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Response to Recession in Alberta's Health System

Country: 
Canada
Partner Institute: 
Canadian Policy Research Networks (CPRN), Ottawa
Survey no: 
(14) 2009
Author(s): 
Margaret MacAdam, Ph.D., Senior Fellow, Health
Health Policy Issues: 
Political Context, Funding / Pooling, Benefit Basket, Access, Responsiveness
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Abstract

Some provinces in Canada are responding quickly to actual and projected budget deficits due to changing economic conditions by making reductions in health care spending. The report describes actions being taken by the Alberta government.

Purpose of health policy or idea

Canadian federal and  provincial governments are projecting budget deficits this year due to the slowing of the global economy. Alberta recently became Canada's wealthiest province, largely due to its supply of oil and natural gas, commodities which rose in price until last year. In the spring of 2009, for the first time in 15 years, the government of Alberta reported that it is facing a deficit. The current projection is that the deficit is $6.9 billion for 2009/10, primarily due to lower natural gas prices (CBC News, 2009b, c, d). Health expenses increased 13.2% in 2008/09, but  funding increased only 6.5% leading to an estimated shortfall of  about  $1.1 billion (CBC News, 2009b). Over the last six months, a series of announcements have provided more detail about the plans to manage the deficit. First, the Health Minister reported that a new committee has been appointed to reform health legislation and to review the basket of services covered by Alberta's health program (CBC News, 2009a).  Second, some services are already being delisted (CBC News, 2009c). Third, the Alberta Health Services Board, which manages health care in the province, is taking additional steps: 246 mental health hospital beds will be closed, 350 acute hospital beds will be closed over the next 3 years, all providers have been asked to cut their budgets by 3% beginning December 1, 2009, and a voluntary retirement plan is being offered to health employees to assist with reduction of the workforce (Alberta Health Services Board, 2009c; CBC News, 2009e).

One of the most controversial of the actions is the proposed closing of more than half of the 410 beds at the Alberta Hospital, a large mental health facility in Edmonton (Bennett, 2009). The plan is to provide more services for patients with mental illness in the community. On September 16, Alberta Health Services reported that 775 community-living options would be created, including assisted living, home care and long-term care to compensate for the proposed closing of 350 hospital beds by those who are waiting for an alternative level of care (ALC). As well 150 community spaces have been created for mental health patients of the Alberta Hospital; additonal spaces will be announced as they are developed. The CEO of Alberta Health Services has stated that no beds will be closed until community alternatives are in place (Alberta Health Services Board, 2009c).   

In the future, there will be an effort to align growth and capital costs with revenue  to prevent an increase in the deficit, and eventually once the budget is balanced the Alberta Health Services Board has announced that there will be a scheduled repayment of acculumated debt. 

In late September, a leaked document suggested that the government was also planning to greatly reduce the supply of nursing home beds, perhaps by as many as 9000 beds  by providing more options in the community (CBC, 2009g). The government stated that the plan was to freeze the number of nursing home beds, but half of them would be either refurbished or replaced by 2015. At the same time, assisted living spaces would be increased (Health Edition, 2009).

Main points

Main objectives

The main objectives of these activities in Alberta are to reduce health expenditures as well as to improve the efficiency of Alberta's health care system.

Type of incentives

financial

Groups affected

patients and consumers, providers, Alberta Health Services Board

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Characteristics of this policy

Degree of Innovation traditional traditional innovative
Degree of Controversy consensual controversial highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low high very high
Transferability strongly system-dependent system-dependent system-neutral

It the government proceeds to implement all the changes being discussed, the imapct on access and equity within the public health delivery system could be great.   However, the approval rating of the government has been falling in opinion polls, and it may retreat from some of the more controversial initiatives.

