Rot at the top of the IWK

The IWK CEO expense scandal illustrates there is rot at the top.

As the CBC peels away the layers of this scandal and subsequent cover up I think Nova Scotians and Atlantic Canadians, since the IWK is the regional children’s hospital, have been caught off-guard. It is like the region has taken a punch in the gut.

What seemed like an innocent accounting issue has grown into the type of misused public funds and subsequent cover-up on a scale and style worthy of a Washington scandal. The selective reporting/withholding of information eclipses the misuse of money to shake the foundations of public trust.

If this can happen at such a highly-regarded institution, what is happening at our other boards, commissions and agencies? And yes, what about the Nova Scotia Health Authority and predecessor authorities? A line has been crossed which opens all to scrutiny.

We now rightly have questions about the veracity of the executive, of senior management and the board. Boards of directors are supposed to be the public’s guardian. They are supposed to have the inside information and access to ensure operations are true, accurate and managed according to the rules and regulations as well as being in line with the moral expectations of the public. This is a massive violation.

Where was the board? Robert Hanf, former president of Nova Scotia Power and former chairman of the IWK board, said he was never alerted to any inaccuracies. He only became aware of a potential problem following the CBC’s freedom of information requests. How is it that someone put in the position of board chairman because of his business expertise didn’t notice documents were incomplete? A reporter, who probably hasn’t the business background of Hanf, noticed it and challenged it. Hanf told the CBC, “the IWK board put confidence in the assurances we were provided. I trusted the information being provided to me had been properly reviewed internally and therefore that it was accurate.”

That sounds like lazy over-sight. And lazy over-sight is probably more rampant across public boards than anyone wants to admit. What do we expect with drop-in volunteer boards? I have repeatedly asked how many times any health board ever said no to an executive request? Has any board ever held executives to account for missed deadlines, spending, performance and patient outcomes? Or are public boards just rubber stamps for all too unaccountable public executives? The rot comes from relying on – and knowing how to play – the incestuous old boys clubs that populate public boards.

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Liberal math is bad for doctors

The Federal Liberals have announced plans to change the tax law with regard to small businesses.

The federal Liberal message is that people who earn $50,000 shouldn’t pay more taxes than those who earn $250,000. It’s an offensive message because it’s a vacuous sound bite that illustrates the bubble Parliamentarians and their advisors inhabit. A small business may earn $250,000 or more, but that’s the company revenue, it’s not the owner’s income.

It costs money to generate income. The government doesn’t recognize how many people live off that $250,000 – there can be employees plus the owner and any family he supports. That $250,000 gross pays for company operations, supplies, services, as well as taxes.

This sudden, ill-conceived policy change can have negative impact on health care. Most doctors are incorporated. Their practices are a small business, so they need the liability protection incorporation offers and the ability to manage business costs in a simple, straight-forward way that is acceptable to the tax department.

Here’s a crash course in family practice math:

In March 2017 a Halifax doctor, who is incorporated, told me their 2016 take-home pay was $60,000! In comparison, the Nova Scotia Health Authority has established a $144,000 pay rate for a nurse practitioner. The NP is also provided with $32,000 for an assistant, plus an office paid for by the health authority. The NP qualifies for benefits that doctors don’t (paid vacation, access to unemployment insurance, CPP, maternity leave, sick days and so forth). For this the nurse practitioner is expected to see 800 patients a year. New doctors are expected to have a patient load of 1,400 patients. Old doctors have patient files numbering from 2,000 on up.

In Nova Scotia we treat physicians like old-style assembly-line workers who are paid on a piece-work basis that we call fee-for-services. And some of those services, like refilling a prescription, aren’t a billable item, so those become the doctor’s un-deductible donation to the health care system.

When a doctor in Nova Scotia is paid for a qualifying service, they receive an average of $31.45 per patient appointment vs the $70 paid to the corporation which provides the 8-1-1 answering service. A telephone call earns a major foreign corporation more than twice what a doctor’s appointment pays.

Here’s what the federal Liberal Party is attacking:

A family practice doctor sees four patients per hour. $31.45 x 4 = a gross hourly income of $125.80.

