Alberta agrees to $50M deal to take over private medical lab tester

EDMONTON -- Alberta took a giant step Friday to taking medical lab testing away from private sector providers.

Alberta Health Services announced Friday it will pay DynaLife $50 million for its assets and take over as employer for its 1,200 staff.

Another $15 million will be invested over the next five years for lab equipment upgrades.

The plan kicks in when the recently extended contract with DynaLife expires in 2022.

"That's really good news for stable lab services in the province of Alberta," Health Minister Sarah Hoffman said in an interview.

"It's going to continue to put patients first as we move forward."

Alberta Health Services is responsible for delivering day-to-day health care.

AHS president Verna Yiu, in a statement, said the deal provides critical continuity given that lab testing supports an estimated 70 per cent of the decisions on patient care.

"With this agreement now in place, AHS will not need to recruit a new workforce," said Yiu.

"This is the latest step in creating a sustainable, long-term lab services model for Alberta that meets the rising number and complexity of lab tests."

The company's current deal with AHS is worth about $130 million a year. It handles about 55 per cent of the lab tests in Edmonton and northern Alberta.

The move follows up a Health Quality Council report in the spring that urged the government move toward a single integrated health delivery platform.

It also reverses a trend pursued in recent years by AHS to expand privatization of lab services.

Australia-based Sonic Healthcare was on track to take over all AHS lab testing in Edmonton under a $3 billion, 15-year contract until Hoffman stepped in to cancel it last fall.

Hoffman said she was not convinced that privatization provides the best level of care at the best price.

Opposition leaders said Friday's decision was a backward move that put ideology above practicality.

"Reflexively shutting out private operators leads to higher costs and further layers of bureaucracy throughout our health-care system," said Wildrose health critic Drew Barnes.

Progressive Conservative health critic Richard Starke said: "Health care costs will skyrocket when this government takes control of provincial lab services.

"Alberta taxpayers have a right to know why the minister has chosen the most expensive option available to her, and what she plans on taking over next."

The DynaLife lab workers are represented by the Health Sciences Association of Alberta.

Association president Mike Parker said it was the right decision.

"There has been far too much uncertainty in recent years on how best to provide lab services in the Edmonton zone," said Parker.

"We have seen decisions made by previous governments based on an ideological commitment to privatization without evidence to back up that it was in the best interests of Albertans."

The advocacy group Friends of Medicare agreed.

"By eliminating duplicate administration and the need for private profit, public funds can now be directed 100 per cent to better resourcing and staffing our laboratory services," said executive director Sandra Azocar.

"This is a win for patients and for those looking for better use of public funds in health care."