Political and economic background

Concerns about rising health spending have been evident for the last several years in Alberta. In 2008, the Province ended its policy of community-based health planning and service delivery when it abolished the regional health authorities and created a province-wide health services board to be responsible for the delivery of health services (See our report 12 (2008), Recentralization in Alberta). The sudden downturn in the economy is motivating the government to be more aggressive in managing the health budget.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Origins of health policy idea

In times of economic stress it is not unusual for governments to consider options such as cutting costs, borrowing, raising taxes or some combination of these alternatives. To date the Alberta government has considered borrowing (but has made no final decision), has decided to cut costs and has made no mention of raising taxes.

Initiators of idea/main actors

  • Government
  • Providers
  • Patients, Consumers
  • Others
  • Political Parties

Approach of idea

The approach of the idea is described as:
renewed:

Stakeholder positions

Many groups have expressed their concerns about the proposals of the government. The  most prominent have been the Alberta Union of Public employees which is spending $100,000 on prime time television ads opposing the closing of the more than half of the beds at  the Alberta Hospital, the largest mental health facility in the province (Bennett, 2009). Another strong group is the College and Association of Registered Nurses of Alberta which is objecting to the replacement of registered nurses with less qualified nursing staff. The College stated that two-thirds of the registered nurses graduating this year cannot find work within Alberta Health Services. As well they are concerned that employed registered nurses are being overworked (Alberta College and Association of Registered Nurses, 2009a,b).  Friends of Medicare, an advocay group which monitors government health service delivery, has issued press releases, commissioned a poll and picked the Premier's riding office. The results of the poll indicated that 56.2% of Albertans believe that the government has a hidden agenda to privatize the health care system, and 67.9% believe that delisting services will mean that they will have to pay more out of their own pockets for health care (Friends of Medicare, 2009). Public Interest Alberta has strongly opposed the plan to greatly reduce the supply of nursing home beds in the province (CBC News, 2009g). In June, United Nurses of Alberta filed a grievance with  Alberta Health Services for not posting job vacancies, claiming that not filling vacancies forces nurses to work overtime (CBC News, 2009h).

Actors and positions

Description of actors and their positions
Government
Alberta Governmentvery supportivevery supportive strongly opposed
Alberta Health Services Boardvery supportivevery supportive strongly opposed
Providers
Health Workersvery supportiveopposed strongly opposed
College and Association of Registered Nursesvery supportiveopposed strongly opposed
United Nurses of Albertavery supportiveopposed strongly opposed
Alberta Union of Public Employeesvery supportiveopposed strongly opposed
Patients, Consumers
Friends of Medicarevery supportiveopposed strongly opposed
Others
Criminal Trial Lawyers Associationvery supportiveopposed strongly opposed
Political Parties
Conservative Partyvery supportivevery supportive strongly opposed
Liberal and new Democratic Partiesvery supportiveopposed strongly opposed

Influences in policy making and legislation

NA

Legislative outcome

n/a

Actors and influence

Description of actors and their influence

Government
Alberta Governmentvery strongvery strong none
Alberta Health Services Boardvery strongvery strong none
Providers
Health Workersvery strongstrong none
College and Association of Registered Nursesvery strongstrong none
United Nurses of Albertavery strongweak none
Alberta Union of Public Employeesvery strongweak none
Patients, Consumers
Friends of Medicarevery strongweak none
Others
Criminal Trial Lawyers Associationvery strongweak none
Political Parties
Conservative Partyvery strongvery strong none
Liberal and new Democratic Partiesvery strongweak none
Alberta Government, Alberta Health Services Board, Conservative PartyUnited Nurses of Alberta, Alberta Union of Public Employees, Friends of Medicare, Criminal Trial Lawyers Association, Liberal and new Democratic PartiesHealth Workers, College and Association of Registered Nurses

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

Implementation is underway. Although there have been many objections to the proposed cut backs, and a grievances have been filed, to date the government has not  indicated reductions in the planned course of action. On September 15, Alberta Health Services reported that the performance agreement of the CEO was structured around achievement of many of the steps listed above. Specifically, 30% of the CEO's bonus (worth up to $144,000 in addition to the base salary of $575,000) will be based on achievement of the budget targets set forth by the Board; 40% will be based on improving access and the remaining 30% will be based on quality improvement. The Chair of the Board stated that "We have set specific targets and action plans to achieve these goals with the needs of patient front-and-center in our planning. A cornerstone of the strategy is to ensure that we are increasing community living options, as well as preparing for expected increases in pressure on emergency departments. Moving toward a sustainable, balanced budget over the next two to three years will make it possible to then broaden these performance measures." (Alberta Health Services Board, 2009b).

