Adriana LaGrange, Minister of Health for Alberta, makes an announcement in Calgary, Dec. 21, 2023.Todd Korol/The Canadian Press
Health Minister Adriana LaGrange stripped Alberta’s health authority of its power to negotiate contracts for private surgical facilities, according to a government directive, after the agency’s then-chief executive allegedly raised concerns internally about the prices in the contracts.
The Globe and Mail last week reported a series of allegations former Alberta Health Services CEO Athana Mentzelopoulos’s lawyer Dan Scott made in a letter to AHS on Jan. 20. The letter alleges government officials, including Premier Danielle Smith’s then-chief of staff, interfered in AHS’s procurement process on behalf of private companies. The lawyer’s letter also alleges Alberta eroded Ms. Mentzelopoulos’s authority to negotiate deals for chartered surgical facilities, which are privately owned outfits that perform operations paid for by the government as part of the public health system.
Ms. LaGrange, in a government directive dated Oct. 18 and obtained by The Globe and Mail, declared CSFs, a “critical component” of Alberta’s health care system. The government is overhauling the health care system, and the five-page directive states that, therefore, Ms. LaGrange’s “department intends to take an enhanced role with respect to CSFs.”
The government terminated Ms. Mentzelopoulos’s four-year contract on Jan. 8, two days before she was to meet with the province’s Auditor-General about her internal investigation into procurement practices at AHS, her letter alleges. Ms. Mentzelopoulos’s letter alleges she refused to pursue deals she believed were too costly compared with similar agreements.
Ms. Smith came into office on a campaign to overhaul the health care system and has since made significant changes to AHS. Her government has twice removed the entire board of AHS, and installed three different leaders.
Auditor-General Doug Wylie has since confirmed he is looking into the AHS contracts while the RCMP says it has received complaints. The revelations have prompted calls for independent investigations into Ms. Mentzelopoulos’s allegations, while Ms. Smith has asked the Auditor-General to expedite his review. AHS on Thursday also said it is conducting a review.
The letter alleges government officials, throughout 2024, were putting pressure on Ms. Mentzelopoulos to extend a contract for Alberta Surgical Group Ltd., a CSF firm in Edmonton, and negotiate deals for new facilities in Red Deer and Lethbridge. She alleges it was unclear who owned some of the CSFs, adding to her discomfort.
Christine Myatt, a spokeswoman for AHS, in a statement said the agency executed a contract extension with ASG in October. That deal, she said, secured lower rates for contracted services than those set out in the original contract. It is unclear, however, if the terms of the extension mirror those outlined in the October directive. No deals have been finalized for facilities in Red Deer or Lethbridge, she added.
Ms. LaGrange’s directive in October ordered AHS to take “immediate steps,” in consultation with the health department, to extend ASG’s contract. The order prescribed an adjusted number of procedures and costs per procedure.
Ms. Mentzelopoulos, in her lawyer’s Jan. 20 letter, alleges Ms. LaGrange’s proposed prices were inflated compared with similar deals.
“The October Directive also set out specific rates for CSFs that Mentzelopoulos later assessed and determined were in excess of the most recently negotiated AHS rates (e.g. rates between AHS and a CSF built at the Enoch Cree Nation) and would lead to significantly increased costs to AHS – and potentially hundreds of millions in profits for the CSFs owners,” the letter alleges.
Chris Nickerson, Alberta Health’s assistant deputy minister overseeing acute care, on Dec. 23 sent Ms. Mentzelopoulos a letter exercising power, as authorized by the October directive, to lead negotiations and discussions related to CSFs. The Globe has reviewed Mr. Nickerson’s letter.
“This letter is to advise that the Department will be assuming responsibility for conducting due diligence for the CSF Procurements including due diligence with respect to any selected proponents,” Mr. Nickerson’s two-page letter said. “AHS shall cease any due diligence underway with respect to the CSF Procurements or any selected proponent unless and until further notified.”
The December letter, again relying on the October directive, ordered AHS to give Alberta Health “all reports, data, or information” necessary for the department to conduct due diligence on the contracts and potential facilities.
“This includes, without limitation, any findings or reports arising from any investigation or review conducted or initiated by AHS with respect to the CSF Procurements or any of the selected proponents,” the December letter said.
Jessi Rampton, Ms. LaGrange’s spokeswoman, said after Alberta’s government learned of concerns surrounding CSFs, it repeatedly asked AHS for documentation to substantiate the claims.
“It was extremely concerning that no substantive information and documentation had been provided to the government after nearly eight months of requesting it,” Ms. Rampton said in a statement. “And that is why Minister Adriana LaGrange issued a directive in December to compel AHS to share all details related to CSF contracts and contracting with Alberta Health.”
The order, Ms. Rampton said, was not about shutting down AHS’s internal review. “To the contrary, it was about understanding whether there was actual evidence of the problems raised by the former CEO of AHS, or whether AHS management was simply attempting to disrupt the growth of CSFs in the health system.”
Mr. Nickerson did not acknowledge a request for comment Monday. The Premier’s Office did not acknowledge requests for comment on Monday. Ms. Mentzelopoulos has not commented on the allegations.
ASG did not acknowledge a request seeking comment Monday, but on Friday said it was “shocked and dismayed” at the allegations and that the claims are “false and do not reflect our values, our mission, or the dedication of our team to providing exemplary surgical services efficiently and cost effectively.”
Ms. Mentzelopoulos’s letter alleges the October directive came after months of her resisting government interference regarding CSF negotiations. It alleges she launched an internal review into CSF contracts and procurement, but the Dec. 23 letter ordered her to end it.
Ms. Mentzelopoulos alleges she asked Alberta Health who would handle the CSF process under the October directive and was told Jitendra Prasad, who at one time led AHS’s procurement operations, would lead the negotiations for the government department. She was also informed that Mr. Prasad helped draft the October directive, her letter alleges.
In early 2024, Marshall Smith, then the premier’s chief of staff, told Ms. Mentzelopoulos that Mr. Prasad had been installed in Alberta Health to take care of contracting, the former AHS executive alleges.
“Mentzelopoulos was uncomfortable with the inference that Prasad would be taking some level of direction from Marshall Smith, and potentially the Premier’s Office, on AHS procurement and contract issues that were specific to AHS and fell within Mentzelopoulos’ mandate as President and CEO,” she alleges in her letter.
Mr. Smith left government in early October. He did not acknowledge messages seeking comment.
Mr. Prasad did not acknowledge a message seeking comment.
The letter alleges that Ms. LaGrange had been briefed on the investigations, but was dismissive of them.