CBC News has learned of new cuts that are expected to shrink the capacity to treat patients in some of Alberta's busiest hospitals.

Alberta Health Services and Covenant Health have announced plans to downsize the rate of pay for several key doctor jobs at all Edmonton hospitals - even as the demand for their services increases.

Sources say the pay cut will discourage experienced doctors from working these shifts, creating a doctor drain which could negatively impact the speed and quality of hospital patient care in Edmonton.

AHS says the change is necessary in the face of the provincial government's hard-line call to reduce spending.

Tough choices

“It is clear that current funding models are not sustainable within the broader context of the financial challenges facing Alberta,” reads one of several leaked memos about the changes, signed by Dr. David Mador and Dr. Jeff Robinson, senior managers for AHS and Covenant Health.

They explain that Edmonton's acute-care budget has a deficit projected at $5 million for 2014/2015 and that figure is expected to increase without "substantive change.”

This is one of the money savers they came up with: a decision to significantly prune the pay offered to “hospitalists,” that is, doctors who specialize in the care of patients in hospitals.

Dozens of hospitalists work in Edmonton. They work under contract and fill several different hospital roles like making rounds, assisting in surgeries, ordering tests and medication, covering overnight shifts and generally overseeing patient care.

The changes are set to go into effect in April, but front-line hospital staff and the Alberta Medical Association are already strongly opposed.

Why stay when it's better to go?

"These people are indispensable. The entire system depends on them [hospitalists] in some way," said one senior Edmonton physician who's concerned the cut will affect his patients.

"I worry we will no longer be able to attract the good people we need in these jobs.”

He and several other Edmonton doctors and surgeons spoke to CBC about the changes under condition of anonymity, because they fear they may be sanctioned or fired for speaking out.

Right now, hospitalists in the Edmonton Zone can bill Alberta Health for each service they offer in a shift. They also receive stipends from a separate budget, overseen by AHS and Covenant Health to top up their pay.

In the past, busier and more complex hospital departments typically offered contracts with higher pay top-ups to attract skilled and experienced doctors who already had their own private practices.

Starting in April, AHS and Covenant Health will reduce or in some case eliminate those top-ups – a change that amounts to a substantial income downgrade for many and makes contract jobs in hospitals much less appealing.

“Why do all the stress of working in a hospital when I can make more money at a clinic?” asked one doctor who is personally affected by the cut.

He works full time in a leadership role at an Edmonton hospital. The cut will effectively reduce his $350,000 average annual salary by about one-third. So he has already decided to reduce his hospital work hours and go back to private practice.

“You're going to get a lot of lesser-trained, lesser-experienced doctors filling those roles.”

Strong opposition

One of Alberta's leading health-care advocacy groups wrote a stern reply just a few days after the changes were quietly announced in January.

The announcement memos “have been brought to our attention by several physicians concerned about the impact this will have on their income and the acute care services they provide,” wrote Alberta Medical Association president Dr. Richard Johnston.

Johnston reminded his colleagues that the province’s health regions rejected a similar attempt to organize a standardized pay rate across the province about a decade ago. He said the absence of negotiations this time around, coupled with very little notice, is likely to sour doctors on working for AHS in hospitals.

“Sudden unilateral changes, which in some cases are to be made within the time frame of a binding contract, are unfair to these doctors,” he wrote. “And will certainly act as a deterrent to further involvement with AHS.”

The AHS and Covenant Health memos say the hospitalist pay cut decision is based on a year-long review of Edmonton's acute care coverage model. The review found that demand for clinical services kept rising in recent years – without a reciprocating increase in budget.

In an interview, Mador said the changes have been in the works for months and was surprised to hear doctors' concerns.

"It's not sudden," he said. "This has been underway for over a year. And we have talked to various physician groups."

Mador would not say how much money the changes will save.