A recent report by Alberta’s auditor general has revealed the province’s unsuccessful attempt to privatize community lab services, resulting in significant costs as the government had to acquire a private company for millions of dollars.
The report, disclosed on Wednesday, highlighted a lack of thorough examination by the provincial health ministry and Alberta Health Services regarding the 2022 contract with DynaLife, a prominent lab services provider in Edmonton and northern Alberta. The deal aimed to transfer lab services province-wide to DynaLife.
Auditor General Doug Wylie’s investigation faced numerous challenges, including uncooperative officials, obstruction of information by AHS and the province, and the deliberate destruction of evidence sought by the auditor general.
Rebecca Graff-McRae, the research manager at the University of Alberta’s Parkland Institute, expressed concerns about the lack of accountability in the process.
Initially, the provincial government anticipated saving millions annually with the DynaLife contract but terminated it less than a year later due to service delivery issues and DynaLife’s financial troubles. Subsequently, in 2023, the province bought DynaLife for nearly $100 million and integrated it into Alberta Precision Laboratories (APL).
Key findings from the report included insufficient record-keeping of crucial discussions, failure to follow proper processes for outsourcing lab services, and a lack of evaluation of financial proposals by DynaLife. The report highlighted that Alberta taxpayers spent $125 million between 2013 and 2023 on unsuccessful lab procurements initiated by the government.
The report indicated that the province and AHS lacked a business plan for the DynaLife outsourcing, relying instead on a flawed 2019 report from Ernst & Young. The estimated savings from outsourcing were overestimated, with subsequent analysis suggesting that savings stemmed from having a single organization managing all services, not from outsourcing to a private provider.
The challenges faced during the investigation included restricted access to information by AHS and the Ministry of Health, as well as the destruction of evidence, hindering the audit process. The report raised concerns about the lack of transparency and accountability in the procurement processes.
The report emphasized that taxpayer money was spent on unsuccessful lab procurements, including the superlab construction that was later canceled, raising questions about the government’s decision-making processes.
Overall, the report shed light on the complexities and issues surrounding the failed attempt to privatize community lab services in Alberta, indicating the need for greater transparency and accountability in government initiatives.
