HSA calls on Premier's office to end secret negotiations with BCMA on lab services

Deal would give private labs exclusive access to out-patient lab testing and divert millions in savings back to doctor-controlled fund

Health science professionals who work in BC's hospital labs are calling on the Campbell government to end secret negotiations with the BC Medical Association over the issue of lab reform.

The Health Sciences Association of BC has learned that the government and the BCMA are on the brink of an agreement that could end the competitive bidding process announced last summer and guarantee the private sector full access to lucrative out-patient testing.

"After 18 months of negotiations, the Campbell government has abandoned its commitment to openness and transparency, in favour of a secret deal that guarantees millions of dollars in profits for private sector labs," says Cindy Stewart, president of the Health Sciences Association of BC.

Stewart says the BCMA began meeting with the Premier's Office in January in an effort to stop the competitive bidding process that would allow both private and public labs to compete for out-patient lab services.

This meeting was followed by a flurry of correspondence between the BCMA and the Premier's office in which the BCMA calls for an end to the competitive bidding process and offers to reduce fees for pathologists by 20 per cent ($60 million) in exchange for a commitment that the savings would go back into a fund controlled by the BCMA. The government responds by holding firm on the competitive model but offering to exclude public labs from bidding.

"Last summer, the government committed to reforming the lab system and re-directing millions of dollars back into much-needed health care services," Stewart says. "Instead, the government is negotiating a secret deal that guarantees massive profits for private labs, and diverts $60 million in savings back to a fund controlled by the BCMA."

"We are calling on the Campbell government to end these secretive talks with the BCMA and resume negotiations that include all health stakeholders," Stewart says. "The government was on the right track last summer and should not allow one group -- whose membership includes pathologists who have a vested interest in making profits for shareholders -- to derail that process."

One of BC's largest and most profitable private labs, BC Biomedical, is owned by a group of pathologists.

Last July, the Ministry of Health Services released a report that estimated the government could save up to $150 million annually by proceeding with a lab reform initiative that included reducing pathologist fees, improving and coordinating information systems, and introducing a competitive bid process for out-patient testing.

-30-

 Letter to Gordon Campbell (PDF file)

Chronology - BC Laboratory Reform

May 2002 - The BC Liberal government hires THiiNC inc., an Ontario-based consulting firm specializing in health care restructuring to engage stakeholders in a discussion about lab reform.

November, 2002 - The Ministry of Health Services announces the government's intent to undertake a comprehensive review of BC's laboratory services with a view to introducing reforms that would lead to a more efficient and sustainable provincial system.

Ministry hires former Assistant Deputy Minister Lillian Bayne to provide an overview of lab services in BC, identify issues and concerns, and recommend approaches to resolving them.

July, 2003 - Lillian Bayne releases her report which reveals the following:

• BC's lab costs are the highest in the country - 50 per cent higher than the national average and increasing at a faster rate than anywhere else in Canada.
• Reforming BC's lab system could lead to savings of between $100 million and $150 million annually.
• •profit margins enjoyed by the private sector are considerable.
• The presence of multiple providers in the public and private sector should mean competitive fee-setting or pricing for lab services, however, this does not happen for a variety of reasons.
• The artificial distinction between inpatient and outpatient services, reinforced by separate funding and administration, does nothing to serve patients' needs for comprehensive and integrated care.

July 9, 2003 - Ministry of Health Services announces the government will undertake a competitive bidding process to provide out-patient medical laboratory testing. Both public and private sector providers are invited to bid.

August 27, 2003 - The government passes an Order-in-Council allowing government to reduce pathology fees by 20 per cent.

Summer/fall 2003 - Hospital labs begin preparing bids that would integrate in-patient and out-patient testing, and keep lab revenue in hospitals.

Fall, 2003 - MDS Metro Laboratory Services and BC Biomedical Laboratories begin lobbying the office of the Premier on the issue of lab reform.

December, 2003 - BC Supreme Court rules the Order in Council is inconsistent with the government's Hospital Insurance Act.

January 23, 2004 - The BCMA enters into private negotiations with Ken Dobell, Deputy Minister to the Premier, demanding that the government abandon the competitive bidding process. In exchange, the BCMA offers to voluntarily reduce pathology fees by 20 per cent.

February 13, 2004 - The BCMA proposes an alternative model whereby lab fees and the allocation of work would be determined by a central body with representatives appointed jointly by the Ministry and the BCMA. In exchange, the BCMA agrees to take a 20 per cent cut to lab fees (for a total savings of $60 million) but insists that the disposition of the savings remains under the control of the BCMA.

March 16, 2004 - Pathologists from three of BC's largest hospitals issue a news release decrying the secret negotiations between the Premier's office and the BCMA.

May 13, 2004 - In a letter to the BCMA, Ken Dobell states that the government prefers a competitive bidding process. Dobell offers to exclude public labs from bidding on tendered out-patient work, guaranteeing the private labs exclusive access to tendered out-patient testing.

May 18, 2004 - The BCMA responds to Ken Dobell, again arguing for a non-competitive process and proposing a sweetheart arrangement that would give the BCMA control over how lab savings are spent. The BCMA urges Dobell to conclude their negotiations quickly.

Information: Rebecca Maurer
Director of Communications
604 439 0994 office

Miriam Sobrino
Communications Officer
604 439 0994 office / 604 328 2886 cell