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July 18,

PUBLIC ACCOUNTS COMMITTEE

Pursuant to Standing Order 68, Calvin Peach, MHA for Bellevue, substitutes

for Sandy Collins, MHA for Terra Nova.

The Committee met at 9:00 a.m. in the House of Assembly Chamber.

MR. BRAZIL: I would like to welcome everybody as we do a hearing for the

Centre for Health Information.

For those who do not know, I am David Brazil, Vice-Chair of the Public

Accounts Committee. Unfortunately, the Chair is on the missing list. I expect he

will show up, so I will vacate the Chair then and he will take over.

What we will do first is I will ask everybody to introduce themselves,

particularly the members of the Committee, what district they represent, and

then we will go to our witnesses and the members from the Auditor General's

office.

We will start with Mr. Joyce.

MR. JOYCE: Eddie Joyce, Bay of Islands.

MR. MITCHELMORE: Christopher Mitchelmore, The Straits White Bay North.

MR. K. PARSONS: Kevin Parsons, Cape St. Francis.

MR. PEACH: Calvin Peach, Bellevue.

MR. CROSS: Eli Cross, Bonavista North.

MR. BRAZIL: Okay, we will start with the Auditor General's staff.

MS RUSSELL: Sandra Russell, Deputy Auditor General.

MR. PADDON: Terry Paddon, Auditor General.

MR. SULLIVAN: Brad Sullivan, Audit Senior.

MR. BRAZIL: The witnesses from the Centre for Health Information, please.

MR. BARRON: Mike Barron, Newfoundland and Labrador Centre for Health

Information.

MR. DILLON: Ray Dillon, Chair Newfoundland and Labrador Centre for Health

Information.

MR. JANES: Jim Janes, Board Member and Chair of the Finance and Audit

Committee.

MR. CLARK: Steve Clark, Chief Financial Officer with the Centre.

MR. BRAZIL: Thank you.

I am going to ask the Clerk now if she would swear in the witnesses and those

who have not been sworn in before. I think some members of the Auditor General's

staff have been, and that still stands.

Swearing of Witnesses

Mr. Brad Sullivan

Mr. Mike Barron

Mr. Ray Dillon

Mr. Jim Janes

Mr. Steve Clark

MR. BRAZIL: Now that we have all the witnesses sworn in, I am going to

vacate the Chair and turn it over to the Chairperson. We have done our basic

introductions so you can just do a little lead-in.

CHAIR (Bennett): Thank you very much.

I apologize for being late. My name is Jim Bennett, and I am Chair of the

Public Accounts Committee. Fortunately, we have a more-than-capable Deputy

Chair. He just proved it.

Even though this is a public hearing, it is a relatively informal hearing. It

is not what you would see in any sort of a courtroom cross examination or that

type of thing. It is more of a question and answer. This Committee works on the

premise that we are primarily interested in how practices and procedures have

taken place in different entities.

We do not see ourselves as an entity that chases people or challenges people.

We provide an opportunity for the entities that come before us, who have

primarily been reviewed by the Auditor General, to explain the background, how

certain things were done, and how they took place. We are interested in making

sure that we have a good footing in all cases to go forward.

Often when groups come before us, we tend to be satisfied with the types of

explanations they provide. Often, many of the questions have already been

resolved. Often, any changes in process or procedures have already taken place.

That is not unusual for us at all.

The Auditor General, Mr. Paddon, usually starts with his observations or

statements. After having had an opportunity, if you want to provide any opening

explanation or statement, that is not required; it is simply offered. Then the

Committee members ask questions, and we do it in a rotation. Committee members

ask questions for up to ten minutes. At the end of ten minutes, it goes to

another member, then another member, and then another member. Nobody needs to

feel that they are being oppressed or berated. Like I said, it is not like a

court type of setting; it is more an informal Q & A.

With that statement, does anybody have any questions before I go to Mr.

Paddon?

Mr. Paddon.

MR. PADDON: Thank you, Mr. Chair.

Good morning, everybody. I just wanted to take a couple of minutes, not to go

through the whole

section of this report but just to highlight what I thought

were a couple of key more significant items for the Committee's benefit.

First of all, the staff of the Auditor General's office who are here today

were introduced. Sandra Russell is the Deputy Auditor General. Brad Sullivan,

Chartered Accountant, is an Audit Senior with the office. He was responsible for

the review done at the Newfoundland and Labrador Centre for Health Information.

In terms of the context of our review, it was completed in November 2012. Our

report came out in January 2013. The period of the review covered April 2007 to

November 2012, a period of four-and-a-half years. The focus of our review when

we went in was to look at compensation and recruitment, to look at purchases of

goods and services, and to look at governance.

In terms of observations that are in my report, we have observations around

compensation and recruitment practices and around governance. We provided eight

recommendations overall. I will note that there were no recommendations around

the purchase of goods and services.

Just to highlight a couple of things around the compensation and recruitment

aspect of the report, in terms of compensation, based on some correspondence we

saw from the Department of Health and Community Services to the Centre, we felt

that it was an expectation of government that the Centre's compensation policies

should be consistent with government. That then formed some of the basis for the

recommendations and the findings in our report.

I will also note that on the recruitment side, and it is noted in the report,

that the Centre is not covered by the Public Service Commission Act, although we

would have sort of expected that they would follow the spirit and intent of that

act.

In terms of issues identified in the recruitment and compensation area, there

were a number of areas that we highlighted: job competitions, issues around

upscale hiring, the pay structure of the Centre, step increases used for

retention purposes, issues around reclassifications, pay in lieu of notice, the

employment contract of the CEO, salary increases, and the use of external

consultants. I do not want to focus on all of those, but I just provide some

comment on three areas of those: pay structure, step increases, and the

reclassifications, just to highlight those for the Committee members.

In terms of the pay structure, the act that created the centre was proclaimed

effective April 27, 2007. That was really the starting point of the Centre. All

positions that came over to the Centre at that point in time had previously been

classified for whatever system they were in. Upon proclamation, the Centre hired

the Hay Group to review all of the positions and to do a new classification.

That is fair enough. We do not have any issues with that process. That is

something that I think you would normally do.

In January 2008, the Board of Directors approved new classification and the

pay structure. This was retroactive back to the start of the Centre, April 2007.

That, again, would not be unusual; that would be a normal course of events.

The point we do note in the report is that the new pay structure, the new

classification system, was not approved by the Minister of the Department of

Health and Community Services.

Once the new structure was implemented, our report notes that there was an

increase at that point in time in annual salaries as a result of the

classification of about $203,000. While I do not know what the exact percentage

was probably roughly 2 per cent, in that range - that, in and of itself, I do

not think would be an unusual number to see. I guess one of the points that we

do make is that of the $203,000 about 45 per cent of that went to six employees

and the rest went to other fifty-two employees. So there seemed to be sort of a

weighting towards the more senior people in the organization, in terms of the

new classification system.

The other point that we make on the pay structure is the issue of the Hay

system itself. The Province of Newfoundland and Labrador uses the Hay Group. It

is a consulting group that provides advice and has a system of classification

that rates positions. Based on the amount of knowhow, accountability and

problem-solving around the job, you would assign a number of points to that job

and the points then would equate to a pay level. So generally speaking, your pay

is structured around the complexity of your job. The government uses that system

and that is the same group that the Centre used to look at their classification

system.

We would have expected that if the number of points assigned to a particular

job at the Centre were similar to the number of points that were assigned to a

job with the provincial government, you would expect to see similar salaries for

similar points. I guess what we found was that for similar point totals at the

Centre, the salary levels were significantly higher than similar point totals

with the provincial government. In fact, the amount of salaries for similar

point totals in the Centre than in government was about $1.3 million annually

higher. If those positions went to the full steps at the top of the scale, it

would be about $1.6 million higher. In a nutshell, if those similarly rated

positions were in government, they would have been paid in aggregate $1.3

million less than at the Centre.

In terms of step increases, the Centre policy does provide the CEO with

discretion to adjust salary steps in extraordinary circumstances for retention

purposes. The extraordinary circumstances would be for performance issues, so if

you were performing at a higher level than expected, or other people, then

presumably you would be able to qualify for a step increase; or if there were

market pressures, so if you were at risk of losing a person you could adjust

them.

While this is Centre policy, and being outside, I presume they can make their

own policy, I do not think there is an issue there. We would note that it is

inconsistent with government policy. Government policy does not allow for step

increases for retention or for performance issues. We found eleven instances

during the period of our review where there were step increases for performance

or for extraordinary circumstances.

The last point I just want to highlight before I give up the floor is the

issue of reclassifications. As I had mentioned, when the Centre first came into

existence in 2007, they went through a process of looking at all their

positions. They were all reclassified in January to March, 2008, retroactive to

2007. At that point in time, I would have expected that everybody would have

been reasonably satisfied that the classification and pay levels for those

positions were appropriate based on the review that was done at the time.

What we did then in the period from March 2008 to October 2012, the end of

our review, we looked at forty-three requests for reclassification by employees.

Basically, they say: I do not believe I am appropriately classified; I would

like to have a review. Generally in government, if you have a reclassification

review, it is because the duties of the position have changed since the last

time it was reclassified, and that is fair enough. So there would be an

independent review by the Human Resource Secretariat and they would adjudicate

whether they thought the duties had changed.

What we found in the Centre's

case is that, of the forty-three requests for reclassification since every

position was reclassified, thirty-eight of those requests were successful,

which is about an 88 per cent success rate. We did talk to the Human Resource

Secretariat here in government to find out what the success rate in the core

civil service is, and it is about 20 per cent. We found that was sort of an

unusually high rate in any event, but we thought it was more unusual in the fact

that everything had been looked at in 2008 in the first place. I would not have

expected to see that kind of level of reclassification in such a short period of

time, so that was one of the items that we highlighted.

Other than that, I know everybody has read the report so I will not go

through all the other items, but those are three areas that I thought I would

just highlight for the Committee's benefit. I will leave it at that.

Thank you, Mr. Chair.

CHAIR: Do any members have any questions for Mr. Paddon?

Maybe for clarification, for me, just so that I understand it a little more

clearly, when you refer to Hay, you may have said a standard or something of

that nature that government uses, Hay is a consultant, and then you would expect

that it would be uniformly applied throughout government entities or agencies.

Does that mean like saying and I know this is really simplistic if a litre

has 1,000 millilitres in government or has 1,000 millilitres everywhere else, a

litre is a litre is a litre, so Hay is Hay is Hay with no variation?

MR. PADDON: I am not saying that you could not have a variation. The Hay

Group is a consulting group that has a methodology for classifying and rating

positions in an organization. You look at the complexity of the job, the

know-how, the accountabilities that are around that job, and you would assign

points for different complexities, so the higher the complexity the higher

number of points.

For different point levels, you would assign a salary range or salary level.

There is no doubt that you can assign any salary, it depends on your capacity to

pay for different points. That is certainly up to the discretion of whoever is

using the Hay system. The Province uses it, the Centre uses it, but there are

all kinds of other organizations. You would not necessarily expect the salary

level if IBM was using it, for argument sake, the salary levels for different

points might be different from government.

All I would suggest is that the Centre is using public money to pay its

employees, so one would think that there would be some consistency between the

salary levels assigned for a point total at the Centre and the salary total

applied to a point level for government.