An 8-hour day seeing 32 patients @ $125.80 = $1006.40.

A five-day week seeing 160 patients @ $1006.40 generates $5,032 in gross income.

Allowing for two weeks of unpaid vacation for the physician, plus 10 statutory holidays per calendar year gives the physician a potential for 240 working days (snow days will reduce that number). So $1006.40 x 240 days = $241,536 for the practice’s annual gross income for handling 7,680 patient appointments.

From that gross revenue, deduct average costs like: $38,000 for a receptionist/secretary, plus a part-time person to fill in when she is ill or on vacation (that’s $8,770) and $100,000 practice costs (rent, utilities, supplies, equipment, insurance and so forth). These expenses amount to $146,770. This leaves the family physician with a pre-tax income of $94,766.

In Nova Scotia, $95,000 can provide a decent lifestyle. But that’s a pre-tax figure. And consider the years of education required to train and qualify as a doctor and then the student debt to pay off. And there should be some consideration given for the stress and responsibility placed on a physician’s shoulders.

And when it comes to retirement the medical system doesn’t end its abuse. Physicians are required to maintain patient records for 10 years past the last appointment. Pediatric files have to be maintained for 10 years past the patient’s age of majority. For some that can mean preserving and making files available for 29 years! There’s a cost for safe, secure file storage and time to find and make available any requested files.

There is a huge financial disincentive to being a doctor in Nova Scotia. On top of that we have a health authority that doctors privately describe as “abusive”. And now, on top of low pay and poor working conditions, the federal Liberals are attempting to remove some of the accounting tools available to physicians and other small business owners (including farmers) to smooth out their cash flow and retirement planning.

Effective delivery of health care involves more than a spreadsheet. Doctors are in such demand that we shouldn’t be knowingly implementing regulations to drive them away.

The federal government’s math doesn’t add up. Their proposed changes dis-incentivize physicians from practicing in Canada.


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No hardship in paid leave of absence

Having the IWK’s Chief Financial Officer take a paid leave of absence sends a mixed message. Does it suggest he failed in his job or was bullied into submission by the previous CEO or that the individual is an impediment to investigations by outside auditors?

Part of a memo from the IWK’s board chair, Karen Hutt, printed by The Chronicle Herald says the CFO, “fully understands the importance of an external review and we appreciate that he wants to ensure that the integrity of this process is not compromised.”

I suppose this goes to the concept that “Caesar’s wife must be above suspicion.”

Being asked not to come to work while still being paid $760 a day/$3,800 a week is not a hardship. So, the question for the IWK Board, the Health Minister and the Government is this: if an employee on paid leave is found to have failed in his/her duties is that paid leave considered part of the severance package or are taxpayers left to flush out a package which is built up by money paid for not working?

Is executive severance a bottomless pot of gold?


A postscript: An Ontario judge who, on a lark, wore a Make America Great Again hat to work was suspended, without pay, for 30 days.


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Fudging the figures and playing the expenses

Are the financial improprieties of the IWK Children’s Hospital’s former president and CEO the first shoe to drop on fiscal mismanagement of the health care system?

Those in charge of public institutions always imply that thanks to their extreme due diligence, vetting and measured inquiry into people, ideas and treatments that we hire the best people, have the best system and can be proud of the results. Really?

How is it someone can be judged competent to run a $250-million-a-year budget, yet can’t distinguish between her personal and corporate credit cards? With a salary of $296,000 a year, the CEO should qualify for a sufficiently high credit limit to cover her many flights, car hires, hotel stays, shopping and entertainment. She shouldn’t have to slap it on the public’s card.

Was putting $47,000 in personal expenses on the IWK’s credit card greed, incompetence or carelessness? Given the duration of the expenses – charged over 27 months – this wasn’t some one-off impetuous, indulgent weekend that got away from her. It was systematic spending using public money. Any one reason would be grounds for dismissal.

It raises the question: Is there such a sense of entitlement among the upper echelons of public servants and heads of organizations that they feel “entitled to their entitlements”?

