For years, successive governments have systematically neglected our current public laboratory system, leaving it without upgrades, understaffed, and under-resourced, to the point that privatization was presented as the only option. 

Privatization of health care is never the solution. The ethical implications of corporate involvement in our health care are of grave concern to Albertans because our current laws protect private corporations from the public disclosure of ‘confidential business information’. Unlike public health providers, private contractors will not have to disclose how our public health dollars are being spent, allocated, or collected. We have already seen that for-profit delivery has led to decreased transparency and accountability in our health care system, as in the cases of home care and seniors’ care. The priority of for-profit companies is to make money – money that should be going into better public services instead of being paid out to corporate shareholders. Far too often, the corporate sector’s motive to increase profits negatively impacts patient needs and safety. 

For years, many Albertans — including front-line workers in laboratory services and pathologists — have opposed the privatization of Alberta's labs, and will continue to do so in the future. The direction of health care in Alberta should be determined not by ideology and corporate profits, but by how we can provide the best possible care to everyone.

Friends of Medicare calls on Alberta’s government to accept the overwhelming existing evidence against the privatization of lab services. Albertans need to be presented with an honest and transparent business case that will provide the basis for an informed decision. The proclamation that "Alberta is open for business" should not apply to health care. Health care is not a commodity – no one should be able to profit from the poor health of Albertans.

A BRIEF HISTORY OF LAB SERVICES IN ALBERTA’S MAJOR CITIES:

Edmonton

• In 1994, a $12-million “State of the Art Lab” was opened in the Royal Alexandra Hospital (RAH).
• In 1995, various private, for-profit corporations amalgamated to provide lab services in Edmonton.
• By 1996, the RAH lab was changed from full service to ‘stat’ or ‘rapid response’ when they contracted out the lab services to DKML (later renamed DynaLIFE).
• The then-Chief of Laboratory Medicine at the RAH, Dr. John Jacques, quit his job to protest the shutdown of the laboratory, indicating that he had spent months trying to convince the government and the other players involved to centralize regional lab services at the RAH site. He was quoted as saying: “I made my ace, but it didn’t really help. The government was very determined to privatize and their decision had not much to do with economics or with patient care.”
• In 2005, the privatization experiment was deemed a failure and all in-patient lab services in hospitals were brought back into the public sector, although DynaLIFE has continued providing testing outside of hospitals and urgent care centers

Calgary

• In 1996, Premier Ralph Klein tried, and struggled, to get private, for-profit operators to take over lab services in Calgary
• Due to lack of interest from the private sector, only three private corporations came forward, and they did not have enough capacity to take over the lab services from the public sector completely. The two corporations entered into a partnership with the Calgary Health Authority, which put up more than half of the funding and did much of the work.
• By 2006 the experiment was deemed a failure. The corporations pulled out, and all lab services returned fully to the public sector under Calgary Laboratory Services, which is a wholly owned subsidiary of AHS

Alberta Health Services began a plan to further privatize and centralize laboratory services in Edmonton and surrounding area, and moved quietly through the process of putting out a Request for Proposals (RFP) to secure a “preferred proponent.” In October 2014, Sonic Healthcare was chosen to be the private provider of lab services.

Throughout this entire process, the previous government failed to present a reasonable case to Albertans explaining why the further privatization of this essential and integral part of our healthcare system was necessary. There was a lack of public consultation and involvement leading up to the $3 billion, 15-year contract being awarded. Most importantly, the previous government had not answered either the question of who would make decisions about patient care, nor on what basis: the narrow interests of shareholders or the interests of patients and the public good?

Sonic Healthcare is Australia's largest provider of medical testing, with fifty subsidiaries operating in eight countries. AHS planned for the company to provide the medical testing for the public health care system, as well as perform private sector and out-of-province testing. As with all private-public partnership (P3) arrangements, Sonic Healthcare would have put up the financing for the land and the new lab facility, and Albertans would have repaid it with interest. If AHS did not extend the contract at the end of the 15-year term, Albertans would have been stuck with the bill to pay a lump sum for the unamortized portion of the land and facility built by Sonic, and we would have had to buy back the equipment.

Advocates, including pathologists at the University of Alberta Hospital, publicly condemned a new private facility as not being in the interest of patients, and said it would impair timely patient safety and overall quality of care. In the meantime, DynaLIFE who had up until this time been providing contract, was set to expire in the spring of 2015. DynaLIFE, whose contract was worth over $150-million per year, appealed the decision to award this sole-contract to Sonic Healthcare, on claiming that the selection process was rigged. AHS set up its own “Vendor Bid Appeal Panel” to judge the procurement process and the appeal panel sided with DynaLIFE.

