Alberta Health Services (AHS) is reducing administrative expenses by 10 per cent - amounting to $35 million over the next three years - instilling a hiring freeze on all administrative positions that are not mission-critical and implementing a three-year compensation freeze for all management.
Although AHS received a three per cent funding increase in the Alberta budget last week, up to nearly $13 billion, board chair Stephen Lockwood and Dr. Chris Eagle, AHS president and CEO, said the measures are needed.
The moves became effective after being announced during a board meeting at Chinook Regional Hospital Thursday morning.
They will also form the basis for AHS's forthcoming 2013-14 budget, expected to be presented at a special board meeting on April 2, where the focus will be on high-priority areas, Lockwood said.
"That means we will be reducing our costs and we'll be more effective and efficient elsewhere in the health system within the overall budget that we're receiving" he said.
"The next year and beyond will see us transforming the health system. We know the direction we need to take and there's no reason to wait until we get our budget finalized to move forward on some of these matters. We will grow where we need to grow and we will reduce where we need to reduce."
The three-year compensation freeze for all management, as well as out-of-scope employees and physician leaders, will affect about 10,000 of AHS's overall staff of 100,000.
AHS will also be reviewing the size, roles, functions and titles of its senior leadership team. And when the AHS fiscal year ends on March 31, the organization will eliminate pay-at-risk for all executives and commence a review of executive salaries.
Both Lockwood and Dr. Eagle emphasized this doesn't mean any job losses, although with the structure of some union contracts, some people will have to be laid off from one position in order to take a new position as AHS shuffles its priorities.
"We're not intending to reduce the size of our clinical staff," Lockwood said.
"I don't expect the overall numbers of frontline workers to change very much in this," Dr. Eagle added. "Where they're working may change substantially over the next three years - the numbers should not."
Dr. Eagle acknowledges Alberta's population is moving into higher age demographics and says the province's biggest needs will be dealing with chronic disease management.
"That's where we need to be spending much more of our time and effort," he said, adding AHS will look at the needs and challenges of primary-care networks and family-care centres.
"When our budget comes out, you'll see us looking much more at community and much more at the populations at risk and defining what services are really going to make a difference for those populations. We're really looking at how do we re-profile our health-care system."