Wolves and Rabbits: The $3 billion RFP for Lab Services

I was slogging through Alberta Health Service’s Request For Proposals (RFP) for a 15 year $3 billion contract to provide lab services in the Edmonton area when the words of a former boss popped to mind…The world is divided into wolves and rabbits.

Wolves or rabbits?  Care to guess what we are.  Hint: we look really cute on Hallmark Easter cards.

The Rationale  

There is no rationale for AHS’ decision to privatize all lab services in the Edmonton area.  The “explanations” from AHS and Health Minister Horne boil down to this:

  • The volume of tests is increasing 6% a year and patients need new sophisticated genomic and proteomic testing.  This explains the need for a state-of-the-art lab but not why it must be privately built and managed.   
  • AHS’ contract with a private service provider (DynaLIFE) expires in Mar 2015DynaLIFE provides 60% of lab services.  What, the DynaLIFE contract can’t be renewed?  AHS and Covenant provide the remaining 40% of lab services, they’re unaffected by the DynaLIFE contract, why can’t they continue?
  • This is NOT about saving money.  It’s all about improving quality and patient safety.   Have you read the RFP???   

Uncertainties

At first glance, the RFP appears fraught with uncertainty, both financial and people related.

The bidder doesn’t know whether the Superlab will end up at the U of A or on the outskirts of Edmonton.  This impacts the land calculation and whether the Public Health lab is in or out.  He doesn’t know whether AHS will expand the services to include north-central Alberta.   This impacts the size of the Superlab.

On the people side, the bidder must accept the unionized staff and their collective agreements but doesn’t know whether the Alberta Labour Relations Board will approve the transfer of the collective agreements or what it will cost to replace the employees’ LAPP pension plan.

Most importantly, the bidder doesn’t know whether he’ll reach an agreement with the medical and scientific staff (represented by the Pathology Practice Group).  This one is a deal-breaker—without it the deal falls apart.  That would make the Pathology Practice Group a wolf—somebody go tell them, OK? 

Certainties

Before we start feeling sorry for the bidder consider this:  the inclusion of the Superlab in the so-called “services’ contract changes it to a property financing transaction that guarantees the bidder two profit streams.

First, the bidder puts up the financing for the land and the Superlab and Albertans will repay this with interest.  And, if AHS doesn’t extend the contract at the end of the 15 year term, Albertans will pay a lump sum for the unamortized portion of the land and facility and buy back the equipment.

Think about this for a moment.  Finance Minister Horner is adamant that the government should borrow for capital projects because it can get capital loans at the lowest interest rates on the planet.  So why did AHS go to a private company, and not the government, to finance the Superlab? It’s like financing a car loan through GMAC instead of the bank.     

Second, the RFP guarantees the bidder a “fair and reasonable return” on its operational investment and suggests a return of 8% without waiting for the bidders to work out their own profit margins.  A wolf never tables his number first…why negotiate against yourself. 

Third, the RFP includes a number of mechanisms like co-pay or user pay “utilization incentives” that allow the bidder to increase his profit.

Fourth, the Superlab will perform private sector and out of province testing.

It’s true that at any profits above the 8% threshold must be shared 50/50 with AHS, but a wolf (pardon me, savvy corporation) with a team of sharp accountants knows how to shift revenue to minimize profit and maximize bonuses and dividends.       

Failure to perform

There is one flickering ray of hope.  AHS has the power to terminate the contract, reduce its scope, impose financial penalties or take over if the bidder goes into default (eg goes bankrupt, undergoes a nasty change of control) or continually fails to meet key performance indicators (KPIs).

But there’s an alarming caveat—within six months of entering the contract the bidder can tell AHS the KPIs are unrealistic and AHS might revise them.  A wolf will agree to almost anything to land a deal and then fight to change it once the ink is dry.  Why make it easy for him?     

Wolves and Rabbits

A cynic would see this as a $3 billion shell game designed to award 100% of the Edmonton and North/Central Alberta lab services to DynaLIFE (with DynaLIFE awarding the Superlab construction contract to a friend of the government).

