Jun 12 2013

“Independent Boards” for Government Services

Today, Alberta’s Health Minister, Fred Horne, fired the board of directors of Alberta Health Services.  He did so because the board, claiming independence in the day-to-day management of Alberta’s publicly funded health care system, decided to go ahead and pay bonuses to 99 senior executives.  Their argument is that these 99 executives were entitled to these bonuses under their employment contracts that were in force prior to the recent government budget demanded spending cuts.  Mr. Horne, after agreeing earlier this year that the AHS board was “independent”, now decided that they shouldn’t be handing out money while also cutting staff.

Now my first complaint about the AHS board’s decision is that AHS met NONE of it’s targets for performance – so how can one justify paying the executives in charge a bonus that should be tied to performance.  The fact the measurements moved in the direction of meeting the targets should not be sufficient.  You have to meet targets to be rewarded.

Second, why are their 99 senior executives within AHS?  Their compensation should be public, as is the compensation of executive management in publicly traded corporations.  We need not know how much each one makes as an individual, but as a group this should be released on an annual basis.  And 99 seems like a LOT of senior management.

My biggest complaint isn’t about the flip-flop of Mr. Horne on the independence of the boards.  It isn’t even about the legal mess the board and the executives may have against the Province of Alberta (i.e. the taxpayer) for this action – I don’t know what the board members contracts say, but they may have a valid claim for improper termination.

My biggest complaint is regarding why there are such boards and giant executive management structures in the first place.

It has been said that the reason for these “independent” boards is to prevent political meddling in the management and provision of the services provided by the state to the people.  My view is that this is smokescreen.  The real reason for these “independent” boards is to provide plausible deniability for the politicians when the management of the system results in bad press.  When budget cuts are made, the politicians can claim that the board is making the decisions of what to cut, not the the politicians.

I have a better solution.  There should be a CEO in charge of the health system.  His payment measures should be based on “Cost per Patient” on a annualized basis (not per visit) and on customer satisfaction surveys completed by each Patient and/or their family members.

The CEO will have an incentive to reduce “management” because that increases the cost per patient.  He will be focussed on spending money on the purpose of the system – provision of a service to the customer.

The CEO will report directly to the Legislature – not to the Minister.   The minister will be the conduit for government policy, overall budgets, etc. to the CEO and the management team.  To PREVENT political interference in the management of the health system, all communications between the CEO and the political class shall be made PUBLIC within 7 days of the communication.



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1 comment

  1. Cynical Bard

    So having fired the Board, and appointing an Administrator, Fred has changed his mind and agreed that the employees were due the money anyway. So we did all this for absolutely nothing. What else is new?

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