Among the questionable expenses, were two airfares that originally appeared as much smaller charges. A Halifax-Toronto flight initially listed for $517.54 was later upgraded to $1,035.08. A flight to Ottawa was originally recorded as costing $345.89, then charged at $778.17. Looking at these costs where they last-minute, bought-at-the-gate purchases or upgrades to business class? Government regulations stipulate that only flights longer than five hours can be upgraded. Flying time between Halifax and Toronto varies by plane, but averages 1 hour and 50 minutes so wouldn’t allow for business class tickets.

The IWK CEO also expensed $5,876 for a table at the Women’s Executive Network gala. The IWK said this was “consistent with the leadership mandate of the CEO.” Okay, what’s the ROI (return on investment) for that purchase? It reminds me that to celebrate the 25th anniversary of Progress magazine, one of the hospitals – I forget now whether it was the IWK or Capital Health – hosted the bar for the 500 invited guests at the World Trade and Convention Centre. I didn’t understand the benefit to health care for providing such largesse.

Equally troubling is the IWK attitude towards this mismanagement. When the CBC originally broke this story on June 22nd, the IWK’s chief financial officer Stephen D’Arcy said he was “absolutely confident” the hospital now has a good system in place and “We have a very robust control structure.”

Obviously the IWK’s structure wasn’t as good as D’Arcy and the Board would have us believe. If not for the CBC filing a freedom of information request these expenses might never have been questioned by IWK staff, who worked for the president, and thus would be ignored by the board. On June 27, then board chairman Robert Hanf, who had previously been president of Nova Scotia Power, said the board has absolute faith in the health centre’s leadership team and the systems in place to keep track of financial dealings. “Let me assure you — there has not been any financial improprieties whatsoever.”

Ah yes, nothing to see here, move along, everything’s fine. It’s being handled. Well, now we know there was, it wasn’t and wasn’t. Those readers who are shareholders in Nova Scotia Power via Emera might be concerned about this casual attitude over expenses and right and wrong. If Hanf felt that about the IWK, what is happening to shareholders’ money at Emera?

This everything-is-fine-attitude is what happens when you have weak, ineffectual, drop-in boards who meet for lunch to breeze through an agenda and act as cheerleaders giving legal cover to the actions of executives. When has any health board ever said no to the executive?

Right now we’re looking at the IWK. But what about the Nova Scotia Health Authority (NSHA)? How clean are their operations and how lean are administrative costs?

In the final days of the election, as if hoping to edge the government out of office, we learned the NSHA had spent $500,000 on furniture for the executive offices. Was this necessary? Where’s the complete inventory of what was purchased? Did it go to tender?

We shouldn’t be surprised by such expense. NSHA President and CEO Janet Knox is not known for frugality. When she was president of the Annapolis Valley District Health Authority administrative costs averaged one-to-two-percent above the national average. That doesn’t sound like a much until you consider the scale. And the perks are plentiful. For example, every Monday-to-Friday, except holidays, morning and afternoon snacks and a choice of two lunch entrees for 160 white collar workers was and is trucked 5kms across Kentville from the Valley Regional Hospital kitchens to the executive bunker in the town’s industrial park. Unlike every other public employee, Knox felt it acceptable to provide a subsidized lunch for the executives and their support team. (Is this a taxable perk? Should it be?) And, given her history in Kentville, do NSHA head office staff have access to subsidized lunches?

And to make things cheery for the holidays, the Valley Health executives authorize staff from Middleton to drive to Kentville to decorate the executive offices. Valley Regional Hospital staff are expected to decorate the hospital themselves.

Looking at the NSHA vice presidents there is at least one instance of, at best, a highly questionable action by someone accepting a six-figure public salary, and which might also fall into the same category of what the IWK CEO was just caught in. Whether a poor personal choice or a diddle with expenses, this should exclude at least one of the current NSHA VPs from dreaming of assuming Knox’s position when she retires (Knox qualifies for retirement in the next four years).

Back at the IWK, the board spent $60,000 on accountants to sort through the CEO’s expenses. Current board chair Karen Hutt, also with a Nova Scotia Power background, told The Chronicle Herald she isn’t bothered that the fix to the accounting problem cost more than the expenses.