That would make DynaLIFE and Mr Construction Company wolves who’ll make a tidy profit on risk-free deals backstopped by the Alberta taxpayer.

The rest of us are rabbits.  “Patient” rabbits depending on AHS to do the proper inspections and monitoring to ensure their safety, ”employee” rabbits hoping to recoup the value of their lost pensions and learning to cope in an super-centralized workplace and “taxpayer” rabbits paying for a facility and a service that may not be necessary.

lonewolfCome 2016, let’s remember who put us on the wolf’s path and elect a government not wedded to a super-centralized privatized model of service delivery.   Then let’s demand that the government investigate the feasibility of terminating the contract on 12 month’s notice.

Let’s be wolves!

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33 Responses to Wolves and Rabbits: The $3 billion RFP for Lab Services

  1. Einar Davison says:

    I like my wolves in the wild and not providing an essential service. Hey here is a thought, if the government can designate union employees as essential services, then why don’t they declare the places where those employees work as essential and make sure they are available to Albertans with the profit margin completely out of the picture. Funny how the government wants it all their way and not what will be best for Albertans. I challenge whoever forms the government after the next election to think what is truly best for Albertans, and not what they or their contributors think it is. And by the way since when did getting free money from the government to build something even remotely looks like free enterprise. We don’t want individuals on welfare, but have no problems with companies getting essentially welfare. WOW the hypocracy absolutely gobsmacks me. Sorry for the rant! Great piece Susan!

    • Exactly! I don’t know what is more mind boggling–the fact that the private sector is getting corporate welfare or that government and the corporations don’t recognize it as such. Rick Trimp, interim co-CEO of AHS, said “We have the opportunity now to develop a state-of-the art lab facility that would be able to meet all of our testing and diagnostic needs without having to access capital dollars from provincial taxpayers.” Did he think the bidder was going to give AHS the land and the facility for free? If the CEO of a $13 billion enterprise doesn’t understand the rudiments of a $3 billion transaction that he’s responsible for he should be fired.
      OK that’s my rant, thanks Einar!

      • Einar Davison says:

        Well I think corporations should take care of themselves and if they can’t they should fail, isn’t that what free enterprise is? Most small and mid-sized businesses face that reality, why can’t the big corporations? Or why can’t the big corporations who are supported by the Tories do that. In Strathmore the government closed down Long Term Care at Strathmore Hospital (now sitting empty and unused) and gave a private operator $22 million dollars to build a private facility. Basically this is free money and a heck of a nice winning lottery ticket for a PC supporters. Half of the residents of the closed facility have died (and I would say a lot simply because they were losing their “home” and friends), most of the workers are either unemployed or working elsewhere.
        Wouldn’t it be novel if one political party in this province would actually care about the people of this province and not be mouth pieces for industry?
        As far as your rants go…you go girl!!! I love your blog, you back your “rants” with facts. We need to inspire Albertans to take their province back before it is to late!
        Have a Merry Christmas and all the best in the new year!

      • Einar, thank you for your kind support!!

        The Strathmore case is another example of how far off the beaten path the PCs have gone. I think they’ve thrown in the towel. They’re not competent to govern so they’re off loading as many services as possible to the private sector. Unfortunately they’re not sophisticated negotiators. For example the RFP asks bidders to provide a “test menu” which sets out all the direct and indirect costs for tests on a price per test basis for each year of the 15 year term, first for the Edmonton zone and then for the expanded Edmonton/north/central zones. I presume AHS wants to use the “test menu” to monitor costs over the life of the agreement. But will these costs be relevant 5 years from now, let alone 15? Instead of wandering around in the weeds, AHS should put a cap on the profit formula with a mechanism to revisit the formula every couple of years. Better yet, the government could can the whole idea and go back to what it’s supposed to be doing–serving the public.

        Einar, have a very Merry Christmas and a wonderful new year!

