July 4, 2014 5:08 pm

Big payouts to health execs the cost of fixing system: Alberta health minister

Health Minister Fred Horne.

File photo, Global News

EDMONTON – Alberta Health Minister Fred Horne says while he, too, isn’t happy with large salary payouts to former executives, they were necessary to “right-size” the system.

“Those types of contracts do not exist in AHS today,” Horne told reporters Friday.

“(But) we knew there was going to be a cost to people who would be departing the organization.

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“Quite frankly I share the same view around some of those amounts – they’re very large amounts – but that was the cost of right-sizing the system.”

Horne said since then he’s instituted a transparent salary grid, with no hidden bonuses, in line with other comparable jobs in the public sector.

“We’ve delivered on what we said we’d do,” he said.

Horne’s comments were in response to the Alberta Health Services 2013-14 annual report that announced six and seven-figure deals reached with some departing executives.

David Megran, the chief medical officer of clinical operations, left with $730,000 in severance and a $1 million lump sum pension payment.

Bill Trafford, the former acting chief transformation officer, left with $391,000 in severance and pension payments of more than $11,000 per month for 10 years.

Former AHS financial officer Duncan Campbell was paid his annual salary of $425,000 even though he took a five-month leave of absence. He has since left the organization for British Columbia, but is being paid $500,000 to conduct a study on types of health funding models.

Some of these changes came after Horne directed last fall that AHS slim down its executive ranks.

AHS is a separate organization that handles day-to-day delivery of health care under the aegis of Horne’s Health Department.

Horne said some of the problems also stemmed from 2008, when the province dissolved the health regions into the current centralized AHS superboard.

“In the early years of AHS, there were some very large, generous contracts that were let out,” said Horne.

“And they were kind of all over the map. There was no classification system for senior executives.”

It’s been a tumultuous ride for AHS since, with frequent turnover in the executive suite.

Last June, Horne fired the entire board of AHS after it refused his directive to cancel $3.2 million in bonus payments to 99 senior executives.

Opposition critics have said it has been Horne’s interference in the AHS ranks that has led to the confusion, departures and big-ticket severance payments.

Was the transformation from regional boards to one superboard too much too quickly? Horne was asked.

“I think that’s probably part of it,” he said.

“AHS was created very, very quickly. There wasn’t a lot of consultation with the people who were going to be affected.

“We saw some things like executive compensation that really didn’t make a whole lot of sense and quite frankly offended Albertans.”

© The Canadian Press, 2014

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