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Cookie incident uproar costs Alberta health official his job

Stephen Duckett

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The groundwork was laid long before, but make no mistake - it was an oatmeal-and-raisin cookie that cost Alberta Health Services president and chief executive officer Stephen Duckett his job and taxpayers about $680,000 in severance pay.

Observers and opposition parties warn, however, that the problems with Alberta's nascent foray into a lone, massive health board reach far beyond baked goods, saying Dr. Duckett's case was simply a symptom of a failing system.

After more than six hours of deliberation that stretched over Tuesday evening and part of Wednesday, the 14-member Alberta Health Services board came to a "joint" agreement with Dr. Duckett (who is currently on vacation in the United States) that will see him immediately end his time as head of province-wide health board.

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That came five days after Dr. Duckett left an urgent meeting on a crisis in provincial emergency room care and refused to speak to the media - instead, he waved a cookie at a television camera and insisted he was busy eating.

Frustration with the system, and over the government's handling of the ER crisis, crystallized around that single, made-for-TV moment. The snub was deemed "offensive" to "all Albertans" by Premier Ed Stelmach himself, making Wednesday's announcement seem inevitable. Board chairman Ken Hughes acknowledged the cookie "incident" played a role in the decision to part ways with Dr. Duckett.

But both Mr. Hughes and Mr. Stelmach struck the same chord - it wasn't the cookie; it was the firestorm that followed that dragged down Dr. Duckett and prevented him from being able to do his job.

"His ability to carry on and conduct his role as chief executive officer was compromised by his current circumstances - one element of which was that incident," Mr. Hughes said. "The board had clear confidence in him up until that point. But the dynamic changed. The atmosphere changed."

Added Mr. Stelmach: "We just couldn't move forward."

Among those who supported the move were Health Minister Gene Zwozdesky, who felt Albertans had lost trust in Dr. Duckett and made his feelings "clear" to the board, Mr. Hughes said.

But the board itself was split - one member, Gord Bontje, has already resigned over the decision, and Mr. Hughes expects "a couple" others may follow. Whether they left because of the decision to part ways with Dr. Duckett or because of the health minister's interference with their mandate is unclear.

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The departure of Dr. Duckett and the board members come two days after the dismissal of MLA Raj Sherman (the parliamentary secretary for health who broke rank and spoke out against his own party's health policies, only to be kicked out of Mr. Stelmach's party). Alberta has now lost at least three of the key players responsible for delivering health care.

The saga is the latest in what has been a controversial and drawn-out effort by the province to create the so-called AHS "super board," which was formed out of 12 smaller boards. Many have called it a failure, one that left Dr. Duckett doomed from square one.

"Stephen Duckett's actions on Friday were inexcusable, but let's not let a viral [cookie]video distract us from the real problem," Liberal opposition leader David Swann, a physician himself, said in a statement. "The Stelmach administration's failed experiment in centralized decision-making is the root cause of the problems we're seeing in public health care."

Dr. Swann and New Democrat leader Brian Mason had called for Dr. Duckett's dismissal. The Wildrose Alliance, a right-wing party threatening the ruling Progressive Conservatives' base, had not called for it specifically, saying Dr. Duckett might have taken a different job so long as AHS was done away with.

"Whatever happens to Dr. Duckett, the main issue is we have to dismantle the super-board," Wildrose leader Danielle Smith said earlier Wednesday. "Having a single government monopoly responsible for the purchasing, the provision and the evaluation of the system simply isn't working. We're getting worse and worse service.

Mr. Hughes insisted, however, that while the AHS structure could be improved and has had growing pains, "it is effective enough to achieve the primary accountabilities that we have." He pledged to stay in his role as board chairman.

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Many in the Alberta health industry cheered Wednesday's move, as Dr. Duckett - an economist, not a physician - was not popular among many of the rank and file health workers who saw him as, first and foremost, a penny pincher. Many of AHS's 90,000 employees are also fundamentally at odds with the decision to run AHS like a business. The board members are veterans of corporate Canada, and not hospitals. Mr. Hughes, for instance, is a former MP who ran an insurance company.

"This was inevitable," says Donna Wilson, a University of Alberta professor and health policy researcher who urged AHS to move swiftly in finding a replacement who has actually run at least one hospital, or possibly a health board. "At this point, it's the biggest issue of who replaces him? And are they going to do anything about a health board that didn't properly supervise or guide his work?"