CHAIR: Do I understand you to say that there is some flexibility in

arriving at what would be the appropriate point level; or having arrived at the

appropriate point level, there is a variation in the salary level applied?

MR. PADDON: Yes, I would think the latter. You would think that the point

level obviously there is going to be some subjectivity in measuring know-how

and accountabilities and complexity, those sorts of things, but you should be

reasonably consistent.

I do not want to single out a particular job, but if it is a job in the

accounting department, for argument's sake, in the Centre versus a job in the

accounting department in the Department of Finance, one would think that for

similar positions doing similar things, you would come up with similar point

totals.

Then at that point, fair enough, there is probably some discretion within the

organization to say I am going to pay somebody at that point level $40,000;

whereas another organization might say well, I am going to pay them $42,000.

Where both organizations are paid from the public purse, one would think that

there would be some consistency in the salary levels.

CHAIR: This is not in arriving at what we I do not want to say the

correct point level because different organizations may well have different

requirements. I do not know what a point level would be. Let us say, for

example, if it is the company accountant and I will use a company. If the

company accountant performs certain services, then somebody determines what does

that work out to in points.

Company B might have a company accountant, but a totally different point

outcome because that one person may be doing all kinds of payroll, accounts

receivable, and whatever. The other one may be just doing straight audit in a

bigger company.

MR. PADDON: Yes, I think that is a fair statement. You really need to

look at the individual jobs. What we did at the end of the day here is say okay,

we have a job in government that has a point total of 1,000, for argument's

sake, and we have a job at the Centre with a point total of 1,000.

These two jobs have the same point totals. How you get to that, we do not

know. Obviously, they have gone through a process of evaluation. Then we say for

two jobs in two organizations paid by the same public purse effectively, this

job with 1,000 points is paid $50,000 and this job with 1,000 points is paid

$55,000.

CHAIR: Okay. Does that account for years of service? Does that account

for hours

MR. PADDON: Years of service is irrelevant. It is not looking at the

individual; it is looking at the job itself, the duties, and responsibilities of

the particular job.

CHAIR: Length of work week and that sort of thing?

MR. PADDON: It should not really matter how long you work, as long as you

do your work.

CHAIR: Okay.

MR. PADDON: It is looking at the job, the duties, the responsibilities,

the expectations, all those sorts of things, of a particular position. It

ignores the individual; it just looks at the job itself. It does not matter who

is in the job; it is the job itself.

CHAIR: I think this is a bit complex for most people to get their mind

around, how this would actually work.

MR. PADDON: Well, I have been around here long enough that I am not sure

if I have really quite grasped the subtleties of it myself.

CHAIR: Okay.

MR. PADDON: Sometimes it is a mystery.

CHAIR: Does anybody have any questions for Mr. Paddon?

MR. K. PARSONS: I just get back to what Jim was just asking about there

with the Hay report. Obviously, there is a point system; you are mainly talking

about a person coming in as the new position. I would imagine that with years of

experience, I know it does not count, but that would put you probably in another

step. If you had ten years of experience doing a similar job and a person who

starts off with their first year, obviously you would be looking at I know Hay

could look at the particular type of job that you are doing and Hay would say

okay, you are doing the same type of work. You say it has nothing to do with

experience, but that step level would be different, right?

MR. PADDON: Well, there would be a salary range around that point total.

Then you would have, say, twenty-five steps within that range. It is the steps

then that the experience moves you up the ladder.

MR. K. PARSONS: Okay.

MR. PADDON: Theoretically, when you come into a job that has a range of

salary from steps one through twenty-five, you would start at step one. I mean,

there are circumstances where you might start higher. Then, over the years based

on your experience, you would move up the stepladder to account for that

experience.

MR. K. PARSONS: If you look back at a lot of recruitment that is done

today, it is a job to get experienced people and stuff like that, and sometimes

you have to pay for the experience. So, you would obviously determine whether

that person who has ten years experience versus a person that is just coming in

new, then it would be the decision to make where they come to, right?

MR. PADDON: There are provisions to upscale higher when you take somebody

in at a higher scale than step one. There are some parameters around when you

can and cannot do that, but yes, you can account for the experience.

CHAIR: Does anybody else have any questions?

I would like to welcome Mr. Peach. I did not realize he was there sitting in

for Mr. S. Collins, I presume.

I think maybe the Centre wants to sort of provide background; please go

ahead. Each time you speak, you have to say who is speaking, because the person

will be typing it one of these days and will not know who is on first and who is

on second, and that is not that helpful for them. It does not take much more

time and it is useful. Besides that, all of us might not have remembered your

names immediately.

Please, go ahead.

MR. DILLON: Good morning. My name is Ray Dillon and I am the Chair of the

Newfoundland and Labrador Centre for Health Information.

On behalf of the Newfoundland and Labrador Centre for Health Information, we

are pleased to have the opportunity to address the Public Accounts Committee

today regarding the Auditor General's findings and recommendations. We believe

that today's discussion will result in further clarification of the items raised

in the 2012 report.

By the way of background, the Centre was created in 1996 and subsequently

incorporated as a provincial Crown agency in 2007. The organization is

responsible for developing a confidential and secure provincial Electronic

Health Record, and for providing and ensuring appropriate use of quality health

information to support improvements in the health system.

Within this mandate, the Centre has strived to establish itself, and thus the

Province, as a leader in health information management. We have developed our

operational models based upon industry best practices and sought to attract and

retain the best possible people to ensure we are all well positioned to achieve

our mandate.

As a result, the Centre is a national leader in health information management

and is on the forefront of Electronic Health Record, or EHR, development in

Canada. The Province's position is to be among the first three provinces in

Canada to establish an interoperable EHR. Once implemented, the EHR will provide

more accurate, reliable, and comparable data to support health care policy and

decision making, program monitoring, resource allocation, improved

accountability and stability in the health system, and enhanced quality and

safety in patient care.

Several core components of the EHR are already in place or are currently

being implemented, including the client and provider registries; the Picture

Archiving and Communication System, or PACS,

the provincial digital diagnostic imaging system ; and

the Pharmacy Network, the provincial drug information system. The Centre is also

preparing to implement the iEHR/Labs project, which includes an EHR viewer, a

provincial laboratory information system, and a shared health record containing

select clinical reports.

The Centre also proudly collaborates with key health system partners,

including the Department of Health and Community Services, as well as the

regional health authorities, to support other provincial health information

systems and initiatives as required. The Centre leads and manages many valuable

linkages between these partners at all levels, from frontline to executive

teams, to ensure a provincial lens is applied to health information management

issues and projects. Examples of Centre leadership include facilitating the

provincial Telehealth program, the clinical safety reporting system, and

multijurisdictional telepathology projects.

The Centre continues to play a significant and increasing role in health

information management and health analytics, including providing analysis and

evaluation of health information to support enhanced decision making and policy

development within the health care system.

For example, the Centre's Research and Evaluation Department has responded to

adverse events in the health system, completing analysis for the Cameron

inquiry, supporting the H1N1 epidemic by indentifying populations at risk and

examining disease rates to inform resourcing and immunization rollout decisions,

and examining trends in cardiac conditions and risk factors to support a

provincial program determining need for additional diagnostic equipment and

physician allocation.

Through these and its many other initiatives, the Centre is delivering

valuable work for the provincial investments provided. The Centre also leverages

these provincial investments to secure additional funding from the federal

government and other organizations, including Canada Health Infoway commitments

totalling $73 million, of which $51 million has been received since 2002. The

Centre's Research and Evaluation team has also generated $6.1 million in

revenues from additional sources outside of direct provincial government funding

from private sector and federal government sources in recent years.

Even with much valuable work completed and currently underway, the e-health

and health information fields still hold significant potential for further

development and growth, particularly for a Province such as ours with its vast

geography and dispersed population. The Centre is equipped, skilled, and

positioned to take on more leadership for the benefit of the Province, including

strengthening the provincial health analytics framework with a goal of

maximizing the data and information already available to us, building on

existing partnerships to increase adoption and use of provincial health

information systems, and lead identification and prioritization of strategic

e-health initiatives and activities for the future.

Changes and improvements that will address recommendations offered by the

Auditor General were already underway, including discussions with the Department

of Health and Community Services on compensation alignment and implementation of

an electronic human resource information system. Since the release of the

report, the Centre has taken measures to further these initiatives. One such

action was submitting a road map to the Department of Health and Community

Services outlining an approach to aligning Centre compensation and related

policies with those of government.

I trust today's discussion will provide further clarity to the issues raised

by the Auditor General and demonstrate our commitment to strengthening our

organization for the benefit of the Province. The Centre remains committed to

diligent use of provincial investments, achieving its mandate, and realizing its

vision of improved health through quality health information.

Thank you.

CHAIR: Before we start, I am not sure if anybody advised our witnesses

that the washroom facilities are behind the door. Ordinarily, we take a break at

10:30 a.m. We have from 9:00 a.m. until noon, if we need that long.

I will ask Mr. Joyce from the Official Opposition to begin to ask questions.

MR. JOYCE: First of all, thanks for appearing today. I am sure there are

going to be some questions arising here today that are going to answer a lot of

first when we read the report and saw the report, a lot of concerns raised.

The first question when I read the report and I went through this is: Who

do you answer to? It looks like you are off on your own and you can do what you

like. Who do you answer to itself? Who do you have to take direction from? Which

department? Is it any department or are you just stand alone?

MR. DILLON: We are an entity that exists under its own legislation. We

report to the Department of Health and Community Services.

MR. JOYCE: It is the Department of Health and Community Services that you

are supposed to get all these approvals from, or the Treasury Board?

MR. DILLON: The organization itself because the legislation exists that

enables its existence; for the most part the organization would look to that

legislation, in collaboration with the Department of Health and Community

Services.

MR. JOYCE: I am just asking general questions before I get into some

specific questions. All these pay raises, were they done in consultation with

the Department of Health?

MR. DILLON: Because the NLCHI has its own legislation, it was the view of

the board and just for clarity again I am sorry, I did not introduce myself as

Ray Dillon, the Chair. I am a relatively recent addition to the board. I began

in February. Much of what I can represent would be from board minutes and

discussions with previous board members.

The board at the time, understanding the legislation, believed that it was

within its rights, duties, and obligations as a board to make these approvals

themselves. If you read the strict legislative guidelines, it would fall within

their domain to make those decisions.

MR. JOYCE: Who appoints the board?

MR. DILLON: The government.

MR. JOYCE: The government makes their own government appointees. Then the

board gets on and follows the direction, without any consultation with the

Department of Health.

MR. DILLON: I would say that there are many consultations on many areas

and many levels, given that we all support the health system. There is a

tremendous amount of dialogue and daily interaction with the Department of

Health and Community Services.

MR. JOYCE: Okay.

The other question and it is very general, once these decisions are made I

know in one case the Auditor General mentioned that the person from the

Department of Health was on the board said no, you should not do this without

consultation with the minister, but the board went ahead and made the decision

anyway.

Do you feel that you have legislation in place in the board or just the

separate authority to make decisions even if you do not consult with the

department, even with the department's official who is sitting on the board

saying no, we should not make the decision; we should consult with the minister?

How can you say that you are doing consulting with the minister when you are

advised not to do it, but you went ahead and did it anyway?

