Alberta’s $100M Lab Privatization Fiasco Exposed by Auditor

URGENT UPDATE: A damning report from Alberta’s Auditor General, Doug Wylie, reveals that the provincial government’s attempt to privatize lab services has wasted over $100 million. Released on October 25, 2023, this report uncovers significant failures in due diligence and oversight concerning the controversial contract with DynaLife, which was meant to streamline lab services across the province.

The report highlights a series of alarming issues, including a lack of cooperation from key officials at Alberta Health Services (AHS) and the provincial health ministry. Notably, the DynaLife contract, initially touted as a means to save millions, was terminated less than a year after its launch due to persistent service delivery problems and DynaLife’s financial instability.

Wylie’s investigation pointed to minimal record-keeping during critical discussions involving AHS executives and health department officials. The findings suggest that AHS proceeded with the DynaLife contract despite being aware that the anticipated cost savings were unlikely to materialize. Between 2013 and 2023, Alberta taxpayers incurred $125 million in expenses from unsuccessful lab service privatizations.

The report also reveals that crucial evidence was obstructed during the investigation, with AHS restricting access to documents and failing to adhere to its own protocols for creating a business case for outsourcing.

“Our access to information was restricted by AHS and this restriction was supported by the Ministry of Health,”

said Wylie.

Initially, a 2019 report by Ernst & Young estimated potential savings from outsourcing lab services at $102 million. However, this figure was later revised down to between $18 million and $36 million after further analysis, which indicated that savings would be achieved through consolidating services under a single public provider rather than privatization.

In a shocking turn of events, the Alberta government ultimately purchased DynaLife for nearly $100 million in 2023 and integrated it into the public provider, Alberta Precision Laboratories (APL). This move raises serious questions about the financial stewardship of public funds and the efficacy of privatization efforts in Alberta.

The history between Alberta and DynaLife is fraught with challenges. Previously, in 2014, a $3 billion contract was awarded to Sonic Healthcare, which was later canceled by the NDP government in 2015. The NDP’s plan to acquire DynaLife was projected to cost $65 million, significantly lower than the recent buyout by the United Conservative Party (UCP).

Alberta’s government has faced scrutiny for its handling of AHS and the privatization of lab services, particularly after the UCP’s review of AHS aimed at finding efficiencies. The investigation underscores an urgent need for accountability and transparency in public service management.

As this situation unfolds, the implications for Alberta’s healthcare system and taxpayer funds remain critical. The provincial government must address these revelations and consider the future of lab services in Alberta. What happens next could reshape the landscape of healthcare delivery in the region.

Stay tuned for updates as this story develops.