Monitoring and evaluation

The Alberta Health Services Board will be monitoring its success toward meeting its financial objectives. To date there has been no announcement of a formal evaluation of the impact of the reductions or changed models of service delivery, such as the greater use of community services for previously hospitalized patients.

Results of evaluation

NA

Expected outcome

The proposed changes have been more aggressive than those proposed so far by other Canadian provincal governments. The recent escalation of negative publicity may force some conciliatory actions but these are likely to be few and minor. The Conservative Party won the provincial election last year and is in a strong position to weather opposition to its plans to manage the health deficit. While it is likely that the proposed changes will not accomplish all that the government and the Alberta Health Services Board expect in terms of improving access, quality and sustainability, the new investments in community options for patients with mental illness and those requiring long-term care will expand patient choice while providing care in less restrictive settings than hospitals.

Impact of this policy

Quality of Health Care Services marginal rather marginal fundamental
Level of Equity system less equitable two system more equitable
Cost Efficiency very low low very high

References

Sources of Information

  • Alberta Health Services (2009a) Community Living expansion adds almost 800 new spaces. September 16. Press Realease  www.albertahealthservices.ca
  • Alberta Health Services (2009b). 2009-2012 performance measures and CEO access and qaulity improvement targets posted. September 15. Press Release  www.albertahealthservices.ca
  • Alberta Health Services Board (2009c). Announcement.  Press release. August 26.   Available at www.friendsofmedicare.org.
  • Bennett, D. (2009). Albertans debate government's plan to close mental-health hospital beds.  Canadian Press
  • CBC news (2009a).  Alberta health committee to focus on access.  September 1.  www.cbc.ca
  • CBC News. (2009b). Alberta Health faces $1.1B budget shortfall.  June 30.www.cbc.ca
  • CBC News (2009c). Alberta deficit at $6.9B. August 26. www.cbc.ca
  • CBC News (2009d). Alberta records first deficit in 15 years. June 30. www.cbc.ca
  • CBC News (2009e). Hundreds of Alberta hospital beds to close. September 16. www.cbc.ca
  • CBC News (2009f).  Hundreds protest cuts at premier's office. Septemebr 25. www.cbc.ca
  • CBC News (2009g).  Thousands of long-term beds to close, Alberta NPD charges. Septemebr 23. www.cbc.ca
  • CBC News (2009h). Overworked Nurses accuse Alberta Health Services of hiring freeze. June 5. www.cbc.ca
  • CBC News. (2009i). Alberta to delist more health care services. April 15. www.cbc.ca
  • College and Association of Registered Nurses of Alberta (2009a). Registered nurses respond to Alberta Health Services Budget. Press release.  June 30.www.nurses.ab.ca
  • College and Association of Registered Nurses of Alberta (2009b). Registered Nurses Fear Patient Safety will Suffer. Press Release. August 28.www.nurses.ab.ca
  • Friends of Medicare ( 2009).  Albertans don't want health-care services reduced:poll.  Press Release.  Wednesday April 15. www.friendsofmedicare.org
  • Health Edition (2009). Alberta Health Services closing 350 hospital beds. September 18.  Vol 13, No 37.  www.healthedition.com
  • Health Edition (2009b).  Long-term care needs attention, CHA says. Vol 13, No 38. September 25.
  • The Canadian Press ( 2009) Hundreds protest health-care changes.  The Globe and Mail. Saturday September 24.

Author/s and/or contributors to this survey

Margaret MacAdam, Ph.D., Senior Fellow, Health

Suggested citation for this online article

MacAdam, Margaret. "Response to Recession in Alberta's Health System". Health Policy Monitor, October 2009. Available at http://www.hpm.org/survey/ca/b14/2