Ousted Alberta Health Services boss warned of private surgery prices, documents show

February 26, 2025 Canuck

The former head of Alberta Health Services Athana Mentzelopoulos tried to caution the government about the potential impact of chartered surgical facilities on the provincial health-care system months before she was fired, CBC has learned.

Mentzelopoulos earlier this month filed a $1.7 million wrongful dismissal suit alleging she faced government pressure to sign off on commitments for new chartered surgical facilities (CSFs).

One of those was an approval of a contract extension for one vendor, Alberta Surgical Group (ASG), despite concerns she had that the costs were high compared to other contractors.

In a draft letter obtained by CBC News and referenced in her statement of claim, Mentzelopoulos wrote that “AHS remains committed to supporting CSFs and their role in the health system and recognizes the value that they bring including additional surgical capacity and improved access for scheduled surgeries.”

But she also noted there are challenges as well.

She said that in addition to chartered surgical facilities costing more than the public system, there was concern they could siphon off critical staff from hospitals.

“These disruptions will have negative consequences for patients and communities, limiting timely access to emergent, urgent and medically complex surgeries such as cancer, general surgery, orthopedic and vascular surgery,” she wrote.

The Oct. 1 letter was emailed to Darren Hedley, who at the time was associate deputy minister of health.

The letter was addressed to Health Minister Adriana LaGrange but Mentzelopoulos, in her email, suggested that it should be sent to then-deputy health minister Andre Tremblay. CBC News has not verified whether LaGrange or Tremblay viewed the letter.

Mentzelopoulos wrote that “[chartered surgical facilities] continue to demand higher pricing than the equivalent comparable cost within AHS and with other surgical providers.”

She added health-care staff may choose to work in those private facilities over the public system because they can offer higher incomes, more flexible schedules and fewer on-call requirements.

A limited workforce and budget will increase the chances of “acute care service disruptions” across the province, she wrote.

Mentzelopoulos made several recommendations, such as ensuring chartered facility pricing “not exceed the validated AHS internal costs” and that funds “not be provided for services that do not occur.”

On Oct. 18, weeks after the letter was shared with Hedley, LaGrange issued a directive ordering the provincial government to take over contract negotiations with chartered facilities.

‘Recognized the risk’

Mike Parker, president of the Health Sciences Association of Alberta, reviewed Mentzelopoulos’s letter and said it raised red flags.

“As an employee at that time, as the CEO of AHS, she recognized the risk in all of this conversation. She was doing her due diligence and reporting that risk into the ministry,” Parker said.

“Public health-care is for the patients and private surgical facilities are for the profits and they do not see eye to eye in their models.”

Stirling Bryan, a health economist at University of British Columbia, said the message of Mentzelopoulos’s comments in the letter are “fair.”

“We’re in a workforce crisis, that some people say, in health-care in Canada at this point,” he said, adding there is a limited supply of workers.

“Undoubtedly in the short-term at least, there would be some adverse consequences.”

However, he notes that publicly-funded private provision of health-care acts as a pressure valve for the health-care system.

“We have long wait lists and people see this as an opportunity, potentially, to actually relieve waiting lists by having extra capacity for surgeries and for delivering care in the private sector to complement the services that are provided in the public sector,” Bryan said.

He said the procedures in the private system are typically more expensive than the public system but he said that it allows for more operations to be done, thereby easing wait lists.

However, Bryan said private surgeries should be approached with caution.

“It’s a short-term fix that shouldn’t be seen as something that can solve a systemic problem that we have in the system,” he said.

When asked about the concerns in the letter at an unrelated press conference Monday, Alberta Premier Danielle Smith said the public system is well resourced.

Price comparison

In the letter, Mentzelopoulos also includes a table that compares AHS costing for hip, knee and shoulder replacement surgeries with private providers like ASG and Clearpoint.

While a hip replacement would cost $4,044 with AHS, it would cost $8,303 at ASG and $3,622 at Clearpoint.

The table shows a shoulder replacement would cost $4,833 with AHS, $11,243 at ASG and $3,875 at Clearpoint.

A knee replacement would cost $4,036 with AHS, $8,510 at ASG and $3,276 at Clearpoint.

Rose Carter, a lawyer representing ASG, said the company’s contract with AHS contains a confidentiality clause that prohibits it from disclosing anything related to the contract

“Thus, ASG is unable to publicly defend itself,” Carter said in an email.

She instead pointed to numbers from Canadian Institute for Health Information (CIHI).

“ASG’s numbers are below those previously reported in the press,” Carter said.

When asked about the difference in pricing, Smith disputed Mentzelopoulos’s numbers, saying that she relies on numbers from CIHI.

That data, which includes inpatient costs, shows the mean cost of a hip replacement in Alberta in 2021-2022 was $10,737.

The AHS data, according to the letter, excludes costs covered by the health authority, such as implant device costs, clinical lab services and diagnostic imaging.

When pressed on the contrasting figures, Smith said Mentzelopoulos’s numbers were incorrect.

“When AHS claims that they have a lower cost structure and they only include half the cost, I’m sorry, there’s no credibility to that,” Smith said on Monday.

“We can’t be making up numbers with Alberta Health Services in order to make it look like chartered surgical facilities are more costly.”

When asked whether her government would be okay with paying more for surgeries in private facilities, Smith said she “would hope not.”

“The notion behind chartered surgical centres is exactly that, that they are supposed to be able to offer surgery at a lower cost. And so, I guess, that’s the question is, what is the actual cost?” she said.

Bryan, the health economics professor, also examined the chart and called the private cost of a procedure double what it is in the public system “a little surprising.”

He said, with confidentiality agreements normally part of contract signing, it is difficult to ascertain what the price differentials are.

“I would be alarmed at that sort of differential if this was seen as a long-term fix for the health-care system and for the provision of elective surgery in an Albertan or Canadian context,” he said.

He said that private contractors for health-care “inevitably” leave provincial governments in vulnerable positions because of fiscal constraints in health-care.

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