ATTEMPTS TO REVERSE PRIVATIZATION:

Following their 2015 election, the Alberta NDP announced a ministerial directive to cancel the request for proposal process for the privatization of laboratory services in Edmonton and northern Alberta, and began undertaking a review of service delivery models.

A 2017 report from the Health Quality Council of Alberta recommended creating a provincial lab agency and information system, and found that the majority of equipment in Edmonton's public lab was obsolete and that lab were outdated and cramped. Without modern equipment, samples are sometimes sent out-of-province, delaying diagnoses and treatment for patients.

In 2017, the NDP government established a Steering Committee to consult with stakeholders, and conducted a governance review of Alberta's laboratory system. They halted the previous government's move to privatize Alberta's laboratory services, and made the decision to reverse the privatization of lab services, and end the costly experiments with privatization that previous governments had been conducting. A new administrative board, Alberta Public Laboratories (APL), was created as a subsidiary of AHS, merging Calgary Lab Services and labs with Alberta Health Services and Covenant Health. In early 2019, construction began on a $590-million centralized public lab facility in Edmonton, with plans for a $50-million buyout of DynaLIFE by 2022. The centralized public lab would have allowed for integration of services across Alberta, and created a shared information system to the benefit of patients and medical researchers alike.

A CHANGE IN GOVERNMENT:

During his 2019 campaign, Jason Kenney stated that if elected they would scrap a laboratory hub and revisit a plan to put all laboratory services under government control. Kenney’s announcement contained no arguments that would persuade Albertans that privatizing an integral part of our health care would benefit our families or communities. He presented no plan other than to attack the work that health care professionals and experts have already done in this area to ensure that the policy driving this change is ultimately in the public interest.

By April 23, even before the newly-elected United Conservative Party had been sworn in, we learned that construction on the laboratory hub been put on hold until the new government had an opportunity to “review the project.” Ultimately, the government chose to cancel construction contracts on the laboratory hub, but neglected to reveal the costs associated with the cancellation, or how they plan to address the outdated technology and infrastructure in Alberta's existing labs.

$23-million had already been invested in the planning and construction, not to mention the costs incurred in compensation to cancelled contractors. With the cancellation of what was to be the first expansion of our public lab services in decades, Albertans have been left with no clear path forward for our fractured and crumbling laboratory system, and nothing to show for this multi-million dollar debacle except an extremely expensive field.

While Albertans minds were fixed on the release of budget 2019, the existing leadership of Alberta Public Laboratories (APL) was suddenly removed and the name changed to Alberta Precision Laboratories. The removal of the word ‘public’ from the organization’s name signaled a narrative and cultural change towards privatization, and showed where this government's commitment lies: in securing profits for its corporate friends, rather than to finding public solutions to expand and strengthen Albertans' public health care system.

With lab services no longer able to meet the growing demands of this province, and in urgent need of investments to improve outdated technology and infrastructure, privatization is once again being offered to Albertans as the only solution. 

THE CURRENT SITUATION:

In February 2020, the Alberta Health Services Performance Review that the Alberta government commissioned from Ernst & Young (EY) recommended the privatization/outsourcing of the province's lab services. Since then, the government has awarded a $986,500 contract to the firm to become Alberta's "Health Contacting Secretariat," a role which will assume responsibility for building the health care delivery 'market' and reducing barriers to market entry for large corporate players. 

Despite the integral role that Alberta's public medical laboratories played in the province's COVID-19 pandemic response, the UCP government has not slowed in their intent to privatize this vital part of our health care. In December 2020, the government issued a Request for Proposals for community lab services, leaving them up for grabs to the highest bidder. The contract was eventually awarded to DynaLIFE, and in December 2022, the majority of Alberta’s community medical laboratory services were transitioned from being publicly delivered by APL, to being privately delivered by DynaLIFE. 

The government has continually failed to provide any evidence that their fragmented approach will save money or ensure better community lab services for Albertans. Despite claims that this move is in the financial interest of Albertans, a 2022 report from Parkland Institute found that the planned contracting out of community lab services would save less money than claimed, and that AHS had not even conducted a cost-benefit analysis comparing privatization to the fully public option already in the works.

The transition is already proving rocky. But despite the public repeatedly rejecting attempts to privatize our medical laboratory system, this 'health care zombie' is once again rearing its head, as Albertans being asked to accept major health care policy changes based on faith and not facts all over again.

• Read more on Friends of Medicare's ongoing work to stop the privatization of Alberta's medical laboratories.