System in Chaos

Can a new CEO heal all that ails Alberta Health Services

By Larry Johnsrude

When she took over as the top administrator of healthcare in Alberta, Vickie Kaminski did something that, as far as she knows, none of her predecessors had ever done. She spent the summer meeting with front-line staff—nurses, doctors and other healthcare professionals—in groups ranging from eight or nine to 300, and promised to personally reply to their proposals for delivering healthcare better. “I’ve received hundreds of emails from people with suggestions and frustrations,” says Kaminski, who started in June as president and CEO of Alberta Health Services. “I do respond to emails myself. I often get a comment back saying ‘I’m very surprised you answered me.’ They’re not expecting me to follow through.”

She could have expected such skepticism from the front lines. Many in those positions have long complained that AHS, the ostensibly arm’s-length body in charge of hospitals, nursing homes and other public healthcare facilities across the province, has a tin ear when it comes to heeding their concerns and advice. “If that is in fact the case,” allows Kaminski, “then we’re not listening to very important people. They’re the first to know if there is a problem. We cannot underestimate the power in that.”

Comforting words from someone who spent much of her 35-year career on the front lines herself. An Ontario-trained registered nurse, Kaminski rose through the ranks there and later in Newfoundland, where she headed one of the health regions and helped the province recover from a scandal over errors in breast cancer treatment. She still holds non-practising RN licences in Ontario and Newfoundland. She plans to apply for one in Alberta as well. “I believe the ties you have to the health system come from your professional background,” she says.

Albertans may find it appropriate that former Health Minister Fred Horne chose a nurse to help find a cure for the province’s ailing healthcare system.“What I set out to do… was to find someone who really understood what it takes to deliver care at the front-line level,” Horne says. “There are few people Kaminski cannot turn to and say ‘I did your job.’ ”

But is she up to the job of saving AHS? With an annual salary of $540,000, and expectations to match, Kaminski certainly has her work cut out. As the sixth CEO in the five-year history of AHS (including interim and acting CEOs), she takes over an organization marred by internal turmoil, rapid personnel changes at the senior level, suspicions of “corporatization” of public health delivery and charges of poor performance to the detriment of the people it is supposed to be serving.

CEO Vickie Kaminski takes over an organization marred by internal turmoil and rapid personnel changes.

Many Albertans are not pleased with how the healthcare system is working. Alberta Health’s own numbers show that patient satisfaction is below expectations. In a 2013 survey, only 63 per cent of Albertans said they were satisfied or very satisfied with the health services they personally received in the previous year. That’s down from 67 per cent two years earlier and falls short of the government’s own target of a 68 per cent satisfaction rate.

An independent Insights West survey done during the summer’s PC leadership race painted a bleaker picture. Of some 600 Albertans polled online, only 25 per cent expressed satisfaction with the Conservative government’s handling of healthcare, which respondents considered the top issue in the province. The only category where they were less satisfied was overall government accountability, with a paltry 15 per cent satisfaction level.

Other data reveal that we tend to be less satisfied the farther we live from major cities and the less healthy we are. A 2012 survey by the Health Quality Council of Alberta (HQCA) found that those living in northern Alberta were less likely to be happy with Alberta healthcare than those in the rest of the province, and that those of us in good health are more likely to be satisfied than those with chronic illnesses.

Many of us are not finding it easy to use the health system either. Only 54 per cent of Albertans who went to an emergency department in 2012 described access as easy, and only 51 per cent thought accessing health services was easy generally.

The health department’s 2012/2013 annual report says too many of us are still waiting too long for surgeries such as hip and knee replacement. The average wait time for a new hip in 2012 was 36 weeks, down from 40 weeks the year before but still substantially above the target of 22 weeks. The situation was similar for knee replacement—an average wait time of 41 weeks, down from 48 the year before but still above the target of 28 weeks. With cataract surgery, the government is moving closer to its target, with waits down to 29 weeks compared to 37 weeks the year before but still above the target of 25 weeks.

