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Alberta Health Services extends Dynalife medical lab services contract for five years

Sarah Hoffman

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Alberta's health care community was abuzz this morning with word Alberta Health Services has renewed its contract with Dynalife Diagnostic Laboratory Services for five years.

As of lunch hour, the province-wide public health care provider had not published a news release explaining the decision, although CEO Verna Yiu issued a statement saying the extension "provides stability and predictability for staff and patients while AHS and Alberta Health transition to a new provincial model for laboratory services in Alberta."

In October 2015, the Edmonton-based private company's contract was renewed for a single year two months after Health Minister Sarah Hoffman ordered AHS to cancel a request for proposals on a $3-billion, 15-year medical laboratory contract for Edmonton and parts of Northern Alberta that would have resulted in a much higher level of privatization of an essential public service.

In 2014, with the Progressive Conservatives still in power in Edmonton, AHS had announced an Australian company called Sonic Healthcare Ltd. was the "preferred vendor" for the privatization contract, a deal worked out behind closed doors under then health minister Stephen Mandel.

When Hoffman's August 2015 directive was announced, the minister informed media she had been presented no evidence the scheme was in the best interests of Albertans and promised her department would do a province-wide review of medical lab services. "I do not feel that I have enough evidence telling me … that there is a strong public benefit," she said in her very short formal statement announcing the cancellation.

Hoffman elucidated that position later in the day, explaining the extension of privatization would have put about 30 per cent of medical lab tests in the province in private hands, and almost 75 per cent in Edmonton and Alberta’s north. She characterized handing over that much of an essential public service to a private, for-profit, foreign company as a dangerous and expensive "experiment in privatization."

About 1,100 Dynalife employees and another 500 public employees would have been impacted by the change to Sonic, and critics argued the plan could result in increased pressure to perform unneeded tests to benefit the Australian company's bottom line.

Dynalife, which had done the work in the Edmonton area for years, also launched an appeal of the decision and the appeal panel reported that AHS had "breached its duty of fairness" in the bidding process in a "substantive" manner, media reported at the time.

Vickie Kaminski, who was CEO of AHS at the time the privatization plan surfaced, defended the process notwithstanding the shortcomings revealed by Dynalife's appeal. In November 2015, Kaminski resigned as the top executive of AHS.

She has since landed a job as chief transformation manager of South Australia's health care system based in Adelaide, where she told the Australian Broadcasting Corporation she quit AHS because "the Alberta health system was unable to achieve planned changes due to the politics involved."

This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.

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