Alberta's health-care spending will rise to $14.85 billion from $12.74 billion. (CBC)

Premier Ed Stelmach says the province is increasing the amount it spends on health because healthcare is the number one priority for Albertans.

A 16-per-cent jump in health spending in Tuesday's budget took many by surprise.

Health costs will soon take up about 44 per cent of the $38-billion provincial budget.

"It's the number one issue for Albertans," the premier said, defending the increase. "And if it's the priority then it's the priority and it's reflected in the budget. This is increased funding for a publicly delivered system."

Tuesday's budget offers money to cover the deficit for Alberta Health Services, the province-wide health board, at $542 million for the current fiscal year and $759 million in 2010-11, with the latter number including $40 million in pension adjustments for AHS staff. AHS is also getting a $512-million — or six per cent — increase in its base funding.

Overall, health-care spending will rise to $14.85 billion from $12.74 billion.

Not out of control

Stelmach said that to ensure accountability, AHS will no longer be allowed to run deficits. And he insisted that the projected spending increases are not out of control.

"That funding is sustainable," he said. "It's going to give all of those that deliver the health system a good plan ... and they will deliver the plan based on the money that's available."

Health economist Herb Emery said he was surprised by the sizable increase to the health budget, adding the problem has never been a lack of money, but rather the way it is spent. "Alberta's real problem in health care is we have 'affluenza' we have too much money and we keep throwing money at it rather than getting serious about thinking about how to set the system up."

Emery wonders what happened to plans initiated by Alberta Health Services CEO Stephen Duckett, which, he said, wasn't just about closing beds as has been suggested. That report, Emery said, contained a strategy to get more bang for the billions of healthcare bucks: such as using licensed practical nurses instead of expensive registered nurses in some situations.

Wait times a priority

AHS chair Ken Hughes said now that the province is eliminating its debt and providing long term funding, many of Duckett's recommendations can be implemented.

"What we are all very pleased with here is that we can stop talking about budgets and deficits and start talking about access and quality." Hughes said, adding Alberta Health Services plans as a priority to address surgery and emergency room wait times.

The government, meantime, says it will move quickly to consult the public and health-care providers on a new Alberta Health Act which is expected to be introduced this fall.