Alberta Health is also below its own targets in flu immunization rates among seniors and children alike and in childhood vaccination rates and is missing targets in dealing with sexually transmitted infections. The department’s annual report also shows too many people waiting for continuing care, thereby tying up acute-care beds.

It’s not as if the Alberta government isn’t spending enough on health. The total outlay is expected to top $18-billion in the 2014–2015 budget year, accounting for about 45 per cent of all provincial spending on programs and services. In 2013, public spending on health totalled $4,951 for every man, woman and child in the province, compared to a national average of $4,200 per capita public-sector health spending. Spending in Alberta, according to the Canadian Institute for Health Information (CIHI), rose at annual rates ranging from 9.7 to 12.5 per cent between 2008 and 2011, the latest years for which figures are available.

Our spending on hospitals in 2013 took up about 35 per cent of our total health expenditures, more than 5 percentage points above the national average, and our spending on physicians was 14.5 per cent of our total health spending, second only to Ontario.

Fortunately, we can afford it. Total health spending in Alberta in 2013 accounted for 8.3 per cent of our gross domestic product. This is the lowest spending-to-GDP ratio in the country, well below the Canadian average of 11.2 per cent. Our province’s perennially strong economy makes it unsurprising we have more money to spend on healthcare than anyone else.

Still, the figures suggest we’re not getting the best value for our dollars. We spend about 13 per cent more per capita than the average, but have scant evidence we’re getting 13 per cent more for our money.

Opposition parties are laying the blame for this underperformance at the top, with AHS, the government agency that runs the health system. Wildrose leader Danielle Smith went so far last spring as to challenge Minister Horne in the legislature to admit AHS has been “a failure” and “a disaster.” Her particular point of contention was the revelation that AHS spent almost $1-billion on sole-sourced, untendered administration contracts in 2011 and 2012, many awarded to former AHS senior officials. “I don’t know how else to describe this out-of-control bureaucracy, with its record of exorbitant salaries and waste,” Smith says.

Opposition politicians aren’t the only ones saying this. The debate over the future of AHS gained new prominence over the summer when then PC leadership candidate Jim Prentice called the organization “overcentralized” and frustrating to staff, who feel they have lost their voice in how healthcare is delivered. He called for the creation of a regional board representing communities across the province to replace the board Horne fired a year ago. Horne had said he would expand the role of the health advisory councils, voluntary bodies with no power to set policy at the local level, but he was not reappointed to cabinet in September. Based on Prentice’s campaign comments, the new health minister, Stephen Mandel, may be tasked with appointing new board members.

AHS is an easy target. To its critics it has become a symbol of excess and inefficiency, with its revolving door for top officials, a salary range twice that of the regular civil service, questionable performance bonuses, expense account scandals and a $3-million price tag for severance in a shakeup a year ago. But AHS is a creature of the government that created it.

The organization has its roots in the cost-cutting 1990s. As part of an overall deficit-reduction strategy, then-premier Ralph Klein collapsed about 250 individual hospital boards into 17 health regions. A decade later he reorganized them again, down to nine regional administrations.

Then, in an abrupt change of direction in 2008, new premier Ed Stelmach and his health minister, Ron Liepert, undertook an overhaul once again, centralizing the nine regions into one divided into six zones, all falling under one “superboard.” This superboard—AHS—is now the largest employer in Alberta and fifth-largest in Canada, with more than 104,000 employees. Ken Hughes was the first chairman of the 15-member government-appointed board, which was later whittled down to 10 and then disbanded completely.

What followed could be described as a farce if it didn’t involve the province’s largest public expenditure in an area that affects every Albertan in the most intimate way. From the start, the creation of AHS as a quasi-independent entity raised suspicions it was a ruse to shield government from unpopular healthcare decisions. Economist Stephen Duckett, who had made a name for himself in his native Australia for cost-cutting innovations, was hired as the first AHS president and CEO. Rather than deflect attention from the stresses in the health system, however, his recruitment merely increased the tension.

