Super Lab - FOIP

Alberta Health
ervc
April
30, 2014
File:
Re:
2013-G-0391
Freedom of Information and Protection of Privacy Act Request

Respo nse to Access Request
I am responding to your request of November 22, 2013 for all direction given in relation to the
project known as the "proposed privatized $3-billion Edmonton medical superlab", including
direction from the Minister of Health and Wellness, Legal and Privacy, CPSM and Executives
and Managers at AHS. Additionally, you have requested the business case and the briefing
notes for the project. We had an opportunity to discuss your request with you via telephone on
December 9, 2013 when we agreed that your request would no longer include the direction
given by Legal and Privacy in relation to the project.
A copy of the records is enclosed. Some of the records you requested contain information that is
withheld from disclosure under sections 24(1)(a)(d) and 25(1)(c)(iii) of the Act. We have severed
the excepted information so that we could disclose to you the remaining information in the
records. A photocopy of the detailed sections of the Act is included for your reference.
Should you have any questions or concerns, please feel free to contact me, quoting the file
number above, at 780-643-4605.
Section 65 of the Freedom of Information and Protection of Privacy Act provides you with the
right to ask the Information and Privacy Commissioner to review any matter related to this
request for information. You have 60 days from the receipt of this notice to request a review by
writing to the Information and Privacy Commissioner, 410, 9925- 109 Street, Edmonton, AB,
T5K 2J8. If you wish to request a review, please provide the Office of the Information and
Privacy Commissioner with the following information:
1.
2.
3.
The reference number quoted at the top of this notice.

A copy of this letter.
A copy of your original request for information that you sent to Alberta Health Services.
Legal & Privacy - Information & Privacy

Suite 1220, 10405 Jasper Avenue, Edmonton AB T5J 3N4
www.albertahealthservices.ca
Fax: 780-643-4559
Yours truly,
Alberta Health Services
).J
Derek Wojtas
Information & Privacy Coordinator
FOIP & HIA Access Services
Enclosures: 108 pages
FREEDOM OF INFORMATION AND P ROTECTION OF P RIVACY ACT
RSA 2000
Chapter F-25
Division 2
Exceptions to Disclosure
Advice from officials
24( I) The head of a public body may refuse to disclose information to an applicant if the disclosure
could reasonably be expected to reveal
(a) advice, proposals, recommendations, analyses or policy options developed by or for a public
body or a member of the Executive Council,
(d)
plans relating to the management of personnel or the administration of a public body that have
not yet been implemented,
Disclosure harmful to economic and other interests

of a public body
25(1) The head of a public body may refuse to disclose information to an applicant if the disclosure
could reasonably be expected to harm the economic interest of a public body or the Government of
Alberta or the ability of the Government to manage the economy, including the following information:
(c) information the disclosure of which could reasonably be expected to

(i) result in financial loss to,
(ii) prejudice the competitive position of, or
(iii) interfere with contractual or other negotiations of,
the Government of Alberta or a public body;
,;
II
Alberta Health
Services
APPL CANT COPY
Approved I Noted:
--
--
-------- -
Executive Committee Meeting

February 19, 2013 Item 190213-14
Dr. Chris Eagle, President & CEO
BRIEFING NOTE
Date:
Comments/Questions/Conditions:
Date: February 11, 2013

Title: Laboratory Services Procurement Update
Issue:
A global scan of potential clinical lab service providers for AHS's North Hub operation is
complete. Seven high potential providers have been shortlisted and will be included in a non
binding indicative offer (NBIO) process to arrive at a final list of qualified vendors.
Recommendation:
This update be received by Executive Committee for information and feedback.
Key Messages:
To ensure continued quality lab service beyond March
31,2015
(expiration of the existing
Dynalifeox. Lab Services contract) and to support the new delivery model for Lab Services,
a very detailed market assessment of laboratory service providers was completed by Boston
Consulting Group (BCG) identifying six high potential suppliers. AHS completed an internal
review of scoring to arrive at a final shortlist of seven potential providers: Quest (US),
LabCorp (US), Sonic (Austrailia), Gamma Dynacare (Canada), LifeLabs (Canada),
Dynalifeox (Canada) and CML Healthcare (Canada). Mandatory eligibility requirements and
evaluation criteria are included in the attached slide deck for reference (Attachment 1).
Dynalifeox. the incumbent service provider, is a joint venture between LifeLabs (owners
Borealis) and Gamma Dynacare (owners LabCorp). We are uncertain about the bidding
strategy of the related firms all having made the shortlist, therefore all will be invited to
submit a bid.
A request for information (RFI), that may include a non-binding indicative offer (NBIO),
outlining the key terms of the engagement, including the investment of capital to develop and
operate a new high volume high performance lab facility in Edmonton, will be finalized by
February 28 and released to the shortlisted Vendors no later than the first week of March.
Vendors will be given a month for initial responses, expecting an additional 3 months for the
due diligence prior to initiating negotiations with the preferred vendor.
Current cost to provide Laboratory Services in the Central, Edmonton and North Zones
(North Hub catchment area) is $300M per year including AHS operations and contract with
health service providers
Confidential
Ncf for
Circulation
,.
APPLICANT COPY
Proposed term of the contract, given the initial required capital outlay, would be
with appropriate exit provisions..
15-20 years
The procurement process outlined above is in accordance with the AHS contracting policies
and applicable trade legislation. A Fairness Monitor has been engaged to oversee and
provide expert advice during the entire procurement and contracting phase.
Background and Current Situation:
AHS Laboratory Services has undertaken an exercise to determine the optimum Lab
Services delivery model to address the need to have an efficient, high quality fully leveraged
laboratory service capability for the long term.
A public private dual hub and spoke model was presented to AFC June 2012. AFC was
supportive of this direction and approved AHS Lab Services to proceed with the North Hub
Lab procurement process and continued consultation and engagement on the model design.
Key procurement project milestones include:
Market Assessment to identify viable Lab Services Providers ready and qualified/capable
of providing the necessary scope of services at the required levels of performance,
quality and accreditation within the required timeframe for service readiness. Complete
Formal Assessment of specific target market by AHS - to validate Market Assessment
findings and seek a special Proposal(s) from the potential Providers(s) for the delivery of
lab services. Target vendor responses by March 31, due diligence June 30.
Initiate negotiations with the final two or three clinical lab service providers.
Implementation and transition of services to new Lab Services Agreement
Note: given the aggressive timelines of the procurement process, we may need to extend the
existing contract for laboratory services for one year under the current terms and conditions.
Laboratory model design is progressing concurrent to the procurement work and is required
to build out the RFI/NBIO. A medical subcommittee of the of the Lab Model Design team is
actively meeting to:
Evaluate and recommend the medical governance, accountability and reporting

structure within the new laboratory model
Advise on administrative structure and shared supports within AHS
Advise on clinical delivery requirements
Define required supports for clinical research and teaching
Be available for consultation, on an as-needed basis, to administrative officers

responsible for contract negotiations
Advise on communications and change management strategies.
Confidential
N for
Circulation
..
APPLICANT COPY
Risk Management Considerations:
Category
Description
s.24( I )(a)
Likelihood
Severity
Quality &
Patient
Safety
Mitigation Action or
Tactics
Verified by
(Name &
Position)
Medium
Likelihood
High
Severity
A hub and spoke model

represents a change in how
Laboratory Services are
provided.
Policy,
External
Environment
& Public
Confidence
Medium
Likelihood
Medium
Severity
Medium
Likelihood
Medium
Severity
Human
Capital
Trained Laboratory Services

resources are in high demand
within the province;
Low
Likelihood
( HR Staff)
---
Confidential
N<J for
Circulation
....
APPLICANT COPY
s.24( 1 )(a)
Category
Description
Likelihood
Severity
Tactics
Verified by
(Name &
Position)
High
Severity
Low
Likelihood
High
Severity
Low
Likelihood
Medium
Severity
Infrastructure
Under the new agreement, a

lab facility is required. Any
Laboratory Services provider
Low
Likelihood
(of inability
must have the ability to

establish a state of the art
laboratory facility in the
Edmonton area within
to continue
care)
appropriate geographic
proximity to service the
community collection sites
and hospitals by 2017. In the
absence of a facility quality of
services and patient safety
could be compromised.
Confidential
(IT/Facilities
Staff)
Medium
Severity
NIOIJ for
Circulation
....
APPLICANT COPY
s.24(1)(a)
Category
Description
Likelihood
Severity
Information used and held by

the Laboratory Services
provider includes sensitive
and confidential health
information and personal
information of Albertans
which must be protected
AHS also requires a

Laboratory Services provider
Tactics
Verified by
(Name &
Position)
Low
Likelihood
Medium
Severity
who is able to provide

information technology and
information management
support to advance the
province's long-term
innovation agenda in health
care information.
Confidential
N18 for
Circulation
APPLICANT COPY
s.24(1)(a)
Category
Description
Likelihood
Severity
Tactics
High
Likelihood
(that costs
will
increase
Finance
Verified by
(Name &
Position)
(Finance
Staff)
over time)
Medium
Severity
(with
measures
to constrain
cost- i.e.
demand
utilization)
Confidential
N0 for
Circulation
"'
APPLICANT COPY
s.24(1)(a)
Description
Category
Likelihood
Severity
Tactics
Verified by
(Name &
Position)
Medium
Likelihood
High
Severity
I
Engagement:
Engagement Status
What has been
What is planned?
achieved to date?
Internal
1.
Lab Model Design

Team
2.
Design Team
Medical Sub
Committee
Prioritization of
subcommittee work
Review and advice on
the market assessment
work to date and
potential contract
structures
Agreement on Dual
Hub and Spoke Model
Initial review of
potential
Medical/ Scientific
Structure
Human Resources
Labor Relations has been

fully briefed on the new lab
delivery model
Communications
Communications are
participating on the
Ongoing advice on potential

contract framework (P3)
Subcommittee oversight
of
definition
Clear
medical/scientific roles and
responsibilities within the
new model
Clearly
define
governance structure
the
Link in HR on appropriate
design subcommittees and
negotiation strategy
development.
procurement process
working group
Confidential
Nqt for
Circulation
APPLICANT COPY
Lab Medical and

Administrative Leads
External
UofA and UofC
Update
Alberta Health
Covenant
Participation on and regular

communication from the
design subcommittees
Discussion occurred
prior to presenting the
model to AFC in June.
Represented on both
the Design T earn and
the Design Tearn
Medical Subcommittee.
Preliminary discussion with

AH: Bill Trafford and Chris
Eagle.
Identified need for a P3 expert

on the Deal team.
Recommend this knowledge
base come from GoA.
C M O H advised of the
process and the intent to
keep Prov Lab out of
scope.
Other TB D
Represented on the Design

Team
Have requested a presentation

to their S LT and Board:
Outstanding
Local and professional

consultations by the design
teams TBD.
Clinicians
Communications Plan:
Colleen Turner, VP Communications is participating on the procurement working group. A

detailed communication plan is developed and communications planned as milestones are
reached.. The following communications have been released to date:
Communication BN to AH outlining the proposed laboratory procurement process:

November 23, 2012
Market assessment notification to vendors, including mandatory eligibility requirements:
January 30, 2013
Memorandum of procurement process to AHS Senior Leadership and Lab Staff: January
29,2013
Informal notification of procurement process to HSAA and AUPE: January 29, 2013.
Compliance with Policy:
Process is compliance to applicable AHS policies.

Next Steps if Approved:
1.
Finalize the framework of the RFI/NBIO for release to the seven shortlisted providers:
o
Type and scope of contract
o
Risk allocation
o
Price and service regulation
o
Governance
2.
Pull together the Deal Team. In addition to Bill Trafford, Jitendra Prasad, Kevin Gault and
Tammy Hofer, a P3 expert and experience financial resource will be required to support the
bid analysis and negotiations.
Bid analysis
3.
Confidential
N<8 for
Circulation
APPLICANT COPY
4.
Finalize negotiation strategy and begin negotiations
Individual Accountable:
Tammy Hofer, VP Lab Services

Jitendra Prasad, SVP, Contracts Procurement and Supply Chain
Management
Legal Services Review: The processes and procedures are in compliance with applicable
laws, regulations and trade agreements in force in Alberta and the federal laws of Canada as
applicable.
PREPARED BY:
Name:
EXECUTIVE COMMITTEE MEMBER SPONSOR:

Name:
Bill Trafford, EVP & COO
LEGAL & PRIVACY REVI EW:

Name:
Kevin Gault, Legal Counsel
COMMUNICATIONS REVIEW
Name:
Colleen Turner, VP Communications
Attachment(s):
1.
2.
Select slides from the Market Assessment

Select slides from the Demand Forecast
Confidential
Ne for Circulation
APPLICANT COPY
Action
Agenda
Non-Responsive
14. Laborato Services Procurement U12date - B. Trafford
B. Trafford provided an update on the market
assessment conducted by Boston Consulting

Group (BCG). Updated information provided.
Current goal is to have a preferred vendor

identified within four months.
c-
Consent Agenda
Action
Non-Responsive
Executive Committee- Meeting Minutes- February 19, 2013

Executive Committee Advice only - not for dl t butlon
APPLICANT COPY
Alberta Health
Services
BRIEFING NOTE

April30, 2013 Item
300413-04
Approved I Noted:
Dr. Chris Eagle, President and CEO

Date:
Date: April
25"', 2013
Title: Laboratory Services Procurement Update

Issue:
The procurement process for a private laboratory services provider was Initiated on Monday April 8111 2013 with
the release of a Request for Expression of Interest (RFEOI) to seven short listed providers.
Recommendation:
s.24( I )(a)
Key Messages:
A progress update briefing note (attached) will be submitted to Alberta Health following this EC update .
This may be in person with the Minister and Deputy Minister or through Joint Executive Committee.
Following a comprehensive market assessment, seven laboratory services providers have been short listed
as high potential suppliers to meet the future needs of AHS.
the
An RFEOI outlinin
suppliers on April 8
key terms of the service requirements was released to the seven short listed
2013.
DynaUfe Dx & CML Healthcare submitted interest in the RFEOI. The DynaUfe Dx partners (Labcorp,
Lifelabs and Gamma Dynacare) opted to bid through the Dynalife Dx joint venture: Sonic Healthcare
declined interest in the RFEOI. A personal follow up with Sonic will be conducted to better understand lack
of interest.
Quest Diagnostics has expressed Interest but for legitimate reasons was unable to respond immediately .
RFEOI will be extended to accommodate them as they are highly credible.
Notification to pursue a 1-2 year contract extension was sent to Dynallfe on March 21 81 2013. This extension
will ensure adequate time to transition services should the incumbent not be the preferred vendor.
nd
Negotiations will begin on May 2 2013.
Lab model design continues concurrent to the procurement process. Sub committees of the design team
continue to plan the required medical structure, support for academics, teaching and research, governance
and regulation within the new model, human resource strategies, and the Provincial Lab for Public Health
Mandate.
Confidential Not for Circulation
11
APPLICANT COPY
Background and Current Situation:
AHS Laboratory Services has undertaken an exercise to determine the optimum Lab Services delivery
model. A public private dual hub and spoke model was presented to AFC June 2012. AFC was supportive
of this direction. A well planned procurement process has been developed to secure the prtvate north hub
vendor.
Key procurement project milestones include:
Market Assessment to identify viable Lab Services Providers Complete
Formal Assessment of target market by AHS to validate Market Assessment Complete
Forecast Demand & Financial Costing for North Hub model Complete
Initiate Negotiations with existing supplier on extension/transition May 2nd
Release of RFEOI to seven shortllsted suppliers Complete
Vendor conference and information session Complete
Evaluate RFEOI to limit RFP list to a maximum of three suppliers Planning May 2013
Release directed RFP to three suppliers Planning June 2013
AHS due diligence process and final negotiations with two suppliers
Up to September 30
111
Communications Plan:
Colleen Turner, VP Communications is participating on the procurement working group. A detailed

communication plan is developed and communications planned as milestones are reached. The following
communications have been released to date:
Communication BN to AH outlining the proposed laboratory procurement process: November 23, 2012
Market assessment notification to vendors, including mandatory eligibility requirements: January 30,
2013
Memorandum of procurement process to AHS Senior Leadership and Lab Staff: January 29, 2013
Informal notification of procurement process to HSM and AUPE: January 29, 2013.
Communication BN to AH to provide an update on the procurement process: Apr112013
with Policy:
Process Is compliance to applicable AHS policies.
Compliance
Individual Accountable:

Jitendra Prasad, SVP, Contracts Procurement and Supply Chain
Management
Legal Services Review: The processes and procedures are In compliance with applicable laws, regulations
and trade agreements In force in Alberta and the federal laws of Canada as applicable.
PREPARED BY:
Name:
Name:
Bill Trafford, EVP & COO
LEGAL & PRIVACY REVIEW:

Name:
Kevin Gault, Legal Counsel
COMMUNICATIONS REVIEW
Name:
Confidential Not for Circulation
12
APPLICANT COPY
Alberta Health
Services

April30, 2013 Item 300413-04 {att.)
Briefing Note and Key Messages
Laboratory Service Delivery for Northern Alberta

Date:
1h
April 16 , 2013
Issue: Alberta Health Services (AHS) is seeking to establish a new "hub and spoke"
delivery model for laboratory services in conjunction with the 2015 expiration of
the Dyna LIFE Dx (DL) contract for laboratory services. T h is model is designed
to ensure quality and cost of this essential service is sustaina ble over the long
term .
A new, privately owned , state of the art central facility ("h u b") will be constructed
in Edmonton with the private partner directly operating a network of laboratories
("spokes"), including hospital and community operations in North , Edmonton,
and Central AHS health service Zones for a minimum term of 10 to 15 years.
The laboratory procurement and transition considerations are extremely
complex . To ensu re a seamless transition, AHS will begin negotiations with DL
to extend the cu rrent contract for up to 2 years under existing terms and
conditions.
Actions:
AHS has completed a comprehensive market assessment for Northern Alberta

with the assistance of an external consultant to develop a short list of potential
suppliers.
AHS has released a Request for Expression of I nterest {RFEOI) to the seven
short-listed providers to engage their inte rest.
AHS has engaged an independent 'fairness mon itor' to provide transparency
oversight and compliance throughout the procurement process for laboratory
services provision in Northern Alberta .
AHS will assess the responses to the RF EOI with the opportunity to develop a
Request for Proposals { RFP) for laboratory service provision in Northern Alberta.
Expected completion date of contract planned for early 2014.
AHS will begin contract extension negotiations with DL May 2, 2013.
Background:
AHS' contract with the current private laboratory service p rovider (DL) expires at
the end of March 2015.
A transition period of 18-24 months is planned to minimize risk.
Confidential Not for Circulation. Advice to Minister.