  2. Carlos Beca says:

    Same old strategy all over again. This has been happening for decades now and the greedy binge continues. Someone is going to have a fatter or foreign bank account in the end and it will not be any of the rabbits.
    This is abhorrent and sounds like legalized corruption. That is what governments are these days. Not even sure why bother with the RFP which costs a lot of time and money. Just give Dynalife the facility, garanteed profits, locked contract and a pat in the back for taking all these risks on behalf of the rabbits, after all we are just a bunch of useless, unresponsive, brainless bunch.
    Rabbits are so bad that cannot understand this is not corporate welfare, this is simply creating new jobs for the PEOPLE of Alberta. The people is the government’s main concern as they ad nauseum repeat in every single speech. I feel really bad that I cannot understand this kind of politics, but I have finally quit not having a new years resolution. I have one this year and it is to study hard to understand the very complex, intelligent dedication this government has towards the rabbits. It is quite touching indeed, especially when the photo ops are with the children that somehow survived their treatment under the auspices of Social Services. I am going to do my
    best.

    • Carlos, everyone should follow your lead and make the same new year’s resolution. It’s hard to understand what’s going on behind the scenes with a government that’s been in power for over 40 years but we need to keep on pushing for answers.

      AHS has tried to sooth the 1,920 people impacted by this privatization by saying that they’ll transition to the new employer with comparable salaries and benefits, including union status, but it says nothing about “comparable” pensions to replace their LAPP pensions which are non-transferable. Pension benefits are a part of compensation, so what AHS is really saying is their “total compensation package” may be less than what they have now.

      The work force is under tremendous stress, which manifests itself in illness and mental anguish, not just because their own futures are uncertain, but because they’re so concerned that the public will get poorer service so that the bidder can maintain his profit margin (which AHS thinks should be at the 8% or higher level!!). I do not want to see my tax dollars go into an executive’s bonus because he’s met his cost reduction targets by deregulating tests and throwing the full cost on to me.

  3. carlosbeca says:

    Susan, Merry Christmas and a very healthy and prosperous New Year.
    Thank you so very much for bringing to our attention some of the great policies by our Oil Regulated Government. They just took one more step for the final take over of our resources

    http://www.edmontonjournal.com/business/Alberta+environment+regulators+paid+industry/9316498/story.html

    Happy Holidays

    • Thanks for the link Carlos. When the fish and wildlife officers, forestry officers, biologists and rangers who are responsible for enforcing environmental compliance end up working for the Alberta Energy Regulator which is 100% funded by industry and for salaries that are 20% to 80% higher than what they got in their old jobs, you have to wonder how successful they will be in bringing forward enforcement actions. It was wrong of the government to put the environmental staff under the same umbrella as the energy development/approval staff. No wonder Redford’s credibility on environmental matters is shot!

      OK and now to change gears, I’d like to wish you a very Merry Christmas Carlos! I look forward to many more conversations as we go through the new year. All the very best to you throughout the holiday season.

  4. porky5 says:

    Genomic and protemic testing? When some people can´t get family doctors, appointmenets with specialists and electivie surgery? Priorities in health care are all wrong.

    • You’re absolutely right…the priorities are misplaced, doctors are opting out, nurses, healthcare workers and lab staff and techs are suffering as a result of cost reduction measures and yet the government presses on. This is not the consultative thoughtful government we were promised when Ms Redford took over the leadership of the PCs and we can’t and won’t let it continue.

  5. Jason P says:

    Did you know dynalifedx makes a 21% profit in their current contract with ahs?

    • Thanks for this Jason. I can’t understand why people who argue the private sector can deliver public services more efficiently than the public sector ignore the fact that the private sector takes its profit off the top first. A corporation’s primary goal is to deliver value to its shareholders. Shareholders are not the staff doing the lab tests or the patients waiting for their test results–these people are lower down on the food chain.

  6. Jack says:

    Your article is well written, but too well for me to understand it. What is your key point? What are you against? What are you for? I would hope the service providers compete through the market, I mean every person (legal person or natural person) can provide any lab service. Health minister sets report standard and publish evaluation on all service providers, so patients can choose any service provider. As I know AHS is a corporation, not a part of the government.

