Lab Trends In Canada Run Ahead of U.S.A.

Labs in Canada face tight budgets and an even tighter supply of trained lab staff

CEO SUMMARY: In specific ways, laboratories in Canada are already confronting the future that awaits laboratories in the United States. Many of the challenges are identical, including shrinking reimbursement and funding, as well as a shortage of skilled lab staff. One unfolding development is pressure on pathologists to accept less compensation, leading pathologists in two provinces to study productivity.

IN DIFFERENT PROVINCES OF CANADA, laboratory organizations are dealing with issues and trends that put them ahead of similar trends in the United States.

That made the presentations particularly interesting at this year’s Executive Edge conference, conducted September 25-26 in Toronto, Ontario. This meeting is co-produced by QSE Consulting and THE DARK REPORT.

Almost 100 laboratory administrators and pathologists from across Canada gathered this year to learn the latest in laboratory management and hear about innovative responses to current trends in Canadian healthcare. Although much of the content is focused on how laboratories can meet the needs of Canada’s single-payer health system, many challenges facing Canadian laboratories are nearly identical with the challenges confronting laboratories in the United States.

The basic list is familiar. Reimbursement and funding for laboratory services in Canada is declining steadily. One consequence of this trend is that laboratory consolidation across multiple regions is ongoing. Another consequence of tight health- care budgets is that several provinces are reassessing the level of compensation paid to pathologists.

Of course, trained technical labor is in short supply. In particular, the impending retirement of baby boomer medical technologists is a recognized threat to the ability of labs in Canada to meet the demand for lab testing.

Touching All Three Trends

One laboratory case study that touched all three of these trends was the regional laboratory consolidation project that took place in the Okanagan-Kootenay area of British Columbia. Marty Woods, Director of Redesign for the Interior Health Authority of British Columbia, played a key role in creating a rationalized regional laboratory organization from 34 separate laboratory sites, spread across several hundred miles in the interior of British Columbia.

“Over the years, there was a common incentive across all of these laboratories,” explained Woods. “It was ‘Don’t change unless you must!’ So little had been done in recent years to realize efficiencies and bring costs in line with current budgets. We thus embarked on a project to standardize and rationalize testing services and operations across these 34 laboratory sites.

5 LIS Vendors, 34 Versions

“The challenges were daunting,” he continued. “For example, the labs utilized just five LIS vendors. But there were 34 different versions of LIS to be standardized. To succeed in this regionalization project, we decided to standardize the product and set about to match test menus to the care settings in each community. Then information technology was standardized to support these testing services.”

Adequate laboratory staffing was not an issue, at least at present. “But that will change,” observed Woods. “Approximately 25% of laboratory staff serving labs in this interior region of British Columbia will retire in five to seven years. That is 100 positions. Currently our educational system is producing three to four graduating students per year as replacements.”

Another issue was the loss of half the pathologists from one group. “When contract negotiations with the British Columbia government reached an impasse, five of 10 pathologists in the group left the area to work else- where,” explained Woods. “In these communities, it is not easy to replace so many pathologists.”

Compensation for pathology services has been contentious in British Columbia because the provincial health system targeted laboratory medicine for reimbursement reductions in recent years. THE DARK REPORT has provided some coverage of these events. (See April 26, 2004 and November 22, 2004.)

To speak directly to this issue, Jatinder Bhan, Chair and Director of C.J. Coady Associates in New Westminster, British Columbia, appeared at Executive Edge and dis- cussed why the provincial health authority was seeking to redesign the reimbursement program for pathologists working in the province. Dr. Bhan presented pathologist productivity studies that were used to support contract negotiations that led to a revised compensation agreement between the province and pathologists. In Ontario, Canada’s most populous province, a similar assessment of pathologist productivity and compensation is under way. Bertha Garcia, M.D., Chair and Chief of Pathology at
University Hospital in London, Ontario, reported on the progress of these studies.

THE DARK REPORT considers it no coincidence that pathologists in British Columbia and Ontario are being forced to defend their compensation. In the United States, payers have been challenging clinical pathology professional services for two decades. (See pages 2-5.)

Coag Testing In Pharmacies

Another fascinating case study was the provision of coagulation testing services in commercial pharmacies. In Vancouver, British Columbia, Wendy Leong, PharmD, MBA, worked with Long Pharmacies to establish clinics in the pharmacies to perform point-of-care testing and advise the patients and pharmacists on anticoagulant therapies. Dr. Leon is the Anticoagulation Service Director and Assistant Professor of Pharmacy at the University of British Columbia.

As these examples show, lab directors and pathologists in Canada are implementing their own solutions to the common challenges faced by labs on both sides of the border.

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