MR. DILLON: The board itself, there are many constituents represented on

the board. At that time there was a member from the department that was one of

those constituents. Again, not being in the room at the time, but I think the

decision was that input was received and valued and weighed, but I guess the

board's reading of the legislation, their belief, as a sort of duly formed

board, that it was within their mandate to make the decisions as a board.

MR. JOYCE: I am just shocked when you read it that they have their own

separate entities that you do not have to follow the government guidelines.

Do you feel now that you have to follow the government guidelines and

restrictions that are put on everybody in government, every government agency?

If you read your own legislation, it is almost like do you feel that you have

to follow government guidelines or you do not

MR. DILLON: I can say as the board that exists today, certainly we have

heard loud and clear from the shareholder which is the Department of Health and

Community Services that they want us to be in line, and we have given the

direction to the CEO and his team that on a go-forward basis we are going to

fall in line with the policies and procedures of the provincial government. I

cannot speak for what happened in the past but certainly on a go-forward

MR. JOYCE: Is there anybody who could speak to what happened in the past

because this is what we are discussing about

MR. DILLON: On a detailed basis, I think on a detailed question, we can.

The question that was asked was going forward, do you think and I guess I just

answered that going forward, absolutely.

MR. JOYCE: At the time when the decisions were made and, of course, I

am sure the minutes were given to the Department of Health or Treasury Board

at any time did the government or the minister at the time when a lot of these

issues were taking place, did they step in and order a rollback or to stop doing

these type of practices? Did the department? Because I am assuming with a

representative from the Minister of Health on the board that they would receive

copies of these minutes and what was happening.

MR. DILLON: To the best of my knowledge there was no order to do any

rollbacks. There is certainly an ongoing communication between the department

and the Centre around policies and issues certainly in the last year.

MR. JOYCE: One can assume that the minister or the government was aware

that these practices were taking place?

MR. DILLON: I do not know to what extent Mike?

MR. BARRON: I would not have been privy to any conversation between the

board Chair and the government at that time. To put it all into context, when

the Centre

CHAIR: Excuse me, it is important to identify yourself.

MR. BARRON Oh, I am sorry, Mr. Bennett. Mike Barron, President and CEO,

Newfoundland and Labrador Centre for Health Information.

To put all this in the context at the time, the Centre was just beginning to

get where it needed to get to avail of all those federal funds that we spoke

about, that Mr. Dillon mentioned in the opening comments. It was acknowledged at

that time by the board that the Centre was having difficulty recruiting people

that they required in order to meet the obligations associated with these funds

from the federal government.

These were not grants; these funds were actually investment frameworks and

they were gated. We actually had to make sure that we made certain progress in

order for us to receive the money that we were booked.

At the time and the board had good, broad representation the board was

well aware of the difficulties that the Centre was having in recruiting. As a

result of that difficulty in recruiting, the board, through its own

consultations and with conversations with government there is no question they

occurred; there was always an ongoing relationship and a contact with

government.

The board deliberately and necessarily put in a pay scale system that would

allow the Centre to retain and recruit those people required for the Centre for

Health Information to fulfill its mandate, as per the legislation. Now, on an

ongoing basis, every year the Centre does participate in all the government

processes with regard to budgeting. For example, after 2008, the Centre, just

like any other government entity, we would have to put our individual positions

in to government for budget approval the same as any other entity.

MR. JOYCE: The position on the board from the Department of Health, was

it an ADM, DM?

MR. BARRON: That was an ADM at the time.

MR. JOYCE: So an ADM knew that all this discrepancy was going on in the

board. I am assuming then put it back to the minister, but there was never

anything done by the Department of Health. There was never any direction to say

MR. BARRON: The only direction that I, as CEO, received was from the

board Chair to proceed as per the board's recommendation with the new pay

scales.

MR. JOYCE: With all due respect and when you go through some of this

here and you talk about hiring people when you just reclassify and move people

up to a higher classification, that is not what you call recruitment; that is

increasing a pay salary. By any way you want to take it, in several incidents

that were mentioned here in the Auditor General's report where people were just

reclassified in another position, getting an extra $40,000 or $50,000 a year,

that is not what you call recruitment; that is what you call just increasing

pay.

MR. BARRON: With all respect, to put it into the context of the situation

at the time, the Centre went from fifty people in 2007 to 150 people in 2010,

2011, or 2012. The complexity of the organization and the complexity of the

projects, because we are dealing with a project environment this was not an

established government department or an established government Crown agency that

has been around for a long time; we were inventing one. When I say we, I mean

the people on the board and the staff of the Centre.

So when you see those big increases, they were not arbitrarily assigned pay

increases just because; it was always done, certainly, with our external

consulting help. We used Knightsbridge Robertson Surrette. We used practices

that would be used in the private sector, not only to recruit but to retain

people. The economy in the St. John's area at the time, there was significant

pressure on the best resources of the Centre to leave, and that would have put

multi-million dollar public projects at great risk.

MR. JOYCE: If you felt that, you would have went public instead of just

taking people internally and just increasing. If you went public, you would see

if you could get a better bang for your buck.

MR. BARRON: I am sorry?

MR. JOYCE: If you felt that, you would have went public with the

positions instead of just changing the position title, giving a

reclassification; you would have went public to see if you could get a better

bang for your buck with the increase in funds.

That is the normal procedure for anybody if you need the expertise, you

would go public to see if you could get a better bang for your buck. By just

taking people and just changing their title, increasing their salary by $30,000,

$40,000 or $50,000 does give the perception that you are just feeding the people

within right or wrong?

MR. BARRON: Yes, we cannot change that perception, but I am trying to

give you folks the context because at the time what happened we are talking

about two specific examples that were outlined in the report. At the time, these

positions were not just given new titles and new salaries. These positions were

growing as the organization matured and as we continued to go down that path of

being a leader in the country on Electronic Health Records and that

sub-speciality and the difficultly to maintain and grow an organization.

It was not as simple as changing their title and given them new salaries.

Their responsibilities changed as the organization grew, as it evolved. As the

organization grew and evolved, our job as an executive, and my job as CEO, was

to make sure that we put in a solid team as we moved forward on these large

investments.

MR. JOYCE: On page 188 of the Auditor General's report, it says no formal

response from the minister regarding the CEO's contract, and this is just a

prime example. I can read it, but there is no need. "explicitly allows for

alterations to existing terms with the recommendation of the Board Chair and

approval of the Minister" for changes to the CEO contract. "The Centre was

unable to provide a copy of a response to this letter from the Minister. We were

informed by the Centre that they had not received a formal response from the

Minister."

"In June 2009, less than three years into the CEO's contract, and without

written agreement from the Minister, the CEO entered into a contract of

employment directly with the Centre." It goes on, the contract "to begin at

$150,766 annually, which was step 2 on the CEO pay scale. The terms of the

contract allowed three steps per year and an annual performance".

How can you go ahead with this without permission from the minister? Within

the agreement, it says here that you need permission from the minister. Did the

minister, at any time, give permission to go ahead with this?

MR. BARRON: We would not have been privy to discussions of the board

Chair and the minister.

MR. JOYCE: Can you produce a letter today saying that the minister and

it says right here the approval of the minister. Can you say here today or can

you give us any documentation that the minister approved this?

MR. BARRON: The documentation that we would have is that the board Chair

met with the minister.

MR. JOYCE: So there is nothing on the record.

Who was the board Chair at the time?

MR. BARRON: Mr. Bill Fanning.

MR. JOYCE: Bill Fanning.

So is there anything on record to say the minister gave approval for this?

MR. BARRON: Not to my knowledge.

MR. JOYCE: Not to your knowledge, okay, because this is the type of

problems that you are running into. In the employment contract where you need

approval from the minister, and obviously there is nothing written or there is

nothing here to produce to say there was, but you go ahead and do it anyway.

MR. BARRON: Well, I act on the directions of the board.

MR. JOYCE: Okay.

CHAIR: Mr. Joyce, we should move on to another member now. I let you go

over a fair bit because you were in particular subject area. Rather than

continue on, we can come back.

MR. JOYCE: My last point on this, and I will just come back, is I can say

there is absolutely no written documentation giving permission to go ahead and

do it, but it was just done on the okay of the board Chair.

MR. BARRON: Absolutely.

CHAIR: Mr. Brazil.

MR. BRAZIL: Thank you, Mr. Bennett.

Once again, welcome. A few opening comments there I will make as the

Vice-Chair. When I did read the Auditor General's report we had met with the

Auditor General and as a Committee we went through the issues around the Centre

for Health Information and some of the concerns, particularly around

reclassification, salary increases, and the retention and attraction a number

of issues sort of jumped totally out at me at the time. As a former civil

servant, I have been very engaged in the reclassification process and the

retention and attraction strategy itself.

I will say your responses did alleviate some of my concerns, particularly

around how you move forward. As much as this is about accountability for the

past, to me it is more important about how we move forward and rectify some of

the issues. I would think and hope that the Auditor General's concept would be

similar around that.

The fact that something has been identified that was an issue may be a

challenge for the organization, definitely a challenge for government about how

we make the optics and the perception, but as much as the operations, have an

even flow and as closely connected to government as possible. I would be

hypocritical if I did not say that you guys are a very unique entity. The

retention and attraction process that you must go through to be able to make

sure you have qualified people there, in itself, is unique.

As somebody who worked in government and worked on a retention and attraction

strategy for part of the Province, I do realize the challenges. I do realize it

does not fit in a neat little package. Sometimes you have to deviate from what

the rest of the world sees as the norm. Sometimes you have to add in some

incentives and try to find ways that are creative, yet within the realm of what

is acceptable when you are dealing with taxpayers' money to get the best result,

and particularly get the best people to be able to move this forward.

I do also acknowledge that this was a new entity that was trying to move

forward and is set out to address in particular improving our health

information. With that being said, I feel a lot better now and in the last few

weeks, reading your responses and even the opening comments, than I did a few

weeks ago after reading the Auditor General's report.

With that being said, obviously there are a couple of things that come to

mind right now from my perspective and being somebody who was reclassified in

three different occasions in my career, but also was involved in doing a number

of reclassifications for a number of my staff as a senior manager, that there

are times that the organization does change its responsibilities. Sometimes they

change year to year; sometimes it is over the course of new programs and

services. I do identify while it may not be with the norm, I think the norm was

23 per cent to 24 per cent of reclassifications are successful.

I have worked in areas where twelve of the fifteen people who we put forward

were reclassified. It is not a norm there. I accept that, particularly around a

new entity. That clarifies one of the concerns I had about was it that the job

descriptions prior to that or the responsibilities were either too lax, they did

not meet the needs, or that it was a lot easier to reclassify people to give

them the new salary.

Reading your responses, I feel confident that it is more about as the entity

grew, as you looked at more responsibilities for staff and the specialities, it

made sense that the new responsibilities would put them in a different higher

reclassification level. So, I accept that part of it, and that was one of my

initial concerns around making sure that the Centre for Health Information is

accountable and that it does not have carte blanche freedom to do certain

things.

Again looking, I did read the legislation and there probably are some grey

areas there. I give credit; in a grey area, as somebody too who was part of a

Crown corporation back in the 1980s, you go with what you think works for the

Crown corporation and you leave it to government to determine whether or not it

is following the realm of what their

interpretation was.