    • Carol Wodak says:

      AHS is a government corporation – not yet selling shares either privately or publicly, at least not openly. AHS is created by legislation, appointed by and directed by government, accountable (in secret, anyway) to government – but NOT to the legislature).
      Oh, the possibilities of devolution as championed by Reagan and Thatcher and New Public Management (Google that if you don’t recognize the concept).

      • Jack says:

        ==You wrote========
        AHS is a government corporation – not yet selling shares either privately or publicly, at least not openly. AHS is created by legislation, appointed by and directed by government, accountable (in secret, anyway) to government – but NOT to the legislature).
        Oh, the possibilities of devolution as championed by Reagan and Thatcher and New Public Management (Google that if you don’t recognize the concept).
        =============
        Thank you for the instruction! It seems to me that what you are talking about is very deep, and very complicated and with very long history. I guess if I google them, I will be drowned by the information. Anyway, since it is too complicated for me to understand it, I just put them aside.

        Let’s discuss a simple scenario. A service, government or “its corportation” can monopoly it, so no one else is allow to compete with it. Another case, government corporation and anyone else can provide the same service, they compete for customers. You seems to against the 2nd case because “in real life once the private interests take over, and the profit motive becomes the number one objective things go down the drain and becomes very difficult to get out of it for different reasons”. I do not really understand your logic. The public funded service is high standard, and even no profit is needed for the organization, so should be with a lower price, am i right? Not to mention gov can put even more money to reduce the price. While for the private service, low standard, and profit seeking, so must be with high price. Why do not we just let consumers to choose? Please elaborate why “in real life” you you do not like the private service.

        Learn from you, I would suggest to google “monopoly” and “collusion” to understand the concepts. At present, in the medical industry, there is no competition at all. Though the medical service is “free”, people from low society can not get served at all unless they are so sick, their symptoms are so obvious.

        At present, I would say the provincial health plan, to some extent, is not helping the service consumers, but helping the service providers. Monopoly and collusion is the problem. Collusion is illegal in all other industry, why collusion is allowed in the medical industry only because of government monopoly. I hope government pays for patients not for doctors. I am from the bottom of the society, but I want government to be out of the medical service providing.

        I really appreciate your response. I am always looking forward to your response.

  7. Jack, in a nutshell I’m against the privatization of lab services in the absence of a darn good business case demonstrating why a private lab will provide better service (at the same or lower cost) than a public lab. The Health Minister failed to provide one. And yes, AHS is a corporation but it is 100% controlled by the government. Lastly patients will not be able to choose a service provider because the Superlab will be the only game in town for all patients in the greater Edmonton region.

    • Jack says:

      At first, I want to say thank you for your response.
      It is OK for me that you do not like privatization. but could you please allow me or any other person to provide you the same lab service? I would charge a market rate. I do not take tax payer’s money to invest in my business, can you allow this? And for any service, you as a patient, you will get the test result, i.e. the professional report. For the public system, even for a report, you have to pay $30+, or you will have to beg your doctor to get a copy. Since many people want the report, some times, they can serve you and waive the $30.

      Another example, Toronto data, public MRI scan $2500 without a CD or report (CD $15 extra, report $30 extra, $2500 is paid by the provincial health plan, very difficult to get a referral since doctors are not just doctors but also resource allocators), private MRI scan is about $500 and you get a CD with report, whenever you need, you get it done in a couple of days. You want to argue the two services are different? but they are the same scan.

      Take urology as an example, you want to argue the services are different? In fact, same model machine does the test, and produces the report. I have no objection that government provides this service, but could you please allow me to provide the same service?

      We are so different, so I am wondering whether I missed some important factors. Would you please help me by pointing those factors out?

      more questions:
      #1. are you against many (or at least) several service providers or for it? Of course, one of them can be government or government wholly owned corporation. I am for it.
      #2. do you want to have several service providers to choose, or you do not want that to happen? I want the choices.
      #3. are you against the super lab or for it? If there is a test which requires super machine, so the super lab, I am for it. Otherwise, I am against it. And there is no super big size machine, so there is no reason for the super lab. If you are for it, I guess you are supporting more people play poke games when they are on job.