His 20-month tenure was characterized by clashes with frontline employees and healthcare groups but little visible improvement in the system. The most bizarre spectacle was when Albertans got to witness their $744,000-a-year health boss waving an oatmeal cookie in front of the TV cameras while telling reporters he was too busy eating it to discuss crowded hospital emergency rooms. Horne fired Duckett a few days later with a $680,000 severance settlement.

The health minister had hoped to get the faltering organization back on track in 2010 with Duckett’s replacement, Dr. Chris Eagle, a physician, professor of medicine and former president of the Calgary Health Region. But the cure didn’t take, and Eagle stepped down in the fall of 2013 after personally apologizing for disruptions caused by the transfer of about 300 Edmonton homecare patients to fewer and larger service providers. In the interim, Horne fired the entire AHS board in June 2013 for defying his orders not to pay about $3-million in previously approved executive bonuses.

There have been other major distractions in AHS’s brief history, including its firing of its chief financial officer, Allaudin Merali, for submitting $346,000 in questionable expense claims for meals at high-end restaurants and for the installation of a phone in his Mercedes-Benz while he was with the Capital Health Region. Former CHR president Sheila Weatherill resigned from the AHS board for approving these expense claims. AHS has since implemented a policy prohibiting staff from expensing wine, and allowing for greater oversight of entertainment and other personal expenses.
AHS was also at the centre of complaints of physician intimidation. A review by the HQCA found doctors were threatened with losing their hospital privileges if they spoke out on behalf of their patients. AHS was also the subject of an embarrassing judicial inquiry headed by retired Justice John Z. Vertes that found that some well-connected Albertans were able to get preferential treatment, including from a private Calgary clinic that helped members jump the queue for colonoscopies in public hospitals and from a private flu vaccination clinic set up for Calgary Flames players and families.

How has such dysfunction come to exist in such a vitally important area as healthcare? Critics cite a general lack of direction going back to massive spending cuts in the 1990s followed by two efforts to introduce more private financing—the Orwellian-sounding Health Care Protection Act, which enabled the integration of private knee, hip and cataract clinics into the public system, and Ralph Klein’s failed so-called “Third Way,” which would have allowed Albertans to pay extra for upgraded hospital rooms or Cadillac surgical procedures.

AHS has become a corporate model that tries to straddle the public and private sectors but ends up being opaque. It lacks a clear chain of command and is unaccountable to the public, leaving the health minister only the option of firing people at the top and starting over. With a salary structure following private-sector drivers, it’s a corporate culture apart from the regular civil service, with pay for senior officials ranging to $515,000 a year, and up to $780,000 for the CEO, while the top deputy minister in government makes a relatively modest $280,000.

In a survey, only 63% of Albertans said they were satisfied with the health services they received in 2012.

“The Byzantine layers of management that AHS has applied to healthcare haven’t done anyone any favours,” says New Democrat David Eggen, that party’s health critic and the former head of Friends of Medicare. “They’re applying a corporate model to our most important, most expensive and the greatest public interest that we all share. The two don’t fit together. There’s an inherent culture clash.”

Whether the stumbling and bumbling by AHS is being felt by patients in hospital beds or is just a sideshow with little outside consequence is another question. Horne insists it hasn’t harmed patient care. “In my view, no,” he says. “Certainly, when you do something [such] as create a large organization very quickly, and its main purpose is to provide quality care and support front-line workers, you can run into problems. There are certainly some things we could have done better in terms of how the change was implemented. I have no trouble admitting that.”

CEO Kaminski says she believes the effects on patient care are more perceived than real. “I don’t think our people on the front lines are letting patients suffer,” she says. “I think confidence in the system is what has suffered. For the majority of Albertans, their individual experience is good. But if they comment on healthcare generally, it’s often a negative one.”

There are no known studies correlating AHS’s administration with results at the patient level. Researchers say it’s dangerous to conclude that growing wait times and less than optimum outcomes on patient surveys are an accurate diagnostic tool, because age, population growth and other factors can skew the results.

Critics of the system, however, say there is enough anecdotal evidence to link the two. “Quality, access and cost are the big indicators of an underperforming system,” says Liberal health critic Dr. David Swann, a physician and former public health officer. “The stress on the system, the overcapacity, beds in hallways, adding an extra bed to the unit, too many seniors who shouldn’t be there [in acute-care beds], it all adds stresses for everybody.”