In this case, as I know from discussions with people in the industry and the

department, now their concerns and what they have echoed to you guys, and

correct me if I am wrong, is that they would like for you guys to stay as close

as possible to the system that the government has in place. Again, understanding

and accepting that there are challenges for an organization such as yours, that

there may be justifiable reasons to deviate from the norm, when we talk about

the Hay scale and everything else.

Accepting the fact that the Auditor General must look at the technical parts

of it and the policy-related stuff to make sure that things do fall into place,

I wanted to get that as part of a concern out there. I have gone through some of

the key questions that I might have and I will probably come back to some of the

technical ones after you guys have talked about them, but what I would like is a

better understanding of where you are as an organization now, keeping in mind

that you have to be as accountable as possible for the Auditor General and there

will be a follow-up in the two-year process to make sure things are moving.

I would like to know if there are some challenges that you guys think you are

going to face because we are going to be around, the Public Accounts, and I

would hope that the Auditor General would want to know if we are all going to

waste our time or is there a way that we can head it off.

I just throw out the question. Are there some challenges you think you are

going to face now to be able to meet the needs and particularly the

responsibility of the Centre for Health Information and some of the future

challenges, to know whether or not as an Administration, as a government, as an

Auditor General, what we can expect in the future?

I know it is a very general, but it would clarify I will come back later on

with some specific ones, but I would like to know a little bit more general, for

my own information, if I could, please.

MR. BARRON: An answer to that is that we are hopeful that as we move

through the process to align with government compensation policies that we are

going to be able to maintain and retain those very hard to recruit resources

that are currently mission critical to sustaining those systems associated with

improving health care and patient safety at large for the Province.

We are working through our process with government, involving the Department

of Health and Community Services as well as the Human Resource Secretariat, to

completely re-evaluate everybody at the Centre. The outcome of that will take

time, but we are working on that road map with government actively. We have

already submitted twenty of the twenty-four compensation policies to government

where we have aligned our policies directly with government. The other four, the

only reason they have not been submitted is because they are pending the

re-evaluation process of the individual positions we have.

When I say hopeful, when that process is complete, there are three things

that have occurred over the last number of years. First of all, since we put in

the pay scales, the new pay scale systems, government has given over 20 per cent

effective increases to the government pay scales. Hopefully that will help

alleviate some of those challenges we had on the recruitment side with regard to

how we compensate our people.

Secondly, the large portion of our business and the organization from when I

went to the Centre to now has been largely project based. Of course, projects

are very risky. All of these projects become interoperable. They are

interdependent. It is a very complex environment. The environment is now

starting to switch as we complete this last of the larger projects to a more

operational environment. We are hoping that will reduce the impact of a more

aligned salary scale with government. Going from that more complex project base

to operational environment one would assume would be less risky. Once again, we

are hopeful.

The major thing I would point out is we are working very closely with the

department. The board has completely agreed to align with the compensation

policies. The third factor I did not mention yet is that government does have a

market adjustment policy that we are hoping will be able to meet the

requirements and challenges associated with those very hard to recruit specific

positions; for example, health information architects and jobs of that nature

that are difficult to recruit right across the country, let alone in a place as

removed as we are here in Newfoundland and Labrador.

With those three things in mind, we are hopeful that the process will result

in the Centre still being able to maintain and sustain those huge investments of

the taxpayer and certainly for the good of the health system of the Province.

MR. BRAZIL: Okay. That clarifies a number of my concerns. I appreciate

that.

One of the other things I was thinking about as I was reading, and part of

the opening statements that were made, a proportion of this money is federally

related to special projects and special research initiatives. Are there any

additional challenges in that, that interfere or have a bearing, or something

that we should be aware of, when dealing with accessing the federal money?

MR. BARRON: Well, as of right now, Canada Health Infoway, which has been

a major contributor to the capital costs of these large-scale projects, are in a

bit of a holding pattern now given the current federal government lack of

additional funding support. They still have a lot of money leftover from when

they were originally funded.

We do not see any huge opportunities at this time to avail of additional

money from Canada Health Infoway given the current federal lack of additional

support at this time; however, if funding was provided to Canada Health Infoway

down the road, the organization using government pay scales may face some of the

similar challenges that it faced back in 2007 with the recruitment and retention

of people required to deliver projects in a timely fashion, but as well to meet

the requirements of these funding mechanisms.

It is very important to note once again that these projects are not grants.

They have specific timelines and they have specific requirements. We have to

reach a standard that allows us to get that money back from the federal

government. At the same time, we are very much aware that these investments do

not go forward without accompanying Newfoundland and Labrador taxpayers' money.

We balance both. At the end of the day the provincial government, the people of

the Province, are responsible to sustain and maintain these systems once they

are in place.

MR. BRAZIL: Exactly. That is why I wanted to get that out there. My

understanding was recruiting might be a different realm depending on what

federal partnerships we have and the salary bases there. I just wanted that on

record so people would understand it is not as simple as everybody gets paid

this amount of money because it is fifty people looking for that one job or that

one position.

Okay, I am fairly clear on that. I think some technical issues there or some

administrative ones of how we move forward will come out. I am going to let some

of my colleagues ask those questions and I will get back to it again.

Thank you, Mr. Chair. Thank you for your information.

CHAIR: Mr. Mitchelmore.

MR. MITCHELMORE: I have a number of questions. I guess initially to

start, on March 31, 2012 the Auditor General's report states there were 156

employees at the Newfoundland and Labrador Centre for Health Information. Can

you provide me with an update on the number of employees who are currently

working for the Centre for Health Information?

MR. BARRON: I would not have an exact number because that can change as

you can appreciate by one or two or whatever throughout the week. Right now we

have approximately 155 to 160 employees.

MR. MITCHELMORE: Okay.

The Auditor General's report provided the budgetary items as to how you

operated in terms of revenue and expenditures. Has the provincial revenue

changed, since the Auditor General's report, that would impact operations?

MR. BARRON: This year's budget process allowed the Centre to maintain its

budget from the previous year.

MR. MITCHELMORE: You have maintained the budget, but has that led to the

loss of employees because of

MR. BARRON: No, not at all. Once again, we are in a more complex

environment than just the operational budget side of the equation. We are still

involved with very large projects that are capital funded and as a result those

capital funded projects would not show up on the bottom line of our operational

budget; however, there are people who are involved with the operational budget

that support and are involved with the project-based initiatives.

MR. MITCHELMORE: Throughout the budgetary requests then do you make a

submission to the Department of Health and Community Services for your annual

operating budget?

MR. BARRON: We make a submission the same as any other Crown agency of

government.

MR. MITCHELMORE: Okay.

I guess I have to ask if you could shed light on why the minister would not

have responded to letters on March 4, 2008, regarding a board decision to

implement the new salary scales for the Centre, or again on January 20, 2009,

regarding the employment contract of the CEO.

There was a member present from the department sitting on the board. There

were letters written to the minister. Whenever a letter is written to the

minister, it usually warrants a response. Any letter that I have written to the

Minister of Health and Community Services, typically there is a response in a

relatively good turnaround. I am wondering why there was no response from the

minister. Was there a lack of oversight here, or accountability?

MR. BARRON: Once again, all I can speak to is the direction that I

received from our board. I certainly would not be party to that discussion.

MR. MITCHELMORE: Would you, as a member of the board at the time, being a

voting member of the board, have been part of that conversation and that

dialogue; or would you have excluded yourself in both of these instances due to

conflict of interest?

MR. BARRON: Anything involving compensation and/or the financial approval

of the financial statements, things of that nature, I would have been in

conflict and I would not be party to. In certain cases, I may be in the room. In

other cases, I would be excused; for example, the time some of the compensation

issues were occurring. I certainly would not have been in the room at any time

where the board members were discussing the renegotiation of the CEO contract.

MR. MITCHELMORE: Right.

I guess my big concern is that as a board, with the obligations that are

there, one would expect that if you issue a letter that you would not take

action until a response is received. Was there any attempt from the board to

conduct follow-up with the Minister of Health? Maybe someone from the Finance

Committee could speak to this, if there was direction.

MR. JANES: From my knowledge, there were letters sent and there were

meetings between the Chair, Mr. Bill Fanning, and the minister. As far as I am

aware, there was never a response received in writing. There may have been

indications between the Chair of the Centre and the minister, but we were never

made aware of what those comments or otherwise were.

MR. MITCHELMORE: Did Mr. Fanning, as the board Chair, table the motion to

accept these salary increases and the CEO's contract on those situations, since

he was in discussion with the minister?

MR. JANES: He did.

MR. MITCHELMORE: So ultimately Mr. Fanning would be the person who is

accountable. I guess the other board members had questions pertaining to this?

If I was sitting on a board, I would want to see something in writing or have

some affirmation that what I am doing is in compliance with the legislation, and

this certainly was not.

MR. JANES: Indeed, it was a fact that these discussions took place with

the board. The board was fully informed. The board was asked to provide their

support to the position that the Chair had put forward. I think it is a matter

of records in the minutes that everybody, except for the government

representative, voted in favour of the new salary scales that were put in place.

MR. MITCHELMORE: So the government representative did not make the case

on any level, saying this is not something the department is willing or

recommends? The board and every other member just said, well, we are going to

ignore this type of input from the department?

MR. JANES: What I recall was that the member from the department

indicated that his preference would be to hear from the minister before he had

really anything further to say.

MR. MITCHELMORE: What had to expedite this process? Was there cause why

the salaries had to be increased, the CEO's contract had to be renegotiated at

that time, and that there could not have been a deferral?

MR. JANES: The situation regarding the need to recruit somewhere between

forty and fifty new staff members was becoming critical because, as the CEO

indicated, there were timelines and there were requirements in dealing with

Canada Health Infoway that required these things to proceed in a certain

fashion. If they did not, there were penalties and other costs associated with

being unable to meet the contract. The issue was not necessarily totally

expediency, but a need to make sure that we were in a position to complete the

contracts.

MR. MITCHELMORE: Now, was there any indication that you would have been

unable to recruit forty to fifty new staff members without implementing new pay

scales? There were no job advertisements. There was no going to competition with

the salary range that had already existed. In a number of cases, what actually

happened was the senior management had basically increased their salaries quite

exponentially in comparison to the general public sector.

MR. JANES: These needed positions were advertised. The responses we had

received were not permitting the Centre to hire them because, primarily, the

salary being offered for the positions was not enough to permit them to be

hired. They just were not going for it, and that is the reason why we had forty

or fifty positions unfilled.

MR. MITCHELMORE: Then I would ask if we could refer to Table 2 on page

180. The Auditor General had talked about the salary increases and said six

positions received an average increase in salary of approximately $15,500 each.

These are basically the senior management positions that were already hired,

these would have been staff already in place, and the other fifty-two remaining

employees received an average salary increase of $2,100. This seems very

marginal in trying to be able to recruit someone. If they are going to take a

job or not $2,000, on average, is not really going to make that big of a

difference in a marketplace such as this.

MR. JANES: I think Table 2 represents what happened at a point in time.

The issue regarding the hiring of the almost fifty people was a separate

situation. What salary we were offering was not permitting us to attract the

people for those jobs.

MR. MITCHELMORE: The Auditor General's report shows that those fifty-two

people were, on average, getting just a $2,000 increase in comparison to a major

increase for senior staff.

