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AHS privatizing nearly 10,000 health care positions

With privatized services, you’d be paying not only for the labour of those workers; you’d also be paying for the profits of the private companies providing the services.

Yesterday, the UCP government announced upcoming funding cuts to Alberta Health Services.

The announcement stated, in part, that “there will be no job losses for nurses or for other front-line clinical staff”. Except, this isn’t quite true.

In his media conference, Tyler Shandro, Alberta’s Health Minister, stated the following:

So, to that end, I can confidently say government’s direction is that there will be no job losses for nurses or front-line clinical staff. Any reductions must be managed through vacant positions and existing initiatives, like operational best practices.

So, job losses of nurses and front-line clinical staff are still possible, they just have to be through attrition and operational best practices.

However, not filling a vacancy caused by attrition is still a job loss.

They reduce the number of people providing public services. Plus, not refilling vacancies caused by people leaving jobs (through retirement or quitting or whatever) means that people graduating have fewer jobs available. We’re functionally laying off graduates before they’ve even graduated.

And what exactly are operational best practices? According to the Alberta Health Services Performance Review,

OBP benchmarking is based on a worked hours metric; the total worked hours per workload unit specific to the function of the department. For example, the metric used in inpatient units is the total worked hours per patient day. OBP develops savings targets, based on reducing the number of worked hours in a given unit to the relevant benchmarks.

Alberta Health Services Performance Review, p. 27

Reducing worked hours in a given department obviously will impact how many workers are filling those hours.

Job losses through attrition and OBP are still job losses.

The announcement went on to outline which job losses were happening for sure. One area they’ll be cutting is 100 management positions.

Out of 83,053.05 FTEs in the 2019–2020 fiscal year, 3,201.66 were board members, executive, and management. That’s only 3.7%. Those board members, executive, and management collectively received $481.7 million. The other 96.3% received $8.04 billion.

Cutting 100 managers will affect only 3.1% of the total managers. The managers listed in the previous paragraph make, on average, of about $150,000 a year (including benefits). So, laying off 100 of them would potentially save AHS a little over $15 million.

According to the announcement, the Alberta government “has directed that only a portion of the actions identified in the implementation plan proceed”, which will cut as much as $600 million from the AHS budget.

That means even with laying off the managers, there’s still $580 million that’d have to come from somewhere. And the announcement indicated 5 areas that will likely make up those job losses:

  • Contracting out laundry services
  • Contracting out community labs
  • Potentially contracting out environmental services (housekeeping) in 2022
  • Potentially contracting out food preparation in 2023
  • Streamlining non-clinical and back office operations

AHS already contracts out 68.5% of its laundry services—primarily Calgary and Edmonton—to a single private company. Outside Calgary and Edmonton laundry services is generally provided through 6 AHS-operated regional processing plants and 44 dedicated on-site facilities.

Likewise, 70% of community lab services are provided by the private sector. And if environmental services are similarly auctioned off to a private company and AHS hires a food vendor, the UCP thinks these contracts—as well as “streamlining” operations—can result in the remaining $580 million in savings.

Here’s the thing though. There’s no way to save $600 million without job cuts. Even if you contract it out.

Contracting out a service that you’re already providing yourself doesn’t make the service go away. You’ll still need clean laundry. You’ll still need lab work. You’ll still need food services. You’ll still need housekeeping. And so you’ll pay for them.

But if you plan to pay hundreds of millions of dollars less than you do now, then the private companies providing the services must deliver those services for less than what you’re paying now. Except you’d be paying not only for the labour of those workers; you’d also be paying for the profits of the private companies providing the service.

Unlike the public sector, private companies are motivated by profit, and that profit must be factored into the cost of the service provided.

According to his media conference, Shandro claimed that once all the contracting out was complete, “9,700 positions [will be] shifted to private sector delivery”.

Except, it’s impossible to pay hundreds of millions of dollars less than what you’re paying now for the same services plus profit. And if we the provincial government does end up paying less for these services it will be because of one of these 3 scenarios:

  1. The same number of workers but with lower wages and fewer benefits
  2. The same wages and benefits but fewer workers
  3. A combination of the two.

Either way, tax cuts will be job cuts. There won’t be 9,700 jobs shifted to the private sector. Some of those jobs will be lost forever.

And let’s not lose sight of the fact that the majority of the people working in the areas targeted by the UCP government will be women.

In his media conference, Tyler Shandro, Alberta’s Health Minister, stated the following:

Today, I’m releasing the AHS Review Implementation Plan in its entirety and outlining the priority given by government to AHS for ensuring a long-term and gradual implementation of the plan.

Make no mistake. When they said that “there will be no job losses for nurses or for other front-line clinical staff”, they didn’t mean ever. They meant right now. Those cuts will still be coming, but they’ll be—to use Shandro’s words—gradual and over the long-term.

Remember, Alberta already has the second highest unemployment rate in the country. These changes will not improve that.

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By Kim Siever

I live in Lethbridge with my spouse and 5 of our 6 children. I’m a writer, focusing on political news, social issues, and the occasional poem. My politics are radically left. I recently finished writing a book debunking several capitalism myths. My newest book writing project is on the labour history of Lethbridge.

I’m also dichotomally Mormon. And I’m a functional vegetarian: I have a blog post about that somewhere around here. My pronouns are he/him, and I’m queer.

2 replies on “AHS privatizing nearly 10,000 health care positions”

I have seen suggestions that the Vancouver Island health authority took similar steps several years ago and subsequently found that little or no cost savings were achieved and service quality and patient outcomes suffered, so now they are reversing course and bringing those services back in-house. Do you know if this is true? Also, any idea to what extent other provincial health authorities outsource these services, and what their experiences have been in terms of cost savings, service quality and patient outcomes?

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