Hutt’s attitude is extremely generous for an organization that in 2012 was so stretched for money it asked parents to supply diapers for their hospitalized children as a way to save $10-20,000 a year.

The IWK is one organization with an expense problem. What about the much larger NSHA and all the other government boards, agencies and commissions? What happens to one happens to others.

This is a prime example of why we need activist boards and not more groups of back-slapping insiders.

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Problems continue with Public Compensation Disclosure reporting

The current Public Sector Compensation Disclosure reports have been published:

When the NDP originally introduced Public Sector Compensation Disclosure the act stipulated that employees earning more than $100,000 a year be identified by name, job title and salary. The idea was that the public, who are the final employer, should have an opportunity to determine value for money.

In the first round of compensation reporting some – not all organizations – met the requirements of the Act. Sometime since the Act’s implementation the wording of the Act, or at least the wording one can find on-line, has been changed or altered so that only names and incomes are required to be reported.

This raises the question: who changed the wording and was it formally approved by the Legislature? And if it was changed by the Legislature on what grounds was this done?

Even with this change, some reporting bodies follow the original spirit of the public disclosure. For example among the universities: Dalhousie University, Mount St. Vincent University, NS College of Art & Design and St. Mary’s University report name, title and compensation. Acadia University, Acadia Divinity College, Atlantic School of Theology, Cape Breton University, St. Francis University, Universite Sainte-Anne and University of Kings College only give name and income.

In health care, reporting is all over the place. The Nova Scotia Health Authority (NSHA) and IWK Health Centre now only report the names and compensation paid to individuals.

Prior to the merger of the nine health authorities that created the NSHA, some followed the legislated reporting rules, others didn’t. In 2013 and 2014 Capital Health didn’t identify staff by title, and only reported names and compensation. Then in 2015 they did provide titles.

In all the years they reported, the Cape Breton Health Authority, Annapolis Valley District Health, Guysborough Antigonish Strait Health Authority and South West Nova District Health Authority all reported names, titles and compensation.

Colchester East Hants Health Authority, Cumberland Health Authority, IWK Health Centre and Pictou County Health Authority never met the reporting requirements.

The South Shore District Health Authority initially failed to report job titles, but did add them.

So why are organizations allowed to cherry-pick what part of the legislation they will adhere to? Where is the oversight by the Department of Health and Wellness?

I also question the accuracy of these reports. I don’t see doctors listed. If they’re not included, who else is being excluded?

When you compare the 2015 Capital Health report with the current NSHA list there are discrepancies. Four doctors who worked for Capital Health in 2015 are still on the list, albeit without title/occupation listed. Most have seen a 30 percent pay raise. However, seven physicians and one resident shown in 2015 are no longer found on the list of NSHA employees. Have they left the province? Is their departure an example of the physician shortage in the province that twice as many doctors leave the employ of the NSHA as stay?

By including job titles, the public sees what work is done on their behalf and, maybe using their own knowledge and experience, identify problem areas. This type of reporting can also let organizations self-identify if their bureaucracy has gotten out of hand, if they have higher administrative costs than is standard and acceptable, if progress is being made in efficiency, and see where staff are overworked because of shortages of specialists.

To omit the job titles cheats the public and employee. Just posting names and incomes reduces the public compensation disclosure to a type of prurient exercise rather than grasping the larger picture about how the people’s business is conducted.

The government should require all qualifying organizations to meet these original requirements.

Since the NSHA and IWK have decided to flaunt the spirit of the Legislation, here are the current compensation figures of the health executives. The NSHA figures in brackets are last year’s compensation:


Tracy Kitch, President and CEO $296,289

Steve Ashton, VP People and Organization Development $195,131

Gina Connel, Chief of Communications and Public Relations $140,643

Stephen D’Arcy, CFO $197,241

Jen Feron, General Counsel $175,256

Mary Ann Hiltz, VP Quality and System Performance $163,680

Dr. Krista Jangaard, VP Medicine $270,077

Dr. Patrick McGrath, VP Research, Innovation and Knowledge Transfer $252,640

Jocelyn Vine, VP Patient Care and Chief Nurse Executive $208,984



Janet Knox, President and CEO $342,043.68 ($339,790.28)