MR. JANES: Yes, and that is what the table shows; that is clear.

MR. MITCHELMORE: I wanted to ask: The President and CEO had just made

reference to the 20 per cent wage increase that was negotiated between the

provincial government and the public sector units as their collective agreement.

The Centre for Health Information is not part of this collective agreement. They

are not in that type of environment, are they?

MR. JANES: No.

MR. MITCHELMORE: Were there wage increases during those years of 8, 4, 4

and 4 to the staff?

MR. JANES: The process as I understand it was that Lloyd Powell, who was

a partner in Robertson Surrette, looked at the overall situation for the Centre.

He came back with his report. Then recommendations were made into the Finance

and Audit Committee as to what type of increase that could be accorded the staff

based on cost of living type of situation. The three situations that came to the

committee; two of them recommended no increase, and the other one a very nominal

increase.

MR. MITCHELMORE: Was there an increase over those years as well, and what

were those increases?

MR. CLARK: There were increases. In 2008, there was a 5 per cent

increase; in 2009, 4 per cent; 2010, zero per cent; 2011, 2 per cent; and in

2012, zero per cent. It was a total of 11 per cent as compared to the 20 per

cent.

MR. MITCHELMORE: Okay.

MR. CLARK: I would like to also point out that there were step increases

over this span of time which also account for the increases of the salaries.

MR. MITCHELMORE: Okay.

MR. CLARK: I would like to point out one other thing if I could.

Section

12 of the legislation actually reads as follows, "The centre may employ or

engage the services of those persons it considers necessary to attain the object

section 4 and determine their respective duties and powers, their conditions

of employment or engagement and their remuneration." I would like to point that

out. This is fairly consistent with other Crown agencies, that they do have the

legal authority to implement remuneration.

MR. BARRON: If I may, to add to that. You mentioned the $2,500. A lot of

those people would have been involved with the reclassification process as the

organization continued to grow and evolve.

There were other people who did have increased remuneration as time went on.

This all comes down to urgency, as Mr. Janes tried to speak to and spoke to. In

2007, it was urgency.

Another member of our board at the time was the provincial CIO. He is

certainly well aware of the government processes and everything else. He fully

supported the increase as well. The thing is there is legislation. We followed

the legislation and we had a mandate. In order to do that, we had to put that

system in place.

I think it is very important for the Committee to also recognize that the pay

scales that were put in place by the Centre in 2008 were the same as Nalcor

rates at the time, job rates. We use, in Atlantic Canada, 80-20: public, 80;

private, 20.

Using our consultants and using the Hay methodology, that is where the salary

scales came from and they happen to be identical to the salaries that were being

employed at Nalcor at the time, which certainly gave the board more comfort in

the approach they were taking.

MR. MITCHELMORE: Thank you, Mr. Barron. I will certainly have the

opportunity to pick up on this the next time I get to speak.

CHAIR: Mr. K. Parsons.

MR. K. PARSONS: I just want to start off, just looking at the report and

looking at your responses and the Auditor General's response here this morning,

I am trying to figure out where you guys come from to get everything that you

have in place, say, for your salaries and for your reclassification and

everything else. It seems like, to me, that you were not following anything that

government was doing; it was something that you were basically on your own, like

Mr. Joyce said there earlier.

I was wondering: Do you do an annual report that you submit to government?

MR. CLARK: Yes, we do.

MR. K. PARSONS: Okay.

In that report, do you have any recommendations or anything at all to

government saying the reasons why you are looking for money? Has the money

increased since 2007 that you received?

MR. CLARK: We follow the same budget process as any department within

government. We submit a budget request every year, and that is for the

operations. We do obtain capital monies through other avenues such as Canada

Health Infoway, but the budget process is exact same as government. So we submit

a budget; it would be very detailed. It would include salaries and so forth.

Those items are approved on an annual basis.

MR. K. PARSONS: Since 2007, your budget from 2007 to 2012, how much has

it increased in total?

MR. CLARK: I would have to look at the numbers, but it would be a

significant jump.

MR. K. PARSONS: You had fifty-two employees, I think you said, in 2007

and now you are up to 156, is it, in that area?

MR. CLARK: Yes.

MR. K. PARSONS: Most of your revenues obviously come from the provincial

government.

MR. CLARK: Yes, I think that is fair to say.

MR. K. PARSONS: Your mandate I mean, obviously when I look at this

report I look at it and try to figure out why you are not on the same, when I

look at reclassification, for example. The provincial government normal

reclassification is at 22 per cent, while you guys went and reclassified at 88

per cent.

Can you just explain to me the whole reclassification? I understand you went

just through the part where you said we were growing and whatever, but just

explain some departments where you did grow and where people had to be

reclassified. You grew from fifty-two employees to 156 employees, so just give

us an idea of what the mandate obviously with fifty-two employees versus 156.

MR. BARRON: Certainly. What that staff increase reflects is the increased

capital project funding we were involved with and the capital projects. If you

want to see where the money goes or have gone, you take it from the evolution of

the Electronic Health Record, which is the bulk of what the Centre uses its

funding for. It is for the development and the sustainability of the Electronic

Health Record.

The Electronic Health Record is probably among the most complex information

systems the Province currently maintains and is building. It started with the

client registry, which is a system that connects all the regional health

authorities' systems so that you can properly identify a patient safely as you

start to bring information together from multiple systems, which is what the

Electronic Health Record is.

It is the creation of a person-specific, comprehensive information base for a

patient. It is taking information from multiple places and putting it in one

place so that a provider, a physician in Stephenville, will see the information

on Mike Barron when I present, instead of the physician in Stephenville, if I am

out there for some reason, has no information on me. That is what makes it that

complex.

Anyway, it started out with the client registry. From there we built the

provincial Picture Archiving and Communication System, which in layman's terms,

and I am sure you people already know what it is, is essentially the X rays and

the reports. At the time, we were dealing with nine different systems within the

regional health authorities, four regional health authorities with their own PAC

System. What the PAC System has done now is allow all of those to be in one

place.

Now, when you have a patient, for example, in Labrador who has an incident

that requires a specialist to view the image, a specialist who may not be

available in Labrador, in order for that patient to be properly treated and a

proper decision to be made on whether to transport, treat, or whatever those

clinical decisions are, that system allows for that image and that information

to be exchanged between those two regions. Once again, a large-scale system,

very complex, and client registry is tied into this because you need to be able

to make sure you identify a patient correctly.

Another aspect is the provincial drug information network. That system, which

is currently in process of implementation, is currently in approximately 40 per

cent of community pharmacies around the Province. Each individual pharmacy

eventually I mean, you need 100 per cent at the end of the day. Right now we

are up to 40 per cent. All that information, once again, goes into that whole

complex system environment.

As all these projects are rolled out, they need to be sustained. As part and

parcel of needing additional people to undertake the project itself, we also

need to keep the people and hopefully have the knowledge transferred within the

organization to sustain those systems without having to go out to the market.

Actually, that brings up a point. The cost of external resources in this

industry is exorbitant, to say the last. A business analyst can cost you $1,000

a day. I know at the time at the board when we put the new salary scales in,

that was another part of it, we wanted the people of the Province to have their

own capacity without having to go out there and pay those big rates.

In getting back to your main question, as this EHR, which is among the most

complex systems in the Province, continues to evolve, that is where the growth

of the Centre has come from.

MR. K. PARSONS: Where do you think we are today? I can understand you are

saying in 2007 this is a new entity, we are starting off, and we have a mandate

to do this, this, this, and this. Now we are in 2013; are we to the point now

where you can see that we have enough employees there now; our mandate, we can

meet, that government set out in 2007 for us to do; we are at that point now

that we can have the pharmacies, everybody online, and are reporting where are

we?

MR. BARRON: Based on the information we have and there is another piece

of the EHR puzzle that is also in progress, which is the iEHR/Labs project that

Mr. Dillon referred to earlier. That system is going to bring the lab

information together.

In the initial stages that system will have lab results just from Eastern

Health's lab system, but it will make those results available right around the

Province. Eastern Health provides some of the most complex lab testing in the

Province. In a lot of cases, it is the only place where you can get testing.

Instead of that information now going whatever way it used to go, that will

go right back. I just wanted to get it in context. That is your basic EHR. You

have your pharmacy, you have your PACS, and you have your labs. There is another

system that will probably have things like discharge

summary and other things.

In terms of the numbers, we have certainly always said that we felt

comfortable at a number between 150 to 190 people who should be able to maintain

these systems once they are all in place. A comfort level for the organization,

but particularly as we understood that we were a glue. We were not the health

system; we supported the health system.

We felt very comfortable that that number of around 160 to another ten or

twenty, it depends on what happens over the next year or so, but never did we

ever expect to exceed 200 people at any time. At this point in time, I know you

will hear it coming out of my mouth as well as certain other people's, that 160

to 170 of the type of people we have is a good number to manage, and that is

plenty.

The only time you would consider going beyond that is if the cost of external

resources, for example, consultants and external companies got exorbitant and we

felt we could build a capacity at a lower cost for the Province, then we would

pursue that in consultation with the Department of Health and Community

Services.

MR. K. PARSONS: Where are we in relation to other provinces in our

information that we have out there? Where is Newfoundland when it comes to our

health information at this point?

MR. BARRON: We are very proud of where we are, and I say we, I mean the

people of the health system who have helped build this. It is also important to

realize that the 160 people at the Centre are not the only ones involved with

these projects. We leverage people at the Regional Health Authorities and we

also leverage people at the provider level, whether it is physicians, private

physicians, et cetera, for parts of our project.

At this point in time, we are considered in the top three provinces in the

country in terms of developing the Electronic Health Record. Our client registry

is considered the standard. Our pharmacy network is leading edge. It is more

clinical than other pharmacy systems that have been put in place in the past. As

a result, we are currently involved in setting the standard with the private

sector, as well as with Canada Health Infoway participation, in making the

Newfoundland standard the national standard, just because we have done it. We

like to use the expression: we punch well above our weight.

MR. K. PARSONS: Okay. That is reassuring to know that our investments are

there and we are where we are supposed to be with the rest of Canada, but

reading the report I understand that 2007 to 2012 was a big growing period for

you guys and everything else, but when you read the report and you look at other

agencies in government and everything else, you must agree with what the Auditor

General has come up with. Looking at salary increases that are just unbelievable

when you look at

The Member for The Straits White Bay North just mentioned about the

fifty-two employees, with six of them taking the majority of $15,000. That is

only just a small increase in a short period of time. Out of those fifty-two

employees, I know they all had increases, are they the people who originally

started with your group? The fifty-two, those who were original, all these

people got reclassified. When they first got hired, were they hired above where

they were?

MR. BARRON: No, what happened was, actually it was an evolution. It was

the evolution of a very major success story. If Canada Health Infoway did not

come on the scene in the early 2000s, a lot of this would never have happened.

Those fifty-odd only became fifty-odd because of success that the Centre had

obtaining funding in 2001-2002 for the client registry.

What happened was the government at the time gave the Centre a $3 million

budget, approximately, to put in a client registry. Now we used to call it it

was a bit of a Volkswagen because it was not a lot of money, but we got $6

million without having any additional money from the provincial government to

make our Volkswagen into a Cadillac. That is where the growth started to occur.

