Move AHS overhead charges to the table

March 2, 2022

Dr. Vesta Michelle Warren, AMA President

I am writing to share my concerns and the AMA’s response regarding a letter that was sent yesterday to physicians from Alberta Health Services. AHS is providing notice that on July 1, 2022, it will implement a framework “for assessing and recovering physician overhead costs that will be a consistent approach for AHS physician overhead across all zones, and in all facilities; urban, regional and rural. Note: Timelines are subject to pandemic response.”

AHS has provided us with some presentations about overhead policy and we have appreciated the opportunity to provide feedback and share some of our perspectives. More specifically, we have been consistent in advising AHS that:

  • There must be sensitivity applied to matters that negatively affect physician compensation - particularly at this time. The pandemic has significantly affected the viability of practice for nearly every physician in Alberta and with a care deficit to address, we need to be looking for ways to improve access to medical services.
  • AHS overhead policy, along with all other areas where changes to physician compensation are being contemplated, belong under the umbrella of our provincial negotiations. Government and the AMA are currently at the table and the AMA believes we must pursue a comprehensive provincial framework that encompasses all aspects of physician compensation.

We need stability, and we have already agreed on the importance of having mechanisms in place to ensure that the arrangements we make are equitable. We need consistency. A siloed approach to issues like overhead will not work. I will keep you updated in the coming days as we continue to seek resolution to changes affecting many of our colleagues in AHS facilities.

I will be making these points:

  1. Due process must occur to ensure that: overhead charges and any included subsidies are fair and reasonable; ambulatory/outpatient services continue to be provided to Albertans; and charges properly reflect the AHS overhead supports being provided to physicians.
  2. Overhead cost policy - like all other discussions that affect physician compensation - belongs at the negotiating table and should be part of a physician compensation framework. If government and AHS have decided to address AHS overhead policy separately, then we will be bringing those costs to the table and will expect them to be recovered.
  3. Many physicians who have been providing excellent services in AHS facilities will now need to consider their options if government and AHS continue to move forward on this item. We will support them in exploring and assessing the advantages of relocation (at a time when virtual workforces have freed up a great deal of commercial real estate in the province).
  4. Many other physicians who maintain an AHS office, also run a community office. Some of these physicians may be willing to pay AHS an overhead charge and continue coming to the hospital to treat their most complex patients that require more time and wrap-around services, earning less income for the time that it takes to provide these services. They may, though, also choose to see the simplest cases in their community office. New overhead charges will directly affect decisions for these physicians, and we will assist them in making decisions of this kind.
  5. Alberta Health’s previously announced Z-code fee policy has also been linked to AHS’ overhead review and this has created significant concern for our members. As with AHS overhead charges, the issue of Z-code discounts also belongs on the negotiating table.

I have previously expressed appreciation for various extensions granted on AHS program and payment changes. With a new July 1 timeline placed in front of us, I can only speak again for common sense. As I wrote in December:

“We welcome the space and time provided by (AHS extensions) as an opportunity to continue to work with government to develop a comprehensive strategy built on consistent compensation policy. In our view, these matters need to be discussed in negotiations leading to a provincial agreement and a framework that deals with all aspects of physician compensation."

We have already heard from physicians who are deeply concerned about the AHS letter. We will be actively pursuing this issue and I expect it will be addressed at the March 11 virtual Representative Forum.

I will write again soon.

If you would like to contact me on this or any other topic, you can reach me at


Vesta Michelle Warren, MD, CCFP, FCFP
President, Alberta Medical Association

Alberta Medical Association Mission: Advocate for and support Alberta physicians. Strengthen their leadership in the provision of sustainable quality care.