Allan Horsburgh, VP stewartship and accountability and CFO $217,119.44 ($209,292.24)

Lindsay Peach, VP, integrated health services community support and management $212,489.21 ($209,452.10)

Tricia Cochrane, VP integrated health services program primary care and population health $206,626.22 ($203,072.33)

Tim guest, VP, integrated health service program care and chief nursing officer $206,657.85   ($203,279.30)

Paula bond, VP integrated health service program care $232,321.80 ($229,729.88)

Dr. Lynne Harrigan, VP medicine $302,957.57 ($352,478.83)

Colin Stevenson, VP quality system performance and transformation $147,433.87

Carmelle d’Entremont, VP of people and organization development $206,657.86 ($199,179.24)

When you fudge these figures, what other facts are you being loose with?

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ER closures due to uneven fee schedules

News articles about ER closures always place the cause of the disruption as “a doctor shortage”.

In January 26, 2017, Cumberland News Now quoted Dr. Bill Lowe, head of family medicine for the Nova Scotia Health Authority’s northern zone that the ER closures at All Saints was due to “an inability to find sufficient locum physicians to fill all the shifts.”

March 30, MBS Radio reported, “The South Cumberland ER in Parrsboro will be closed Saturday from 8:30am-8:30pm. It’s due to a doctor shortage.”

On April 20, MBS reported, “The South Cumberland ER in Parrsboro will have several day closures next week and weekend. It’ll be closed Monday, Wednesday, Thursday, Friday, Saturday and Sunday from 8:30am-8:30pm due to a doctor shortage.”

Cumberland News Now reported on April 26 that the Pugwash ER would be closed for four hours “because there is no physician to provide the necessary medical coverage.”

On May 17, CKDH radio reported another ER closure for Pugwash “due to a doctor shortage.”

In total Cumberland County ERs had 65 closures in 71 days.

What is left out of the announcements about these doctor shortages is that there are no doctors available to work for the fee schedule offered. The fees paid to rural ER doctors are so low that it doesn’t make economic sense for physicians to leave their offices to staff ERs. To do so is an act of fiscal charity.

Left unsaid is that our universal health care system has a tiered, geography-based fee schedule. The Nova Scotia Health Authority, like its predecessor authorities, believes that rural health can be provided for less money than urban health. So the fees paid to doctors working in rural ERs is less than that paid to doctors working in city ERs.

I’ve written about this before (

In setting the fee schedules there is a lop-sided valuation of responsibilities. Health executives, whose pay is not based on geographic determinants, have decided that rural ERs are less challenging situations, so those doctors are paid $75 an hour less than a doctor in a Halifax-based ER.

It’s a curious distinction. It implies an official policy that says city people are sicker than rural residents. The subtext is that rural lives don’t matter (as much).

How is it that we believe a uniform rate of pay for teachers is necessary to achieve a universal level of education for all students in the province, but we use geography to devalue a physician’s contribution to patient health? MLAs, Cabinet Ministers, civil servants, health executives have one pay scale, regardless if they represent and/or work in a rural or urban riding or setting. There is no distinction made based on geography. So why is it okay to play with health care dollars in this manner?

We can hire all kinds of recruiters to try to attract doctors to the province, but if we don’t pay them competitively, we will continue to have ER closures. Of course, those closures don’t happen in the city because of the pay rate provided to ER doctors. As I previously wrote a county warden felt it unfair to place rural doctors at the bottom of the pay pile because they (the rural doctor) had the greater responsibility for the patient.

In a city ER, the doctor has a wider array of support services and specialists to call on. A city ER can “process” a patient more quickly. In a rural setting, the ER doctor has fewer on-site resources, so is more involved in stabilizing the patient then determining if that patient can return home, must stay on-site for treatment or should be transferred to the city.

I also suggest that rural doctors are often dealing with a bloodier type of medicine given rural occupations in farming, fishing and forestry. Not as many city residents are working with heavy equipment, large animals or sharp instruments in all types of weather.

The growth in ER closures is the canary in the mineshaft for the problems in health care. In the past, physicians spoke about problems with the system and management. Now their complaints are management and money.