Now, of course, once that inertia starts and you are building an

interoperable electronic health record which nationally is considered a standard

that you need for proper patient safety and good patient care, particularly

around large geographic areas much like Newfoundland and Labrador, once that

inertia started, that is where the additional funding and where the urgency

became evident that we needed the best and brightest to help us keep and

maintain and build these systems.

The money that Infoway have was also creating an incredible pressure right

across the country on those skill sets. We had people looking from Ontario at

our people trying to drag them out of here as well.

MR. K. PARSONS: I guess if you look at the whole health care system you

would say the same problem occurs with doctors, nurses, and professionals all

through the health care system. Sometimes you just cannot have a blank cheque to

write that cheque because of recruitment.

MR. BARRON: Yes, and certainly the Centre has never had a blank cheque.

The Centre

MR. K. PARSONS: My point is that with the increases and upscale and

everything else, that you move steps up and everything else, you still have to

be in some kind of an alignment with obviously government, I would think. Going

forward, where do you see this?

MR. BARRON: If you took a snapshot today, excluding the growth period and

the complexity, the urgency and all those things that happened between 2007 and

2012, if you took a snapshot today you would see that the salaries at the Centre

are very much aligned with other Crown agencies. Particularly if you look at RDC

or you look at Nalcor, you can look at the university the same way.

If you took a snapshot you would see we are now in that place where the

organization has matured. You will not see a reclassification rate with the

success rate that you have seen in the past. That will not happen, because that

was part of that growing process.

As we move forward, reclassifications, first of all, will be few and far

between because the jobs are now much more established. The deliverables, the

requirements, and the clarity around those positions are very much now set. It

would be like a Crown agency that has been around for a while, you would not

expect them all of a sudden to increase all their salaries, no, but right now if

you compared us to other agencies with similar complexities and the need for

those specialized skill sets, we are very much in line.

We hope to be able to work with government through that market adjustment

process in the future to allow us to hire those hard to recruit positions as we

move forward.

MR. K. PARSONS: Yes. It will be interesting to see when the Auditor

General's report comes back in two years time where we are. If the Auditor

General I know most of the times when you do your report, you look at the

recommendations from the report from agencies from the Centre. How do you feel

about their responses?

CHAIR: Maybe Mr. Paddon could hold that thought and we could take a

ten-minute break. He can respond when he comes back if he wants, and then we

will go to Mr. Joyce.

MR. K. PARSONS: Okay.

CHAIR: All three clocks are different. I think each clock is set

(inaudible). I am going to go by the one right here that says 10:37 o'clock. See

you exactly at 10:45 o'clock.

Recess

MR. JOYCE: I will just go back to some of the things that were brought up

earlier. (Inaudible) Who was the minister at the time (inaudible)? Can we get a

copy of those minutes from the board meetings (inaudible)?

MR. BARRON: We will make those minutes available to the Committee. What

was the other question, I am sorry?

MR. JOYCE: Who was the Minister of Health at the time?

MR. BARRON: I believe it was Mr. Ross Wiseman.

MR. JOYCE: Ross Wiseman, okay. He would not put anything in writing, but

according to Mr. Fanning it was agreeable?

MR. BARRON: I cannot speak to that. All I can speak to is that Mr.

Fanning and the board approved and directed me to put in the new pay scales.

MR. JOYCE: I am not sure if you are familiar with it or can remember it.

Did he say he spoke to the minister?

MR. BARRON: I might have it here.

MR. JOYCE: Okay.

MR. BARRON: With regard to what particular issue?

MR. JOYCE: The issue I even use the CEO's pay increase.

MR. BARRON: I do not know if that is in the minutes. To be honest with

you, I do not know. I do not know if there were any.

MR. JOYCE: It was said earlier that it was brought back to the board and

Mr. Fanning said he was supposed to get permission from the minister. He came

back and said he spoke to the minister, and discussion went ahead.

MR. BARRON: With the CEO increase, that would have been dealt with by the

CEO evaluation committee, which is a subcommittee of the board, and that may not

have gone directly to the board. I will certainly check the minutes for you. I

do not have those minutes.

MR. JOYCE: You do not even know if there was ever discussion with the

minister?

MR. BARRON: There was, definitely we have documentation to show there

was discussion with the minister.

MR. JOYCE: Can we get that documentation?

MR. BARRON: Absolutely. That would also include the benchmarking that the

external consulting company used to come up with the new salary for the CEO as

well.

MR. JOYCE: Also, that there was discussions with the minister to increase

this to that level.

MR. BARRON: This would be the documentation that was provided.

MR. JOYCE: It is strange. The impression that is given here is that there

was no permission given by the Minister of Health at the time for that.

MR. BARRON: In terms of the protocol for providing that information,

would we send that to the Chair?

CHAIR: Yes, you can send it to the Committee here and we can follow up

with you, the same way as you filed the response. You sent the response forward

on June 28, so we would be happy to receive it here.

MR. BARRON: We commit to sending that ASAP. When I go back to the office,

we will ship it out to you folks.

CHAIR: Okay. Thank you.

MR. JOYCE: It was mentioned earlier in the discussions about the budget

process and that there was a budget process submitted to the Department of

Health and Community Services, approved, and came back. In the budget process,

was it put that there will be these massive increases of over 100 per cent for

certain employees, and was that approved?

The perception that is given here is that there is a budget process, we

submitted these increases to the Department of Health and Community Services,

and they came back and said okay. Was that the way it was done? That is the

normal procedure for most departments and that is the impression we are getting

here today.

MR. BARRON: The budget process would be that we submit the request for

our operational funding the same as any other Crown agency and that we would

provide the details on a position-by-position basis of what the remuneration for

those positions was required.

MR. JOYCE: Did you do that?

MR. BARRON: Absolutely.

MR. JOYCE: When you submitted that you were going to increase someone's

salary by 100 per cent, was that approved by the department?

MR. BARRON: We would submit the positions as they were classified at that

time, yes.

MR. JOYCE: Also the increases?

MR. BARRON: Well, whatever they were at the time. It would be: What would

the step increase be for every individual employed to be accounted for in that

particular budget year? So, we would submit that on an individual basis.

MR. JOYCE: I must be confused because in the Auditor General's report it

said a lot of step increases were not followed. The Auditor General can correct

me any time, but I am after reading the report. For example, if you were on step

twenty-five, there are certain individuals here who received massive increases

and were put back to step three so they can go through all these steps again. Am

I correct on that?

MR. PADDON: I guess you need to understand that the increases that you

are talking about of, say, 100-and-some-odd per cent, they did not happen in one

year. That happened over a period of time. What Mr. Barron is saying is that

when he does a budget I do not mean to put words in Mr. Barron's mouth, but

when they do a budget request they will say for the upcoming year, given the

positions that we expect to have at the Centre, here is how much money we need

to fund them. It would not necessarily say that four years ago those positions

were at X and this year they are at Y. It would be a point in time kind of

analysis.

You are not necessarily going to see, in a budget process, where things have

gone over a period of time.

MR. JOYCE: Massive increases, okay.

I just want to make it clear; I know I am probably repeating myself. Each

time that there was an increase put in, for each different position, it was

approved by the Department of Health.

MR. BARRON: All positions were approved on an annual basis by the

Department of Health and Community Services.

MR. JOYCE: Also the increases?

MR. BARRON: Whatever the number, we put the actual required compensation

for each position in as part of the budget process.

MR. JOYCE: Jeepers, because the impression given here is that you are

almost like off on your own and doing your own thing and

MR. BARRON: Well, certainly we did have our own policies, which were

based on the spirit of Eastern Health and Treasury Board policies. We

acknowledge that our pay scales were certainly higher than government's; that

was deliberate. That was the strategy of the board to deal with the urgent issue

of recruitment in a very tight market. That is not in question.

When you see those increases over periods of time, it always reflected

well, for the most part, there were always external consultants involved with

how we set our benchmarks. As we dealt with urgent recruitment and retention

needs in the organization, we used the policies that we had in place to meet the

needs of the organization in order for us to fulfill our mandate.

MR. JOYCE: On page 174 stating that the Centre "would be submitting a

request for exemption from policies the Board determines will negatively impact

operations. That submission will be made by September 30, 2012.' The Minister

acknowledged receipt of this letter.

"The Centre did not submit the request for exemption to the Minister by

September 30, 2012. Further, in early October, the Centre recommended that the

CEO meet with the Deputy Minister of the Department to determine a course of

action to address the Treasury Board direction."

Can you tell me what happened out of that meeting?

MR. BARRON: Yes, Sir. What happened first of all was that we had the

original communication on June 5, 2012, referred to it at the top of the page.

MR. JOYCE: Yes.

MR. BARRON: That actually created confusion for the board. It made us

unsure and it made the Centre unsure of where we stood. As of 2008 we had our

own policies, and we were following that process, the policies that were put in

place as of 2008. Here we are now in 2012 and all of a sudden we need to deal

with this. Of course the first thing the board was thinking of was how is that

going to impact the organization from a risk perspective and in the complex and

difficult projects that we were undertaking.

As part of that process we had another legal review to make sure that we were

legally sound and that the legislation did allow us to have our own compensation

and our own policies. That reflected it and the legal opinion at the time gave

us an indication that you really do not need to apply for an exemption, you

already have it because your legislation allows you to do that.

That being said, we understood quite clearly with the discussions that we had

with the deputy minister or that I had personally with the deputy minister that

the Centre would have to start to undertake activities to align compensation.

The board voluntarily accepted that as part of the recommendations of the AG

report, as well as the discussions that were ongoing at the time. The board

acknowledged that and, as time went on, we are now continuing to work on that

process.

MR. JOYCE: Okay. Can we get a copy of that legal opinion? Would that be

proper?

MR. BARRON: Yes, Sir. I will put that in the same package.

MR. JOYCE: The same package, yes. I am not sure if that would be proper

to give out a legal opinion.

MR. BARRON: I will ask the lawyer and I will let you know.

MR. JOYCE: It would be nice to have it.

MR. BARRON: Oh, absolutely.

MR. JOYCE: I have to be honest with you in speaking here today. The

impression you get with this is that the entity was tucked away on its own,

giving all their buddies an increase somewhere along the line because they felt

somebody but now, from the testimony given here today, the Department of

Health was aware of this and approved this.

This was not the perception that I had, personally, of this organization. Of

course, now, it falls back on the Department of Health. It is almost like okay,

we will give you permission, but we are not going to put it in writing. You guys

go ahead and do what you want to do. It is strange, actually.

CHAIR: Mr. Joyce, before you go into another area, maybe we should go to

Mr. Cross.

MR. CROSS: Thank you very much, Mr. Chair.

I guess I will make a few seconds of an introductory comment. Coming into

hearings like this and after receiving the reports from the Auditor General's

department, we read through these things as lay people in lots of cases I guess.

I feel like when I get the document with so many reports that there is a fair

amount of confusion keeping them separated and whatever. You get through some

degree of clarity as you read through them and get to digest them a little bit.

You come to the hearing and you are not really prepared or you do not feel

adequately prepared at this point. Probably at the end of the hearing is where I

feel that maybe I need to be when I start the whole process. Because at the end

of the hearing, I will have some context of this; I think two or three people

have referred to putting context to some of the queries that we may have.

