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LifeLabs Announces New Funding Agreement for Laboratory Services
Modest increases in capped funding reflect economic challenges facing the province
TORONTO, ON (December 19, 2008) -- LifeLabs Medical Laboratory Services today announced that the Ontario Association of Medical Laboratories (OAML) has reached a new three-year funding agreement with the Ontario Ministry of Health and Long-term Care (MOHLTC) for the provision of community laboratory services used in the diagnosis, treatment, monitoring and prevention of illness and disease in patients.
The new agreement includes a 3% increase in base funding for the government fiscal year ended March 31, 2009 (year one of the agreement), for community laboratory services performed under the Ontario Health Insurance Plan (OHIP). In years two (ending March 31, 2010) and three (ending March 31, 2011) of the agreement, funding increases are 2% and 1.3% respectively compared to prior years.
LifeLabs, which provides approximately 31.6 percent of community laboratory services in Ontario, will receive its proportional share of these increases. Roughly 99 percent of tests performed by LifeLabs in the province are covered under OHIP.
“These are modest increases when you consider that public demand for lab tests is growing by more than 10% annually, driven in large part by an increased focus on the early detection and improved monitoring and management of diseases,” said Frank Amodeo, Acting CEO and Chief Financial Officer, LifeLabs.
“However, LifeLabs recognizes that the current global economic crisis is having an impact on the government’s fiscal resources and that we have a shared responsibility to ensure Ontarians continued access to important healthcare services, including the services we provide,” added Amodeo. “The new agreement provides stable funding for the future in support of patient care.”
Similar to previous funding arrangements, the new agreement provides for adjustment funding in years two and three of the agreement, should industry billings exceed certain thresholds. If earned these adjustments would be paid annually to OAML members according to their proportional shares of the provincial funding cap.
The new agreement is retroactive to April 1, 2008, which is when the previous funding agreement expired.
About Laboratory Testing:
Laboratory testing is integral to the healthcare system. Some reports estimate that lab results constitute about 70% of a patient’s medical record, while up to 80% of all clinical treatment decisions are based on results from laboratory tests. Early and effective treatment of illness and disease can deliver significant savings to the healthcare system.
According to a 2007 report conducted by Deloitte for the OAML, laboratory testing has delivered $1.2 billion in savings to Ontario’s healthcare system over a 10 year period. The annual cost of community laboratory testing, as reflected in the latest OAML funding agreement, comprises less than 3% of the total healthcare budget in the province.
About LifeLabs:
LifeLabs, provides laboratory testing services, which help physicians and other healthcare professionals diagnose, treat, monitor and prevent illness in patients. LifeLabs employs more than 3000 professionally trained staff, who deliver more than 50 million laboratory tests annually to over 10 million patients and nearly 20,000 physician customers. LifeLabs has operated in Canada for nearly 50 years. Today it is owned by Borealis Infrastructure, a global leader in infrastructure investing, with assets in energy, transportation and infrastructure buildings, including long-term care facilities and hospitals, pipelines and telecommunications. For information, visit http://www.lifelabs.com/.
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