NOTE: This is a Communications Briefing Note for use by
AHS and AH Communications Departments and the Government of Alberta.
13
APPLICANT COPY
Alberta Health
Services
Almost one th ird of Alberta's curre nt laboratory services are delivered by private
laboratory service providers.
AHS is using this as an opportunity to implement a new service model to ensure
a patient-focused, high quality cost effective system that meets Albertans needs.
The uhub and spoke" model, which incorporates a northern central uhub" in
Edmonton and outlying commun ity, regional and rural facilities, will be similar to
the model currently being run in Calgary by Calgary Laboratory Services, which
plans to expand and include Southern Alberta.
An Edmonton central "hub" will ensure costs , quality, innovation and efficiencies
can be delivered and contin ually improved to ensure sustainability and
accessibility for a ll Albertans.
The decision to do a market assessment with pre-defined criteria was made due
to the size (current expenditure $250 million per year) & length of this contract
(anticipated 1 0- 1 5 years) and its potential impact on patient care; the provider
needs to be fully capable and experienced with delivering service of this size.
The public-private partnership model was chosen as it keeps AHS accountable
for laboratory services to ensure province-wide standard ization and best practice,
makes use of the expertise available in private industry and creates healthy
competition between public and private to help keep overall costs down.
The scope of laboratory services for this model will include all routine and priority
testing for screen ing , diagnosis , treatment, monitoring and prevention of disease .
It will include specimen collection & analysis, and provide test results and
interpretations for the medical treatment of all types of patients includ ing:
primary care, acute care, community facilities and in-home testing. The Provincial
Laboratory for Public Health (PLPH) is cu rrently out of scope of this model,
however a co-located lease arrangement in the new facility will be considered .
AHS Laboratory Services cu rrently provides services through 1 62 accredited
laboratory sites located throughout the province that includes partnerships with
Covenant Health , DynaLIFE Dx, Calgary Laboratory Services, and Medicine Hat
Diagnostics Laboratory. Laboratory Services performed 65.2M tests in fiscal year
201 1 /1 2 at a total AHS cost of $543M .
AHS will maintain overall m anagement of the partnership to ensure province

wide policies and best practice to support consistent care for all Albertans.
Key Messages:
Alberta Health Services is working to improve laboratory services for Albertans

through a new model of delivering services for the northern half of the province
that will be in place prior to 201 5 .

NOTE: This is a Communications Briefing Note for use by
14
APPLICANT COPY
Alberta Health
Services
AHS has hired an independent fairness monitor to ensure an open and

competitive process.
This process also ensures Albertans receive the best possible service once a
long term agreement with a laboratory service provider is completed.
This new model of delivering services will help expand services offered to
patients , especially those in rural areas; standardize services province-wide;
decrease wait times on tests and results; and red uce costs.
During the transition to the new delivery model, patients can be assured that
there will be little to no impact on the quality of their care, includ ing access to
services and the timeliness of their results.
The Northern Alberta service delivery model will be similar to the one being
operated in Calgary through Calgary Laboratory Services.
Contact for Follow Up:

Tammy Hofer
Vice P resident, Laboratory Services
780.951.4168
Bill Trafford
Executive Vice President & Chief
Development Officer
403.943.0383

NOTE: This Is a Communications Briefing Note for use by
15
APPLICANT COPY
Alberta Health Services
June 11, 2013
MINUTES
In Attendance:
Chris Eagle
Chris Mazurkewich
Vema Yiu
Dave Megran
Duncan Campbell (absent)
Deb Rhodes
David Diamond
Stephen Gould (absent)
Roman Cooney
Gerry Predy (absent)
Kathryn Todd
Report Back
Barb Pitts
Deb Gordon (absent)
Patti Grier
Lorinda Prociuk
Isaac Van Dyne (recorder)
Action
Non-Responsive
Action
Agenda
1.
Lab Procurement Project- North Hub Uodate
C. Eagle
{Guest: Bill Trafford)
B. Trafford provided overview of project status and

work underway for issuance of the RFP in July.
Discussion of options for main lab facility in

Edmonton. Further follow up on location and
discussions with the UofA are needed .
Next steps for CLS discussed .
Non-Responsive
---
---
---
1t3'
Executive Committee- Meeting Minutes- June 11, 2013

Executive Committe e Advice only - not for dl
butlon
Alberta Health
....
APPLICA
Noted:

June 11, 2013 Item 110613-01
l>Bf\t ICeS
BRIEFING NOTE
Date:
Date: June 5, 201 3

Title: Lab Procurement Project- North Hub Update
Issue:
The current vendor agreement for lab services in North Alberta will expire in March, 2015.
Currently an RFEOI has been issued for a new vendor for service and work is in progress to
complete the RFP for issuance in July, 2013.
Recommendation:
The attached presentation (Attachment #1) is brought forward for information purposes
as an update to the current status of the Lab Procurement Project - North Hub.
Background:
The procurement process for a private laboratory service provider to Northern Alberta was
initiated on Monday, April 8th, 2013 with the release of a Request for Expression of Interest
(RFEOI) to seven short listed providers. Four parties have expressed interest and are currently
involved in vendor meetings with Alberta Health Services.
Key Dates:
April, 2013
July, 2013
November, 2013
March, 2014
March 2015
2016
RFEOI issued
RFP Issued
Negotiations
New Contract Finalized and Transition Begins
Current Agreement Expires
Transition Complete
PREPARED BY:
N ame :
Bill Trafford, Senior Advisor to the President & CEO
EXECUTIVE COMMITTEE MEMBER S PONSOR:
Name:
Dr. Chris E agle, President & CEO
Attachment(s):
Attachment #1 - Lab Procurement - North Hub Update/Risks/Issues
Confidential Nlt for Circulation
II Alberta Health
Services
June 11, 2013 Hem 110613-01
LAB PROCUR
CX>
....lo.
(att.)
NT- NORTH HUB
pdate/Risks/mssues
prepared by
Bill Trafford
Senior Advisor to the President and CEO
June 4, 2013
CONFIDENTIAL DRAFT
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Services
Background
1
Modernization of the AHS Laboratory Services:
0 Inefficiencies in current model
(112 labs,
38 full function)
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0 Sustainability issues
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! Linear volume/cost relationship
! Utilization
! Professional staff
! New complex tests
! New Laboratory technology (point of Care testing, digital pathology)
D Edmonton needs major investment (space, equipment)

D Current provider (Dynalife
OX) contract expires March,
2015.
Alberta Health
Services
ackground
1.
ontinued
. . .
Dual "Hub and Spoke":
0 Accepted Model;
! High volume "hub"; scale, efficiencies, investment optimized
N
0
! Single investment for "esoteric" tests

! Local labs based on urgency of tests/nature of tests
0 Alberta Health Services would have 21abs (Calgary, Edmonton)
!
Redundancy
Private/Public
Ease of implementation
Natural referral paths
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ab Procure
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HIGH LEVEL MILESTONES
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FINALIZED
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RFP
NEGOTIATIONS
Nov2013
..--'r'"J.;:'-::_r
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TRANSITION
March 2014
March 2015
DynallfeDX
essence:
Two scenanos
)-
TRANSITION
NEW CONTRACT
DynaLife OX is successful proponent

New provider is successful proponent
Scope is:
Red Deer and North
Acute labs in Edmonton Zone/Covenant/Community

Now world class facilitv in Edmonton
Agreement
Expires
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Alberta Heaith
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Lab Procurement North Hub

ssues Kequiring Guidance
--------=-----aa=-------=-----.az=-.m= =-===z=aaa-=--=-a-a...a.Eall
Location of Main Lab facility:

Choices:
1. Edmonton - commercial/industrial area;

2. Edmonton- close proximity to U of A;
3. Utilize existing AHS facility with "shelled
in" space.
N
(..)
s.24( 1 )(a)
ADVANTAGE
1.
2.
3.
DISADVANTAGE
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New North Hub provider will want opportunity to grow:
Leverage investment
Multiple dimensions
Provincial
;.. Inter-provincial
-,. National
-,. Esoteric testing
Private services (eg. Homeopathic)
How do we position CLS in the South?
Competitive playing field (quality, safety, cost)
Opportunity to "merge"?
Necessary skills.
Overall Lab Services Governance:
Academic
' -.......
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FIN A CIAL WORK STREAMS
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---
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Concept of "Fair" return
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Incentives & Disincentives
Expected efficiencies
tion I
Fairness opinion
In context of non-current
costs and predicted future
changes vs. test of world
Board/OAG document
Key question - will this
arrangement produce high
quality/savings that we can
do ourselves?
Will provider be capable of
sustaining (capex, etc.)?
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PRICING COSTING ANALYSIS

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APPLICANT COPY
____Qp_!nlng Remarks
C. Eagle (Guest BUI Trafford,
Action
Agenda
Action
Non-Responsive
1.
Lab Project Uodate (Engagement Plan} - C. Mazurkewich

(Guests: Bill Trafford and Tammy Hofer)
In its current form the Lab Services RFP has a scope

that includes all lab operations in the North half of the
province (including Central , Edmonton and North
Zones, excluding the Provincial Lab for Public Health).
The contract with our current provider (Dynalife)

expires March 201 5 and we must be in a position to
ensure continuity of service. As part of this continuity,
the current physical facility cannot be extended beyond
201 7 and therefore a new one must be built. The
timing to accomplish this is very short as the
complexity and effort to develop a new facility and
transition staff is very significant. An RFP must be
issued for an undertaking of this magnitude.
The recommendation is to reduce the scope of the

RFP to the current services provided by Dynalife and
the acute lab operations in Edmonton Zone (AHS and
Covenant). As well , include an option to have the
successful proponent expand into the North and
Central Zone.
Recommendations were approved and next steps will

be to review with Minister and OA before proceeding. If
approved, next steps will be to speak with the
stakeholders (Covenant, PCNs etc).
The RFP would be issued at the end of September.
Non-Responsive
L
-----
tg
Executive Committee- Meeting Minutes- August 20, 2013

Executive Committee Advice only - not for dl
butlon
APPLICANT COPY
Agenda
I
r=-4. Lab Service RFP Engagement Update- C. Mazurkewich
_
__
Action
(Guests: Bill Traffordframmy Hofer)
Update provided on the RFP.
Discussion regarding the HR issues. M. Haley and

D. Diamond to work on some of the outstanding
issues with B. Trafford and T. Hofer.
Worse case scenario planning needs to be

completed.
Non-Responsive
Action
Non-Responsive
Executive Committee- Meeting Minutes- September 03, 2013

Executive Committee Advice only - not for di
ibutlon
Alberta Health
APPLIGAN I GUPY
BRIEFING NOTE

September 03, 201 3 Hem 030913-04
Noted:

Date:
Date: August 30, 201 3
Title:
Lab Service RFP Engagement Update
Issue:
AHS is preparing to issue a Lab Services RFP to provide services for all lab operations in
Edmonton Zone. The RFP will see a private provider deliver all lab services in the Zone,
including community, hospital and acute care sites. The provider will take over services from
AHS, Covenant and current private provider, Dynalifeox.
The contract with our current provider (Dynalife0x) expires March, 20 1 5 and we must be in a
position to ensure continuity of service. As part of this continuity, the current physical facility
cannot be extended beyond 20 1 7 and therefore a new one must be built. The timing to
accomplish this is very short as the complexity and effort to develop a new facility and transition
staff is very significant. An RFP must be issued for an undertaking of this magnitude.
A community engagement and communications strategy has been developed to engage key
stakeholder in the process.
Recommendation :
The Briefing note, as well a s attached documents:

1.
Calendar of Engagement (Attachment #1 )
2.
Power point Presentations:

a) The Future of Laboratory Services - Staff (Attachment #2)
b) The Future of Laboratory Services - Pathologists (Attachment #3)
are for information purposes.
Key Messages:
AHS is implementing a new plan for laboratory services in Edmonton Zone.
The contract with our current provider , Dynalifeox expires in March, 201 5, and we must be in a
position to ensure continuity of service. As part of this continuity, we know we need a new lab
Confidential N
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APPLICANT COPY
facility within the next four years to handle current and future demand as well as higher volumes
of new, complex tests such as genomics.
Because the timing to accomplish this is short, and the complexity and effort needed to develop
a new facility and transition staff is significant, we plan to issue a Request for Proposals (RFP).
RFP Bids will be solicited through an open, transparent and competitive process, overseen by an
independent fairness monitor.
This new contract gives us an opportunity to review how we provide Lab Services in the
Edmonton Zone, and will allow us to build a sustainable system that will meet current and future
demands.
The current model, where Dynalifeox provides all community lab and hospital referral testing
while Alberta Health Services and Covenant Health operate all acute hospital and urgent care
labs, is unsustainable for a number of reasons.
With lab volumes rising at nearly six per cent year each year and demands for newer, more
expensive esoteric tests rising even f aster, we know that a major investment is required for a
new highly automated state-of-the-art facility in Edmonton along with a sophisticate information
systems to tackle appropriate lab utilization. We also know that with an aging workforce we are
facing significant staff and recruitment challenges.
As such, the new service model will see one service provider handle all lab services in the
Edmonton Zone. It is a similar model to what currently happens in Calgary Zone with Calgary
Lab Services.
The plan will also take into account the importance of the University of Alberta Hospital lab and
its close links to the U of A Faculty of Medicine, Department of Laboratory Medicine and
Pathology teaching, research and clinical trials support.
A modem state-of-the-art lab in Edmonton will be dosely linked to this academic and research
agenda. There is a well understood need for such a capability and utilizing expertise and capital
from a well-respected lab services provider reduces risk and the need for directly funded capital.
s.24( I )(a)
s.24( I )(d)
AHS Lab Services will meet with all affected staff and stakeholders to answer questions about
the new services model for Edmonton Zone.
Confidential
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s.24( I )(a)
In 201 1 an evaluation of Lab Services across the Province was undertaken as four trends were
identified:
s.24( I )(a)
1.
Growth in lab volumes increases at 5%-6%/year.
2.
Demand for new, more expensive tests (genomic, esoteric, and cancer) i s increasing at a
much higher rate.
3.
Workforce, particularly Pathologists will be in short supply for the foreseeable Mure.
4.
New technologies such as point of care testing digital pathology are now offering
significant cost and quality improvements.
Confidential
,.,:at\or Circulation
APPLICANT COPY
s.24( I )(a)
Next Steps:
Approval for the recommendations as presented to the Administrator and Minister was obtained
on August 24111 Based on this approval the following will represent the next steps:
1 . A communication/engagement exercise would be undertaken focused in Edmonton and

on the following groups:
- Current AHS/Covenant lab staff;
- Current AHS/Covenant Pathologists;
- University of Alberta Faculty of Medicine.
(Note: discussion on this topic have been ongoing with these groups, however, an
opportunity for all involved staff to engage would be valuable); and
- The Edmonton Zone Primary Care Networks as the major user of community lab
services currently provided by Dynalife0x.
- Other partners and stakeholders as outlined in the engagemenUcomms plan.
The specifics of these discussions would be to hear, understand and to share content of the RFP
and answer any questions. Concerns would be addressed to the extent possible and where
possible changes to either the RFP or transition plan would be made.
Engagement/Comm u nications launch day is Se pt 1 1 , 2013.
1.
Based o n the engagement exercise, refine the RFP if necessary and then issue it to the
four qualified providers. This would be targeted for early October.
2.
Continue with face to face information sessions to continue to answer ongoing questions
and issues.
3.
Evaluation of the RFP responses would be completed by Feb/March 201 4 and

award/negotiations to commence immediately thereafter.
4.
Transition work needs to begin by July/August 2014
Individual Accountable: Bill Trafford , Senior Advisor to the President & CEO
PREPARED BY:
Name :
Bill Trafford, Senior Advisor to the President & CEO
Tammy Hofer, Vice President. Laboratory Services

