Alberta Health Services is threatening to cut about 2,500 surgeries from Edmonton-region hospitals due to "significant budget constraints" faced by its surgical units.

In an internal August 2013 AHS memo obtained by CBC News, Dr. Douglas Hedden warns that after crunching the budget numbers, the "overall budget reduction is approximately five per cent."

"If costs continue at the same rate as the previous fiscal year (2012/2013), the net impact on case volumes would need to be a reduction of approximately 2,500 cases across the zone to come in on budget," states the memo, which was sent to every surgeon in the Edmonton region.

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Wildrose leader Danielle Smith has questioned how cuts to surgeries will affect client care. (CBC)

"What is this going to mean for patient care?" Wildrose leader Danielle Smith responded. "(Patients) are going to continue to suffer through a lower quality of life, continue to suffer through pain, and continue to suffer through not knowing when it is going to be their place in the queue."

In a follow-up memo, sent on Sept. 6, Hedden said his previous memo represented a "worst-case scenario," and he said, "we are continuing to communicate that we feel that the resources for surgical services are inadequate to meet the needs of the population we serve."

In an interview with CBC News, senior AHS official Dr. Michael Murphy said the figure of 2,500 surgeries was simply a "tangible" example of what could happen in a worst-case scenario.

Murphy said they have already realized significant cost savings, but he did not rule out cuts to surgery.

"If you don’t have enough money, at the end of the day, you may need to reduce the number of surgeries that you do," Murphy said. "And that is a common strategy used all across the country when you’re told by government, ‘You’re only getting ‘X,’ and you need to spend ‘Y.’"

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In an interview with CBC News, Dr. Michael Murphy says cutting 2,500 would be only a worst-case scenario. (CBC)

"The last thing you want to do is cancel surgery," he said, later adding that he is unaware of any Edmonton surgical divisions being told to cut surgeries.

Surgeries slashed in October

But CBC News spoke to one orthopedic surgeon who said he has already been told that 250 orthopedic surgeries will be cut across the region, and the cuts are scheduled to take effect in October.

Sandra Azocar of Friends of Medicare criticized the surgery cuts for putting money before people.

"I think the message it sends is that (AHS) is not really concerned with the betterment of the patients because they are concerned with coming in under budget," she said. "And when you put budgets over the medical needs of people, then you are going about it in the wrong way."

University of Alberta law professor Timothy Caulfield said cuts of this magnitude will place a "tremendous strain" on not only the individual surgical units, but the health-care system as a whole.

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"When you put budgets over the medical needs of people, then you are going about it in the wrong way," says Sandra Azocar, speaking for Medicare. (CBC)

"Everyone appreciates that money is tight," said Caulfield, a Canada Research Chair in health law and policy. "Everyone appreciates that you want to make a system as efficient as possible.  But to have the system just react to a shortage of funds is less than ideal."

He said the cuts also may potentially increase the risk of legal liability in certain cases.

"If a decision is not focused on the interests and the needs of the patient, but rather on money, is it going to raise these liability issues if something goes wrong?"

Competition for resources

While the memo states that the goal is for surgical units to "work together towards coming in on budget," the units must individually demonstrate their ability to operate within their new fiscal targets — or suffer the consequences.

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University of Alberta law professor Timothy Caulfield says cuts of this magnitude will strain both individual surgical units and the health-care system as a whole. (CBC)

"Surgical divisions that are unable to stay within their allocated budget will be disproportionately affected by disclosures," the memo states. Conversely, departments that meet their budget goals will keep their surplus and can use it for additional surgeries.

Azocar said that will effectively pit surgical units against each other in a fight for more money.

"It is an internal competition," she said. "And (they are) competing for very limited, stretched resources," she said.

The AHS budget does not detail exactly how much it spends on surgeries each year. Its $13.3-billion budget, passed in April, represented a three per cent increase over the previous year.

Smith said she can’t understand why AHS would need to cut surgeries, given this increase.

"We thought that what we were going to see was more resources going to the frontline, more surgeries being performed," she said. "And what this suggests is that they are maintaining their administrative bureaucracy at the expense of patients and that is not right."