A proposed merger by two giants in the medical lab industry would raise prices, cut service quality, and hijack Ontario's regulations , a group consisting of smaller medical laboratories says.
Nevertheless, the province will not step in to halt the merger, creating a single provider handling 62 per cent of Ontario's lab testing.
In a statement to QP Briefing Tuesday, Health and Long-term Care Minister Deb Matthews said "the ministry of health will work closely with the companies involved in order to ensure quality and access are protected and enhanced for patients," and confirmed that the government does not currently intend to intervene to halt the merger.
The Ontario Coalition for Lab Reform (OCLR) issued a press release Tuesday morning calling on the government to halt the proposed purchase of CML by Lifelabs (owned by OMERS) which the coalition says would create a single "mega-lab" with effective service monopolies in communities throughout the province.
NDP health critic France Gélinas agrees with the coalition, warning the merger threatens to reduce service levels in areas where patients already have a difficult time accessing labs.
"The big players have maintained their profit share by decreasing access. You see less and less accessibility. There used to be many collection points, many points of access. Now you have one megalab," Gélinas says.
But the Nickel Belt MPP stopped short of telling the government to halt the merger entirely, saying "the government needs to do its due diligence."
"Is it feasible? Yes, but there needs to be a lot of caution and it needs to be done in the open."
While one of the communities that would suddenly be faced with a single laboratory company is in northern Ontario (Sudbury) the majority of towns and cities on the list provided by the OCLR are in the province's south, and include some of the larger GTHA municipalities such as Richmond Hill and Oakville.
The government has been involved in consultations with various members of the medical lab sector, including the three largest companies (including Lifelabs and CML) but also smaller players and primary care providers. Gélinas says none of the ideas for regulatory changes in the industry included the merger of two of the largest players.
Alpha Laboratories CEO and OCLR spokesperson (as well as former MP and MPP) Gerard Kennedy says that the merger is actually an attempt to short-circuit the regulatory review.
"This has been done off to one side, and we think it's important that all the people, the doctors, the lab technologists, everyone is aware," Kennedy said. "We think it's time this is made a public issue, not one in the boardrooms or stockrooms."
Another issue is that the province effectively regulates the size of laboratory companies through OHIP billing practices. Individual companies are allocated a corporate cap, and all work within an industry-wide cap. The Information and Privacy Commissioner <a href="http://www.ipc.on.ca/images/Findings/PO-2780.pdf">described the system in a 2009 report</a>: "As a practical matter, and as a general rule, if laboratories work above the corporate cap, they are offering a discount for their laboratory services because they will be subject to a clawback by the ministry of the amounts billed in excess of the corporate cap."
Kennedy says the OCLR would prefer to see the corporate caps removed. The coalition has also proposed the government actually reduce fees paid under OHIP for services.
According to a fact sheet provided by OCLR, some lab tests paid for by the province have seen radical cost reductions since the last time the province did a major revision of its fees and the government is in effect overpaying private companies.
In a release late Tuesday, Lifelabs committed to not closing any of its patient care centres as a result of the purchase of CML, and downplayed any concerns that the merger would short-circuit regulation.
"The Ministry has managed the lab services through the development of a ‘capped’ system which protects the costs of lab service for taxpayers. The proposed acquisition will have no impact on any of the authority of the Ministry of Health and LifeLabs looks forward to continuing to work with the Ministry to improve the delivery of community lab services in Ontario."
"LifeLabs also looks forward to working with Alpha, Bio-Test, Medex, all other community labs, the Ontario Association of Medical Labs, Ontario hospitals, the Ontario Public Health Lab and others so that, together, we can continue to build an exceptionally effective, accessible, high quality and efficient community lab system for all Ontarians."

Merger will hijack regulation of medical labs: Coalition

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