AHS executive vice president and physician Chris Eagle will step in on an interim basis. Mr. Hughes expects a new CEO will be found within three months. Dr. Eagle is free to seek that position.

"This was a very difficult decision," said Mr. Hughes, saying "loyalty" to the "extremely effective" Mr. Duckett by many on the board left them in disagreement. "This is not an easy role. If it was an easy role, it'd be a different story, wouldn't it?" Mr. Hughes said.

The AHS board is meant to be independent of government, yet Mr. Hughes acknowledged the wishes of the Health Minister played a role. "I did speak to the minister, and the directions were clear," Mr. Hughes said.

Flanked by Mr. Stelmach, Mr. Zwozdesky insisted Wednesday he didn't explicitly order Dr. Duckett out, but said "I personally found the comments inappropriate, and they began to stand in the way of our need to move forward."

Dr. Duckett was recruited from Australia and took over in March, 2009, as the head of AHS. Unions and opposition groups have jumped quickly to call the merger a failure, noting it ran an accumulated deficit of over $1.2-billion after its creation. The provincial government insists that, with time, it will save on administrative costs. Things are turning around - the most recent fiscal update, released in August, showed a first quarter surplus of $143-million. But "just finally getting the budget under control, I don't think it's enough to say he's performing well," said Dr. Wilson of the U of A.

In addition to the creation of AHS, the province has set about rebuilding a healthcare system that was gutted by Mr. Stelmach's predecessor, Ralph Klein. They repeat regularly that they've provided a five-year funding agreement to AHS - something no other province has done.

"We've done so much compared to other jurisdictions," Mr. Stelmach said, sounding frustrated. "The last two weeks have taken away from it, especially since Friday," when the cookie incident happened.

When Dr. Duckett left the meeting that day, an AHS press conference had been scheduled about 30 minutes later, but he wasn't going to be at it - only Dr. Eagle to speak. Media, wanting to hear from the man overseeing an $11.2-billion annual budget for health care in the province, chased him. Dr. Duckett refused repeatedly to answer questions, saying he was too busy eating the cookie and, at one point, thrusting the cookie towards the face of a reporter. He was chased down the street by cameras, and would not address any questions.

The refusal was viewed by many as a slap in the face. Dr. Duckett turned to his blog the next day and apologized. It wasn't until Tuesday in the legislature that Mr. Stelmach condemned the comments.

"I found the comments last Friday quite offensive. In fact, all Albertans found them offensive. It came at a time when there was a really good plan put in place, but all of that good work was relegated to the back burner, and all of the focus was on what the comments were," the premier said. He later told reporters than he used much stronger language behind closed doors, but repeatedly declined to say if he'd specifically asked the AHS board to make a decision.

By public standards, Dr. Duckett was well paid. Under his five year contract, he had a base salary of $575,000, a car allowance of $18,000 annually, an annual bonus of between $0 and $143,750 (set by the board), a $50,000 moving bonus, six weeks' vacation and one paid year of sabbatical for every five years of service. He also has annual allowances of $10,000 for personal development courses and $15,000 for financial advice.

However, the figures pale in comparison to what a CEO of a similarly sized private company would make. Canadian Tire had $10-billion in revenue last year, similar to AHS's funding level, but the retail company's C.E.O. took home $6.4-million in compensation, nearly 10 times what Dr. Duckett earned.

Dr. Duckett's contract allowed both sides to walk away in the case of "mutual agreement" without a financial obligation. Though Mr. Hughes called this week's decision an "agreement," Dr. Duckett will receive one year's salary, plus 15 per cent, in addition to $20,000 in moving costs, totalling $681,250. Those terms are all consistent, according to the contract, with a dismissal "without just cause." Mr. Zwozdesky declined to answer questions about how an "agreed" departure required a severance package.

Asked whether this week has been the worst of his tenure as premier, Mr. Stelmach smiled and quipped that it had not. He pledged to continue with the development of AHS, despite the mounting criticism.

"The system is working. Does it need some improvements? Obviously," Mr. Stelmach said.

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About the Author
Parliamentary reporter

Josh is a parliamentary reporter in Ottawa. Before moving to the nation's capital in 2013, he covered provincial affairs in Edmonton and throughout Alberta. He joined the Globe in 2008 in Toronto before returning to his home province in 2010. More

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