      I am looking forward to your response.

      • Carlos Beca says:

        Jack no one is against what you are proposing, the problem is that in real life things do not work the wonderful way you are describing here.
        I have nothing against privatization as long as the standards can be maintained. In real life once the private interests take over, and the profit motive becomes the number one objective things go down the drain and becomes very difficult to get out of it for different reasons I am not going to get into here.
        Now I also suggest that you read before you make your point. It was never written anywhere here that we are for a superlab so I am not sure why you are suggesting that if Susan is for the super lab she is supporting more people play poker games when they are on the job.

      • Jack says:

        For the super lab, I just follow the logic, if you are against privatization, then many little labs and a super lab are same thing, so in fact, you are for a super lab.

        “supporting people play poker games” is what I said, I mean a big organization is very low efficient, many people are just there to kill their time. If you get into a large hospital, at any given point of time, there are several people who are playing poker games on their computer.

        OK. back to the main point: private service. “Standards”, it is very difficult to make a different standard for a lab test. For example, urology, it is science, as long as your machine is working, they are all same. There are all machine work, not manual work. There is no different standard.

        When there is no manual work related, the standards are same. Now, we talk about the service standard when manual work is involved. For example, an MRI exam. Machine can acquire same images by a radiologic technologist, but a radiologist can spend more or less time to read the images and write a report. It seems that you think the public funded radiologist will spend more time on reading the images and spend more time to “dictate” the report. In fact, at present, the public side, you can not get the images nor can you see the report unless you pay $30 or beg your family doctor to see the “professional report”. And it is very difficult for you to have a 3rd party to evaluate the exam. From the private side, you get everything, and a real “professional” report. You are free to have any 3rd party to evaluate the exam. If you do not get the opportunity to evaluate the exam, how can you say the public funded service is better than the private service? Profit seeking organizations are not just competing with price, but also the output quality. If you run an MRI facility which issues looks-shitty report, and I also run an MRI facility which issues looks-professional report. You will be out of the market. Why profit-seeking is a problem for you? Please elaborate!

  8. Carlos Beca says:

    Just to clarify I am not for a super lab at all.

    I can understand some of your points and I can understand privatization when there is a good business case for it as well as a system in place to keep track of standards and whether or not services are provided as per contract. I am not talking only about lab work, I am talking about all services, in this case, within the Health Care System. We have examples of countries like Sweden, where they have outsourced some of their services and they are able to maintain similar levels of care in the private as well as the public funded system. Unfortunately this is not the norm. In most countries that have both, the public system gets worse than before privatization and the private clinics are so expensive that only the rich can access them. In Canada and especially here in Alberta we have started this process a while back and slowly the private is becoming the norm and the fact of the matter is that the system as a whole is worse. You may not agree with me but I have been in Alberta since 1981 and I can tell you that it is night and day. I do not believe, as much as I would like to, that we can actually do the same job as they do in countries like Sweden. Why? Because in Sweden there is a rooted tradition of the common interest, that profit is second to quality and that people are more important that corporations. Here we do not have that tradition and we quickly move into profit mode and the consequences can be quite bad. Our Health Care System is not deteriorating because of all the reasons mentioned by many experts, but because there is no will to fix it or change it in a way that can still be single payer public non-profit funded system. There is a belief that the American way is better despite the fact that we all know it is not and it is also more expensive.
    In summary I do have great reservations about public and private interests working together when it comes to major enterprises like education, Health care….etc. When we look at the US with all of their business experience and their might, they now rate worse than any of the other industrialized countries in everything except weaponry.