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Name:
Chris Mazu rkewich, EVP and COO
Communications
Name:
Atta chmen t( s ) :
Attachment #1 - Calendar of Engagement

Attachment #2 - the Future of laboratory Services - Staff
Attachment #3 - The Future of Laboratory Services - Pathologists
Confidential N
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COPY
APPLICANT
- --
Septem ber 201 3

Monday
SUO
CONFIDENTIAL DRAFT - SUBJECT TO CHANGES
Wednesda
Tuesday

September 03, 2013 Item 030913-04 (att. 1)
Regular RFP Mlv

1 2:30-2:00
2:110 - 3:00
EZ Lab Engagement
Cancer Care
Discussion
4tb
EZ Ex..:uttv. Mtg
Mlke Conroy &
Dr. Madot
7:00 - 8:00 a.m.
Confirmed
Friday
Thursday
l :00- 2:00 PM
Sat
13
14
Dr.
Confirmed
Conlnned
10
S :JO - :00 p.m.
11
lBA
COEC
......... ........ . .. ... ... ............
RFP Draft Review

location: Boardroom A
SSP
Confirmed
...
TBA
Edmonton
Pathologbl
..............................._____
...
------ .. ------ ------- -
4:30- 5:00 p.m.
Edm Zone Senlot

Leadenhlp Team
Bnl & Tammy In penon
ConftrfTied
TBA
Union Meeting tor
Head'o Up
UofA
Location 1 J2.47WMC at
12
RAH slalf Mtg

Ill & Tammy In
1 0:00 - 12:00
person
------------------
...
1 :00 - 3:00
UoiA llall Mtg
a r. rammy ln
pllflon
10:00 - 11 :30
attending)
ani r. Tammy In
MIS llall meeting

(Covenatll
person
---------------
..
1 2:00 - 1 :30 ASLP
BIU & Tammy
VIdeo conference
....................................... ....
.. .
JliC
...........................................
Coni' call wllfl

crtallable HAC
5:1 5 - 5:45 p.m.

Edm ZMAC
lnl & Tammy In person
fending Conflrm"llon
rMm (2 HACI
anr atrecled)
UoiA
Info Memo and FAQ

out to key
----------
Location: 1 J2.47WMC at
elolcltltolden.
Including AH! senior
leaden. all lab

sew/co: efotr.
palhologllb, HAC,
AMA and AAI1. U ol
A. foundofiOM. rural
commun/ly /eadetJ,
lruHe pGges launch

... .... ...... ............ ............ .... .
---
...
15
17
16
Leduc: stall meeting

a r. Tommy In
10:00 - 12'()()
penon
.. . .......... .............. . .............
UoiA llall meeting

1 .. - 12-M
proon
r. Tommy In
........ ...... ....... ..... ..............
1 :00 - 3:00
..
penon
A/lending)
BIII & Tammy ln
24
23
18
..
GNH llall meelfng

(Covenant
22
....... .... ...... .....
Update to
EC
Slvrgeon stall
1 - - 3
26
IIA
COEC
.......... .. ................. .. ..........
...
Updole lo:
--
DRAFT
Reply to
Engagement
37
21
25
Released
Version 3 - August 7
Edm. PCN'1
.. . ............. ..................... ..
meeting a r.
Tammy In penon
.............. .....................
...
1 RFP
30
20
1 :00- 3:00
RAH lfall meeflng
IDI I. Tammy In
penon
......... .............. ......_.._____
...
Dr. Eagle
Admlftlltratar/Minlst
er
29
19
8:30 - 9:30
6:00- 9:00
Greater Edm HAC
(held In Fl Salle.)
27
28
11,11 Alberta Health
ExecUtive Committee MeetiRg

September 03. 201 3 ltern 9091 3-04 {att
Services
The F utu re of Labo rato ry

Servi ces De l ivery
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Th e C h a l l e n g e
The ch a l le nge of Laboratory Med i cine a n d Pathology

(LM P) is to provide u n ifo rm service i n the face of
s h ri n ki n g fu n d i n g , scarce cap ita l , a n ag i n g wo rkfo rce
a nd ris i n g d e ma n d .
This cha l lenge w i l l be exacerbated i nto the futu re

forci ng g reate r structu ral a nd tech nolog i ca l i n novatio n to
a l low LM P to meet demands.
The ch a l lenge ca n o n ly be met by sig n ifica nt i nvestment

i n a utom ation a n d tech nology ( i n cl ud i ng i nfo systems) .
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De m a n d
70,000
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60,000
Lab test utilization is g rowi ng at
50,000
an annual average rate of 5 . 3 % , a
40,000
Anatomic Pathology
Olemistry & Hematology
: Esoteric
rate over three times faster than

o
Alberta population to i ncrease

43 . 5% in the next 25 years ; 1 3 1 %
increase in those 65 years and
older
--
--- - - -
---
- - - -- -
140,000
is chang i ng with the advent of
100,000
and proteomics
18
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- -- -- -- -- - - - - - - -- ---- "
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The breadth of laboratory testing
notably i n the area of genomics
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Chemistry & Hematology
80, 0 00
Esoteric
60,000
11 M icrobiology
40 ,0 00
Transfusion M edldne
20,000
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-
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n u merous new tech nolog ies ,
Transfusion Medicine
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ere a
s s
Cost of lab services increase at the same rate as volume growth

year). Cost grows exponentially for new more com plex tests.
ena
(5-6% per
Skills, staffi ng , eq u ipment and i nfrastructu re will not be sufficient to meet

q ua l ity, safety and a ccess standards g iven resou rce constra i nts and
req u i red investment.
We esti mate the cu rrent Alberta pool of g rad uating tech nolog ists will
replace only 4 7o/o of eli gible reti rees . The average Canadian path olog i st is
in his or her m id-fifties (cu rrent estimated Canadian pathologist deficit is
370).
Appropriate utilization of lab services req u i res sophi sticated tools, skills and
tech niques a nd is d ifficult to accomplish in a frag mented environment.
Tech nology is cha n g i ng and we need to ensure we can leverage the
opportu n ities provided by new platfo rms, tech n iq ues and i nformation
systems.
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Services
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S pace
UAH
5th
floo r (AP)
1 3o/o
overs u bscri bed , little space for
add ition a l patho log ists
UAH
4th
floor
3 1 o/o
oversu bscribed , l ittle space to
i ntrod u ce emerg i ng tech nolog ies
RAH : ad m i n istrative and patho logy offi ce space is the

largest need .
P L P H a nd Genetic Lab SeiVices (G LS ) : req u i re total

reb u i ld to o perate i n existi ng space co nstra i nts
10
labs i n the provi n ce hold interi m accred itatio n d ue to
issues with space
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La b C o ntra ct
The l ong te rm co ntract with Al berta's pri m a ry p rivate lab

service provider expi res M a rch
3 1 , 20 1 5 .
It is not
reaso nable to operate a critica l se rvice witho ut a
VJ
contract.
The cu rre nt p roviders b u i ld ing lease expi res i n
20 1 7
and the land lord is re-developing faci lity a nd wi l l not

renew.
Sig n ifica nt contract val ue d ictates a com petitive p rocess

Co n sidera b le i nvestme nt i n all laborato ry i nfrastructu re
i s req u i red a n d it m u st be plan ned a nd b u i lt q u ickly.
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laboratories
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Best practice q ual ity management
O perating economies of scale
I ntegrated information databases
Bu l k purchasing d iscou nts
Laboratory uti lization assistance
Eq u ity of service i n remote areas
Operational standardization
Standard ized d iag nostic testi ng
Operational redu ndancy (disaster
Targeted automation
recovery)
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H u b and S po ke I nteg rated Model
N ewly constructed state of

the a rt ful ly automated lab
facility in Edmonton to
Northern Alberta
process all non-u rgent core

laboratory d isci pli nes and
01
specialty testi ng .
LAB SERVICES
_
GOVERNANCE
B u i lt i n close proxi mity to the

U ofA Campus to su pport the
academic mandate of LM P
Southern Alberta
I nclude space to co-locate

th e P rovi ncial Lab for Public
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Finalize'scope of
RFP through
engagem ent
Ap p roach
-1
Value
- ReleaseRF.P, award
contract and
negotiate
T ransitibn and
o ptim ize services in

Edm onton Zone
Expand services to
remaining operations
. _
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Current services
provided by DLDX
Acute/urgent care
lab operations in
the Edmonton
Zone (AHS and
CH)
Edmonton GLS
Include an option
expand services to
North and Central
Zones at the
discretion of AHS
Based on
engagement,
refine and release
RFP
Evaluation and
selection by March
2014
Complete
negotiations by
July 201 4
Staff (public and

private) transition
to successful
proponent April 1 ,
201 5
New facility
constructed and
operational
Acute care labs
optimized
Standardized
provincial LIS and
Meditech
interfaces
implemented
Evaluate service
needs and
optimization
potential for North
and Central Zones
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Privately funded new "state of the art" lab in Edmonton
-...... .
Relieves space and capital constraints
S u pports lower test costs through lean processes and automation
Better serves our research and academic community by dedicating space , consolidatin
activities to one location, and introd ucing potential commercialization pipelines
G rowth managed within reasonable cost.

Better use of constrained Lab staff
More interaction with clinicians/patients .
More access to expertise/backup.
Increased affordability of new complex tests :
Demand for genomic, proteomic.
Access to capital , expertise in managing utilization to " make room" for new tests.
Experience with leading edge tests in "scaled u p" environment.
Ability to more quickly adapt and invest in new lab services technology
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delivery of l a b services:
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This provides expanded opportu n ity and career paths for

everyon e .
We wi ll have several req u i rements of the successfu l proponent as it

relates to employees.
Specifically, emp loyees wi l l :
be offered conti n u ed employment

be provid ed with conti n ued u nion representation (where
presently u nionized )
receive compa rable terms and conditions of employment
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The challenge of Laboratory Medicine and Pathology

(LMP) is to provide uniform service in the face of
shrinking funding , scarce capital , an aging workforce
and rising demand .
This challenge will be exacerbated into the future
forcing greater structu ral and technological innovation to
allow LM P to meet demands.
The challenge can only be met by significant investment
in automation and technology (including info systems).
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80 ,000
70,000
.L
60,000
Lab test util ization is g rowing at
- -
rate over three times faster than
I
J ,o,ooo t--
Alberta popu lation to increase

increase in those 65 years and
!
.
- - --
-- ---
-- .
--
43 .5o/o in the next 25 years ; 1 3 1 /o
- -- - -
an annual average rate of 5 .3/o , a

the popu lation growth in Alberta
01
50,0 00
Anatomic Pathology
- --
40,000
30,000
-.
ceritrar,ECimonton _& WOr!![Zone VOfume (KJ
Esoteric
'
140,000
The breadth of laboratory testing
120,000
is changing with the advent of
100,000
Transfusion Medldne
,....cd
..
...
_ _ ___
2012
---
older
-- 25
--- - '
- -
-+-
Anatomic Pathology
80,000
notably in the area of genomics
Chemistry & Hematology
60,000
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40,000
Transfusion M edidne
20,000
2012
L---- --- - - -
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numerous new technologies ,

and proteomics
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20,000 -- -
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--
2025
- -
--
..... - - -
. ----- - -
____ ____ _
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Alberta Wealth
Servioes
Better Quality Better Outcomes, Better Value
S ustai nabi l ity
lrnr
aure
1 1 5 ILabs
ben;a
Cost of lab services i ncrease at the same rate as vo l u m e g rowth (5-6o/o per
year) . Cost grows exponenti a l ly for new more com plex tests .
S kills, staffi n g , equi pment and infrastructu re will not be sufficient to meet
q uality, safety and access standards given resource constrai nts and
0'1
w
req u i red investment.
We esti mate the cu rrent Alberta pool of g rad uati ng tech nologists wi l l
replace o n ly 4 7o/o of eligible reti rees. The average Canad ian pathologist i s
i n h i s o r h e r m id-fifties (cu rrent esti mated Canad ian pathologist deficit i s
370).
Appropriate util ization of lab services req u i res sophisticated tools, ski l ls and
tech n i q u es and is difficu lt to accom plish in a fragmented envi ron ment.
Tech nology is cha nging and we need to ensure we can leverage the
opportun ities provided by new platfo rms, tech niq ues and i nform atio n .
systems.
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Better Qltalit)!, Better Outcomes, Better Value
S pace
(]I
UAH 5th floor (AP) 1 3/o oversubscribed , little space for

add itional pathologists
UAH 4th floor 3 1 o/o oversubscribed , little space to
introduce emerging technologies
RAH : ad ministrative and pathology office space is the

largest need .
PLPH and Genetic Lab Services (GLS): require total
rebuild to operate in existing space constraints
10
labs in the province hold interim accreditation due to

issues with space
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Better Qutlllity, Better 0UtMnes, Better value
ab Contrclct
01
01
The long term contract with Alberta's primary private lab

service provider expires March 3 1 , 2 0 1 5 . It is not
reasonable to operate a critical service without a
contract.
The current providers building lease expires in 20 1 7
and the landlord is re-developing facility and will not
renew.
Significant contract value d ictates a com petitive process
Considerable i nvestment in all laboratory infrastructure
is req u i red and it must be planned and built quickly.
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The
Servjces
otential
An integrated laboratory model provides a mechanism to

bring a n u m ber of benefits when com pared to independent
laboratories
(]1
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Cohesive single point accountability
Best practice quality management
Operating econom ies of sca le
Integrated information databases
Bulk purchasing d iscounts
Laboratory uti lization assistance
Equity of service in remote areas
Operational standard ization
Standardized d iagnostic testing
Operational red undancy (disaster
Targeted automation
recovery)
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Better Qunlity, Better Outcomes., Better Value

H u b and Spoke I nteg rated M odel
,....
N ewly constructed state of

the a rt fu lly automated lab
faci l ity in Ed monton to
Northern Alberta
p rocess all non-urg ent co re

laboratory d isci pli nes a n d
CJ'I
-.....!
LAB SERVICES
_
GOVERNANC E
s pecialty testi n g .
B u i lt i n close p roxi m ity to the
U ofA Ca m pus to support the
Southem Alberta
a cademic mandate of L M P
I ncl ude space to co-locate
the P rovi ncial Lab fo r P u b lic
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Health ( P LPH )
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Better Quality, Better Outcomes, Better Value
P roposed P l an and Approa(:h

