History of 1990s Laboratory Restructuring in Alberta

• General news updates on healthcare restructuring in Alberta (mid-1990s)

Laboratory Up-dates

• Here is where I will put the latest laboratory information as it becomes known. Background information and an overview are provided later in this document. Those of you who visit from time to time may wonder what, if anything, has happened over the past few months. Lots is occurring, but mostly behind the scenes in committees. What follows are some brief glimpses of recent developments. Events are reported in reverse chronological order, i.e., the latest news is reported first.

Lab Service Privatization Creating 'Mass Confusion'

• The Edmonton Journal of 2 June 1996 reported this quote from Elisabeth Ballermann, the President of the Health Sciences Association of Alberta (the union representing laboratory technologists): "Our people are saying it is mass confusion." One problem is the new region-wide computer system, which tracks tissues and fluid samples. Technologists are telling their union that the computer cannot track samples effectively and some get lost.

• Wendy Phillpotts, the regional technical director of lab services, contacted in England where she is on vacation, is quoted as saying, "I am not going to tell you there are no problems. There are always problems. But is there anything more than usual? No."

• Dr. Paul Greenwood, who represents Edmonton doctors as head of the regional medical staff association, backed the technologists. Citing several examples of slow or lost test results, he suggested that centralization had gone too far because the budget cut went so deep: "The lower you go, the more you have to centralize. I fail to see the logic of lab restructuring."

$7M Fund for Docs in Distress

• The fund will pay up to $100,000 each to eligible doctors: $25,000 for counselling, $25,000 for help with job searching, $25,000 for relocating, and $25,000 for skill upgrading. There are further unspecified funds for retraining or transferring to another branch of medicine.

• The money comes from a $37 million pool of money not collected by doctors over the past four years. Under that deal with the government (see "Doctors Get Chance to Make -Not Lose-Extra Money" under General News Updates ), doctors agreed to have their overall budget capped in exchange for sharing in any money not claimed. In essence, if doctors cut back on treating patients and did not bill the government for all the money budgeted for the year, they got a cut of the savings.

• The president of the United Nurses of Alberta said the program is "just another example of the disproportionate recognition of physicians versus every other healthcare provider." She points out that the government allocated $15 million to be split among all other (non-physician) health workers who lost their jobs, from a pool of 60,0000 people; in contrast, physicians get $7 million to be split among doctors who lost their jobs, from a pool of 4,200 doctors in the province. Rather than $100,000 other displaced health workers received an average of $2,000 to $4,000 each.

• As reported on CBC radio (7 May) by the president of the Alberta Society of Laboratory Physicians, 32 of 135 Albertan laboratory physicians have lost their jobs or have retired early due to restructuring. Of these only six are still without jobs and therefore eligible for the funds. The aid program for doctors was defended on the basis that the money was theirs,i.e., it was not new money but rather money that was initially earmarked for doctors. The amount of relief was defended on the basis that doctors have more expenses and need more money than other health workers.

• To be eligible, doctors must have felt a severe impact since June 1995 and and have lost 25% of their income or position or practice.

• The president of the Alberta Medical Association says the program is fair: "The people involved are really going through a turmoil in their lives. They have families and kids and they don't know what is going to happen. They go through bouts of depression and anger."

Healthcare Staffing

• Medical laboratory technologists: 1990: 2,000 1994: 1,609 % change: -19.6 %

• Physical therapists: 1990: 693 1994: 657 % change: -5.2 %

• Occupational therapists: 1990: 321 1994: 284 % change: -11.5 %

• Audiologists & speech pathologists: 1990: 265 1994: 221 % change: -16.6 %

• Licensed practical nurses: 1990: 2,496 1994: 1,699 % change: -31 %

• Registered nurses: 1990: 11,181 1994: 7,811 % change: -30.1 %

No figures were available for the number of physician positions that may have been lost, if any, during this time.

NEWCO/DKML

• In Edmonton, the contract with the private laboratory sector, designated "newco" but formally Dynacare Kasper Medical Laboratories (DKML), now appears to be near the signing stage , but a final agreement is still being negotiated.

  Just what is DKML? It's a merger of three firms:

  1. Dynacare, Inc., based in Toronto, but running labs in Ontario, Alberta, California, Washington, Texas, and Wyoming
  2. MDS Health Group, based in Calgary, which describes itself as Canada's largest technology-based life and health sciences company, with annual revenues of $680 million
  3. Kasper Medical Laboratories, Alberta's largest medical lab, founded by pathologist Thaddeaus A. Kasper

  The Edmonton Journal (Dec.2) reports that DKML is still asking the provincial government for $13 million to reimburse the company for what it calls "restructuring and transitional costs." A spokesman for DKML says the $13 million reflects the expense of merging three separate companies to cope with the 40 percent cut in government lab payments; it also includes severance packages for laid off workers, the cost of closing down about 100 small labs and collection sites, and the expense of renovating and setting up a new central lab. The government has turned down DKML's request and talks continue.

