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Alberta Health Services Chair to Health Minister on executive bonuses: 'Drop dead, Fred!'

Stephen Lockwood

Whatever happens next, it seems certain Alberta Health Minster Fred Horne is going to end up with egg on his face.

Indeed, when the dust has settled from the current contretemps at Alberta Health Services, the entire government of Alison Redford is likely to look foolish.

Challenged yesterday by Alberta Health Services Chair Stephen Lockwood over the question of bonuses for the health system’s top 99 executives, Horne has no way to respond that won't make him look either foolish or weak, possibly both.

Yesterday morning, Horne ordered Lockwood in no uncertain terms not to pay $3.2 million in budgeted bonuses in the current fiscal year to the senior executives of AHS, the massive province-wide health agency that was created in 2008 by former Premier Ed Stelmach and then-health-minister Ron Liepert.

"Later this afternoon, the AHS board will announce that it has made a decision to award bonuses to its employees," Horne prophesied in a statement issued after a news conference in Lethbridge.

"However, at a time when we've asked our front-line providers -- including doctors and teachers -- to take freezes in pay, we cannot and will not accept AHS's decision," he said. "It is completely out of step with the times. As a result, today, I have issued a directive that instructs the AHS board to reconsider its decision to pay executive bonuses." (Emphasis added by me.)

Never mind that back in March, Horne said in response to questions about exactly the same situation: "It's a decision for the AHS board." But that was then and this is now -- a time frame during which it appears to have dawned on the government that generous bonuses for senior public-sector executives are both sure to be unpopular with voters and bad optics for a government demanding big concessions from public service unions.

The independent-minded AHS chair, however, obviously had other ideas.

Yesterday afternoon, Lockwood, a lawyer and trucking company executive from Calgary who is plainly used to not being challenged by anyone about anything, called a special meeting of the board, where the members promptly voted to defy Horne and pay the bonuses.

One has to feel a certain sympathy for Lockwood's position, which is that a deal's a deal, the executives were promised bonuses this year and AHS will keep its word. Next year, there will be no bonuses, Lockwood has already said.

"This is about doing something once you have said it and not backtracking on it," he told a local newspaper yesterday.

His challenge to the health minister leaves Horne and the Redford Government with only two choices, neither of them particularly palatable:

Horne can fire the entire board, or at least Lockwood.

This will make the health minister look like a fool.

After all, it was Horne who appointed Lockwood as chair less than a year ago in September 2012, praising his "tremendous business experience" and touting him as the right man to lead the health system into the future. (Lockwood was the permanent replacement for Ken Hughes, who quit to run for Redford's Progressive Conservative Party, for which he is now the energy minister.)

And imagine what would happen if it were then revealed that AHS was doing much better than expected financially under Lockwood’s leadership -- even after the bonuses!

On the other hand, Horne could not fire Lockwood.

This will make the minister appear powerless, or at least weak.

Firing any member of the board over voting to do its duty as it sees fit will also raise serious and potentially complicated questions about who actually runs AHS.

The board exists, after all, to insulate the government from unpopular decisions about the administration of the provincial health system. If any member of the board is fired because for not doing the government's bidding over an item of business well within the purview of the board, the whole edifice is exposed as a fraud and the health system as little more than a government department.

If anything goes wrong -- and, count on it, there are going to be big health care controversies facing this government in the next few months -- Horne and the rest of the Redford Government will have nothing to hide behind and no one to blame.

It would also raise the question of just what we taxpayers are paying Dr. Chris Eagle, the CEO of AHS, his $585,000-per-year salary (plus his controversial bonus, cutely termed "pay at risk" by AHS) to do if Horne is now running the show himself.

But if Horne doesn't fire the board, he will be tolerating an open rebellion -- surely not an example this increasingly shaky-seeming government wants to offer when there may be other rebellions brewing, even within Redford's own Tory caucus.

Probably the best option for Horne is to keep Lockwood and the rest of the board on, but somehow persuade them to change their minds. It doesn't sound, though, very much as if Lockwood will give him that chance.

Perhaps Horne should have paid attention to what Lockwood had to say for himself when he hired him.

"I've never been one to back down from a challenge," Lockwood said at his first news conference as chair. Apparently he meant it.

Well, this is what happens when the government appoints people who turn out to have minds of their own -- something that doesn't happen very often here in PC Alberta.

Stand by for developments.

This post also appears on David Climenhaga's blog, Alberta Diary.

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