Finalize scope of
RFP through
engagement
C.11
(X)
Ct
provided by DLDX
Acute/urgent care
lab operations in
the Edmonton
Zone (AHS and
CH)
Edmonton GLS
Include an o ption
expand services to
North and Central
Zones at the
discretion of AHS
lieiease RFP, :1-d-,

contract and
negotiate
:$.tt.Q.f !J
engagement,
refine and release
RFP
Evaluation and
selection by March
2014
Complete
negotiations by
July 2014
Expand services to
remaining operations
+(ppM -nd
private) transition
to successful
proponent by April
201 5
New facility
constructed and
operational
Acute care labs

optimized
Standardized
provincial LIS and
Meditech
interfaces
implemented
te J.Qe
needs and
optimization
potential for North
and Central Zones
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Be n efits
CJ1
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Edmonton becomes a major centre for lab capability in Western Canada
Privately funded new 'state of the art" lab in Edmonton
Relieves space and capital constraints
Supports lower test costs through lean processes and automation
Better serves our research and academic community by dedicating space, consolidating
activities to one location, and introducing potential commercialization pipelines
Growth managed within reasonable cost.
Better use of constrained Lab staff
More interaction with clinicians/patients.
More access to expertise/backup.
Increased affordability of new complex tests:
Demand for genomic, proteomic.
Access to capital, expertise in managing utilization to make room" for new tests.
Experience with leading edge tests in scaled up" environment.
Ability to more quickly adapt and invest in new lab services technology
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..
""::'/Jetter Qu4lity, Better Outcomes, Better
Vatue
M ed ica l S cientific Staff
The winning proponent is expected to be a world leader in delivery of laboratory and

pathology services
We expect
1 OOo/o of medical/scientific staff (public and private) to transfer to the winning
proponent under existing terms and conditions of the ASLP agreement.
Protected academic and research time has been accounted for and is expected to
continue.
We intentionally have not been prescriptive in the RFP around the pathologist model
(employees, contractors, ARP, etc). We are requiring the proponent to provide options
for the medical professional model and its operation in the Alberta landscape.
Considerable emphasis has been placed on governance, for both clinical and academics
Considerable emphasis is placed on the academics and research mandated. We have

worked closely with the UofA to ensure that the RFP meets their needs.
-
Dr. Lorne Babiuk, VP Research represents the faculty on our Design Team
Dr. Michael Mengel, Interim Chair DLMP, is an active member on the Medical Design
Subcommittee
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'
Services
/Jetter Quality, Better Outoo.mes, Better VtJ.lue
For D is;cuss ion
0')
What medical professional model do you see working

best under this partnership?
How best can we involve this g roup in the RFP
evaluation and proponent selection?
We would welcome your thoughts/ideas on what would be helpful

to you on any transition.
Staff are encouraged at any time through this process to send their questions and comments to:
XXXX@albertahealthservices .ca
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Alberta Health
Services
Executive S u m m a ry
AHS Laboratory Services has undertaken an exercise to determine the optimum Lab Services delivery model to add ress the need to have an efficient,
high q uality fully leveraged laboratory service capability for the long term. Of the three models reviewed, a public private dual hub a nd spoke model
with rational distribution of testing capacity was identified having the most potential.
This document is intended to provide the reader with an overview of Laboratory Services and insight into why the current structure does not have the
scale or influence to effect ti mely, meaningful system level volu me-reducing change. A new model is required to bend the cost cu rve and create
sustainable economics while maintaining a nd enhancing quality laboratory services.
The proposed dual hub and spoke model will demonstrate:
Reduction in a nnual operating cost through consolidated services
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Reduction to the cost trajectory of laboratory services through long term system level changes that decelerate volume growth
Improved patient care through expanded quality programs and leveraged clinical expertise
Standardized and enhanced performance
Expanded access to new technologies and services to all communities
Consolidated i nfrastructure and expertise
Enhanced research activity through single source data and platforms
Ongoing support of academics and teaching
Enhanced rural services resu lting in lower clinical risk.
A healthy level of competition between the public and private service providers to keep overall costs down
A level of redundancy within the system
The public private dual hub and spoke Lab Model was presented to the Audit and Finance Committee of the AHS Board in June 2012. The committee
was su pportive of this direction a nd approved Lab Services to proceed with the North Laboratory Hub procu rement process and continued consultation
and engagement on the model design.
Consultants have been engaged to complete a market assessment and develop a shortlist of qualified Laboratory Service Providers to deliver North Hub
laboratory services. I n addition, the market assessment firm will provide expert advice and a nalysis i n general Laboratory Services market trends and
best practice.
With the procurement process well u nderway, Laboratory Services is now initiating the next phase of consultation and engagement. A uDesign Team"
and appropriate subcommittees will bring together a number of groups to assist in more detailed discussions on planning and model development,
Page 1 2
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potential implementation approach and local or professional consultations to dea l with specific issues.
B us i n ess Ove rview
An effective laboratory service is an essential pa rt of a quality health service and plays major roles in both research and teaching. Laboratory tests
provide health practitioners with objective information that is needed to prevent, diagnose, treat and manage disease. It is estimated that laboratory
data have a n impact on over 70 percent of medical decisions1.
The fu nctions to su pport patient care performed by laboratory medicine are nu merous:
Identify the risk of developing disease
(j)
Disease detection
Planning and disease management
Selecting safe and effective treatments
Monitoring treatment response
Identifying threats to patient safety and public health
Laboratory medicine plays a vita l consu ltative role in clinical care in the areas of hematopathology, genetics, infection control and transfusion medicine
programs. In addition, research scientists and laboratory physicians conduct basic and translational research which advances the understanding and
treatment of disease.
Under its mandate, AHS has assumed responsibility for all clinical laboratory and public health laboratory services in Alberta. Laboratory Services
provides an integrated provincial laboratory medicine & pathology service su pporting a ll acute care, community, and public health testing across the
province. Laboratory Services offers a com prehensive range of routine and specialized testing and clinical consultation in adult, perinatal and neonatal
pathology.
Laboratory services supports over 2,400 employees with services available seven days a week across 133 accredited metropolitan and rural laboratory
sites. Laboratory services performed over 65 million laboratory tests in 2011. Each laboratory is equi pped with diagnostic instru mentation and staffed by
laboratory professionals with extensive technical and scientific training who a re all committed to qua lity testing and services.
In addition, Laboratory Services actively supports clinical trials and applied research. Through the i ntegration of Laboratory Services with teaching
hospitals and university medical schools and colleges, research, education and training opportu nities are provided to a broad range of health care
professionals and students of laboratory medicine and pathology.
1 ASLP Pathology's Future: A View from Leaders in Health Care, June 20 1 0

Page 1 3
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Laboratories follow a stringent accreditation process and are accredited through such organizations as the College of Physicians and Surgeons of Alberta
(CPSA); College of American Pathologists (CAP) and the International Orga nization of Standardization (ISO). Laboratory Services has developed objectives
that align with the strategic direction of AHS.
Vision
"Right test, right time, right place, right cast"
Mission
Our mission puts patients first by providing services which are:
Highest quality, optimised for our contribution to the care pathway
Responsive to users: convenient, accessible, effective, safe, appropriate
Cost effective: managed from end to end adopting innovative technologies operated by a well tra ined and engaged workforce
Integrated : su pporting acute care and community based services; enhancing other clinical services, i.e., cancer care, and population and pu blic
health.
C u rre nt State
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Description of Service
In the major metro of Edmonton, existing laboratory services operate under a mix of public and private service delivery. The University of Alberta
Hospital (UAH), AHS' hub la boratory in Edmonton is a full service laboratory2 performing high volume, specialty and esoteric testing for Northern
Alberta. UAH laboratory infrastructure, i.e. quality, safety and education, supports Rapid Response Laboratory (RRL) Operations at the fou r metropolitan
hospital (two Covenant Health Board Operated), the cancer laboratory (CCI ) and six rural facility laboratories. UAH, cancer and metropolitan hospital
laboratories have on site pathology services.
DynaliFEo. (DLDx), a contracted private services provider, operates all Patient Service Centres (PSC) and the major high volume diagnostic facility in
Edmonton for com munity testing. With exception of testing at the UAH and CCI, all routine testing from the rapid response and rural laboratories is sent
to DLDx for testing. This includes all routine chemistry and hematology; all microbiology; and all anatomic pathology processing (slides are returned to
hospital pathologists for reporting). DLDx maintains a very robust transportation network within the city
The service contract with DLDx, expiring March 3 1, 2015, is very specific in terms of exclusivity and test splits between UAH and DLDx. Duplication,
redu ndancy and excess capacity was intentionally built into the system in Microbiology, Anatomic Pathology and high volume hematology and
chemistry. The majority of specialty and esoteric testing (i.e., molecu lar pathology, immunohistochemistry, special chemistry, flow cytometry, etc.) is
not duplicated a nd is performed at UAH or CCI.
2 Acute Care Microbiology at UAH is integrated with the Provincial Laboratory for Public Health and discussed in that section.
Page 1 4
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I n the major metro of Calgary, existing laboratory services are provided by Calgary laboratory Services (CLS), a wholly owned subsidiary of AHS. CLS, an
independent service provider, is governed by it s own Board, policies and organizational structure including corporate services (i.e., finance, human
resou rces and su pply chain management).
Like Edmonton, a number of PSCs are operated across the city with testing directed, via an advanced transportation network, to a central Diagnostic
Service Centre {DSC) for testing. Also similar, is the operation of RRLs in each of the four hospitals, providing u rgent and priority testing, referring
routine, esoteric and specialty testing to the DSC. All hospitals have on site pathology services.
Two notable differences from the Edmonton model include:
1. The laboratory at the Foothi lls Medical Centre (FMC), Calgary's academic and tertiary ca re hospital is not a full service laboratory. Although
some expanded services are centralized to this site (i.e., flow cytometry and transfusion services), there is l ittle duplication between this
laboratory and the testing provided at the DSC.
2. Community a nd hospital laboratory operations fall to one service provider u nder one organizational structu re. This effectively eliminates any
competitive interests between public/private and community/hospital laboratories, resulting in an i ntegrated model with standardized
procedu res and quality practices. In 2012, a service level agreement between CLS a nd AHS was executed to manage all Calgary Rural
laboratories. U nder this model, staff remained employees of AHS; however, all operations are managed by CLS.
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Outside of CLS, AHS provides some routine and specialized services in the Calgary Zone. This i ncludes Genetic Testi ng at the Alberta Children's Hospital
(ACH) and operation of P rovincial Laboratory for Public Health (detailed below).
Outside of these two primary urban centers, medical laboratory testing and pathology service levels and delivery models vary; however, a hub and
spoke test referra l model is commonly used, following legacy regional referral lines.
Suburban Hospital facilities (5) have relatively full service laboratories performing chem istry, hematology, t ransfusion medicine, microbiology and
anatomic pathology. Each laboratory acts as the major service hub for the smal ler rural laboratories in each zone. low volume and specialized testing
a re referred to one of two locations for processing:
South Zone refers to CLS
Central Zone refers primarily to DLDx
North Zone refers to DLDx

One distinct difference is the Northern lights Regional Hospital in Fort MacMurray. DlDx holds the contract for complete laboratory services in the
former Northern Lights Region. The Northern Lights laboratory functions much like a RRL with most routine testing transported to the DlDx base
laboratory in Edmonton for testing.
The approach to community services varies across subu rban communities:
Medicine Hat is contracted to Medicine Hat Diagnostic Labs (MH DL), a small private laboratory operati ng only in the Medicine Hat area.
AHS operates all lethbridge collection facilities (5) and testing is centralized to the regiona l hospital laboratory.
DlDx operates the collection facility in Red Deer and testing is centralized to the regional hospital laboratory.
AHS operates two collection facilities in G rande Prairie and testing is centralized to the regional hospital laboratory.
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DlDx operates the collection facility in Fort MacMu rray and testing is centralized to the regiona l hospital (DlDx operated) or to the DlDx base
laboratory in Edmonton.
Outside the subu rban communities, rural hospital laboratory menus vary. Depending on former legacy regional design, hospital services and geographic
isolation, laboratories range from minimal stat hematology and chemistry menus to basic microbiology and anatomic pathology testing. More complex
and specialized testing referrals follow the same patterns as described for subu rban laboratories.
Most rural hospital laboratories provide community collection and testing services, referring offsite testing through their defined hub and spoke referral
routes. The exception is Cam rose and Lloyd minster where DLDx operates a stand alone collection facility in these communities, referring testing to their
base laboratory in Edmonton.
Reference and esoteric testing for the province is performed in both Edmonton and Calgary:
(j')
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AHS Genetics and Molecular Diagnostics laboratories are integrated under one administrative and medical structure located at UAH Edmonton
and ACH Calgary. Some duplication and redundancy exists across laboratories
ProvLab performs m ost specialized and esoteric microbiology testing for the province. Testing is limited to one site or the other, with necessary
redundancy built i n across the two laboratory sites.
Specialized Cancer Biomarker Testing at the cancer facilities in Calgary and Edmonton are currently in the process of integrating into the service
delivery of CLS and UAH/CCI respectively. Duplication exists across the two cities.
UAH and CLS have significant specialized Hematology, Coagulation, Chemistry, Toxicology and Molecular Pathology testing menus. Duplication
exists across the two cities and laboratories. Low volume assays are generally performed in one location or the other. Very low volume assays
are referred to reference laboratories in eastern Canada or the United States for testing.
Two H LA Laboratories, UAH and CLS operate in the province. The UAH focus is on solid tissue transplantation while the CLS focus is on bone
ma rrow tra nsplantation. This level of specialization resu lts in little duplication while allowing for some redu ndancy of equipment and staff
expertise.
The public health laboratory is a full service AHS M icrobiology/Public Health Reference Laboratory. Referred to as ProvLab, this fully integrated
laboratory is split between s ites in Edmonton ( UAH site) and Calgary {FMC site). The Edmonton laboratory is fully i ntegrated with the acute care
diagnostic clinical microbiology service for the University of Al berta Hospital in cooperation with UAH Medical M icrobiology. The Calgary laboratory,
although in close proxim ity to the CLS laboratories at FMC and the DSC, is not integrated within any other Calgary laboratory service.
Public health laboratories play a role in monitoring, and helping to control diseases and other agents that could potentially threaten population health in
contrast to medical laboratories, which conduct testing to diagnose conditions affecting individual patients. Public health laboratories safeguard the
Page 1 6
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health of communities. The Provlab collaborates with the other provincial and territorial, national and international public health and emergency
response agencies.
N e ed for Cha nge

ACTIV ITY
Integrated patient
PROCESS
ISSUE
result reporting
Electronic lab results are located
across many systems
Patient safety concerns with manual

back entry of results
lab tests are referred across
system (LIS) vendors with 9
maximize economies of scale
independent database
I nconsistencies in what
designs
back into source systems
Inefficient use of resources
Difficult/time consu ming to
Systems not configured to
standardization
support data requests/result
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Unable to adequately track lab
POSP systems only interfaced

with former health entity LIS
Utilization management difficult to
No standard terminology for

laboratory test orders and
results across LIS'
Architecture to control flow of

information is very complex and
labor i ntensive. Multiple points for
Multiple testing platforms

from multiple manufacturers
failure
Diversity across clinical

practice
referral tests are reported
implement
reach consensus on
specimens across the system
0)
(X)
3 laboratory information
zones and boundaries to
(du plicate order entry, result entry)
PEOPLE
TECHNOLOGY
results in methodology and

reference interval d ifferences.
Full provincial picture not available

for epidemiology or research.
Procurement and
Supply Chain
Not taking full cost advantage of
consolidated p rocurement
lack standardize d
performance standa rds to

select products/equipment
M ultiple testing platforms
3 large organizations (AHS,
from multiple man ufacturers
CLS and DlDx) with separate
limited capital to support
purchasing and contracting
planned sta ndardization
departments
Technical/professional
Variation in scope of practice
preferences
Planning and
resource allocation
Page 1 7
No benchmarks to compare
resou rces across
No clear definition of test

menu or diagnostic supplies
Variation in LIS design limits

analytic capabilities and
of lab technical and
Alberta Health
Services
ACTIVITY
PROCESS
ISSUE
No defined strategy for
PEOPLE
TECHNOLOGY
required at each level of lab.
facilities/organization
professional staff
comparability
Variability of how expenses
No workload measurement
system for lab pathologists
are classified and captured
infrastructure and capacity

development
Difficult to project human resource

needs from year to year
Demand/Volume
management
Disparate functioning labs do not
have the scale or clout to effect
to introduce utilization rules
meaningful volume red ucing change
sets within AHS
across multiple US systems.
lab test continue to grow at over 6%
There is no disincentive for
inappropriate lab utilization
Diversity across clinical

practice
Difficult and time consuming
lack an online rules based
to reach consensus on
decision support order entry
utilization guidelines
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per year
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Difficult and time consuming
practice guidelines and order
at a system wide level
Lack standardized clinical
Aging population, higher burden of
Paper based ordering in

Edmonton Zone and all
chronic disease and cancer
community/primary care
Lab system is q uickly becoming
u nsustainable
Do not have the analytics or

sophistication necessary to
understand current ordering
patterns at a system level
Universal access to
all essential tests,

expertise and
Inequity of service to remote areas
Adoption of new innovations and
appropriate for the health
technology enhancements required
care delivery level
homogeneous
to d rive down systemic costs
quality
manage m ent
It is neither feasible nor practical to

establish similar laboratory capacity
at all levels of health care delivery
from central to remote areas
Access to clinical and quality

expertise in limited in remote and
Lack a u niform test menu
Older/inefficient technology
IT system linkages are
Difficult to recruit
professional and technical
resources to rural/remote
deficient
locations
Rapid advancements in the
Duplication of quality and
Unnecessary duplication of
field of genetics and
clinical expertise across the
testing and testing platforms
molecular techniq ues
three organizations.
leads to higher cost and
Lab systems becoming more
and more automated
capital investment
Access to capital funding for