State-of-the Art Lab Soon to Be Empty

• Some doctors at a tertiary care hospital (Royal Alexander Hospital or RAH) that will have only a rapid response lab after Feb. 1996 are beginning to complain as the reality sets in. They have a brand new $12 million dollar state-of-the-art laboratory that opened in May 1994 but will soon sit empty. The 39,000-square-foot facility was planned and built just as the government cutbacks were beginning. Speculation at the time was that the RAH lab was positioning itself to be the site of centralized testing in the region.

  The opposition health critic in the provincial legislature has commented that it is ironic that DK's request for $13 million has come at the same time that the $12 million RAH lab is being mothballed.

Former RAH Lab Boss Reveals He Quit to Protest Shutdown

• Dr. John Jacques, the former chief of laboratory medicine at the RAH, has revealed that he quit his post to protest the impending shutdown of the $12 million RAH laboratory. Jacques says that he spent months trying to convince the government and the other players involved to centralize regional lab services at the RAH site. He is quoted as saying, "I made my case, 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. "

  Jacques' biggest fear is that there will be only one or two pathologists left at the hospital. He also worries that the loss of a cutting-edge laboratory will damage the RAH's work as a research and teaching hospital. Jacques now works at the King Fahed National Guard Hospital in Saudi Arabia.

Most Lab Staff to Lose Jobs at the Misericordia

• The Misericordia Hospital will start closing most of its medical laboratory on Dec. 11, letting go most of its lab staff and sending all but the most urgent tests to DK. Technologists at the hospital are still waiting to find out who will lose jobs and when.

  A former president of the Misericordia's medical staff is quoted as saying, "This is a dollar-driven system. Quality is certainly a second priority." The hospital's current acting head has responded that as long as DKML provides testing in a timely manner he doesn't think that closing the Misericordia's lab will make much difference to patient care.

Bumping

• Edmonton technologists voted 62 % for bumping (based on seniority among unionized technologists) to occur only within each facility, not city-wide. There will still be a large need for re-training/re-orienting within the system.

To give you some idea of the type of downsizing that is occurring, consider the following: At the RAH, the second largest hospital in the city, the number of lab managers is scheduled to drop from 3 to 0, the number of lab supervisors is scheduled to drop from 20 to 2, and the number of technologists is scheduled to drop from 54 to 19. All told, in Edmonton 300 positions have been eliminated at DKML, and another 300 are disappearing from the hospital labs.

Severance Packages

• In brief, unionized technologists in the region have been offered a severance package in which they can receive severance pay of 2 weeks salary x years of service to a maximum of 40 weeks salary. Termination dates must be mutually agreeable between employer and employee. Many technologists have applied for the package, which has been offered again in November .

Background Information

As background, in 1993-4 the government-funded Capital Region(mainly the city of Edmonton) spent $78 million on laboratory services.(Some $280 million was spent in the entire province.) There are six hospital-based labs, three private labs with 124 collection sites, and three special labs(e.g.,Red Cross, public health) in the Region. The number of lab technologists and similar workers is estimated at 1200.

Summary of the Capital Region Plans

• Budget cuts of 40%($33 million) will be made over the next 18 months (June 1995--Dec. 1996).

• Current lab jobs (meaning laboratory technologists) will be cut by 50-60%. This translates to 500 to 800 job losses, depending on the number of part-time workers. There have already been significant layoffs due to hospital closures/downsizing. Also, an established trend, especially in the private sector, has been laying off technologists and re-hiring them as lab assistants or aides at greatly reduced salaries.

• The number of private lab collection sites will go from 124 to about 24-30.

• Almost all of the current routine hospital-based and private lab services for the city will be done in one core lab operated by the private sector.

• Small rapid response (STAT) labs, where results are ready in 45 minutes,will be located in hospitals and community health centres and will be operated by the private sector.

• The public sector laboratory, designated the Capital Health Authority (CHA) laboratory, will be a full service laboratory and will be located at the University of Alberta Hospitals. As stated, all other testing (core lab and rapid response labs )will be done by the private sector, which will have 75 % of the business in the CHA region.

• Hospital-based blood transfusion will be centralized to the University of Alberta Hospitals . Other hospitals will have "minor" blood bank capabilities, as part of the rapid-response labs.

• The number of pathologists, clinical chemists, clinical microbiologists, etc., likely to lose their jobs is unknown, but will not approach anywhere near 50-60%. As one official at an informational meeting explained, "Their jobs are harder to automate than laboratory testing."

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