AHS cuts and outsourcing to save $600 million

Publisher’s Note: This article was updated at 2:15 to include commentary from Alberta’s official opposition.

by Stephen Dafoe

Following on a February 2020 report that identified 57 recommendations and 72 saving opportunities, the Government of Alberta is now directing Alberta Health Services (AHS) to implement a portion of their plan.

The province says there will be no job losses for nurses or other front-line clinical staff in its efforts to save about $600 million per year. However, the implementation will see significant staffing cuts to lab work, laundry services, housekeeping, and food services. AHS will also see a cut of at least 100 management positions and undertake a full review of senior executives by the end of the government’s fiscal year. Total cuts are estimated to be between 9700 and 11000 positions over three years.

“The pandemic has changed everything. As a result, AHS has been directed to proceed carefully, putting patient care above all else,” said Minister of Health Tyler Shandro in a media release Tuesday morning. As a first step, AHS has been directed to eliminate a minimum of 100 management positions and to proceed with previously announced contracting work. This approach will allow us to strike the right balance between supporting the COVID-19 response and Alberta’s challenging fiscal situation.”

Earlier government plans to contract laundry and community lab services will continue with the province issuing requests for proposals by year’s end. Currently, 70 per cent of lab work and 68 per cent of health care laundry services are performed by the private sector. 

The government says AHS will streamline non-clinical and back-office operations, a process they say will have minimal job losses. Attention will be on optimizing distribution and inventory management to strengthen staff scheduling and overtime management systems. 

AHS President and CEO Dr. Verna Yiu said AHS remains committed to continuing the improvement of the organization’s financial sustainability.

CTF supports efforts to create efficiency

The Canadian Taxpayers Federation (CTF) offered their support to find $600 million in savings. In a press release issued shortly after Tuesday’s announcement, CTF Alberta Director Franco Terrazzano said the information was an excellent step to make Alberta’s health-care system more efficient.  

“Alberta’s businesses do a great job of doing laundry and preparing meals, so this is a no-brainer to help relieve some of the mounting costs to taxpayers.”

Terrazzano cites the Blue Ribbon Panel on Alberta’s finances, saying Alberta could save $3.6 billion annually if per-person healthcare spending were in line with Ontario, British Columbia and Quebec. 

“Finding savings through attrition, outsourcing and reducing management bureaucrats is necessary to find savings in Alberta’s high-cost health-care system,” Terrazzano said.

Alberta’s NDP Official Opposition called Tuesday’s AHS announcement “Jason Kenney’s plan to destroy 11,000 jobs and tear down Alberta’s public healthcare system in the midst of a deadly pandemic.”

NDP reaction

The NDP responded to the announcement Tuesday afternoon, saying Premier Jason Kenney was destroying 11,000 jobs, creating hospital chaos and imposing new costs on Alberta families. 

“Jason Kenney’s plans are completely irresponsible. Frankly, these plans are stupid,” said Rachel Notley, Leader of the NDP Official Opposition. “These plans will cause harm to patients, harm to communities – particularly rural ones—and they will harm our chances for an economic recovery.”

The NDP say the implementation plan will create new charges and co-pays for seniors in long-term care.

“Jason Kenney believes the Albertans who are cleaning rooms, washing bedding and preparing food in our hospitals during a pandemic are expendable to pay for his $4.7-billion corporate handout,” Notley said. “Let’s be clear: these Albertans are frontline workers. They are heroes and they deserve better treatment from their government.”


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