    As far as your question about profit, I have never been against profit and never will be, but again I also am not for free loading. The idea that regulation is bad and that we do much better without it, is to me just an excuse for the taking. This is the profit I am against. Unfortunately with globalization and deregulation this is becoming the norm. It is not by accident that inequality is growing by leaps and bounds. It is not by accident that 6 people in the US have more wealth than 40% of the population. The same in Canada I just do not know the numbers. I am totally against this situation for different reasons but especially because I have lived in a country where inequality is extreme and I know what that does to a society and to their people. Some people will call me commie for saying so, but to be honest, it no longer bothers me. I have my political/social beliefs which evolved since I was born in 1953 and through some very tumultuous times which allowed me to experience two different types of dictatorships, communism and two different democracies. I do know for a fact that capitalism without strong regulation and a strong state is as bad as communism in the same circumstances, if not worse.
    Profit and private interests are fine and are extremely helpful in the development of any society, but it has to be within a well regulated and strongly democratic system of government. This is what I believe and not the mixed bag of Neo-Conservative propaganda allied with a slow inflicted deterioration of democratic values that we are now witnessing in Canada with a total control by powerful private interests. Our MPs and MLAs and the respective House of Commons and Legislatures are nothing but pseudo democracies. We all know where the real decisions are made these days. Unfortunately even the shows are bad quality when one has premiers that cannot even hide their disdain for our Legislatures.

    Yes I am a progressive thinking citizen and I do believe that any public organization can be made to work as well as any private one as long as people really want it in the first place. Profit is not the only thing that motivates humans and extreme profit is as bad to a society as extreme poverty.

    • Carlos that was extremely well said! There is absolutely nothing that I can add. Thank you!

      • Carlos Beca says:

        Well I am glad that I could contribute positively to the discussion.
        Thank you I appreciate your comment.

    • Jack says:

      Your argument with Sweden’s rooted tradition of common interest, I am not convinced. I believe in market mechanism. if there is any “extreme profit”, and there is no regulation, other people will entry the market to share the market. And through competition, prices drop, and profit is gone.

      When there is no market like current system, government’s money is not for patients, but for medical service providers (doctors etc). In my opinion, doctors should earn money from patients, while patients could be helped by the government. At present, the government is helping the doctors, while doctors pretend to take care of patients. In fact, patients are just a mean for the doctors to claim payment from government.

      I am very glad to see you said you are against “free loading”, so what is your suggestion to avoid free loading?

      You said “Our Health Care System is not deteriorating because of all the reasons mentioned by many experts, but because there is no will to fix it or change it in a way that can still be single payer public non-profit funded system.”

      “single payer” or “single player”? I guess a typo, am I right? What I hate is the single player. I want to see many many service providers to compete. I hope different service providers charge different rates. I mean different family doctors charge different rate. I hope they charge by the time they spend on their patients. And the provincial health care pays only the standardized rate. If you are seeing a doctor who charges you a rate higher than that, you will have to pay the extra portion from your own pocket.

      Seems to me, you are against private big enterprise, but for a public owned big organization. I am against both of them. I want to see many many small private service providers compete. Why do you think it can not be a good system?

      You mentioned the US case, and you said “more expensive”. I have no data. Do you mean the population average (total health related expense / population) or for a specific individual. For an individual, it is free for you for most things here, while in US, you will have to pay for most things. This is not the right comparison. For population average, I would doubt your statement.

      You mentioned decision making. Here, I might go a little too far. I want to make the decision, I mean I want to have choices when I need a service. At present, as a patient, we have no access to the resources directly, you will have to convince your family doctor then you can access to a specialist or a lab test. I want to get rid of the referral system. Which test or exam or which treatment is needed, let me make the decision. Doctors just provide me with information, i.e. consultation service.

      looking forward to your response!

