Tab for cancelling lab service hits $ 3M
Wildrose says costly decision based on ideology with no care for costs
More than $ 3 million and counting is down the drain after the health minister told Alberta Health Services to cancel a proposed deal with a private Australian company to take over lab testing in Edmonton.
Health Minister Sarah Hoffman said the decision to cancel a $ 3- billion contract with Sonic Healthcare Ltd. to take over Edmonton lab services from Dynalife — and build a new high- tech facility to ease overcrowding — was based on government policy to make sure expanding privately delivered services is in the best interests of patients.
“At this point, I’m not confident this would be anything other than an experiment,” Hoffman said Thursday.
“As it stands today, I do not feel I have enough evidence to convince me that moving forward with this plan is in the best interest of Albertans.”
Hoffman’s ministry immediately launched a review of all lab services in the province to make sure the system has the right balance between public and private delivery of services, such as blood, urine or other diagnostic tests.
Currently, 27 per cent of lab services in Alberta are delivered by private companies. But in Edmonton and northern Alberta, that number rises to 61 per cent, with private company Dynalife doing most tests. Its contract with AHS ends in March 2016.
Sonic, an Australian company, won the new contract in October 2014 to take over the work, but negotiations and the company’s entrance into Alberta were delayed when Dynalife filed an appeal a month later.
If Sonic’s contract were to be honoured, Hoffman said the percentage of lab services delivered by a private company in Alberta would rise to 30 per cent overall, and 74 per cent in Edmonton and north.
“Regardless of any company, the expansion of lab services from public delivery to private delivery, expanding that by 10 per cent, to me was not something I was willing to accept the evidence on and feel with confidence it would improve the outcomes for Albertans,” Hoffman said.
AHS CEO Vickie Kaminski said the contract cancellation makes moot Dynalife’s appeal. The appeal decision recommended AHS re- launch negotiations with the three separate original bidders.
To date, AHS has spent $ 2.5 million on the proposal process and another $ 764,000 on the independent appeal process and legal fees. Because cancellation clauses were part of the contract, AHS also must pay each of three bidders $ 10,000, plus a yet- to- be- determined cancellation amount to Sonic as outlined by a letter of intent.
As such, legal action by Sonic is uncertain.
Kaminski said negotiations will continue with Dynalife to extend their contract beyond March.
“I want to assure the people of Edmonton and northern Alberta that the cancellation of the ( request for proposal) will not result in a disruption or a loss of service,” Kaminski said.
Dr. Shelley Duggan, president of the Edmonton Zone Medical Staff Association, said she expects Alberta will lose lab workers now, not only because they are sad and disengaged about the upheaval, but because there will be a significant delay in building a much- needed laboratory hub with expanded services.
“We need to have a long- term plan for health care and we don’t seem to be able to do that,” said Duggan, who recently urged the government to sign Sonic’s contract.
While Liberal interim leader David Swann agreed Edmonton is falling behind with high- quality lab services, he supported Hoffman’s review and urged her to boost publicly funded health care.
“Publicly funded health services are more efficient and quality controlled in all the evidence that I’ve looked at,” Swann said.
Wildrose health critic Drew Barnes criticized the government for making decisions based on ideology without revealing the entire cost to taxpayers.