Dynalife ownership to transfer all staff, operations, physical labs to Alberta Precision Labs

Alberta's health minister says Alberta Health Services has signed a memorandum of understanding with the ownership of Dynalife, which will see the private provider transfer all of its staff, operations and physical locations in the province to the government-owned Alberta Precision Labs by the end of 2023.

"This change is necessary to make sure Albertans can get their lab work done when and where they need it and get timely results," Adriana LaGrange said.

The province says the work will be completed in phases, with the full transition expected to be complete by December. During the transition, lab testing will continue at the same locations. More appointments in Calgary and other areas will continue to be added as planned, the government said.

AHS announced in 2022 that it had expanded its contract with Dynalife, which already operated labs in Edmonton and some northern Alberta communities. Jason Copping, who was health minister at the time, touted the deal as a cost-saving measure, though labour and health advocacy groups were critical of the move.

AHS then proceeded between December 2022 and February 2023 to transfer operation to Dynalife of previously public community labs in Calgary and other places in southern Alberta.

But over the past number of months, there have been concerns over long waits, sometimes as long as a month, to book appointments for routine tests, particularly in Calgary and southern Alberta.

Premier Danielle Smith previously tasked LaGrange to resolve "the unacceptable lab services delay challenge" across the province as part of her mandate letter, which was released in mid-July.

At the beginning of August, the province started taking more medical test appointments in-house, with Alberta Precision Laboratories offering hundreds of appointments in Calgary.

When asked what the costs would be to make the transition, LaGrange said there was a memorandum of understanding with Dynalife, but final details were still being worked out.

"That is not something that I can share. But as we move forward, we will be able to make that readily available to the public. We want to be transparent," she said.

In a statement, the Opposition NDP called the arrangement with Dynalife a "reckless experiment in privatization," characterizing the strategy as "pure incompetence."

Abnormal waits

In April, Dynalife's CEO Jason Pincock joined the Calgary Eyeopener to discuss why wait times for residents had ballooned to start the year.

"It's a very complex issue, but we are very committed to the Calgary region," he said at the time. "We are equally frustrated. It's not our normal to have these kinds of waits."

Fiona Clement, a professor at the University of Calgary in the department of community health sciences, says Alberta had a long and successful history of working with Dynalife, until recently. (Riley Brandt/University of Calgary)

Fiona Clement, a professor who specializes in health policy in the department of community health sciences at the University of Calgary, said she was surprised to see the announcement given Dynalife's long history in Alberta.

"Dynalife, again, has a decades-long history of providing excellent care up north. It really wasn't until this expansion of Dynalife into the southern parts of Alberta that we started to see issues with wait times for labs," Clement said.

"I think that just really speaks and underscores the complexities of delivering health-care services and setting up a network and an infrastructure and working with stakeholders and physicians and other kinds of health-care providers to set up a service. It's not an easy task."

Dynalife's main testing facility is located in Edmonton.

According to AHS, Dynalife employs 2,900 — more than double its workforce prior to its expansion into Calgary and other zones.

Leanne Alfaro, vice-president with the Health Sciences Association of Alberta union, said the news came as a surprise, but a welcome one, adding that the transition ahead would be complicated.

"We do commend the government for making a difficult decision to reverse course on the privatization of these services," she said.

In a statement posted on social media on Friday afternoon, Smith said the arrangement would provide faster access to timely results, adding that there would be no job losses for frontline staff as part of the agreement.

Dynalife saga

The Smith government's planned takeover of Dynalife is the latest dramatic chapter in a nearly decade-long and often highly political battle over who controls medical lab services.

And this isn't the first time Alberta planned to buy up Dynalife's assets.

In 2014, during Progressive Conservative premier Jim Prentice's brief tenure, AHS had contracted Australian health giant Sonic to take over Dynalife's private lab services in Edmonton and beyond, as well as the health agency's own hospital lab operations.

Dynalife had protested and appealed that 15-year, $3 billion deal, which would have pushed the Edmonton area's longtime lab contractor out of existence once its contract expired in 2016.

When the Alberta NDP won government in 2015, it cancelled negotiations with Sonic, calling the process to choose the new company flawed.

Then in 2016, in a move similar to what the UCP government is now doing, AHS announced plans to acquire all assets of Dynalife, to put all lab services under one publicly funded umbrella.

At the time, that takeover of Edmonton and northern services was to cost $65 million by 2022, when that move was supposed to be complete. The Health Quality Council of Alberta had recommended the province move to a single public-sector lab work provider.

The NDP also launched plans for a "superlab" on provincial land to consolidate lab test processing in a single complex.

However, another government change in 2019 brought a reversal.

Jason Kenney's United Conservative Party had opposed the provincial lab project in his election campaign, and cancelled it — and NDP-era Dynalife takeover plans — after Kenney won.

"We're standing by our commitment to cancel the expensive and disruptive superlab project and the ideologically driven plan to nationalize Dynalife," Tyler Shandro, then the health minister, said at the time.

By that point, the government had already spent $23 million on the superlab project, and would pay another $12.1 million to return the lab construction site to a grassy field.

The province then invited private contractors to bid on lab work that AHS-owned Alberta Precision Labs was doing in Calgary and other districts, ultimately inking the Dynalife deal to start in December 2022.

Problems with Dynalife in Alberta emerged quickly. By February, only two months in, AHS was already in discussions about "the option of acquiring Dynalife and integrating it into AHS operations," according to lobbying records that Dynalife filed with the government.