When it comes to management physicians feel undervalued, stressed and abused. The NSHA speaks of “consultations”, but that is, to quote many physicians, “corporate bullshit”. There are meetings, but the conversation is one sided. Management isn’t listening. The acrimony is so great I’ve heard of physicians telling NSHA executives to “shut up” so they – the physicians – could speak. It doesn’t happen. But the NSHA, coddled by an out-of-touch board, pretends to have dialogue and “consultations” with doctors. And nurses.

On the topic of money, family physicians are stressed. The current fee schedule doesn’t cover basic services like renewing prescriptions, so doctors have to add a billable service to an office visit. Another ridiculous situation is that for a face-to-face appointment a doctor is paid half of what the Province pays for a call to the 8-1-1 service, which is not answered by a doctor.

A doctor’s appointment used to be for whatever medical issues a patient had. Now, patients are actively discouraged from arriving with a list of ailments. Most doctor’s office walls and websites contain notices to confine yourself to one or two issues. A basic patient appointment generates a billable fee of less than $31.

So, to cover their costs, doctors are forced into a type of production-line-like appointment schedule. Where once doctors saw patients for all their medical concerns, time management has become an economic necessity. Doctors were scheduling appointments in 15-minute increments. Recently, I have seen appointments scheduled in 12-minute increments. That allows a doctor to see an additional 8 patients per eight-hour day, so 40 patients a day instead of 32.

Given the costs of operating a practice – rent, utilities, supplies, office staff, technology, equipment, etc. – doctors have to think as much about the economics of a practice as the medicine. The public has the impression that doctors roll in money. The dirty little secret in Nova Scotia is that the family practice income is shit. I recently heard of a family physician whose taxable income was $60,000! A lot of family physicians are earning in the $98-to-$144,000 range. That can seem like a comfortable income when compared to what others earn in Nova Scotia, but doctors deal in life and death. They spent years studying to achieve their qualifications to practice. We pay others comparable amounts – or more – for duties and services with substantially less stress and responsibility.

If we want to solve the doctor shortages – whether in ERs or private practice – we need to pay physicians better. We also have to lighten up on this death-grip idea that a collaborative care practice is the super solution to health care delivery. It is viewed as a questionable option. More on that next week.





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Death while under Protection

Saturday evening a resident in a long-term care facility was found unconscious on the floor of the washroom in their room. It’s unclear if the individual had a heart attack or fell and hit their head. They were unconscious, but breathing on their own.

Their care-giver found them, called the RN on duty, who assessed the person and situation and called 9-1-1. Someone stayed with the resident the whole time. Paramedics arrived within 10 minutes. Just at their point of arrival did the resident stop breathing. There is some question about whether CPR could have helped. None was administered. The caregiver maintains the person had only just stopped breathing, the paramedics decided it was too late to do anything.

Having declared the resident deceased, the paramedics helped move the person from the floor to their bed. The question becomes what next?

This resident was under the direction of Adult Protection Services of the Department of Health and Wellness, with final instructions sealed and held by the Public Trustee.

Staff at the care facility had no instructions about who to contact to inform about the death. Are there family to inform? Is the deceased to be buried, cremated or are they an organ donor? Where organ donation is a factor speed is of the essence. Those details were under seal with the Public Trustee.

This is an example where the health care system is designed for the convenience of the executives rather than the patients and front line workers. The Public Trustee’s office is open Monday to Friday. It’s either from 8:30 am to 4:30 pm or 9 am to 5 pm. Specific hours aren’t listed on the Department of Health’s website. And the 211 Service says “the site” hours are 8:30 am to 4:30 pm. I’m unsure if that’s their (the 211-service’s) site or Dept. of Health’s site:

Nonetheless, the information available is fairly ambiguous. It seems to be a wait-until-the-office-opens situation. Meanwhile, a person’s remains are in limbo. Does Halifax expect long-term care facilities to keep deceased residents around, in this case for 37 hours, until someone comes in to an office? And if that person had agreed to organ donation, would all of those transplantable parts no longer be suitable for surgery?

This is one of the many gaps created in a health care system which relies on top-down ideas. No one seems to have considered the details and procedures for death outside office hours.

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