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Government & policy

Alberta’s health regions sinking into the red

Several of Alberta’s former health regions had run up significant deficits and had relied on government bailouts – leading the political masters in Edmonton to abolish the nine provincial health boards, turf their CEOs and establish a single, over-arching superboard.

New documents show that five of the nine authorities faced budget shortfalls in 2007-08.

As reported in the Calgary Herald, the statements show the two most significant deficits were in Alberta’s major cities: Edmonton-based Capital Health sank $18.5 million into the red last year, while Calgary posted a well-publicized $97.5-million deficit.

In January, Alberta Health provided a one-time payment of $20.7 million to Peace Country Health Region “to address cash flow issues,” according to the department. The province also gave $40 million to David Thompson Health Region in March to assist with the cost of expanding the Red Deer hospital.

Moreover, the Calgary Health Region ran so short of cash earlier this summer, the Alberta government advanced it $32 million to ensure staff pay-cheques wouldn’t bounce – a situation critics say reflects chronic under-funding of the medical system.

“We needed the money to pay for salaries,” said Mark Kastner, a spokesman with the CHR.

At the end of July, Health Minister Ron Liepert said he would ask the Treasury Board for nearly $100 million to cover all of the regional shortfalls by September, while accumulated surpluses in some authorities will cover the rest of the deficit.

“I would anticipate asking for about $96 million, relative to the deficits,” Liepert said.

Opposition critics questioned why the bailouts – and the total amount of the regional deficits – were not made public until now and called on the province to become more transparent about its spending.

“If the government is going to come back to us for an extra $100 million, they need to be far more open about what the heck it is they’re doing,” said NDP MLA Rachel Notley. “We have not been getting the whole story.”

The financial statements come as Liepert is moving to restructure the province’s $13-billion-a-year medical system. This spring, the health minister replaced the province’s nine regions and several other health organizations with a single superboard.

The board has been charged with making the medical system more accessible and sustainable. Alberta currently spends about 40 percent of its budget on healthcare.

Many of the former regions posted deficits in recent years, saying growth in health services has outpaced funding. In 2007-08, the regions collectively sank about $125 million into the red.

Both Calgary and Edmonton attributed their deficits to growing overtime costs, saying staffing shortages and increasing demand for medical services had nurses and other health workers putting in many extra hours.

“We had huge volume and capacity issues and there’s cost associated with that,” said Mark Kastner, a spokesman for the CHR.

Dr. Tom Noseworthy, a health expert at the University of Calgary, said the superboard will likely try to curb future spending increases by cutting administration and increasing the bulk-buying of products.

To achieve long term savings, though, Noseworthy said the board will have to drive a hard bargain on health worker salaries.

Health Region Finances:
• Aspen – $49,000 surplus
• Calgary – $97.5M deficit
• Capital – $18.5M deficit
• Chinook – $3.3M deficit
• David Thompson – $32.6M surplus
• East Central – $2.4M deficit
• Northern Lights – $31.1M surplus
• Peace Country – $4M surplus
• Palliser – $2.7M deficit

Source: 2008 audited financial statements from the regions.