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Government & policy

Alberta Health borrows $220M from Royal Bank

EDMONTON – Alberta Health Services is borrowing $220 million from the Royal Bank to help cover a deficit that’s expected to reach $1.24 billion by the end of the fiscal year, which ends March 31.

What’s more, further borrowing is in the offing. “We’re able to cover our deficit at the moment,” said Alberta Health Services CEO Stephen Duckett (pictured). However, he added that, “Obviously, if we continue on our current trend, we’ll have to borrow some more, which is what we said at the start of the year.”

Rising costs, such as those related to the H1N1 campaign, may drive up the deficit, leading to the need for additional loans.

The Alberta health super-board has been searching for new ways to cut costs. The board has received approximately 450 suggestions from healthcare staff on how to save the system money. Duckett says he will reward the best of these with prizes out of his own pocket.

The board continues to look for ways to save another $550 million each year on top of the $650 million it says it has already found by introducing voluntary retirement packages, leaving 650 job postings empty and consolidating the payroll departments from the former health regions.

So far, about 2% of employees eligible for voluntary retirement packages have applied, although only a handful have been accepted to date, Duckett said.

“We’ve still got further opportunities,” he said.

“There’s a whole lot of other strategies we’ve got in play that we’re still examining because as you appreciate, finding savings of this kind, while still protecting access and quality, requires rigour and requires us to work through this in a systematic and serious way.”

He said Alberta Health Services has no plans to lay off nurses and other front-line health workers, even though salaries of doctors, nurses and others make up the biggest portion of the health budget.

“At the moment, we have no plans for compulsory layoffs to achieve our savings,” Duckett said.

Premier Ed Stelmach has also said no hospitals or hospital beds will be closed if Alberta Health Services runs out of money in February, as some analysts have already suggested.

But Alberta’s health superboard announced in September it will close 300 hospital beds over the next three years while creating more beds for seniors in the community.

Posted Dec.10, 2009