Adriana LaGrange, Minister of Health, speaks about health-care reforms as Alberta Premier Danielle Smith looks on during a news conference in Edmonton on Nov. 8, 2023.JASON FRANSON/The Canadian Press
Alberta’s Auditor-General is examining procurement and contract practices at the provincial health authority and ministry of health after allegations surfaced that officials in Premier Danielle Smith’s government interfered on behalf of private companies.
Alberta Health Services, the health authority, on Thursday said it is conducting its own review and will not sign any new contracts with companies involved in that examination.
Auditor-General Doug Wylie, in a statement Thursday, said his probe will cover chartered surgical facilities (CSFs), COVID-19 personal protective equipment and pain-relief medications. The Auditor-General operates independent of government.
The way Alberta awards health care deals has come under scrutiny. The Globe and Mail, on Wednesday evening, revealed that the government terminated Athana Mentzelopoulos as AHS’s chief executive two days before she was scheduled to meet with the Auditor-General about an investigation she conducted at the health authority.
The Auditor-General was aware of Ms. Mentzelopoulos’s allegations, which include the government ordering her to halt her internal investigation, prior to Wednesday but did not confirm a review until Thursday.
Mr. Wylie said his examination will start with the Alberta Health Ministry and AHS but could extend to other organizations.
“The examination is looking at the effectiveness of management and control processes – including governance and oversight – ensuring value for Albertans while addressing concerns or allegations related to contracting and potential conflicts of interest,” Mr. Wylie said in the statement.
AHS spokeswoman Holly Budd said in a statement that the health authority is looking into the controversy.
“We can confirm that AHS is conducting a review of our procurement procedures and processes related to the matters raised by the former CEO, and in the interim, we have paused the awarding of any contracts involving the parties that are involved in that review,” she said in a statement. “Until this review and the Auditor-General’s review have been completed, we will not be commenting further.”
Meanwhile, Alberta’s opposition New Democratic Party Leader Naheed Nenshi called for a series of investigations, including an RCMP probe, into the allegations enveloping the government and its health operations. Later in the day, the NDP said it has formally requested a police investigation. The RCMP said it was aware of the allegations but did not say whether it would be investigating.
“These are amongst the most shocking allegations that I have ever seen,” Mr. Nenshi told reporters Thursday. “Albertans have every right to say: ‘We deserve an honest government. We deserve a government that does not work to enrich its buddies.’ “
Ms. Mentzelopoulos’s lawyer, on Jan. 20, sent AHS a letter alleging that government officials, including the Premier’s then-chief of staff Marshall Smith, no relation to Ms. Smith, put pressure on Ms. Mentzelopoulos to sign deals for private surgical facilities despite concerns around the value of contracts and questions around ownership.
Alberta Auditor-General Doug Wylie speaks in Edmonton in October, 2019.JASON FRANSON/The Canadian Press
The former executive also alleges that medical supplier MHCare and companies affiliated with its owner, Sam Mraiche, have done roughly $614-million worth of business with AHS. The Globe in July reported that Mr. Mraiche gave cabinet ministers and members of Ms. Smith’s staff luxury box seats for Edmonton Oilers’ games. Mr. Mraiche did not acknowledge a message seeking comment.
AHS placed roughly 170 orders between March, 2020, and October, 2024, with MHCare and Mraiche Holding Corporation, according to a four-page freedom of information document provided to The Globe. Products included personal protective equipment, such as KN95 masks, gloves and gowns, COVID-19 rapid-antigen tests kits, and the pediatric medications. The document does not include how much each order cost.
MHCare facilitated a deal to import roughly $75-million worth of generic pain medication from Turkey in 2022. Only 30 per cent, or 1.5 million of the five million bottles of medication, ever touched down on Alberta soil despite the government paying upfront. Even less of this inventory was used or sold and AHS ordered its staff to stop using the product because of safety concerns.
Ms. Mentzelopoulos alleges that a person involved in co-ordinating the deal for AHS also had an e-mail address with MHCare.
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That former employee, Jitendra Prasad, appeared to be retained or engaged by people with ties to private surgical facilities or other purchasing contracts, while also providing advice and services to Alberta Health and AHS for those same deals.
Neither Mr. Smith nor Mr. Prasad acknowledged messages seeking comment.
Alberta Health Minister Adriana LaGrange’s press secretary, Jessi Rampton, rejected Ms. Mentzelopoulos’s allegation that she was fired for investigating AHS contracts, its procurement processes, and for pressing for proper due diligence and costing when negotiating surgical deals.
Ms. Rampton, in a statement, said Ms. Mentzelopoulos’s contract was cut short, and the AHS board dismissed shortly after, because of the government’s continuing restructuring at the health authority.
“As to the allegations made by the outgoing CEO, Alberta Health Services is reviewing them, but the interpretation that her termination was due to AHS’s review of certain procurement decisions are false,” Ms. Rampton said.
Ms. LaGrange is aware of the Auditor-General’s examination, she said.
“We also welcome the Auditor-General’s review into whether AHS procurement practices were properly followed in these matters and will fully co-operate with that office as they do so,” Ms. Rampton said.
She said there will not be any further comment until the Auditor-General completes his work, saying it is a continuing AHS human-resource issue.
The Health Sciences Association of Alberta called for an independent investigation into private surgical contracts.
“This isn’t just mismanagement – it’s a scandal,” HSAA president Mike Parker said in a statement. “These disturbing allegations confirm what health care professionals have been saying all along – the Alberta Surgical Initiative is a costly failure that puts profits before patients.”
The United Conservative Party wants to shift more surgeries to private clinics, arguing that chartered surgical facilities are more efficient than AHS facilities, like hospitals. But critics argue that a proliferation of CSFs means health care workers, like surgeons and nurses, are unavailable for AHS’s main operations.
“Private surgical contracts are draining resources from our public health system, reducing overall capacity, and driving up costs,” Mr. Parker said. “It also validates concerns we have been expressing since AHS restructuring was first announced: that this whole approach is being driven to increase political influence over how health care is delivered and increase for-profit care.”
Ms. Mentzelopoulos, whose lawyer wrote the letter alleging wrongful dismissal and demanding $1.7-million in compensation to prevent a lawsuit, has not commented.
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