I would like to thank the Auditor General's department first for the briefing

that we had when the report was presented to us, and that helped get us in the

frame of mind of where to look or where to delve into these issues. I would also

like to thank the officials who are here this morning from the Centre for Health

Information because without your candour and your information, I guess we would

still be digging and we would not be getting some of these answers.

I have three or four points I guess that are still sort of sticking out for

me as I read through; some of them have been touched on as others have asked

questions. Because this uses public money, then I feel we have a right to ask

some of these questions. We are all about, and it is mentioned in here, being

efficient and effective.

Very much more, in the sense of banter, on page 179, in 2008 there was a

decision made by the board that had some concerns raised by board members,

especially the government board representative or the department board

representative. There were concerns, yet when all of these concerns were raised,

the decision was still made to go on and move ahead.

Maybe I can understand some of that, but is this still the way this would

operate today or has there been some change through the last four or five years

that would bring us to a different modus operandi as opposed to this issue?

Because there were concerns raised as well, the board representative from the

department voted against that particular motion. How would that work today?

Would it still move on or has there been some change?

MR. BARRON: Absolutely. That would still be the situation where each

individual board member, particularly those who I mean, it is a consensus

board, but if a board member has a particular issue where they feel either they

are in conflict, they would abstain, or if they felt strongly against, they

would vote against.

The biggest change today, of course, is the board has agreed to align with

the government compensation policies on a go-forward basis. Because the state of

urgency is over, because that was an urgent situation back in 2007, the board

right now would operate in such a way and we have a relationship with the

department such that we work with them. The board accepts the fact that we have

to align because the government is the shareholder and we will align. Of course,

we will work with the government policies to the best we can to protect the

investments that have been made over the last ten years.

MR. CROSS: Okay.

My next issue was on page 180 with the chart we are looking at. Again, this

is from 2008 and there is some growth forward with another chart a little later.

At that point, it appeared there were approximately sixty employees in the

operation and the major amount of the salary increase was probably garnished by

six or seven of the top individuals. Was that done based on percentage, these

salary increases, just to draw in line with other agencies, as you had referred?

MR. BARRON: As CEO, my responsibility as directed by the board Chair and

the board was to put in a leadership team that would lead the Centre into that

growth period, into those complex systems, and the end results of meeting the

contractual obligations of Canada Health Infoway and any other organizations we

were contractually obligated to.

When you see the increases here at the leadership level is essentially what

you are looking at here for the most part. That was the set-up. That was the

basis from which the Centre then would grow, begin to build that additional

capacity, and get that additional expertise in a subspecialty of a very

specialized area, which was health information management and technology as

opposed to generalized IT. That is why it shows up the way it does, because the

leadership team had to be in place. That was the priority at the time. Once

again, that was benchmarked against the Atlantic Canada Hay data. The Centre did

not just say: Oh, we are going to give you a raise. That is not the way it

works.

We operated like a business. We had several good, private sector people on

our board. We employed best practices. Essentially, what you see there is the

results of that process to determine what was the best what was the most

appropriate remuneration to put that leadership team in place and keep it there

for the upcoming years.

MR. CROSS: Okay. That was in 2008. Now, if I jump ahead to page 188,

salary increases again. It was during this period of time that the

eight-four-four and four for government employees was in place. It was about a

21 per cent salary increase. Again, it is startling or striking that some

individuals would have over the same four to five year period, 120 per cent.

Just to get a context again for me in my head, some of that was, in the

beginning, adjustment for the competency that you needed and to have the right

individual in the position. Is that still growing at that rate or has it slowed

down?

MR. BARRON: Yes. Once again, to provide context to the committee, the

example given, for example, in the report here of the 119, that is essentially

three major changes in role responsibility and complexity, and the need and the

urgency of the organization to recruit and retain. It was not like: Hey, you are

getting 119 per cent.

Over a period of time as the organization grew, these positions did become

more complex. Once again, we are benchmarked against the Atlantic Canada

standard. We did not make up these pay scales. We did not invent them. We were

using a professional body to come up with those remuneration rates.

When you look at it today, as I mentioned previously, the organization is

much more mature now. We have gone through that growth period. I do not know how

many people have ever gone through what we went through, but certainly, it was a

very difficult time and a very intense time, very complex.

These projects, if you add up the portfolio, the capital funding portfolio of

the Centre over those numbers of years, it is close to $100 million. That is an

awful lot of money that we are responsible to make sure that that money is put

to good use. At the same time, we are trying to minimize the use of external

resources.

Looking at the organization today, that could never happen. If you take a

snapshot of where the organization is today, and as I mentioned previously, we

are in-line with that Atlantic Canadian average at 80-20 public and 20 per cent

private. We are very much aligned with organizations, such as Memorial

University, RDC, and Nalcor, as examples.

MR. CROSS: Okay. The fourth or concluding part for my ten minutes, I

guess. Recommendations on page 191, it says there in the bold area, "The Centre

should: conduct and document job competitions for all job postings; ensure

compensation policies are consistent". I am not going to read through the whole

thing.

At this point in time because some of these things were issues from 2008

forward; in the last five years or four years, how have these grown? Are they

implemented now more in-line with these recommendations? How is the operation

operating now?

MR. BARRON: I apologize; I am missing the specifics of the question.

MR. CROSS: In the sense that there are four recommendations here

MR. BARRON: On page ?

MR. CROSS: On page 191.

MR. BARRON: Oh, I am sorry. Okay, well that is why I was confused.

MR. CROSS: Okay. It is probably my

MR. BARRON: Four recommendations, okay.

MR. CROSS: Of these four recommendations I started reading them. I said

I do not need to waste my time by reading them all. How close to implementation

are these? Are they in-line now? The different picture that you see from 2008 to

2013, would these recommendations be reflected in how you are operating?

MR. BARRON: Yes. The first recommendation, "conduct and document job

competitions for all job postings". That is in place. We do that.

Ensuring "compensation policies are consistent with those of Government". As

I mentioned previously, that is a work in process, where we have already

submitted board approved policies pending confirmation from government that they

are aligned with their policies. We are currently going through the

re-evaluation process of all of our positions. Essentially, yes, that is in

process and/or part of it completed.

Ensuring the "Centre policy is followed regarding: an effort to hire step

1". The Centre will be following government policy. If government says you have

to make all those extra efforts for step 1 that is what the Centre will do. We

will comply and we will align our policies with government. Essentially,

whatever government does, we are committed to making sure that we meet that.

Considering "whether a position vacancy can be filled with a permanent or

temporary salaried hire prior to a decision to outsource work". That is really

on a case by case basis. Sometimes when you are in the middle of a project you

do need to get external resources, and sometimes because it is an expertise that

you just do not have.

Second of all, in order for you to have that in-house you would never be able

to afford to pay those people what it would take to get them in-house. As a

general rule, the Centre has always had a philosophy of trying to develop

internal capacity and where possible, hire the expertise required for the

operation.

MR. CROSS: Okay, thank you.

I defer to Mr. Mitchelmore.

CHAIR: Mr. Mitchelmore.

MR. MITCHELMORE: Thank you.

I would like to ask if we could have a copy of when the Centre had met in

consultation with the Department of Health and Community Services, it says in

the response on page 194 that you would "develop a road map by March 31, 2013

to address alignment and consistency of Centre compensation policies and

practices with those of government."

Would we be able to have a copy of the road map that the Centre is now

following?

MR. BARRON: I certainly would not see any reason. It is still in draft.

Just to give you a little bit of the history of the road map, we did submit a

draft for the March 31 deadline as indicated. A second draft with additional

consultation was put in, in June. As recently as only a week or two, it was

probably just a couple of weeks ago, we submitted an additional, once again,

based on the ongoing consultation with government and further knowledge of

employment law.

This is a complex issue in terms of dealing with the current employees. Any

new employees coming in will be paid on the new government re-evaluated scales.

What we have here is a complex issue of employment law with the current

employees. We are working through a process to minimize the impact to the

organization and to the taxpayers' investments of an alignment process.

Once again, that is in progress. I do not know who owns the document

officially. We do not see any reason why we would not be able to provide it to

the Committee, but it is still in draft.

MR. MITCHELMORE: Thank you, Mr. Barron.

I would like to ask Mr. Dillon if it is typical for a board Chair to make a

motion for approval at a board table. In many cases, board Chairs would not be

putting forward motions for approval in their capacity and in the context of the

bylaws of a board and the legislation. Is that standard procedure, that the

board can make motions, and is it regular practice?

MR. DILLON: I do not know that there is anything precludes that. I do not

know if there is any particular legislation. I have been involved in several

boards and your point is taken that you do not see it typically, but I do not

think there is anything that would stop a Chair, who is a board member who just

happens to be Chair, to put forward a recommendation.

MR. MITCHELMORE: Okay.

Mr. Barron had noted previously that there was not an actual vote on the CEO

increase, which basically was $65,000 over a six-year period. That was done

without the explicit approval of the minister, despite an overall budget going

forward to the Department of Health and Community Services, along with other

individuals receiving increases. How can something be approved from just an

evaluation committee without going to the board? These are fairly large

increases.

MR. DILLON: I guess if your governance allows you, if you set up a

committee that is to make that evaluation and then make that award that would

fall within the guidelines of its existence, of its legislation and bylaws.

MR. MITCHELMORE: Were there any documents submitted from this CEO

evaluation committee to show that such a wage increase was warranted? I guess

these evaluations were done each year as well, or on a regular basis. If we

could have maybe some documentation, as a Committee, to show that these types of

wage increases were warranted, that the committee had done some thorough work on

this and they actually have some basis for the increase.

MR. DILLON: Certainly, we can make available some of the outside

consultants, the documentation, to the Committee.

MR. BARRON: That would be part of the information that we agreed to

provide previously.

MR. MITCHELMORE: Okay.

In terms of when you were looking at this new salary framework, because there

are a number of them there, I guess I would like to ask the more general

question about you have been in the role, Mr. Barron, as CEO since its basic

inception in 2007

MR. BARRON: Not since the inception of the Centre, but certainly the

inception of the legal entity it was September of 2006, which was just short

of a year previous to the actual proclamation of the act.

MR. MITCHELMORE: Right, so during that time in your role since is it

2006 or 2007 that you have been in this role?

MR. BARRON: It was 2006.

MR. MITCHELMORE: What is the turnover at the Centre?

MR. BARRON: In terms of the employees?

MR. MITCHELMORE: In 2006, 2007, and 2008, was there a high level of

turnover during that time?

MR. BARRON: I do not have the exact figures, but I can certainly provide

them to you. I can, as a general statement, say that there was not a big

turnover of people at the Centre.

MR. MITCHELMORE: I guess my question is: Why would there be a warrant for

a new fiscal framework to increase staff 100-plus per cent if there were no

turnover? There is certainly not a retention issue.

MR. BARRON: I would suggest there was no turnover because we did take the

necessary steps to retain those individuals.

MR. MITCHELMORE: Were there indication or documents to support that

people would have left or resigned on the basis of being unsatisfied with the

pay scales that they were receiving?

MR. BARRON: You may not find documentation for a lot of those instances,

but I personally was in the know of people being recruited from outside

agencies. I was personally aware of people potentially being recruited by

government at senior levels, ADM, et cetera. The economy of the time, of course,

was putting an awful lot of pressure the salaries required to maintain those

individuals.

