EDMONTON – Alberta’s NDP government announced a new deal that will see Alberta Health Services take over the medical testing now done by Dynalife, a private-sector laboratory. The agreement will take effect in March 2022, when Dynalife’s recently extended service contract to serve Edmonton and northern Alberta expires.

Under the terms of the deal, AHS will pay Dynalife $50 million for its assets and become the new employer of the company’s 1,200 staff, including managers. The company will also receive another $15 million over the next five years to ensure the lab equipment is upgraded, which will become AHS property when the takeover occurs.

“The $50 million allows us to assume the equipment, the assets, vehicles, infrastructure, desks, and so on. And we get a trained workforce out of it,” Mauro Chies (pictured), vice-president of clinical support services for AHS, told the Edmonton Journal.

“If we had to start from scratch, we would have to post for positions, which is an onerous process. So this is a more efficient way of acquiring services … rather than building from the ground up.”

The change will effectively consolidate all of Alberta’s medical testing under the public umbrella, since Dynalife is currently the only private provider in the system.

The announcement represents a complete reversal from AHS’s plans as of last year, when the health authority was on track to outsource all of the medical testing in the Edmonton region to a single company.

Australia-based Sonic Healthcare won a controversial bidding process over Dynalife, putting it in line for a $3-billion, 15-year contract that would have included construction of a new super-lab facility.

But before any outsourcing deal could be signed, Health Minister Sarah Hoffman abruptly shut down the plan, saying she didn’t want to engage in “costly experiments in privatization.”

Hoffman said she instead wanted a more integrated, public system across the province for lab services. The government and AHS are now considering various options to make this work, including an expansion of the model used in Calgary, where the service is provided by a subsidiary of AHS.

Chies said use of private providers in the future is also possible, if it is determined they can provide a benefit.

Until the takeover, Dynalife is expected to continue to operate from the downtown central lab facility it rents from the government-owned Alberta Investment Management Corp.

Planning has begun for a new laboratory building in Edmonton that can accommodate a greater volume and variety of medical tests, though the government has yet to provide any estimates of costs or construction timelines.

The announcement was applauded by various labour groups, including the Health Sciences Association of Alberta, which represents most of the province’s lab workers.

“By eliminating duplicate administration and the need for private profit, public funds can now be directed 100 percent to better resourcing and staffing our laboratory services,” advocacy group Friends of Medicare added in a statement.

However, opposition parties characterized the move as another example of ideological decision-making by the NDP that will increase centralized bureaucracy and costs to taxpayers.

Wildrose Leader Brian Jean said the government has a pattern of such choices, including Hoffman’s decision earlier this year halt AHS plans to outsource laundry and linen services. That decision could put the province on the hook for expensive upgrades to current aging laundry facilities.

Details on how the transition will be carried out are due Oct. 1, 2018.