-
Page 1 8
in use in remote/rural
Logistics and transportation

deficient to current need
Do not have a cohesive

clinical structure to support
L__ standardized
qua lity
Alberta Health
Services
ACTIVITY
ISSUE
rural locations
PROCESS
PEOPLE
TECHNOLOGY
man agement programs
infrastructure improvement
lab system is falling behind in
and new technology
including performance
technology investment in the area
investments is extremely
standards
of genetics, and cancer care
limited
Expect ongoing recruitment

pressures as workforce ages
(41% of technical workforce
over the age of 45)
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Alberta Health
Services
P rojections
P rojected Alberta Labo1atory Test
Volumes
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80,000,000
60,000,000
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$ 1 00.000,000
$600,000.000
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$500,000.000
$60,000,000
$400,000,000
$40.000,000
$200,000.000
- ---
$20,000.000
0, '\- "'""'" -- - 0'1; '1;

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$ 120.000,000
$3 00,000,000
rI
L
----
$900,000,000
$700,000,000
S!4o.ooo.ooo
$ 1 ,000,000,000
$800,000.000
20.000,000
Pathologist Expenditures
....
;;,
!"
$ 160,0011,000
<11
t-'t
Estimated Albe1ta LaboratOI'Y
Expenditures
"'
I -=--
-------
40.000,000
Projected Alberta Labo1atory
;->
1 40.000,()()0
120.000.000
;:;
,.,.
'"
..
- -- _ , ___ ___ __
$ I 00,000,000
$-
SFY15
FY20
FY25
- ---.
..
FY1 5
FY20
FYZS
Alberta Health
Services
Workforce Ptojections
H88
:88
LT.
H88
:3 I
8
:H888
0
N
illl'
%3-
.-
.:
0
N
0
N
0
N
0
N
0
N
140,000,000
1 0 0,000,0 0 0 - t.1LT Requued
1 20,000,000
,-
80,000 , 000
r-
60,000,000
}-I
r
0
N
160,000,000
2o.ooo.ooo
40,0 0 0,000
,
....
_
..,..,.., 1\iLT Avat.1 a IJ I e
Activity
0
N
-- - ---
-----
Service M od e ls
-..1
N
Three basic service delivery models were identified as having the potential to serve the needs of the health system during the coming 10 to 15 years.
1. AHS Zones managed. Provide or purchase services from existing major service providers
Public private dual hub and spoke with rationa l distribution of testing capacity
2.
3.
Fully outsourced model
Key Characteristics
Key Characteristics
AHS Zone Managed
P ros
s.24( I )(a)
Cons
Managed at the zone level

Zone to provide or purchase laboratory services at their
discretion
Consist of optimized h u b and spoke model within the

zone
Standardization initiatives driven th rough provincial

integration
N etworks
Consolidated purchasing and contracts through AHS

infrastructure
Decentralized delivery of laboratory services
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Alberta Health
Services
Key Characteristics
Publ ic/Private Dual
Hub and Spoke
Pros
s.24( l )(a)
Cons
Tiered network of testing facilities (hub and spoke)

operating under central management with a rational
d istribution of testing capacity
U niform test menu a ppropriate for the health care

delivery level
Two central labs or "hubs" (one public, one private)

responsible for the medical direction and coordi nation of
operational functions for all labs in the network (spokes)
including quality, client services, appointment bookings,
transportation networks, etc.
Common operating, quality and safety procedures for

with i n the respective networks
Advanced logistics and specimen tracking
Public and Private N etworks are connected scientifically
Specialized testing and provincial centres of excellence
and operate under a u nified governance model

""'-.!
VJ
(includes Provincial Lab for Public Health and Genetics)
I ntegrated information technology platforms and

business intelligence tools
Fully Outsourced
Delivery of hospital and community laboratory services

would be provided by a private la boratory service
provider
Delivery would be managed through accountabi lity and

contract agreements
Page 1 1 2
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Alberta Health
Services
Analysis
The following tables compare each potential model against identified opportunities and impact to long range projections.
Opportunities
Zone Managed
Opportunity
Cost savings and future cost avoidance
s.24( 1 )(a)
Hub and
Spoke
Dual
Outsourced
Fully
Revenue potential through subspecialty pathology practice

Standardized diagnostic testing and nomenclature
Homogenous quality management
Leverage laboratory and analytical eXQertise
Common Laboratory Information System and Order E n!_ry_System
Leverage i nvestment in a much better and coordinated way
More effective and timely decision making
Ability to i nfluence practice that will improve outcomes at a lower cost of
""'-.
CJ1
patient care
Research and revenue potentia l to access or mine consolidated provincial
la boratory data
Effect meaningful volume reducing change at a system wide level
P roje cti o ns
-
Activity
s.24(1 )(a)
Zone Managed
Dual Hub and Spoke
Fully Outsourced
Technical
Workforce
Profession al
Workforce
Page 1 1 4
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Alberta Health
Services
O pe ra ting
s.24( 1 )(a)
--
Expenses
capital
Investment
Information
Technology
Investment
-----
""'-.!
(j)
--
Of the three potential models, the public private dual hub and spoke model was selected. The Zone managed model was rejected on the premise that it
does little to support the opportunities existing in an optimized laboratory model and projectio ns were either u nchanged or slightly worse than the
current systems.
The fu lly outsource model, although demonstrating a number of opportunities, was rejected for the following reasons:
Politically unacceptable
Very high risk
Massive labour implications
Budget gains (excluding ongoing capital investment} do not appear to be significant gains over internal or partially outsourced solutions
Past experience with private service provider specifically poor responsiveness and limited relationship between the laboratory and clinical sites.
P rogress a n d N ext Steps

The proposed public private dual hub a nd spoke Lab Model was presented to the Audit and Finance Committee of the AHS Board i n June 2012. The
committee was supportive of this direction and approved Lab Services to proceed with the N orth Laboratory Hub procurement process and continued
consu ltation and engagement on the model design.
North
La b orato ry
Hub Procurement is cu rrently underway. The process is designed to seek out a long term provider for the North Hub as follows:
A proven, viable, financially stable provider that has very low risk of business failure
The means and willingness to i nvest capital to develop a new high volume, high performance laboratory capability in the Edmonton area,
including building a new facility

Page 1 15
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Alberta Health
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Agreement to contractual terms such that given the dynamics of a long term arrangement assure AHS of "value for money" on an ongoing basis
Be willing and capable of accepting our required terms and conditions
The market assessment, designed to identify and evaluate potential suppliers of Laboratory Services, is expected to be complete by January 2013,
proponent selected and negotiations commencing April 2013.
Consultation and engagement, up to this point, has been at a relatively high level. Discussions have occurred with the U niversity of Calgary, University
of Alberta and select AHS Boa rd members where the model has met with wide acceptance.
The next phase of consultation and engagement will bring together a number of grou ps to assist in more detailed discussions on planning, potential
implementation a pproach and local or professional consultations to deal with specific issues. Im mediate next steps are to bring together a "Design
Team" and appropriate subcommittees comprised of pathologists, clinicians and administrators representing clinical and academic interests to engage
in:
Detailed discussion on model planning and development
.......,j
.......,j
Local and professional consu ltations
Potential implementation approaches
Change management planning
Act in an advisory capacity for the Northern Lab Hub Procurement work .
Page 1 1 6
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APPLICANT COPY
N eed for Change
ACTIVITY
Integrated
patient result
reporting
PROCESS
FACTORS
TECHNOLOGY
Lab tests are referred
3 laboratory information
STATUS QUO ISSUES
Electronic lab results are

located across many systems
across zones and
Patient safety concerns with
boundaries to
with 9 independent
manual back entry of results
maximize economies
database designs
Inefficient use of resou rces

(duplicate order entry, result
PEOPLE
of scale
Inconsistencies in
system (US) vendors
Diversity across
entry)
what referral tests are
requests/result reporting
Unable to adequ ately track
reported back into
between systems
lab specimens across the
source systems
Include need for a
Meditech
requirement for
reference lab
consumin to reach
Cerner
interface in the
consensus on
Millennium
standardization
conversion
Difficult/time
to support data
Moderate
MITIGATION
STRATEGIES
Maintain the
clinical practice
Systems not configured
MODIFIED RFP - ASSESSMENT

UN ITENDED
IMPROVEMENT
CONSEQUENCES
OVER STATUS QUO
POSP systems only
RFP.
Continue to
Multiple
implement
Meditech i nstalls
protocols
eliminating back
not addressed
system
interfaced with former
entry result
Utilization management
health entity US
reporting in source
Architecture to control flow
for laboratory test
of information is very
orders and results a cross
complex and labor intensive.
LIS'
difficult to implement
Continue with Lab

Standa rds Project
Multiple testing
Multiple points for failure
systems
No standard terminology
Full provincial picture not
piatforms from multiple
available for epidemiology or
manufacturers results in
resea rch .
methodology and
reference interval
differences.
Procurement
and
Supply Chain
Not taking full cost a dvantage

of consolidated procurement
Lack standardized
M ultiple testing
3 large organizations
Minimal
EZ Lab would be
Continue to have
performance
platforms from multiple
(AHS, CLS and DLDx)
standards to select
manufacturers
with separate
combined u nder
purchasing agent
limited capital to
purchasing and
one purchasing
for the North,
su pport planned
contracti11g
agent, however
Central and South
products/equipment
--
78
--
depletes the AHS
CLS act as the
I
I
APPLI CANT COPY
ACTIVITY
STATUS QUO ISSUES
MODIFIED RFP -
FACTORS
TECHNOLOGY
PROCESS
ASSESSMENT
UNITENDED
CONSEQUENCES
IMPROVEMENT
PEOPLE
OVER STATUS QUO

departments
standardization
Technical/professional
resource
No benchm arks to compare
resources across
allocation
Variation i n US design
diagnostic supplies
capabilities and
No defined strategy for
required at each level
comparability
i nfrastructure and capacity
of lab.
Variation in scope of
Zones to improve
power for the
consolidation.
and South Zones

Moderate
Be more d ifficult to
Will be able to
staff in regional and
technical and
more closely
rural locations with
professional staff
benchmark EZ
the majority of
No workload
and CZ
training taking
practice of lab
limits analytic
test menu or
facilities/organization
Variability of how
measu rement system
place in E d m onton
Diffi cult to project human
expenses are
for lab pathologists
and Calgary
resource needs from year to
classified and
(medical and
year
captured
technical}.
development
No clear definition of
purchasing
Central, North
preferences
Planning and
MmGATION
STRATEGIES
E m ployer
'
competition and
Incentives across
'
Demand/Volume
management
Disparate functioning labs do
not have the scale or clout to
clinical practice
guidelines and order
utilization rules across
reducing change at a system
sets within AHS
multiple LIS systems.
There is no
clinical practice
consuming to introduce
lack an online rules
Moderate
Difficult and time
Balance of power
Continue to
Some time
on decision support
resource the
benefits when EZ
will b e in Ed monton
laboratory
consuming to reach
converts to
and Calgary. AHS
utilization office
consensus on
Cerner
labs will have less
within AHS to push
Assumes some
of a voice.
the utilization
utilization guidelines
Lab test continue to grow at
diincentive for
based decision support
over 6% per year
inappropriate lab
order entry interface
decision support
Aging population, higher
utilization
Paper based ordering in
and online order
Edmonton Zone and all
entry will be
Central Lab Data
community/primary care
i ntroduced with
Repository within
Do not have the
the conversion
CLS to locate all
ana lytics or
to Cerner
Lab I nformation in
burden of chronic disease and

cancer
Diversity across
Difficult and time
effect meaningful volume

wide level
Lack standardized
organizations.
Lab system is qu ickly

becoming unsustainable
sophistication necessal)l
79
agenda
Conti nue with the
APPLICANT COPY
ACTIVITY
STATUS QUO ISSUES
FACTORS
TECHNOLOGY
PROCESS
PEOPLE
MODIFIE D RFP - ASSESSMENT

UN !TENDED
IMPROVEMENT
CONSEQUENCES
OVER STATUS QUO
MITIGATION
STRATEGIES
one place.
to u nderstand current
ordering patterns at a
system level
Universal access
to all essential
tests, expertise
and
homogeneous
Inequity of service to remote
Lack a uniform test
Older/inefficient
Difficult to recruit
Moderate
At minimum
menu a ppropriate
technology in use In
professional and
New state of the
(medical,
need to Include
for the health care
remote/rural
technical resources
art central lab in
a d ministrative and
an option for
and technology
delivery level
IT system linkages are
to rural/remote
Edmonton
technical) is
North Zone
deficient
locations
Will see further
heavily weighted
Medical,
Duplication of quality
consolidation of
within EZ. AHS lab
Technical and
automation
expertise
Quality
management
drive down systemic costs
transportation
It is neither feasible nor
deficient to current
the field .of genetics and
and clinical expertise
need
molecular techniques
across the three
practical to establish similar

laboratory capacity at all
Logistics and
Unnecessary
levels of health care delivery
duplication of testing
from central to remote a reas
and testing platforms
Access to clinical and quality

expertise in limited in
remote and rural locations
areas
quality
AHS Lab expertise
Adoption of new innovations

enha ncements required to
leads o higher cost

and capital
investment
Lab system is falling behind

in technology investment in
Rapid advancements in
Lab systems becoming
Access to capital
(operations,
Consultations in
organizations.
for genetics and
scientific and
the RFP.
Do not h ave a
molecular
q u ality will be
a utomated
cohesive clinical
techniques can
significantly
optimized
Access to capital funding
structure to support
be add ressed
compromised.
transportation of
for i nfrastructure
standardized quality
more and more
Will not address
Improvement and new
management
the
technology investments
programs including
transportation
i extremely limited
performance
standards
the area of genetics, and
cancer care
Expect ongoing
recruitment
80
Need to include
North Zone will be
referral testing in
the most effected
the RFP
Access to Capital
AHS needs to
limitation
for remaining AHS
continue to
between
operations will be
develop a Point of
even more limited
Care/Labless
because of their
strategy for the
regional, rural
and EZ
depleted scale.
remote low
Be more difficult
volume rural
of technical
to staff In regional
sites.
workforce over tile
a n d rural locations
age of 45)
with the m ajority
Alberta Lab
of training taking
Networks to
place in E dmonton
continue to
and Calga ry
promote lab
pressures as
workforce ages (41%
'
Continue with the
APPLI CANT COPY
ACTIVITY
STATUS QUO ISSUES
PROCESS
FACTORS
TECHNOLOGY
PEOPLE
MODIFIED RFP - ASSESSMENT

UNITENDED
IMPROVEMENT
CONSEQUENCES
OVER STATUS QUO
( medical a nd
sta ndardization
technical).
and sharing of
Employer
best practice.
competitio n and
Incentives across
organiza tions.
Will not easily be

a ble to
temporarily
transplant
w orkforce from
Edmonton or
Calgary to rectify
u rgent workforce
issues in ru ral
areas (different
employers,
standa rdization
challenges, etc)
81
MITIGATION
STRATEGIES
APPLICANT COPY
I
I
Activity
I
62,353,569
2outs2
62,353,569
2,234
2outn
65,595,955
2,303
2,277
2013/14
69,006,944
2014/15
72,595,305
2,448
2,364
2015/16
2016/17
76,370,261
80,341,515
2017/11
84,519,274
20111
88,914,276
93,537,818
2020121
98,401,785
2,952
2,747
(204)
2021122
103,518,677
3,047
2,818
(229)
2022/23
108,901,649
3,147
2,890
(257)
2out4
114,564,534
3,250
2,961
(290)
2024/25
120,521,890
3,358
3,032
(326)
2025/26
126,789,029
3,470
3,103
(367)
2026/27
3,587
3,174
(4131
125)
(84)
2,524
2,407
1117)
2,603
2,451
(153)
2234
2234
2234
2234
2234
2234
2234
2234
2234
2234
2234
2234
2234
2234
2234
Vacancy Def cit
(22)
)22)
(22)
(22)
(22)
(22)
(22)
(22)
(22)
(22)
(22)
(22)
(221
122)
Activity
(46)
(49)
(22)
IS!)
(57)
163)
(66)
(70)
(73)
177)
(81)
(85)
(90)
(94)
144)
144)
(44)
(44)
1 34 )
(44)
(44)
(34)
(44)
(34)
149
149
149
(44)
(34)
149
(44)
(34)
149
134)
149
(41)
(46)
MLT
MLT Avllble
Defecit
2234
2ll4
Over 55
430
(611
(61)
(61)
(541
(61)
45-55
663
(44)
(441
(44)
(44)
3545
504
Grads
149
(25)
Total
Tet/FTE
Incremental
149
149
149
149
(60)
1 61 )
(44)
149
(33)
(30)
(28)
1 61)
2,686
2,494
(191)
27,911
69,777 94
c:
3,700
1,600
3,500
3,400
3,300
3,200
1,100
1,000
2,860
2,642
(217)
(61)
(44)
149
42
_
_
_
_
149
16
160,000,000
140,000,000
120,000,000
100,000,000
l:m
2700
2,600
2,500
2,400
1,300
2,200
2,100
2,000
!0,000 ,000
- MLT Requlred
60,000,000
- MlT Av1i11ble
40,000. 000
- Atthtltv
20,000 000
,'""b,v,o....1'b
-& '\.
a '\
o
o '\.
o .,_.o ,
,
a ,
o
24 yean &
35-44 years
youncer
2534 years
Comb,ned Lab &
68
112
48
Lab Tech
54
403
456
Job cateeorv
122
515
504
65 years and
4554 years
5564 years
76
27
331
587
383
20
1903
663
410
older
Total
2.0
2234
82
149
13
(241
-----
133,382,058
2,374
2,321
(53)
MLT Reqlred
2,771
2,538
1233)
2019/2o
1335)
(1,018)
(430)
(28)
(32)
(37)
(663)
(202)
2,235
(4131
APPLICANT COPY
DRA FT
Not for D istri b u tion
La boratory Servi ces

Service Model i ng
September 20, 201 1
83
APPLICANT COPY
Table of Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Cu rrent State
......................
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
P rojections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J O
Cost Drivers
...........................
A: Status Quo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Error! Bookmark not defined.
Service Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Error! Bookmark not defined.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
B: Ultra-Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Error! Bookmark not defined.