      • Djlu says:

        I’ve just recently moved to this province and am desperately trying to catch up on this troubling development in the AHS. I’m reading as much as I can to get the differing points of view and somewhere along the way a glimmer of the the facts and honest truths. I have come from a province that has had a private / public partnership for many years now and have worked as a health care professional in both. The one point I may stress that we in the private sector have reasonable benchmarks set by our colleges that respect the quality of the work being executed that have been established by the professional in each field and must be adhered to by all employers in the province. I have also been ab employee of a company that is owned by Borealis. It has been very much a hands off partnership whereby the appointed management runs the company as they see fit. As for the billing and profits the ministry of health in negotiations with private laboratories of the province set the test fee schedule. I also believe that the ministry budgets a set amount of funding specific to Dx testing in the province and each player depending on the size of their business ( yes I said business) receives a set amount. If our billing rises above that amount I’m told we did not get paid for it. Great advantage to the taxpayers of the province. Studies have been done and shown that private laboratories have demonstrated that they can perform many of these test more economically without compromising quality or turn around times. They have also mastered the task of specimen delivery from clinics to the lab maintaining specimen integrity and public safety by auto and air. The volumes that these labs deal with are an advantage when purchasing all that is required for a functioning operation. We have many quality control programs in place that are both external and internal that we must comply with or their are serious penalties. Not sure what alberta has in place but intend to find out. We also have great EHS programs in place which is compulsory province wide. The company I worked for at one time was a multi faceted publically traded company that was broken up with Dx being sold to Borealis. Their decision was to concentrate on providing the best diagnostic service in Canada.
        Private laboratories are working with the ministry of health to eliminate and reduce testing that is no longer useful or necessary or over- testing as has been the case over the years. Yes their are newer technologies on the market but we must be certain that we evaluate the efficacy and necessity of this testing before we invest billions of dollars in acquiring them. It should not be technology for the sake of it. It must serve us well and not bankrupt us. There are drastic changes coming in Dx and it may not be a bad policy to adopt a wait and see approach to acquire what may be superior and will serve well into the future instead of becoming obsolete in ten yrs. Hospital laboratories serve a different purpose to private ones and are essential to quality patient care especially emergency cases. Just possibly maybe this government should concentrate on building a state of the art BADLY NEEDED hospital in a central area of the city to replace our crumbling decaying leaking structures that we now have. And how about long term care. Who is going to address that. I for one know I will not be able to afford 3-4thousand dollars a mon if & when I have to. But I guess people who collect the maga Bucks don’t have to worry about that.
        Ok to wrap this up this shouldn’t be about private versus public but about finding decent companies that are managed by compassionate caring responsible humans who who are dedicated to keeping cost down while providing quality care. After all we are patients at one time or another and hopefully pay our shares of taxes. It also would help if you paid your taxes where you are most invested and that any profits would stay here in alberta. Personally I have no interest in supporting an Australian or any off shore company.

      • Djlu, thank you for your thoughtful comment. It’s important for the Soapbox to carry the perspectives of those who work in this area. While I agree with a number of your points (reducing unnecessary or outdated tests, evaluating the efficacy and necessity of newer technologies etc), my concern stems from the fact that the private sector’s first duty is to its shareholders–this is spelled out in no uncertain terms in the Business Corporations Act–whereas the public sector’s duty is to the public. I would be happy if private companies were managed by compassionate caring responsible people, but I’ve worked in the private sector for over 26 years (albeit not in healthcare) and have seen too many good people “compromise” their standards when the cost of raw materials skyrockets, or new regulations add additional operating costs, or the tax laws change. At the end of the day the discussion always boils down to “what can we do to prop up the share price” and the answer is usually “cut costs by cutting quality and/or services”. By keeping services in the public sector, and learning the cost effective lessons the private sector can teach us (like bulk buying) we can eliminate the profit motive from the business model.
        I look forward to hearing more from you as the $3 billion lab moves through the process.

  9. carlosbeca says:

    Jack right from your first paragraph I easily realize that our discussion has probably hit the stage where I have to disagree with you and we leave it there. Why?
    Well when anyone tells me that human tradition, experience and reason does not matter (i.e society does not exist only individuals – Margareth Tatcher), I have to apologize but I have no interest in continuing the discussion. I think it is amazing that people can actually believe that. To you the market is what matters and to me it is human experience and wisdom that matters. Markets are human creations and depend on human intervention for proper balance. We disagree right from the beginning and I do not think that it is advantageous to either one of us to discuss starting from this premise.

