Health executive bonuses given despite minister's warning

The board of Alberta Health Services has voted to defy the provincial government and give bonuses to executivesdespite wage freezes and staff cuts across the system.

AHS said in Marchthat cancelling the bonus paymentsso close to the end of the fiscal year would not be fair.

Officials also saidthe pay-at-risk component that is part of the overall compensation package for 99 senior leaders has already been budgeted for and covered in the 2012-13 budget.

"At the end of the day, it's a word called integrity," said board chair StephenLockwood about fulfilling contract obligations.

He expectsthe provincewill be disappointed, butthedecision isfroma board that isseparate and arm's-length from the government.

AHS says it will scratch the bonuses, or "pay-at-risk" payments, for next year as part of its plans to cut10 per cent from its administrative budget.

Review planned

Health Minister FredHornesaid earlier todayhe cannotacceptthe decision of Alberta Health Services to award bonuses toits executives when there have beennumerous cuts to health care.

"At a time when weve asked our front-line providersincluding doctors and teachersto take freezes in pay, we cannot and will not accept AHSs decision. It is completely out of step with the times," he said in a release.

Horne has issued a directive asking AHS to reconsider its decision to pay executive bonuses.

He also announced the government will immediately begin a review of governance for Alberta's boards and commissions, beginning with AHS.Thefindingsfor the AHS review are expectedin September.

"Taxpayers expect us to safeguard limited tax dollars, and were going to do just that," he said."Our governments direction is clearwe will continue to ensure government, our agencies, boards and commissions live within their means."

But Lockwood says there was already a report completed in December 2012 on AHS governance, and it should be released before spending more taxpayers' money.

Budget pressures

There have beennumerous cuts to health care, including staff layoffs,in recent weeks because of a tight provincial budget announced in March.

The Alberta government is facing a $1.97-billion deficit and is borrowing $4.3 billion to pay for capital projects and to make up what Finance Minister Doug Horner called a "cash requirement" of $6.3 billion in the 2013-14 provincial budget.

Liberal Health Critic David Swann said the AHS board needs to look at the optics of its decision.

"It doesn't fit in a system that is making weekly changes to the health-care system based on budget cuts to be handing out bonuses," he said.

"There is no basis for it, we've argued against it for a number of years. It is not necessary. It is demoralizing in the health-care system and they should change it. They should eliminate it from their contracts."

Opposition weighs in

Wildrose Party Leader Danielle Smith says Horne has lost control of Alberta's public health-care system.

"The decision by Alberta Health Services to ignore his weak directive to reconsider pay-at-risk for executives shows a fundamental failure of leadership and calls into question just who is calling the shots in the health-care system," she said.

Smith, Alberta's Opposition leader, says the health minister has two options: direct AHS to rescind the pay-at-risk bonuses for 99 executives or fire the board.

ButSwann says the government is overstepping.

"The minister repeatedly intervenes in health-care assessment," said Swann.

"He says he is separate and quite apart from decisions about the services themselves and is only setting direction, but here he is once again interfering in the management of the health system. It's troublesome and I think it's going to threaten some of the stability in the health system if he keeps doing this."