Recommendation
..............................
84
APPLICANT COPY
Exe c ut ive S u m m a ry
B u s i n es s Ove rv i ew
An effective la boratory service is an essential part of a qua lity hea lth service and plays m ajor roles in both
research and teaching. Laboratory tests provide health practitioners with objective i nformation that is
needed to prevent, diagnose, treat and manage disease. It is estimated that la boratory data have an i mpact
on over 70 percent of medical decisions 1
The fu nctions to su pport patient care performed by laboratory medicine a re numerous:
Identify the risk of developing disease
Disease detection
Planning and disease ma nagement
Selecting safe and effective treatments
M onitoring treatment response
Identifying threats to patient safety and pu blic hea lt h
La boratory medicine plays a vital co nsu ltative role in clinical care in the areas o f hematopathology, genetics,
infection control and transfusion med ici ne programs. In addition, research scientist a nd la boratory physicians
conduct basic and tra nslational research w hich adva nces the u n derstanding and treatment of disease.
U nder its mandate, AHS has assu med respons ibility for all clinical laboratory and pu blic hea lth laboratory
services in Alberta. Laboratory Services provides a n i ntegrated provincial laboratory medicine & pathology
service su pporting all acute care, commu nity, and pu blic health testing across the province. Labo ratory
Services offers a com prehensive range of routine a nd s pecialized testing and clinical consultation in adu lt,
perinatal and neonata l pathology.
La boratory services supports over 2,400 employees with services available seven days a week across 162
accredited metropo l itan and rural laboratory s ites. Laboratory services performed over 60 m illion la boratory
tests in 2010. Each la boratory is equi pped with diagnostic instru mentation and staffed by laboratory
professionals with extensive tech n ical and scientific train ing w ho a re all comm itted to qua lity testing and
services.
In addition, Labo ratory Services actively supports clinical trials a nd a pplied research. Through the integration
of Laboratory Services with teaching hospita ls a nd u niversity medical schools & col leges, research, education
and train ing opportunities a re provided to a broad range of health care professionals and students of
la boratory medicine and pathology.
La boratories follow a stringent accreditation process and a re accredited through such orga nizations as the
College of P hysicians and Surgeons of Alberta (CPSA); College of American Pathologists (CAP) and the
I nternational Orga nization of Standardization (ISO). Labo ratory Services has developed objectives that a lign
with the strategic direction of AHS.
ASLP Pathology ' s Future: A V iew from Leaders i n Health Care, June 20 1 0
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Vision
"Right test, right time, right place, right cost"
Mission
Our mission puts patients first by providing services which a re:
H ighest quality, optimised for our co ntri bution to the care pathway
Responsive to users: convenient, accessible, effective, safe, a ppropriate
Cost effective : managed from end to end adopting innovative tech nologies operated by a well trai ned
and engaged wo rkforce
I ntegrated: s u pporting acute care and community based services; enhancing other clinical services
(i.e. cancer care) and popu lation and public health.
C u r r e nt State
Description of Service
In the major metro of Edmonton, existing la boratory services operate under a mix of public a nd private
service delivery. The U n iversity of Alberta Hospital (UAH ), AHS' h u b laboratory in Edmonton is a fu l l service
laborato ry 2 perfo rming h igh volume, specialty and esoteric testing for Northern Alberta. UAH la boratory
infrastructu re, i.e. quality, safety and education, supports Rapid Response laboratory (RRl) Operations at the
fou r metropolitan hospital (two Covenant H ealth Board Operated), the ca ncer la boratory {CCI ) and six rural
facility la boratories. UAH, cancer and metropolitan hospita l laboratories have on s ite pathology services.
Dynalife DX {DlDX), a contracted private services provider, operates all Patient Service Centres { PSC) a nd the
major h igh volume d iagnostic facility in Edmonton for com m u n ity testing. With exception of testing at the
UAH and CCI, all routine testing from the rapid response and rural labo ratories is sent to DLDx for testing.
This includes a l l routine chemistry and hematology; all microbiology; and all anatom ic pathology processing
(s lides a re retu rned to hospita l pathologists for reporting). DlDx maintains a very robust transportation
network within the city
The service contract with DlDx, expiring M a rch 3 1, 2015, is very specific in terms of exclusivity a nd test splits
between UAH and D lDx. Duplication, redundancy and excess capacity was intentionally built into the system
in M icrobiology, Anatomic Pathology, toxicology a nd h igh volume hematology and chem istry. The majority of
s pecialty and esoteric testing (i.e. molecu lar pathology, immunohistochemistry, special chem istry, flow
cytometry, etc) is not d u plicated and is performed at UAH.
In the major metro of Calgary, existing la boratory services a re provided by Calgary la boratory Services (ClS),
a wholly owned subsidiary of AHS. ClS, an independent service provider, is governed by it s own Boa rd,
policies and orga nizatio nal struct u re including corporate services (i.e. finance, human resou rces, su pply chain
ma nagement).
like Edmonton, a number of PSCs are operated across the city with testing directed, via a n advanced
transportation network, to a central Diagnostic Service Centre ( DSC) for testing. Also similar, is the operation
of RRls in each of the fou r hospitals, provid ing u rgent and priority testing, referring routine, esoteric and
s pecialty testing to the DSC. All hospitals have on s ite pathology services.
Two notable differences from the Edmonton model include:
Acute Care M icrobiology at U A H is i ntegrated with the Provincial Laboratory for Public Health and discussed in that
section.
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1.
2.
The laboratory at the Footh ills Medica l Centre (FMC), Calgary's a cademic and tertiary care hospital is
not a fu ll service laboratory. Although some expa nded services a re centra lized to this site (i.e. flow
cytometry and transfusion services), there is little d u plication between this laboratory and the testing
provided at the DSC.
Com m u n ity and hospital laboratory operations fall t o one service provider u n d e r one orga nizationa l
structure. This effectively elimi nates any com petitive interests between public/private and
community/hospital laboratories, resulting in an integrated model w ith standard ized procedu res and
qua lity practices.
Outside of CLS, AHS provides some routine and s pecialized services in the Calgary Zone. This includes Genetic
Testing at the Alberta Children's Hospital (ACH ), operation of P rovincia l Laboratory for Pu blic Health (deta iled
below), Specialized Cancer Ca re Diagnostics at Tom Baker Cancer Clinic (TBCC) a nd operation of all Calgary
Rural Facility Laboratories. As of Janu ary 1, 2012" all clinical testing from TBCC will t ransfer to CLS, and CLS
will have taken over management of a l l Calgary Rura l Laboratories.
Outside of these two primary urban centers, medical laboratory testing and pathology service levels and
delivery models va ry; however, a h u b and spoke test referra l model is commonly used, following legacy
regio nal referral l ines .
Suburba n H os pital facilities (5) have relatively full service laboratories perform ing chemistry, hematology,
transfusion med icine, microbiology and anatomic pathology. Each laboratory acts as the major service h u b
for the sma lle r rural laboratories in each zone. Low volume and s pecialized testing a re referred to o n e of
three locations for processing:
South Zone refers to CLS
Central Zone refers to D LDx or UAH (former legacy region contracts)
North Zone refers to D LDx or UAH (former legacy regional contracts)

One distinct d iffere nce is the Northern Lights Regional Hospital in Fort MacMu rray. D LDx holds the contract
for complete laboratory services in the former N orthern Lights Region. The Northern Lights Laboratory
fu nctions much like a RRL with most routine testing transported to the DLDx Base Laboratory for testing.
Approach to com m u n ity services vary across subu rban comm u n ities:
Med icine Hat is contracted to M edicine Hat Diagnostic Labs ( M H DL) a small private labo ratory
operating only in the M edicine Hat a rea.
AHS operates a l l Lethbridge collection facilities (5) and testing is centralized to the regional hospital
laboratory.
D LDx operates the collection facility in Red Deer, referring testing to the regional hospita l la boratory.
AHS ope rates two collection facilities in G ra nde P ra irie and testing is centra lized to the regional
hospital la boratory.
D LDx operates the collection facility in Fort MacMurray and testing is centra lized to the regional
hospital (DLDx operated) or to the Edmonton DLDx Base La boratory.
Outside the subu rban comm u n ities, ru ra l hospita l laboratory menus vary. Depending on former legacy
regional design, hospital services and geographic isolation, la boratories range from minimal stat hematology
and chem istry menus to basic m icrobio logy and anatom ic pathology testing. M ore complex and specialized
testing referrals fol low the same patterns as described for subu rban labo ratories.
M ost rural hospital labo ratories provide com m u nity collection and testing services, referring offsite testing
through their defined h u b and spo ke referral routes. The exception is Ca m rose and Lloyd m inister where D LDx
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operates a stand a lone collection facility in these com m u n ities, referring testing to their base laboratory in
Edmonton.
Reference and esoteric testing for the province is performed at in both Edmonton and Calgary:
AHS Genetics and Molecu lar Diagnostics Laboratories a re integrated under one administrative and
medical structure located at UAH Edmonton and ACH Calgary. Some d u plication a nd redu ndancy
exists across laboratories
P rovLab perfo rms most specia lized and esoteric m icrobiology testing for the province. Testing is
li mited to one site or the other, with necessary red u nda ncy built in across the two laboratory sites.
Specialized Cancer Biom a rker Testing at the ca ncer facilities in Calgary a nd Edmonton a re cu rrently in
the process of i ntegrating into the service delivery of CLS and UAH respectively. Du plication across
the two cities exist.
UAH and CLS have significant special ize Hematology, Coagulation, Chemistry, Toxicology and
M olecular Pathology testing menus. Du plication across the two cities a nd laboratories exist. Low
volume assays a re genera l ly performed in one location or the other. Very low volume assays are
referred to reference la boratories in eastern Ca nada or the United States for testing.
Two H LA Laboratories, UAH and CLS operate in the province. UAH focus on solid tissue
trans pla ntation while CLS focus on bone ma rrow transplantation. This level of specialization results in
little du plication while allowing for some redu ndancy of equipment and staff expertise.
Public health laboratory is a full Service AHS M icrobiology/Public Health Reference La boratory ( P rovLab) is a
fu lly integrated laboratory located across two sites in Edmonton {UAH site) and Calgary {FMC site). The
Edmonton Laboratory is fully integrated with the acute care d iagnostic clinica l m icrobiology service for the
U nive rsity of Al berta Hospita l in cooperation with UAH Medical M icrobiology. The Calgary La boratory,
although in close proxim ity to the CLS la boratories at FMC and the DSC is not integrated within any other
Calgary La boratory Service.
Public healt h la boratories play a role in monitori ng, a nd helping to control diseases and other agents that
could potentially t h reaten population health in contrast to medical laboratories, which conduct testing to
d iagnose conditions affecting individual patients. Public hea lth laboratories safeguard the health of
com m u n ities. The ProvLab collaborates with the other provincial and territorial, national and internationa l
public health and emergency response agencies.
Core Functions:
Acting as the provincial la boratory centre to su pport disease prevention, control, s u rveilla nce and
epidemiology through integrated data management.
Providing specialized refe rence la boratory testing in clinical and public health microbiology and
environmental toxicology.
Providing expertise in the identification of new or emerging infectious agents and the development of
appropriate tests.
P roviding o ngoing data and information to the Chief Medical Officer of H ealth and Alberta Health Services
Medical Officer of Health in order to monitor health and disease of the population.
P roviding the laboratory expertise in Emergency Preparedness and Response.
Responding to requests from the Chief Medical Officer of Health and Alberta Health Services M edical
Officer of Health in epidemic o r other emergencies.
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Pursuing education, research and development activities in su pport of its other responsibilities for
securing optimum public hea lth.
Providing in put as requested to assist the development of pu blic policy to s u pport popu lation health.
P romoting la boratory im provement through input into legislation regulation and accreditation processes.
P roviding acute ca re, d iagnostic clinical microbiology for the U niversity of Alberta Hospita l.
Service a reas include:

M icrobiology to include Bacteriology, Parasitology, Mycology
Level l I I Laboratory - Centra lized testing for provincial lab diagnosis of tu bercu losis
Bacte rial Typing Unit ( BTU)
Environmental M icrobiology
Molecular D iagnostics
Virology/Serology
Summary of Testing Facilities by Provider

Edmonton
North Zone
Zone
33
21
AHS
CLS
1
2
Covenant
1
4
D LDx
M H DL
U n ited
24
38
Total
-
Central Zone
Calgary Zone
29
9
10
South Zone
16
-
35
20
17
Summary of Operating Budget and Activity by Zone and Program