As I mentioned previously, the influx of the $1 billion-plus that Canada

Health Infoway put across this country for health information management and

technology expertise certainly upped the ante even more. It was not done

arbitrarily. It was done to meet the needs of the organization in order for it

to fulfill its legislative mandate.

MR. MITCHELMORE: Government lost a big opportunity to leverage funding to

help implement the Electronic Medical Record system for the Province. This

Infoway Canada that you are talking about

MR. BARRON: Canada Health Infoway.

MR. MITCHELMORE: this $1 billion fund; across the country, those funds

were available, but the government did not make use of them. Can you explain or

shed some light on the circumstances for this huge opportunity lost?

MR. BARRON: Certainly, the opportunity is not completely lost. There are

funds still available for the Province to avail of should an approved what we

would call a physician office system program be put in place similar to what

other provinces have.

Over the last number of years we have worked very closely with the department

and actually in consultation as well with the medical association on ideas to

put forward a strategy for the Province to undertake such an initiative. My

latest information that I can provide to the Committee is that is still on the

table as a possibility on a go-forward basis for us to avail of those funds for

the Electronic Medical Record.

MR. MITCHELMORE: It is my understanding that the Centre for Health

Information had been planning a conference to bring together health care

providers and had received private funding to go ahead with the conference to

bring in all these stakeholders and to have that type of consultation. This was

a project, a conference, that was axed either by your Centre or the Department

of Health and Community Services. Just weeks after that, the Premier had taken

Ovations and had done this conference with private funds and things like that.

Why would you not move ahead with such a conference to bring forward these

health professionals who are certainly needed?

MR. BARRON: The conference that the Centre was spearheading, it was not

specifically Electronic Medical Record. It had a broad, comprehensive agenda

that included Electronic Health Records. It included Electronic Medical Records.

It also included health information analytics. It included a health research

agenda as well.

That particular conference, we managed to get our private sector partners to

put forward an amount of money that would allow us to undertake that with

minimal cost to the Centre and to minimize the cost to any of the private sector

participants or attendees at the time.

Just prior to the conference occurring keeping in mind that this is

somebody else's money that we have been lucky enough to earn and get them to

commit to we got to a date and time where, because of the government's

financial position, austerity measures were put in place that certainly did not

make travel an accepted thing at that time, or the attendance of conferences.

That is about as simply as I can put it. What we tried to do, we tried to

make it more amenable to the regional health authorities because that is who

your main attendees would have been; it would have been from the four major

regional health authorities. Even after our efforts to help underwrite the cost

associated with attendance, we still could not confirm much more than ninety to

100 people attending. When we had the commitment from those private sector

companies to provide that money, their understanding was that we would have in

excess of 200 people in attendance.

The decision to stop the conference was made by the Centre because we could

not, in good faith, take that money from those people if we only had 100 people

who were going to show up. It needed to be that 200 people that we gave them the

indication they would have before.

CHAIR: Mr. Mitchelmore, we need to move on to Mr. Peach.

MR. PEACH: Thank you, Mr. Chair.

First of all, I want to say it is a pleasure for me to be here today as a

Member of this Public Accounts Committee. I will say that I was not at the

briefing that they had with the Auditor General, but I did read the Auditor

General's report last night; I went through it thoroughly and there are some

questions that I have. There are some questions that have already been answered,

but there are still some questions that I have for clarification and

understanding, in your response, and also to the Auditor General's report.

I will say that I will commend you, your committee, and your board on the

efforts that you have in moving forward on the recommendations. From the

response that I read and from the Auditor General's report, there were some

recommendations there and you have moved forward on some of these

recommendations, and I want to commend you for that.

It seems that almost all of the recommendations have been acted on in some

way or form. I have to ask: Am I reading it right? There is still work to be

done and there will always be work to be done, but on the recommendations it

seems that most of them have been looked at. Is that a fair statement?

MR. BARRON: Absolutely.

MR. PEACH: I want to ask the Auditor General, as well. Mr. Auditor

General, I am just wondering, moving forward from the report, are you satisfied

with the progress that has been made so far by the board?

MR. PADDON: At this point, I can only say I am neither satisfied nor

dissatisfied because we would have to go back and actually look at how the

Centre has implemented the recommendation. Typically, our process is two years

after we report we would go back and do an evaluation as to where a particular

department, agency, or entity is with the recommendations, and then we would do

a follow-up report to the Legislature.

At this point, in the absence of us actually going back and having a look,

clearly we accept the Centre's responses and the statements they make here

today, but we would actually go back and have a physical look to ensure that

what they have said they have done has been done.

MR. PEACH: Thank you.

Another part of the Auditor General's report, on page 168 under the report

there is a chart that shows Expenses and Employees. The chart shows that

salaries and benefits increased from $2.6 million while the number of employees

has increased from fifty-four to 156. Are the doctors and the nurses included in

the employees? That is more or less for clarification.

MR. BARRON: The Centre probably only has a half-dozen people who would be

registered nurses on staff. Any physicians we have would not be physicians that

are out practicing in the general public.

For example, we have a couple of individuals who came from other countries

who just happened to have an interest in health information management and they

sit there. We really do not employ clinical providers. We employ enough clinical

expertise to provide the means to co-ordinate and to get the input required from

those larger groups, whether it is the nursing association or from the Medical

Association, medical board. We have what we call clinical advisory groups.

Through the Infoway funding, the funding allows us through Infoway to fund

those people to attend meetings where we run sessions to show how the systems

will work and whether or not it will work for them. One of the philosophies at

the Centre is: Do not build it and expect them to come. We want to work with the

people who are actually going to be using the systems, so that when the systems

are developed they are already in a place where they are useful.

As a result, most of our clinical expertise comes from the relationships we

have at the regional health authorities, as well as with the individual

practitioners who participate in our clinical advisory committee structures.

MR. PEACH: Thank you.

Also, following down from that paragraph it said in addition, consulting fees

increased from $2.9 million to $4.8 million. Then the question came to me as to

who is included into that cost?

Also, another question that came out of that, that I wanted clarification on

is: When your in-house consulting left, why did the consulting go on so long?

Why didn't you just hire another in-house consulting? Why did you go outside?

MR. BARRON: The Centre will always require a degree of external

consulting. Always, because you can never get all the expertise you need by

placing a job ad in the paper or on Career Beacon or wherever we put it. That

expertise is not always there. There are certain actual competencies that we

would be lucky to get them in Canada, let alone try to hire them from here.

When you look at the percentage of external consulting, I can say and I

will provide this to the Committee as we speak because I asked the same question

myself, and certainly the board. One of the reasons we needed to put in our own

salary structure was to decrease the dependency on those external consultancies.

Never to eliminate it, because you could never have all the pieces of knowledge

that you need to have. No more than Nalcor could have all the information they

need to build Muskrat Falls or somebody to build. We still have the Norwegian

people helping us with the rigs. It is just very complex and it is a very narrow

bunch of people in the country who know those skill sets.

In 2007, 53 per cent of our total salary costs were consultants. In 2008, it

went to 26 per cent. Of course, this reflects as you notice in the chart, our

totals went down a bit because that was a period in between starting another

major initiative. Go to 2009, it was 45 per cent.

In 2010, as we started gearing up the IHR labs project, it went down to 31

per cent. In 2011, it was 35 per cent, and in 2012 it sits at 29 per cent. What

that does, it certainly give me, as a CEO, an indication that our ability to

create that internal capacity has reduced our reliance on the external

consultants.

MR. PEACH: Okay. Thank you.

MR. CLARK: Could I just add something, please?

MR. PEACH: Yes.

MR. CLARK: I just want to point out that in the spirit of continuous

improvement we are going to follow up on the Auditor General's recommendations

and post temporary positions for some of these initiatives. Hopefully we are

successful, and where not, we will pursue the consulting. That is one of the

areas we are going to improve upon. I just wanted to get that point across.

MR. PEACH: In your series of questions and responses, in your response

under number four of the responses, one of the questions asked was: Did the

department seek their legal advice from the Department of Justice or from

outside counsel? In your response you say you used outside counsel. I am just

wondering why you chose outside counsel? Why didn't you choose the Justice

Department?

MR. BARRON: As a free-standing independent agency, the Centre operates as

a business. In terms of the expertise required, and this was just a mode of

practice and best practices that we followed, we tender as per the Public Tender

Act. We tender professional services.

We have three law firms, each one specializing in three different areas that

the board and I, as CEO, rely on for the expert advice related to contracts.

There are certain issues that come up that may actually involve questions as to

how we relate to government. So it was important for us to have that independent

counsel in order for us to truly be an independent agency.

MR. CLARK: That is not uncommon for other Crown agencies that approach

either.

MR. PEACH: Thank you.

I just have one more question that I am wondering about with regard to

clinics. Does your board mandate include clinics as well, like the Whitbourne

clinic and things like that, or is it the overall health board of the Province?

Are they assessed by the hospital? Like in Carbonear, for instance, they cover

the clinic there in Whitbourne as well.

MR. BARRON: The initiatives at the Centre, particularly those around the

electronic health record, part of the most recent project involve what is known

as an EHR viewer. That viewer will allow the information from the pharmacy

system, from the PAC system, and from the lab system to be available everywhere

in the Province that people have the bandwidth required. Most people do, because

we even have PAC systems that connect Labrador. As you all know, there are some

issues with bandwidth in Labrador.

That viewer will be made available through a change management process to

individual clinics, regional health authorities. Anybody associated with the

health system who is an appropriate user and who requires that information to

provide value to the health system and to the public at large will eventually

have access to that viewer.

MR. PEACH: Thank you, Mr. Chair, and thank you for your responses.

CHAIR: Mr. Joyce, I think.

MR. JOYCE: Yes, I just had a few more questions.

On page 179 I know an important member here mentioned it before - at the

top of 179, there are a few questions here. "At a Board meeting January 16,

2008, the Board considered the new classification and salary scales". "Despite

the concerns raised by the Board representative from the Department the Board

approved" new salaries.

I have two questions on that. Why was it made retroactive to April 27, 2007?

You look at the top of page 179.

MR. BARRON: Certainly, to my recollection, that would have been done

because as a part of the practice of getting our new benchmarks, people were

re-benchmarked long before the actual approval went in place. Their duties were

already into that complex zone, or to that zone that required the additional

salaries, and a decision was made by the board at that time that in fairness to

those people who have been carrying that load, certainly, that it would be

retroactive as part of the pay scale.

MR. JOYCE: Can we get a copy of those minutes? It is strange that you

hire somebody and you go back seven or eight months later, have a board meeting

and say okay, we are going to increase your pay and we are going to make it

retroactive, even though that is what you were hired on for. It seems

MR. BARRON: Yes, that is consistent with what happens in government. If

you go in for a reclassification within government and the reclassification

process is not bullet-quick, because there are a lot of people, 30,000 civil

servants, whatever it is, and a good portion of them may be going for

reclassifications at different times. The classification process allows for it

to be retroactive to the point in time that the classification was made.

MR. JOYCE: So, did you put in a reclassification for those positions? Can

we get a copy of the request for reclassifications?

MR. BARRON: I will provide you with any information that we have that

pertain to how the benchmarking occurred for the 2007. We will provide whatever

we have, in terms of