    I will just say that I also do not like the referral system. It is also true that our current system does not offer the choices that a system like the US does, but these issues are can be changed with serious discussions. These are not issues that exist only in a public funded system. In the US for example, many people have very expensive insurance contracts that limit their access to certain doctors and to a certain number of visits. The choices in a privately run system are not limitless.

    I will just end by saying that I was very surprised that you did know that for example the US in the period between 2009-2013 spent 17.9% of the GDP in both private and public health care while having about 40 million uninsured citizens (not a typo I repeat 40 MILLION) whereas Canada spent in the same period 10.9% of GDP with everyone covered.

    As far as the ‘single payer’, it seems you are being sarcastic but if not, again I have to say that in Health Care systems discussion ‘Single Payer’ is a known and important term which defines that the Government rather than private insurers pays for health care costs. So no it is not a typo,

    Thank you

    • Jack says:

      At first, I appreciate your discussion. I am sorry that you wanted to stop.
      “single payer” really surprised me. Till now, I thought we were focusing on how the medical system should be organized, rather than the financing, so I thought you were talking about “single player”. I would expect you to talk topics one by one, but I can talk about financing too. You know many things are not covered by provincial health care plan. Private/commercial insurance offer coverage. And you are against it? You do not know no society is able to pay for all kinds medical services? Only basic ones can be provided through provincial health care plan! For the rest, I hope only rich people can afford it, so they will have pay for it directly or through private insurance.

      I think you have lots of data (US & Canada data). You are very good, but in this kind of discussion, I would expect you post a link, so readers can verify it. What if you misunderstood it? Since what we are focusing is the medical sector, not the financial sector (insurance is a part of financial sector). In another word, the total earning of the medical sector. And I would like to see Alberta compared to a state from US. The number 40M uninsured citizens does not surprise me. Anyway, what we are talking about is whether people can get the service they need, or put it in another way, is how to organize the medical system to make the system to serve people rather than to serve itself, or another way, how to organize the system to have less cost and better output. Seems to me that you think you got lots of terms, but your opinions are not to the point. I am sorry.

      “The choices in a privately run system are not limitless”? Why do you look for limitless choices? If you are not, then are you trying to use this kind of sentence to be over me?

      And between market and “human tradition, experience, and reason”, I do not see why they can not be together, why they have to fight? If they really have to be one or the other, then what you have to do is to prove Sweden has it, and Canadian do not have it. I am sorry, seems to me, you are not logically sound. If you are, please elaborate, in your opinion, how the system should be organized. I would like to read it. Looking forward to it.

      • Carlos Beca says:

        I am sorry Jack but from your answers I do not think you know what you are talking about.
        I think that you are trying to have some fun. I love a serious discussion but this is certainly not one of them.
        Have fun

      • Jack says:

        I am sorry you feel I “was trying to have fun”. In fact, I was and am very serious, while you think I do not know what I was talking about, I think you are far off the point. I have some kind of attacked you already in order to encourage you to put down something more meaningful on how to organize the medical system. Looking forward to your opinions. Also I hope you are somebody or someone who wants to be somebody. I mean somebody who really has a mind. If neither, then I am not eager to talk to you.

  10. Jack and Carlos, lots of good information here, but sometimes it’s best to agree to disagree. Let’s leave it at that. Thanks.

  11. Cora says:

    Susan, I would like to direct both Jack and Djus to other posts you previously made on this blog, and the accompanying comments on each. I am sure there are more posts that are pertinent, but the following 2 are a couple I found when searching “lab”.
    “Running with scissors”
    “$3 Billion super lab”

    These posts may answer questions they may have, or provide enlightenment on the history of lab privatization in the Edmonton zone, and present problems faced with the current RFP and privatization.

  12. Cora says:

    Sorry, Djlus….

  13. Cora says:

    Sorry, still didn’t work….Djlu

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