2010/2011
2010/2011
Zone
Operating Budget Medical Affairs
Budget
(millions)
(millions)
$42.2
North
$ 19.7
$137.5
Edmonton
$43
.3
Central
Included in
$ 196.2
Calgary
Operating
$37.8
South
$40.6
Provincial Lab for Public
Health
$ 16.0
Genetic Services
$ 11.6
Cancer Se rvices
$5.1
Provincial Administration
$530.4
Total
2010/2011
Activity
(millions)
4.6
22.0
5.7
22.0
Total
108
10
9
5
1
1
133
2010/2011
Activity Covenant*
(millions)
0.5
1.7
.4
<0. 12
4.3
1.6
0.1
<0. 1
n/a
60.5
2.6
covenant operatmg budgets not available
Calga ry Zone laborato ry services operating budget is $39 million more than the Edmonton Zone for rough ly
the same activity. CLS budget comprises the majority of Calgary Zone ($ 190.4M). This amount includes
internal amortization and all corporate fu nctions that are not costed to laboratory services budgets across any
other zones. When comparing Edmonton and Calgary, some consideration must a lso be given to
misalignment of bu dget between Edmonton Zone and provincial programs (i.e. UofA acute care microbiology
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is budgeted for under the Provincial Lab for P u blic Health Budget). F u rthermore, the laboratory operating
budgets for the M isericordia and G rey N u ns H os pitals (Covenant Sites) a re not reflected in the Edmonton
Zone Operating B udget, further s kewing a h igh level comparison. Further review of Edmonton and Calgary
Laboratory Costs is cu rrently u nderway a nd will be reported u nder sepa rate cover.
Workforce
Technical and Administrative
Com bined AHS, CLS and D LDx Workforce Demograph ics as of June 2011
24 years &
younger
25-34
years
35-44
years
45-54
years
55-64
years
65 years
and older
Total
68
112
48
76
27
331
331
731
672
499
267
29
2529
La b Tech
54
403
456
587
383
20
1903
Exempt
17
59
82
134
94
12
398
Total
470
1305
1258
1296
771
61
5161
% of Total
9%
25%
24%
25%
15%
1%
Job Category
Combined Lab & X-Ray Tech
Lab Assistant
Combined AHS, CLS and DLDx Workforce expressed as a percentage of Job Category
24 years &
younger
25-34
years
35-44
years
45-54
years
55-64
years
65 years
a nd older
Combined Lab & X-Ray Tech
2 1%
34%
15%
23%
8%
0%
Lab Assistant
13%
29%
2 7%
20%
1 1%
1%
Lab Tech
3%
21%
24%
31%
20%
1%
Exe m pt
4%
15%
2 1%
34%
24%
3%
Job Category
There a re three t raining programs for laboratory technologist in Alberta: University of Alberta ( BSc M LS),
N o rthern Alberta I nstitute for Technology (NAIT) and Southern Alberta I nstitute for Technology (SAlT). Formal
medical laboratory assistant tra ining programs are offered t h rough NAIT, SAlT and Red Deer Regional College
(R DRC). The following ta ble detai ls program and training ca pacity.
M LT/M LS
M LA
CLXT
Cyto Tech
UofA
29
NAIT
32
42
40
7
SAlT
48
64
RDRC
20
Total
109
126
40
7
Each of the above training programs requires significant practical train ing in the laboratory. AHS, CLS and
D LDx actively partner with the educational institutions to provide practicum space for train ing. Approximately
85% of practicum train ing is provided in Edmonton and Calgary, with 15% offered in the suburban and rural
facilities.
Medical Professional
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Adequate AHS data on medical professiona l staff demogra ph ics is not available. The fol lowing information
was obta ined from CLS.
Job Category
M edical
Percent of total
24 years &
younger
0
0%
35-44
years
18
2 1%
25-34
years
7
8%
45-54
years
28
3 3%
55-64
years
24
29%
65 years
and older
7
8%
Total
84
U n ivers ity of Alberta medical residency programs (Anatomic Pathology, General Pathology, Hematologica l
Pathology, and M ed ica l M icrobiology) a re five-year programs based at the U n iversity Hospita l and s u pported
by other sites within the Ed monton Zone. Residency programs in the laboratory specialties are provided u nder
the u m brella of the Uof A division of Postgraduate M ed ical Education (PGME). Twenty-five res idents a re
cu rrently registered in these programs ( 15 anatom ica l/general pathology; 5 medical microbiology; 5
hem atological pathology). J u nior residency t raining is centered at the UAH; senior/specia lty rotations a re
done in collaboration with all the laboratories in the zone. The la boratories also provide training experiences
for about 45 'off-service' residents per year, who are studying towards medical and s u rgical specialties .
U nive rsity of Ca lga ry residency programs in the la boratory specialties are five-year programs provided at CLS
under the umbrella of the U niversity of Calgary Postgradu ate M ed ical Education (PGM E) office. The U of C
Depart ment of Pathology & Laboratory Medicine (DPLM) offers residency t rain ing progra ms in Anatomic
Pathology (AP) and N e u ropathology ( N P ) and a training program in General Pathology is being developed.
Cu rrently, there a re 17 AP a nd 3 NP residents in these programs (n. b., despite the small numbers in the N P
residency training program, i t i s t h e largest a n d most active i n Canada). These training programs a lso su pport
res idency tra ining in other medical and s u rgical d isciplines; 12 and 15 off-service residents rotate in AP
and NP each yea r, respectively. Although not official residency programs in themselves, Hematological
Pathology and Medical M icrobiology training is provided to rotating off-service residents (n = 18 and 4,
respectively). The DPLM and CLS a lso provide su b-specialty fellows hip train ing in about a dozen discipli nes.
Cost D ri ve rs
A nu mber of broad hea lthcare trends will significantly increase the demand and cost of laboratory services.
Demographic
Aging population
Lo nger l ife expectancy
Increased burden of cancer
Increased bu rden of chronic d isease
I ncreased doctors in the workplace
Health System Goals
Increased numbers of doctors in the workplace
Clin ica l practice cha nges in acute and primary care

Emphasis on prevention and public health
Chronic disease ma nagement
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Science and Technology
Better, faster, smaller, less invasive poi nt-of-care systems
Rapid advances in technology ( M ass Spectrometry, proteomics, Lab on a Chip)
Automation
Molecu lar Diagnostics

In vivo diagnostics
Personalized medicine
Consumer
G reater consumer awareness
Patient self screen ing
Health I nformation Technology
Advances in hardwa re and software
Improved connectivity
Electronic Health Reco rd
Patient Self Service

Automated specimen logistics
Uti lization ma nagement
Digital Pathology
Ru les based decision support

Data min ing
P roj e ct i o n s
Activity
Futu re Alberta la boratory test
volumes are forecasted using
historical activity data for all
labo ratory a reas and operators
between 2008/09 to 2010/11.
Average annual test activity
increase for this period was
5.28%. Annual activity
projections are 74.3, 96.1 and
124.3 m illion tests in years
2015, 2020 and 2025
respectfu lly.
Projected Alberta Laboratory Test

Volumes
124,273,3 5 5
140,000,000
1 2 0,000,000
1 0 0,000,000
80,000,000
60,000,000
40,000,000
20,000,000
FY09
92
FY1 0
FYl l
......... .....
F1 5
F20
F25
APPLICANT COPY
Operating Expenses
La boratory expenditu res a re extrapolated
using h istorical cost data from key
laboratory areas with sufficient a nd
consistent financia l reporting ( Ed monton
Zone, Cent ra l Zone, Calgary Zone, a nd the
Provincial La boratory for Pu blic Health)
between 2007/08 to 2010/11. Average
annual expenditu re increase for this
period was 4.73%. This increase included
expenses related to both inflationary and
volume increases. Laboratory Services
gross operational expenditures
extrapolated from $496M in base year
2010/20 1 1 out to 2025 is $940M to
satisfy an estimated demand of 120M
tests provincially. In addition, Laboratory
M edical P rofessional expenditu res, which
fa ll outside of the La boratory Services
bu dget, are expected to d ramatically
increase. Based on the information
obtained from M edical Affa irs, Ca lga ry and
Edmonton spent over $43 million on
Laboratory M edical P rofessionals and have
seen a combined average increase from
2007/08 to 2010/11 of 7 .57% annually.
Extrapolated Laboratory M ed ical
P rofessional expenditu res from the base
year (2010/11) out to 2024/25 using the
7. 57% average increase projects
expenditu res of over $ 150 million. It is
important to note that the projected $ 150
million does not include costs for
La boratory Medical Professionals from
North Zone, Central Zone, South Zone,
Provi ncia l Laboratory for Public Health, o r
Genetics.
Projected Alberta Laboratory

Expenditures
$ 1,000,000,000
,--------------- $9.49,.6 0.8,.4_7_9
__
$900,000,000
$800,000,000
$700,000,000
lJ8;454,b84
$600,000,000
$500,000,000
$400,000,000
$3 00,000,000
$200,000,000
$ 1 00,000,000
$FY15
FY20
FY25
Estimated Alberta Laboratory

Pathologist Expenditures
$ 1 60,000,000
-- - -U52 t 096
. .
,.7.95
-
$ 1 40,000,000
--
:u uS;582;1.7 o
$ 1 20,000,000
$73.292,776
$60,000,000
$40,000,000
$ 2 0,000,000
$-
L-
....---
$ 1 00,000,000
$ 8 0, 000,000
--
;I
F>
!'FY1 5
FY20
FY25
Capital Investment
Significant ca pita l investment in Laboratory Services is requ i red. AHS, and legacy health regions before, have
not kept pace with the requ i red investment in equi pment, IT systems and space infrastructure.
Immed iate investment of $25M in equ ipment is requ i red. Add itiona lly, AHS should expect to invest $ 1 2 $ 15M annua lly on eq uipment replacement (based on a 10 year replacement schedu le of $150M ca pita l asset
calcu lation, incl udes CLS).
I nvestment is a lso required in aging facilities that a re poorly configu red to meet cu rrent capacity and
workflow. 60 i nfrastructu re ma nagement p rojects (IMP) have been identified in laboratory facilities across
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the province. A conse rvative estimate of magnitude on immed iate renovation requ i rements is $3 M illion.
This does not i nclude the capacity and workflow problems identified at the UAH, RAH and ProvLa b as deta iled
below. Ongoing investments in laboratory space and infrastructu re maintenance should be at minimum $0.75
M i llion per year.
I n January of 2007, F lad & Associates (Fiad) was com m issioned to conduct a clinical laboratory masterplan for
the UAH, RAH and ProvLa b facilities in Edmonton. The scope of the study focused on nea r-term (0-5 years)
and long-term (5-10 years) deve lopment horizons.
The assessment of existing Walter M acke nzie space (UAH) and the RAH laboratory revealed
ProvLab's corrected space deficit not insurmountable, but requ i res a tota l "rebuild" to operate in the
projected M 2
);> Rebu ild does not fu l ly accommodate future requ i rements
Fifth F loor (AP) 6% oversubscribed

);> Requires captu ring u nderutilized space for grossing and h istology - h igh infrastructure
req uirements
);> 13% oversubscribed by 2012
);> 50% increase in workload req u i res additional pathologists
Fourth Floor is cu rrently overs u bscribed by 13%

);> 3 1% oversubscribed by 2012; 40% by 2017
);> Emerging technologies all located on fourth floor
RAH Lab is cu rrently overs u bscribed by 2 1%

);> Admin istrative and pathology office space is largest need
);> Additional lab space is needed primarily for expanding AP grossing and blood bank
);> Repatriation and projected growth of routine core lab testing will requ i re 58% more space by
2012
);> Expanded on site test menu will requ i re additional
An order of magnitude budget was calcu lated by Flad & Associates fo r the Lab M aster Plan. The budget for
the relocation of the ProvLab and s u bsequent renovation is estimated at $98.8 million.
8,970 m 2
8,430 m 2
17,400 m2
New Area
Renovated Area
Total Area
Construction Cost
Esca lation - 1 year ( 15%)
Contingency (20%)
Owner's Costs
Equ ipment
Total Costs
* This cost does not include long-term relocation
Capital Expenditure Summary
Immediate Equ ipment
Immed iate I M P
UAH, Prov Lab and RAH Relocation a nd Redesign
Annual Equipment Expenditure (10 years)
Annual I M P Expenditure ( 10 years)
Total 10 Year I nvestment
$71,624,203
$ 10,743,630
$16,473,567
By Owner
By Owner
$98,841,400
of the RAH lab, estimated at $ 17 . 1 million.
$25,000,000
$3,000,000
$98,800,000
$150,000,000
$7,500,000
$284, 300,000
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I nformation System I nvestment

The current laboratory service is s u pported by 9 separate Laboratory I nformation Systems { LIS). To improve
integration of laboratory resu lts, stream line information ma nagement, reduce du plication of testing,
elimi nate manual reentry of resu lts, facilitate specimen tracking and logisitics, a nd support testing
consol idation, a u n ified LIS system is necessa ry. Regardless of the laboratory service model selected, a
com mon LIS is req u i red. Budget to deploy Cerner M i llennium LIS (cu rrent Calgary Zone System) is estimated
at $30 M illion.
Computerized Provider O rder Entry {CPOE) systems offer many benefits, including reduced test turnaround
time, im proved test utilization, and better ad herence to practice guidelines. Stud ies have s hown a s ignificant
reduction in laboratory orders {15 - 40% need to find a reference). CPOE, a lthough not standard ized or
optim ized, is cu rrently in use in a l l acute care faci lities with the exception of the Edmonton Zone. Significant
opportunity exists to im pede uncontrolled la boratory testing increases and reduce u nnecessary d u plication
through the implementation of a provincial comm u n ity based CPOE system and fu rther roll out to the Acute
Care Facilities in the Edmonton Zone. Budget to im plement is estimated at $35 M illion.
D igital Pathology, the practice of digitizing glass s l ide images ordinarily view under the m icroscope for virtual
review and diagnosis is expected to improve d iagnostic outcomes while maximizing pathologist resources.
While still in ea rly stages of deployment, d igital path ology is expected to become common practice over the
next five years . Budget to im plement is estimated at $ 50 M illion.
Summary of Information System Needs
Project
Un ified LIS
Computerized
Provider Order Entry
D igital Pathology
Total IS Needs
Total Cost Estimate

$30 M
$35 M
$ 50 M
$115M
Workforce
Overa ll, approximately 41% of the overa ll laboratory workforce in Alberta is expected to retire over the next
10 years (assumes reti rements in cu rrent age categories of >45 years). When looking at individ ual job
categories, 52% of Laboratory Technologists and 61% of Exempt Staff should be eligible to retire over this
time { 2301 total staff). The cu rrent pool of graduating technologists is 109 students per year. Based on
cu rrent trends, only 47% of e ligible retirees would be replaced, ass u ming retirement forecasts a re accurate.
This does not account for non reti rement related separations, maternity leaves and new position res u lting
from increased activity levels.
At the cu rrent training levels and demogra phic profiles of existing employees, la boratory assistant training
programs appear to be sufficient to match future need.
The Canadian Association of Pathologist have pu blished ... need published information
.
F a ct o rs
95
APPLICANT COPY
There are difficu lt challenges to overcome and factors that must be considered in the design of a new
labo ratory model in Alberta.
1. Vast geogra ph ies with concentrated popu lation in two u rban centers.
2.
N eed to provide equal access to testing to geogra phically remote rura l regions.
3.
Conflicting end-state beliefs a mong stakeholders.
4.
M isalign ment between administrative a nd medical visions.
5.
Com peting research agendas among stakeholders .
6.
Strong academ ic focus w hich is raised frequently and has im pacted any service level changes at the
Un iversity of Alberta Hospital.
7.
Alberta Hea lth and Wellness {Ch ief M edica l Officer of Health and ADM Comm u n ity and Popu lation
Health D ivision) have a n active interest in the operation of the Provincial Laboratory for Public Health.
The true mandate of the public health laboratory is yet to be clearly defined.
8.
Site based and local operating focus of pathologists.
9.
I ndependent regio nal laboratories support "customized" service delivery to Zones.
10. The need for laboratory services in rural locations as a physician recruitment tool.
11. CLS continues to operate at a rm's length from AHS Laboratory Services.
12. M istrust of the private la boratory among sta keholders.
13. Political tendencies of the private laboratory.
14. Lim ited access to capital i nvestment
15. Dispa rate information systems
16. Political misa lign ment
O p p o rt u n i t i e s
A number of opportunities present themselves when considering an optim ized laboratory mode l .
1.
2.
Cost savings and futu re cost avoidance

Revenue potential t h rough subspecia lty pathology practice
3.
Operational sta ndardization
4.
Standard ized diagnostic testing and nomenclature
5.
Homoge nous qua lity ma nagement
6.
Leverage laboratory and analytica l expertise
7.
Common Laboratory Information System and Order Entry System
8.
Leverage investment in a much better and coordinated way
9.
10. Ability to influence p ra ctice that will improve outcomes at a lower cost of patient care
1 1 . Research and revenue potentia l to access or mine consolidated provincial laboratory data
Se rv i ce M o d e l s
G iven the existing resou rces and infrastructu re for medical laboratory and pathology testing i n the Province of
Alberta, three basic service delivery models were identified as having the potential to serve the needs of the
health system d u ring the coming 10 years.
96
APPLICANT COPY
1.
AHS Zones managed. Provide or purchase services from existing major service providers
2.
Tiered h u b and s poke consolidated model with optim ized regional facilities.
3.
Fully outsou rced Model
AHS Zone Managed

Key Characteristics
Decentralized delivery of laboratory services.
M a naged at the zone level.
Zone to provide or pu rchase laboratory services at their discretion .
Consist of optimized h u b and spoke model within the zone .
Standardization initiatives d riven through provincial integration networks .
Consolidated purchasing and contracts through AHS infrastructure .
Pros
s.24( I )(a)
Cons
Tiered Hub and Spoke Consolidated Model

Key Characteristics
On site laboratory testing consisting of basic test menus based on clinica l program need and specimen
stability limitations
Advanced logistics and specimen tracking
Tiered h u b a nd spoke concept ( referra l sphere)
Tier 1 regional h u bs having expa nded test menus to meet the clin ical needs of the regional facilities.
Service level/test menu decisions based on LEAN principles, capacity and cost effectiveness.
Tier 1 h u bs provide basic su pport to spo ke la boratories.
Tier 2 h u bs ( Edmonton and Ca lga ry) consolidating testing not performed in Tier 1 regional hubs
Tier 2 h u bs administer standard operating, quality and safety procedu res for all labs in their referra l
sphere.
Tier 2 hubs provide more com plex su pport, includes pathologist co nsu ltation, qua lity management,
accreditation, professional development, etc.
Tier 2 h u bs ma nage patient service centres (stand alone and in hospital): standard operating
procedu res; patient appointment bookings; transportation networks.
97
APPLICANT COPY
Specia lized testing and provi ncia l centres of excellence ( includes P rovincial Lab for Pu blic Health and
Genetics)
Structure
Single m anagement (administrative and medical) and point of accountability for each h u b and all
la boratories within the referra l sphere.
Accountable for sta nda rdized practice across all sites in the referral sphere.
North and South spheres would be con nected scientifically and operate as a cooperative with a
unified administration.
Integrated information technology platforms.
I ntegrated bus iness intelligence tools.
s.2 4( 1 )(a)
Pros
Cons
Design
98
APPLICANT COPY
CLS would be expa nded and would be responsible for service provision for South, Calgary and South
Central Zones.
A portion of P rovincial AHS Laboratory Services Staff would be integrated into the expa nded CLS
structure.
Little infrastruct u re investment requ i red to s u pport this tra nsition.
North
AHS/DLDx pa rtnership to manage laboratory services in the North, Edmonton and North Central
Zones.
all com m u n ity, hospital a nd s pecialty testing.
Propose a new base laboratory (Tier 2 hub) be built in close proxim ity to the UAH campus to handle
A portion of Provincia l AHS La boratory Services Staff would be integrated into the AHS/DLDx
partners h ip.
D raw on D LDx parent compa ny resou rces and expertise to ma nage the referra l sphere.
Ass umptions:
D LDx would invest ca pital to facilitate new base la boratory
Partnership would involve integration of admin istrative, technica l and medical staff across both
orga nizations.
Issues/Risks
s.24( 1 )(a)
Fully Outsourced Model

