Alberta budget 2021 targets health cost savings after COVID-19 pandemic

Click to play video: 'Uncertainty around Alberta health care amid budget, COVID-19'
Uncertainty around Alberta health care amid budget, COVID-19
WATCH: Health care has been top of mind for Albertans amid the COVID-19 pandemic. But as Julia Wong reports, the uncertainty around the situation has not been resolved with the 2021 budget – Feb 26, 2021

Alberta’s budget, released Thursday, includes an increase to health spending and at least $1.1 billion to fight COVID-19 and another $1.25 billion in pandemic spending if needed. That’s on top of $5.8 billion in COVID-19 spending last year.

The health budget is to rise by about $1 billion to $21.4 billion.

“Adequately resourcing health care is our number one priority in budget 2021,” Finance Minister Travis Toews said.

But uncertainty around health care hasn’t really been addressed and there are indications of future cost savings after the pandemic is done.

Click to play video: 'Alberta Budget 2021:  Toews says public sector wage structure must be addressed'
Alberta Budget 2021: Toews says public sector wage structure must be addressed

The province still wants to freeze physician compensation.

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“The number is one thing, but I think the bigger issue is that this government has shown itself to be largely unwilling to negotiate in good faith with physicians and to maintain a collegial relationship with physicians,” said Lorian Hardcastle, an associate professor of health law and policy at the University of Calgary.

“There is ongoing litigation there, they have had several contentious interactions in the past.

“In order to achieve those savings with respect to physicians, the government needs to work with physicians themselves and iron out some of the animosity that exists in that relationship.”

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Hardcastle believes it’s not really what the government is trying to do in terms of keeping doctor expenses down that’s become the issue; it’s how it’s going about it.

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“They need to smooth out their relationship with health-care professionals, particularly doctors, and get them on board if they want to implement any of the changes,” she said. “The success of any of the changes the government wants to implement depends on the cooperation of the people who will be affected by those changes and the ones to implement them on the ground.”

For the rest of the health-care sector, the budget is based on a pay cut.

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Negotiations are still underway, but it calls for a $700-million overall reduction this year, with further cuts the following year.

“There’s absolutely no appetite from our members to take any rollbacks or freezes,” said Guy Smith, president of the Alberta Union of Provincial Employees (AUPE). “We’ve just come through multiple years of that.”

He said the reduction is disrespectful to public sector workers.

“They’ve been on the front lines, supporting Albertans through this pandemic, and yet this government is now treating them like this. The anger amongst our members is going to grow,” Smith said.

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A number of public sector collective agreements will soon be up for negotiation — or currently are — and Hardcastle predicts they’ll be heated.

“With several of the health care unions, the negotiations could be quite contentious, with the government wanting to save money, and of course, those unions taking a very reasonable position that: ‘We were some of the people working hardest during COVID and you’re going to continue to lean on us given that COVID is not over and given that, of course, there’s lots of catch-up that will have to happen in the health-care system post-COVID.”

Click to play video: 'Alberta government to cut up to 11,000 health care jobs'
Alberta government to cut up to 11,000 health care jobs

Alberta Health Services will still move ahead with cost-saving measures previously identified in an Ernst & Young review.

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The budget clearly states: “future savings initiatives will be considered once mass vaccination has been achieved.”

“We’re on a path of delivering government services most efficiently,” Toews said.

“I believe every government should be constantly evaluating programs, service delivery methodology, to ensure we’re providing taxpayers with best value.”

The finance minister stressed Alberta’s goals will be to bring spending in line with other provinces on a per-capita basis and keep debt manageable.

“One area where we can no longer delay is addressing a public sector salary structure in Alberta that has for decades, been an outlier compared to that in other provinces,” Toews said.

Click to play video: 'Ernst and Young hired to look at Alberta Health Services'
Ernst and Young hired to look at Alberta Health Services

He thanked front-line workers for going above and beyond their regular responsibilities to respond to the needs created by the pandemic.

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“Your contribution matters and it’s not gone unnoticed.”

“However, addressing public sector salary structure is required to protect government services and ensure a sustainable fiscal trajectory for the province.

“We no longer have the revenue to justify higher comparative wages, especially at a time when many Albertans throughout this province have either experienced a wage reduction or lost their job entirely.”

Hardcastle said the budget makes it clear the province still plans to implement cuts to AHS that were identified pre-pandemic.

“Some of those cuts are certainly not problematic,” she said. “Some of them relate to making sure things operate more efficiently, that patients who don’t need to be in hospital are discharged. Some of what’s in the Ernst & Young report is quite sensible.

“There are other pieces, though, of that report that are concerning and I wouldn’t want to see governments go ahead with.”

For example, Hardcastle is concerned with the discussion around government possibly divesting itself of the AHS-owned continuing care facilities. She also pointed out “modest” funding for programs like AISH and addictions services, which she believes could compound the pressure on the health-care system.

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“The government has certainly adopted more of a recovery approach than a harm-reduction approach and I think the budget for those services, given what’s happened during COVID and given some of those increases in substance use during COVID, that the budget to respond to that was quite modest,” she said.

“The squeezing of all things in the health-care system, and some of those social programs as well, will also place pressure on the health-care system.”

The province did say that if the allocated COVID-19 contingency fund — to cover things like PPE, testing and vaccination — is not enough, there are opportunities for adjustments in the future.

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