The NDP’s Eggen says the constant lurch from crisis to crisis is hampering expansion. “Our health system is more reactive than it’s ever been,” he says. “We look after someone when they’re sick. There has been a lot of focus on acute care. We haven’t moved to that second phase in healthcare, where you expand the range of public health to social workers, optometry, dentistry, physiotherapy, using the family care clinic model—not just dispensing acute care but preventive medicine as well.”

Those working on the front lines say they have no doubt their patients are suffering from lack of direction and questionable decisions at the top. They say they see it every day. “When mom gets put in a room with three men or on a stretcher in a crowded room, we’re the ones who get yelled at,” says Rochelle Walker, an RN at Edmonton’s Royal Alexandra Hospital. Jane Sustrik, first vice-president of the United Nurses of Alberta, blames a lack of planning for well-publicized instances of layoffs followed by scrambles to hire more nurses. “It just shows that a lot of these changes aren’t being thought through at the top levels,” she says.

At the University of Alberta Hospital, nurse Marie-Thérèse Mageau has similar concerns. “They’re decreasing the number of professional eyes on the patient,” she says. “That does affect nursing care. I ‘get’ that AHS is under pressure to save money. But this isn’t an assembly line. These are human beings we’re dealing with.”

Encouraged that a former member of her own profession will now be calling the shots from the top, Walker has one piece of advice for CEO Kaminski: Don’t undervalue those working on the front lines. “Eliminating nursing staff is a popular target because it can save money quickly,” says Walker. “But studies show that having more RNs leads to lower morbidity rates, lower rates of infection, lower rates of hospital readmission, shorter stays, better patient survival rates and overall better health outcomes.”

Alberta is the only province with a single, centralized health administration, although Nova Scotia, with a quarter of our population, is also moving that way. Next door in Saskatchewan, which adopted health regions in 1993, a year before Alberta did, a commission of inquiry in 2001 found the regional approach to be the most efficient.

We spend 13% more per capita than any other province, but we’re not getting 13% more for our money.

Opposition parties and healthcare groups are split on where the health administration should go from here. Friends of Medicare says the structure of our health administration isn’t the issue; rather it’s the government’s failure to properly fund public healthcare in a manner that’s transparent and accountable to the public.

Wildrose leader Danielle Smith is pressing for a partial return to a regional system. “I think there are certain services where there’s some promise in a centralized approach,” she says. “You would probably benefit from having centralized payroll, a centralized legal department, centralized IT and those kinds of things. But when it comes to service delivery and service in hospitals, those are the kinds of decisions that should be made locally.” The Liberals are resigned to leaving AHS as is to avoid further disruption, while the New Democrats want a gradual devolution back to a regional model.

Horne claimed progress in cleaning up some of the administrative mess and bringing costs down, citing a 2013 reorganization that took AHS from 80 vice-presidents to 10. He didn’t explain why AHS felt it needed 80 VPs in the first place. He also cited CIHI figures showing that administration costs in Alberta work out to about 3.5 per cent of total hospital spending compared to a national average of 4.8 per cent.

Kaminski says the advantages of centralized administration include uniformity and economies of scale, which she believes can still be achieved while putting local decisions back into the hands of local managers and community members. She blames confusing lines of authority on a misunderstanding of roles and responsibilities. “When Alberta became one [super-region], this probably shifted the sand for a lot of people and they were unsure if they could make those decisions, stopped making them, rolled everything up centrally, and it just slowed everything down,” she says.

Her immediate task, she says, is to turn down the temperature on a vital health system that has become needlessly politicized. “My job is to provide stability to let us focus on the job at hand, which is to provide basic care without getting sidetracked,” she says. “I don’t want us to get caught up in the kind of uncertainty where we become unsure about taking the needed steps forward. We have very good people and we need to let them work to the best of their abilities.”

Larry Johnsrude is a long-time Western Canadian journalist.

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