Key Characteristics
Delivery of hospita l and com m u nity laboratory services wou ld be provided by a private laboratory
service provider
Delivery would be managed t h rough accou ntability and contract agreements

s.24( 1 )(a)
Pros
Cons
99
APPLICANT COPY
s.24( l )(a)
A n a lys i s
The fol lowing ta bles com pa re each potential model against identified opportunities and im pact t o long range
projections.
s.24( I )(a)
Opportunities
Opportunity
Cost savings
Zone M anage d
and future cost avoidance
Revenue potential through
Tiered Hub and

Spoke
Fully
Outsourced
su bspecia lty pathology practice
Standardized diagnostic testing and nomenclature
Homogenous quality management
Leverage laboratory and a n alytical expertise
Com m o n Laboratory Information System and Order Entry System
Leverage i n vestment in a much better and coordinated way
Ability to i nfluence practice that will improve outcomes at a lower cost of
patient care
Research and reve n u e potential to access or mine consolidated provincial
laboratory data
s.24( l )(a)
Projections
Zone Managed
Activity
Tiered Hub and Spoke
Fully Outsourced
General Comments
Specific utilization strategies,
independent of the
laboratory model, are
required to have any
significant impact on activity
growth and associated costs.
Technical
Regardless of model, still
Workforce
10
project significant workforce

shortages over the next
years. Detailed review of

workforce projections and
1 00
APPLICANT COPY
s.24( 1 )(a)
training programs is required.
Professional
Workforce
Operating
Expenses
Capital
Investment
Information
Technology
Investment
Of the three potential models, only the tiered h u b and spoke model will be analyzed in more deta il. The Zone
managed model was rejected on the premise that it does little to support the opportunities existing in a n
optim ized laboratory model and projections were either unchanged or slightly worse t h a n t h e cu rrent
systems.
The fully outsource model, although demo nstrating a nu mber of opportunities, was rejected for the following
reasons:
Politica lly unacceptable
Very h igh risk
M assive labo u r implications
1 01
APPLICANT COPY
Budget gains (excluding ongoing ca pital investment) do not appear to be significant gains over
internal or partia l ly outsourced solutions
Past experience with private service provider specifically poor responsiveness and limited relationship
between the laboratory and clinical sites.
Tiered Hub and Spoke Model

<<Detai led Analysis>> What is this going to do to the projections??
Reco m m e n d at i o n
1 02
Labontory ServitH
s.25( 1 )(c)(iii)
Fl!Uil'ldd Antyall of Syltematk Chln&H
APPLI CANT COPY
Le1M
Whit Stus Chla Model
Blue Activity or tMI1et lmpct for ech chn1e Initiative

Green Post Chn1e Model
1 03
P11e 1 of 6
LabDntory Servtcu
APPLICANT COPY
s.25( 1 )(c)(iii)
Fhundal AM!ysb of Systemltk Chlil\ltl
Metro/Terdny/Rdrence
Chemlstty/HemtoiiY
Activity
Chemlstry/Hematolty
Cost/Tt
Chemlstry/HematoliY
Total Cost
Ttanduslon M@diclne
Activity
Tr.anduslon Medicine
Cost/Test
Tr.anduslon Medldne
Total Cost
MluobloloJY
Activity
MlucbloloJY
Cost/Test
Mluobk>loJY
Total Cost
!Anatomic PatholoBY
Activity
Anatomic Patholorv
C05t/Test
Anatomic PathoiOIV
Tat11I Cost
Esoteric
Attlvlty
Esoterit
Cost/Test
49,011,7&4
J4J,DM,745
!H,601,tS4
53.542.209
10,179,751
94,lU,100
710,270,140
754,676,971
18,628,539
111.305.512
716,W,121
104,992.011
IOJ,I59..J71
l5J,H1,626
112,1.U,17l
9l5,40&,&.U
1),411,017
UAH olilalal.
Closure of MitHdrii Hit Cornrnu Lab Chem Hem:
Closutt of Medkfne"Hat_Lib(Micro
...,_IMknl'
...O<ftiiH M
Chemlstry/Hemtoi&Y
Activity
Chemlmy/Hematofay
Cost/Test
Chemlstry/Hematoljy
Total Cost
Transfnlon Medicine
Trandusion Meditlne
Activity
Cott/Test
TrarufusJon Medltine
Tati11Ca5t
M croblolorf
Cast/Test
M.croblolosv
Activity
McrobioloJY
TatiiiCast
An.Jtomlc Patholoav
Activity
An1tom c PilthoiOIY
TataiCo1t
Anatomic Patholoty
Esoteric
Cast/Tlt
Activity
Esoteric
Can/Test
Esoteric
Total Cost
TotaiArtlvlty
Total Spend
PSC
Total With PSC
34J,OU,745
53,542.209
TataiCost
196,601,95-t
$
s
s
S
55,148. 475
414,710,187
59,474,122
56,534,336
52,602,951
359,561,712
$
s
$
4,953.567 S
375,640,1Z6
56,802,929
43Z,441,055
11,664,647
$
s
$
s
4DD,IlZ,IZ4
404,715,157
5B.S07,017
60,262,228
4S!t,Jl9,14J
$
S
4&5,047,115
10,686.243
$
s
$
32,462,083 S
403,803,112
62.070.095
465,871,177
60,780,755
426,664,6&0
63,932.197
$
S
490,596,151
$
s
$
66,965,065 S
452,954,9U
65,850,163
511,1105,015
White: StiltUI Quo Model
Green: Po1t Chante Madel
415,091,061
67,825,668
54Z,9Zl,l19
71.536,534 -S
Leand
Blue: Ac:Uvlty or bud1et impact for eath thanae Initiative
67,9",n6
64,722,993
62 093,649
59,481,301
62,566,776
1 04
12,1B4,6ll0
503,353,1U
69,860,438
573,U4,070
s
$
88,770,342
521,625,014
71,956,251
600,511,335
$
s
$
100,518,410 S
551,291,421
74,114.939
615,41),361
83,7S4,162
10,380,J86
77,JD5.3Z!t
73,964,536
70,150,291
$
s
$
S
$
s
$
107,179,192 S
593,162,717
76,338,387
670,20J,174
116,408,054
$
s
$
621,Jl1,171
78,628,539
706,!60,417
91,0&7,964
17,155,366
$
s
s
126,345,095
564.117,!71
80,987,395
745,105,171
137,041,400
s
s
s
S
703,440,029
83,417,017
786,157,045
148.551,598
P te 2
af 6
Flnandalt Analysis Systematic Chanaes
Llbon1 ory Services
of
'oi>I AII Lobs
Chemistry(Hematolav
Chemistry/HematoliV
A<thrity
Cost/Ten
Chemistry/HematoliV
Total Cost
Actlvlty
1Transfusion Medicine
Cost/TI
Transfusion Medidfle
Total Cost
Microblolocv
Activity
'Microbiolocv
MicrabloloiY
Cost/TI
Total Cos
Anatomic Patholoay
Activity
Anatomic Pathaloav
,
Anatomic Patholoav
Cost/Test
Esoteric
Total Cost
Activity
Esoteric
Cost/Test
Esoteric
Total Cost
otaiActlvie ry
!Total
Total Cost
With PSC
Chomi"'V/HomotoiiY
Chemistry/Hematolay
Cost/Test
Total Cost
Cost/Test
Total Cost
Cost/Test
M1crobioloav
Toto11 Cot
Anatomlc Patholoay
Activity
515,914,123
557,127,564
590,165,751
71,595,305
71.370,161
58.507,017
iO,M2.na
62,070,095
.fi3,932.197
722,214,521
65.850.163
625,115,681
661,401,519
701,155,134
743,716,597
711,134,614
601,139,191
679,714,400
639,785,039
93,537,111
103,511,177
101,901,&49
115,422,207
166,402,404
920,569.112
167.125,668
69,860,438
71.956,251
74,114,U!J
135,167,417
185,112,645
931,351,655
H4,614,121
97i.iii'9ii
120,511,190
126,719,02t
133,312,058
1,039,276,118
1,104,251,767
1,173,289,587
76.331,317
78,628,539
80,587,395
83,417.017
1,0$4,461,191
1,117,!04,756
1,115,239,161
1,256,706,604
114,564,534
Cast/Test
Aniltomlc PathoioBY
TotiiiCon
Esoteric
Activity
Esoteric
Cost/Test
Esoteric
Totai C01t
ITotai With JtSC
S5.8"l)2,92!:1
Activity
Mlcrobloloav
::::::
PSC
533,362,822
55.141,475
ActiVity
Anatomic PathaloiV
59,006,144
501,979,019
53,542,209
Activ1ty
I Chemistry/Hematolav
M uabioloav
65.515,955
471.442.014
Total 5p nd
PSC
APPLI CANT COPY
s.25( 1 )(c)(iii)
12.353 569
471,441,014
Total Cos
53,.$42 09
525.!14,223
NI'V
'"
$
s
I
:. :::
69,006 !44
72,595305
76,370,151
496,65!,7'74 $
530,066,439 $
525,091,457 $
551...475 5
$
.. 5
.....
"'
12,Mo 115
$11,SH, 7
50.102.!29
553,411 70:5
-$
36 704,041
$34 908,190
51..507017
7J
36,641.116
5ll.!illfr, l (
-s
6016 311
515
ICI,&IS
77,040,134
$69 686,351
75,649,121
71,515,199
--4
565,512,934 $
597120 10
111,17
146 SH,Il7
533,188,783
........... s
62 010..ot5
118,292,115
$104 349,85
63,3 1!7
SI1o l l lJ!:i
65.150 163
Ui,7&1,SB6
$13151838
$
s
s
576,701,386
57..115.668
... Z7
-$
J,tof4CI,J63
S I 06l 61
16,991,741
U Oi3,712
19,176,330
85,652 1&9
11,177,073
71,141,196
511,491,114
610,520,956
620,571,937 $
658,121.624 $
"5,821,934
69160431
s
$
$
,.. s
s
.... s
76 33 317
94
204,901,151
$161,0!., 1 1
71 956 251
..
145,830,466
5191.294,54
51 C23,936,3D&
74-114,39
162,441 257
$199 16693
-$
,..
282,301 !77
$208.926,80
$
s
101,097,131
1D5,3n,o86
735,700,466 $
777,!84,113
s
1102! 005 $
10917395
71,6119
101 75,751
$219.105.86
-s
109,139,069
!22,507,263
151,11UII
!05.!l4,110
316,367,643
$229,72100
!3 17017
J!t0.71Z,325
5240 7!9 75
52 1 2 1,646 68
Leaend
White Status Quo Model

Blue. Activity or bud1et Impact for each chanae initiative
Green Post Chanse Model
1 05
Pa1e l of 6
APPLI CANT COPY
Llbontory S.Mces
fln11ndal Analysis of !iystematk Chanan
.......,
.
JOllfU Cunent
JOZ6flOZ7 Status Quo

u..o2s.sn
6,090,619
Rurai H
tal
i1.i5i:56i
49, 081,764
Metro/Tenlary/Reference
Total
" lnuease
Operational SpeiMI
2011/12 Current
I10Z5IJOJ7 New Model

I
7,296,233
iii.iii:iii
114"1
7,181,186
Rnlonal Hospital
15 361,452
11,474,871
104,9!'J2,012
91.067,964
1016/2027 Status Quo
109,139,069
RuralH
tal
$ 62 2M
S 154.4M
S 58.0M
Re1tonat Hospital
S 67 2M
S 166 9M
S 61 1M
0
incrust
1-
S 700.8M
Net Between Models
76"
202&/2027 New Model
t=J 1-:M
f Mttro/Tt:rtlary/Rel'ereMe
201
iol' i IKpCal
RqlonaiH!Kpital
S 3S0.07M
$ 350.8M
R a
Operational Spend
Activity
160,000,000
1-tO,OOO,OOCI
120,000,000
100,000,000
!0,000,000
60,000,000
0,000,000
20,000,000
U12 Cunent
7, 11 1, 116
419,011,7'-t
6.090,619
6/2 7 64s
02
a...
11,474,171
13,011,593
7,2%,133
2026/27 Post All Changes

$120.00
5120.00
$100.00
510000
560.00
$10.00
SIO.OO
$60.00
560.00
$.40.00
s.o.oo
SlOOO
$40.00
$20.00
'
$2000
CostfTestAII
Mic.roblo&oav
boterlc:
Antomk PatholoJY
2011/12 Current
Operational Spend
------
chemistry/Hemattrv
eTraMILAion Medicine
MkrobloloiV
Anatomk Patholol"'
Esoteric
Lqend
White Status Quo Model
Blue. A.ttlvlty or budaet lmpiict for each chnae lnlt alive
Green Post Chiin&e Mod l
.......
15,361,452
sao.oo
Chemlstry/Hematofn' Tramf.Aion Medicine
20l6/2027New
91,067,9
2011/ 12 Current
1 0000
Staha
104,992.012
s-
S-
Coit/Ttst AII
eChemlstry/HerNtolcY Transh.alon Medklne
eAMom1CP14holon
---
MkrobiokJty
ebotffk
CIKt/Test.-.11
echemlsttv/HematoiiY Transi.Aion MediciM
Mkrobioloo
e.t.natomkhthokln e boterk
2026/27 Status Quo

Operational Spend
2026/27 Post All Changes
ChemiltJy/Hematolr't'
Chemlnry/Hematol(v
TIIMI.Aion Medil:lne
e Tramluslon Medltlne
Mkrob'olol'l
Muobtolon
eAnatomkPatholon
eAnatom< Patholoty
eEsoterk
Esotttk
1 06
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Legal & Privacy - Information & Privacy

Alberta Health Services

Enclosures: 108 pages

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(c) information the disclosure of which could reasonably be expected to

APPL CANT COPY

Executive Committee Meeting

Dr. Chris Eagle, President & CEO

Date: February 11, 2013

This update be received by Executive Committee for information and feedback.

To ensure continued quality lab service beyond March

(expiration of the existing

Background and Current Situation:

Implementation and transition of services to new Lab Services Agreement

Evaluate and recommend the medical governance, accountability and reporting

Advise on administrative structure and shared supports within AHS

Advise on clinical delivery requirements

Define required supports for clinical research and teaching

Be available for consultation, on an as-needed basis, to administrative officers

Advise on communications and change management strategies.

Risk Management Considerations:

A hub and spoke model

Trained Laboratory Services

Under the new agreement, a

must have the ability to

Information used and held by

AHS also requires a

who is able to provide

What has been

Lab Model Design

Hub and Spoke Model

Labor Relations has been

Ongoing advice on potential

Lab Medical and

UofA and UofC

Participation on and regular

Preliminary discussion with

Identified need for a P3 expert

Represented on the Design

Have requested a presentation

Local and professional

Colleen Turner, VP Communications is participating on the procurement working group. A

Communication BN to AH outlining the proposed laboratory procurement process:

Compliance with Policy:

Process is compliance to applicable AHS policies.

Finalize negotiation strategy and begin negotiations

Tammy Hofer, VP Lab Services

EXECUTIVE COMMITTEE MEMBER SPONSOR:

LEGAL & PRIVACY REVI EW:

Select slides from the Market Assessment

14. Laborato Services Procurement U12date - B. Trafford

B. Trafford provided an update on the market

assessment conducted by Boston Consulting

Current goal is to have a preferred vendor

Executive Committee- Meeting Minutes- February 19, 2013

Executive Committee Meeting

Dr. Chris Eagle, President and CEO

Title: Laboratory Services Procurement Update

Confidential Not for Circulation

Background and Current Situation: