Business

B.C. questions medical test firm takeover

Lisa Hsieh reviews analysis worksheets at BC Biomedical Laboratories
Lisa Hsieh reviews analysis worksheets at BC Biomedical Laboratories' complex in Surrey.
— image credit: Evan Seal / Surrey Leader

The planned buyout of B.C.'s second biggest medical lab company by its larger rival has raised questions over the implications of a near-monopoly in the medical testing field.

LifeLabs on Tuesday unveiled plans to buy Surrey-headquartered BC Biomedical Laboratories for an undisclosed price.

BC Biomedical has nearly 800 employees, 500 of them in Surrey, and runs 45 labs across the Lower Mainland that handle 32,000 tests daily.

Toronto-based LifeLabs has 80 service centres in B.C. and does 44,000 tests per day.

B.C. Health Minister Margaret MacDiarmid said she's notified the federal Competition Bureau that the province wants to closely examine the potential impacts of the deal.

"We're interested because it would mean that one private lab company would have about 95 per cent of the private lab business," she said.

A key concern is whether lab fees paid by government could go up under a single dominant provider, she said.

In 2011-12, LifeLabs billed the Medical Services Plan $125 million, while BC Biomedical billed nearly $80 million.

While the two firms have said there are no plans to lay off staff, MacDiarmid is also concerned the two sets of testing centres may be consolidated, reducing access for patients.

"Right now patients in British Columbia have very good access – probably quite a bit better than some of the other provinces."

MacDiarmid said B.C. isn't yet taking a position for or against the proposed takeover with federal regulators.

The two firms handle the vast majority of publicly funded medical tests not done in hospitals.

NDP health critic Mike Farnworth also wants the deal closely scrutinized.

"I would not want to end up in a situation where we're on the short end of the stick – in terms of pricing and ability to negotiate deals and agreements," he said.

B.C. Medical Association president Dr. Shelley Ross said a price reform initiative to try to reduce lab testing fee costs for government should not be affected by the merger.

"We've been very happy with the performance of both companies over the years," Ross said. "We have no reason to think it's going to change."

The deal is expected to close later this spring, subject to regulatory approval.

LifeLabs president and CEO Sue Paish said in a release the operations must become more effective and efficient in light of rising demand, limited funding and a need to continue reinvesting in new technology.

"We are fully aligned in our commitment to quality and continuous improvement in patient services in B.C. going forward," added BC Biomedical CEO Doug Buchanan.

BC Bio began as a partnership of pathologists founded nearly 55 years ago by Dr. Cam Coady and is now a major source of new biotechnology jobs in the Lower Mainland.

In a Black Press interview last year, Buchanan estimated the firm is seeing growth of five per cent a year in patient visits and seven to eight per cent in test volumes.

The growing and aging population of the Lower Mainland is driving demand, while scientific advances have allowed lab firms to steadily offer new tests.

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