Saturday, January 5, 2008

Calgary Health Region 85 million in red

While the reduction in bureaucracy seems a progressive move, 85 million does not really seem a huge deficit in a 2.8 billion budget. Calgary is a fast growing city so it is not really surprising that funding is not keeping up with rising costs. Perhaps value for money is not being delivered but often attempts to save money can impact negatively on service although it certainly is true that compared to many European systems some of which deliver better service than Canada's does we expend a larger portion of our GDP on health care. Compared to the US though we are far more efficient.

Health region $85M in red
Jack Davis steps down as president, remains CEO

Michelle Lang
Calgary Herald

Friday, January 04, 2008

CREDIT: Calgary Herald Archive
Jack Davis

Calgary Health Region revealed Thursday that its 2007-08 deficit may balloon to $85 million and Jack Davis will hand over the reins as president in part of a senior executive shuffle.

Davis will retain his duties as chief executive officer in the reorganization that takes effect next week.

The CHR's executive team is being pared from about 18 positions to 11 in an attempt to reduce bureaucracy and allow for quicker decision-making.

"There is often duplication of effort and resulting frustration (under the current structure)," wrote Dr. David Megran, CHR's chief medical officer, in the January issue of Calgary physicians' magazine Vital Signs.

"Our staff conveyed their belief that we have a hierarchical and complex decision-making structure."

But the organizational changes are not expected to produce major cost savings at the cash-strapped CHR, leading the Alberta Liberals to call on the government to assess how the province's health authorities are spending their money.

"How much is going into the bureaucracy and how much is going into front-line care?" asked Dr. David Swann, a Calgary Liberal MLA and physician.

"I'm not convinced we're getting value for money."

News that CHR will sink $85 million into the red comes less than two weeks after Davis told the Herald the region would face a large shortfall this year, although he wouldn't reveal the exact size of the deficit.

The financial troubles at CHR -- a $2.8 billion organization that runs Calgary's medical system -- are largely related to massive staff overtime costs, worth about $63 million.

In the past, the provincial government has assisted CHR when the health body failed to balance its books, covering a portion of the region's $70 million deficit in 2006-07.

CHR is looking for the same help this year.

"We want to ask government for assistance," said Mark Kastner, a spokesman for CHR. "Some of our financial issues are related to workforce issues that are out of our control."

But Alberta Health hasn't committed to covering the shortfall, saying the region must come up with a deficit elimination plan.

Dr. Tom Noseworthy, a health policy expert at the University of Calgary, said the CHR may have a more difficult time securing a government bailout this year, noting the province has been under pressure to rein in costs.

Politicians have been hinting they want to bring skyrocketing health budgets under control, saying growth in spending must be brought down from the double digits to inflationary levels.

"The region is up against it this time," said Noseworthy. "They'll have to live within their means."

Noseworthy added the restructuring at CHR removed a layer of management from the region and it's "a signal to the organization that we're now going through more change."

Under the reorganization, Davis will hand over his duties as president to Dr. Chris Eagle, the CHR's former chief clinical officer. In addition to his role as president, Eagle will be the chief operating officer.

Davis, who was not available for an interview Thursday, will focus on his work with CHR's board and the "bigger picture," said Kastner.

The reorganization -- which includes sweeping changes to the way CHR is structured -- isn't likely to significantly cut costs from the region's $91 million administrative budget, in part because only two executive team members have left the organization. Others who aren't part of the new executive team have been reassigned to other areas.

Swann questioned what the reorganization will achieve, arguing past changes to health administration in Alberta have resulted in few improvements to medical care.

But Kastner said the changes allow CHR to have a smaller team focused on health outcomes, such as reducing obesity and tackling the large number of low birthweight babies in Calgary.

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