier Alison Redford and her cabinet were meeting.

Horne said he would immediately begin talking to stakeholders and patients about the best way to deliver health care that costs Alberta $37 million a day.

"We have to be open to all the possibilities."

Horne said he fired the 10-member board of Alberta Health Services, or AHS, after it refused his directive to cancel $3.2 million in bonus payments to 99 senior executives for the fiscal year that ended in March.

Stephen Lockwood, who was the board's chairman, said Tuesday that the issue was about integrity and honouring contracts.

Horne said the board's decision to go ahead with the payouts was intolerable, given tight government budgets and pay freezes in new contracts for doctors and teachers.

The system is also dealing with layoffs to nurses and caregivers along with stresses on home and palliative care.

Horne said the board's refusal, along with his having had to repeatedly direct it to take other actions in recent months, "raised some serious questions as to whether the board can continue to function effectively."

He said his decision was not about "power and control," but in the same news conference he suggested that's exactly what it was.

"When the board refuses to respond to those directives we have a problem," he said.

"Because at that point the question of who is in charge and of governance in the system and the stability of the system comes into question — and I'm not prepared to allow that situation to continue, and neither is the premier."

Horne appointed Janet Davidson, who was an executive with Edmonton's former Capital Health region, to be the administrator of AHS in lieu of the board. She is expected to meet with media on Friday.

Horne acknowledged health care traditionally has been run by a board, but added he may go with one administrator in the future.

Davidson will revisit the $3.2 million in bonuses, he said.

Dr. Chris Eagle, CEO of Alberta Health Services, remains in place.

AHS was created five years ago as an arm's-length agency to oversee day-to-day health-care operations. Policy decisions are left to the health minister and his department.

The idea was to ensure that patient treatment, not political or partisan meddling, was the guiding principle in health care.

But the lines of authority have been blurred because while AHS acts independently of Horne, it must still be accountable to him as the people's representative.

Horne said he was loath to meddle in the pay issue, but decided to step in when he learned that some of the executives wanted to forgo the bonus, but were told by the board they had to take it.

When asked if changing legally binding pay contracts will make it difficult for the government to recruit fresh talent, he said: "This is an issue that we're going to have to work through.

"My opinion has always been that people that work in health care do so not for the money. They do it because they care about delivering better health care to their fellow citizens."

Horne thanked the board members for their work and credited them with finding $700 million in administrative cost savings.

In Edmonton, opposition leaders suggested Horne only need to look in the mirror to know who is responsible for problems with the board.

"All of this is at Fred Horne's door," said Wildrose Leader Danielle Smith.

Horne has been aware of the bonus payouts for months but did nothing, she said.

"Then we get to the 11th hour and because they're defying the minister's order he ends up having to blow the board up," said Smith.

"There's absolute utter chaos in this system, and it's been clear to me for a long time that the health minister has completely lost control over the largest part of his department."

Liberal Leader Raj Sherman agreed.

"Fred Horne needs to go. He either needs to resign or he needs to be fired by the premier," he said.

"Under Fred Horne's watch as minister, Alberta's health-care system has only become more chaotic and inefficient and more expensive."

NDP Leader Brian Mason said the board's dismissal is an opportunity for Horne to reinvent health care to make it responsive to patients.

Mason said the AHS board was made up of business people running health care as if it were a bottom-line corporation.

"These are business people. These are people from the oilpatch, the insurance industry ... so they're running it like a corporation and they put their practices into place."

The dismissals are the latest turmoil to strike at the highest levels of the health service.

In November 2010, former AHS CEO Stephen Duckett saw his contract terminated by the board under pressure from the government. Several members of the board quit over that issue.

Wednesday's decision ends a nine-month term of service for Lockwood.

He had said on Tuesday that not only was the government interfering in the bonuses, it had also directed AHS not to release its annual financial report.

Horne said the report was held back until the bonuses were resolved to ensure what was ultimately released would be accurate.

He also said a review of all government boards and agencies announced Tuesday would continue.

Lockwood said the review isn't needed and challenged the government to make public a report on AHS governance done late last year. Horne said that report is on the government website, but said given his decision to fire the board, the information "is certainly outdated now."

— By Dean Bennett in Edmonton

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