AHS review finds ways to save up to $1.9B — next up is deciding which measures to implement

A major review of Alberta Health Service conducted by a team of external consultants spells out dozens of ways the province could save money and find new efficiencies.

Minister Tyler Shandro promises all savings will be reinvested in health care

Person lying down in hospital bed
A patient on intravenous lies on a hospital bed in this stock image. A major review of Alberta Health Service (AHS) by external consultants Ernst & Young contains 57 recommendations and 72 savings opportunities to improve the quality and sustainability of health services. (Thaiview/Shutterstock)

A major review of Alberta Health Services (AHS) conducted by external consultants spells out dozens of ways the province could save up to $1.9 billion and find new efficiencies — but the province's health minister says some recommendations will be off the table.

The report compiled by Ernst & Young contains 57 recommendations and 72 savings opportunities to improve the quality and sustainability of health service.

AHS said in a separate release it has an implementation team looking at all the recommendations and opportunities in the report and will develop a detailed plan for which measures to implement within 100 days.

"Every dollar we save will be put right back into the health system to deliver on our promise to improve access and make the system work better for patients. It's about freeing up administrative resources so we can spend more directly on Albertans' health care," said Alberta Health Minister Tyler Shandro.

Shandro announced the findings of the report on Monday in Calgary alongside John Bethel of Ernst & Young LLP and AHS CEO Dr. Verna Yiu.

Shandro promises no hospital closures

4 years ago
Duration 0:15
Health Minister Tyler Shandro says the Alberta government accepts the AHS review, but adds these two important guidelines for implementation.

The recommendations address four key areas: people, clinical services, non-clinical services and governance.

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Among the potential money-saving moves recommended in the report:

  • $42M in savings from reducing how much radiologists are paid.
  • $47M to $100M in savings from reducing procedures of limited clinical value.
  • $100M to $146M in savings from outsourcing several non-clinical supports, including housekeeping, protective services, laundry and linen, non-emergency patient transporting and food services.

Some hospitals underused but health minister says closures off the table

The report noted that Alberta has 16 urban hospitals handling well over three million people and 83 others in smaller regional areas caring for about 850,000 people.

It said of those 83 hospitals, 77 have emergency rooms that are underused — averaging three visits a night with a lot of very minor cases — and many of those could be consolidated or operate on reduced hours.

The report also said that close to half of the 83 hospitals could be reconfigured to get better value for money while making sure remote residents still get timely care.

"Underused hospitals lead to inefficient use of staff and facilities," said the report, noting that under their criteria five unnamed facilities could be closed altogether.

The report also said for cities the size of Calgary and Edmonton one adult trauma centre and one pediatric trauma centre in each are enough.

However, Edmonton has two adult trauma centres, at the Royal Alexandra Hospital and the University of Alberta facility.

Shandro said no hospital closures will be on the table. 

"There will be no hospital closures or consolidation of urban trauma centres," Shandro told reporters Monday

Among the potential money-saving moves recommended in the report was $42 million in savings from reducing how much radiologists are paid. (CBC News)

It was a point he reiterated a few times during the question-and-answer session after the announcement.

Shandro announced in July 2019 that Ernst & Young had been awarded the $2-million contract to conduct the review.

Ernst & Young said its engagement process included feedback from about 1,200 physicians, 27,000 front-line staff and 4,200 AHS leaders.

The firm's mandate was to investigate opportunities to reduce costs and improve performance by examining AHS's structure and organization, evaluating its programs, services and policies, finding ways to make it more responsive to the front lines and Albertans, and comparing AHS to other provinces' health systems and best practices.

The 220-page final report stresses that Albertans should be proud of their health-care system, but it notes the province spends more money on public services than any other province.

"The fact that Alberta still leads the country on spending suggests that there are some structural costs within the system, as well as potential inefficiencies, that need to be exposed, analyzed and addressed," the report states.

"Comparatively speaking, Albertans get lower value for their money."

AHS said some of the recommendations will be acted on immediately, while others will require additional exploration. 

"As AHS moves ahead on implementation by turning recommendations and opportunities into specific initiatives, the potential savings will be better defined," the agency said.

Report draws criticism

A suggestion in the report to move some seniors from long-term care beds to supportive living facilities is coming under fire from Public Interest Alberta, a non-profit advocacy organization. It said in a release that this would add to the financial burden faced by seniors.

"The major difference between these two levels of care is that in long-term care pharmaceuticals, medical supplies and medical equipment are covered by the public system; in designated supportive living, those costs are shifted to patients and their families," the release said.

There is potential within these recommendations to seriously impact patient care.- NDP health critic David Shepherd

The report also suggests AHS could reap hundreds of millions of dollars by selling off its subsidiaries, Capital Care and Carewest.

And the report says money could be saved by having private clinics perform more routine surgeries paid for by public health care — a direction the UCP government has already said it's going in.

Opposition NDP health critic David Shepherd lauded some of the recommendations for reform, saying they had been launched under the former NDP government, but cautioned against rash action when it comes to reforming rural health care and using more private clinics to handle routine surgeries.

"There is potential within these recommendations to seriously impact patient care," Shepherd said.

The Alberta Federation of Labour says the report is a blueprint for privatizing Alberta's health-care system.

"Today's release of the AHS review is yet another example of the UCP government using a third party to provide cover for their true agenda: cuts and privatization of our public services," said Gil McGowan, federation president.

With files from The Canadian Press