Alberta Health Services said Thursday it is implementing a hiring freeze, wage freeze and other cost-cutting measures, effective immediately, in an effort to cut costs following the province's 2013 budget announcement last week.

Effective Thursday, a three-year compensation freeze has been put in place for approximately 10,000 Alberta Health Services management, out-of-scope employees and physician leaders.

A hiring freeze is in effect for all administrative positions that are not mission-critical, with any hiring focused on clinical care.

Alberta Health Services is reducing administrative expenses by at least 10 per cent – or $35 million over the next three years.

Pay-at-risk for all executives will be eliminated effective April 1 and a review will be launched on executive salaries.

A review is also being launched looking at the size, roles, functions and titles of senior leadership teams.

Travel is also being frozen – except in “the most exceptional, care-related and business circumstances.”

Alberta Health Services received a three per cent funding increase in last week’s provincial budget, which is 1.5 per cent less than what had earlier been projected.

“The measures I’ve outlined today mark only the initial steps in transforming Alberta’s health system,” Alberta Health Services President and CEO Dr. Chris Eagle said at a meeting in Lethbridge.

“Ultimately transformation will involve workforce changes that will touch on every part of Alberta Health Services, working from the principle that the system must be designed to make sense from the patient perspective, including community-based care and care for vulnerable populations.”

Concerns over jobs

The news has nursing student Hayley Johnson wondering if she'll be employed after graduation.

"It worries me," Johnson said.

Johnson says she's had two potential summer jobs in the works that are now both unavailable due to funding.

"They called back saying they had to close or put the position on hold and close all interviews for now," she said.

Nursing student Jade Watson worries what the changes mean in the long run.

"The nurses who are directly interacting with the patients are important, but if you don't have administrators to organize stuff and make sure that things are running smoothly, that's going to cause problems too," Watson said.


Changes to roles, responsibilities, and looking a re-deployment

Alberta Health Services says clinical staff is the last place they'll look at making cuts, however Eagle said roles and responsibilities for health care workers will change.

“We will ask many of our nurses, support workers, physicians and administrators to put their skills to work where they can have the greatest impact,” Eagle.

“That will mean changes in our workforce. Will it have an impact on the quality of patient care? As you’ve heard, our direction to leaders is no, it should not.”

Eagle said layoffs would be a first step in a process to re-deploy staff.

“To move them from one part of our organization to another where their skills are needed,” he explained.

“In fact, we will continue to hire in high priority areas.”

Board chair Stephen Lockwood said AHS will work towards better quality and better value, despite the less than projected funding increase.

“We will do nothing less than transform Alberta’s health system toward a system that is simpler and easier for patients to understand, in which local leaders have more decision-making authority, where care is more community-focused and where our processes are designed from a patient perspective,” Lockwood said.

“Every new dollar we spend will be spent on those priorities.”

Priorities such as primary care, the aging popualtion and reducing wait times.

"You'll see us looking much more at community and much more at the populations at risk," Eagle said.

But Friends of Medicare says while this is a good first step, it has concerns about next steps.

"We know even pre-budget, hiring freeze is happening with the front-line workers, not just the business and administration part of it," said Sandra Azucar, with Friends of Medicare.

A full AHS 2013-14 budget will be approved by the board at a meeting in early April.

More details on cost-cutting measures are expected at that time.

With files from Carmen Leibel