LifeLabs: Doug Tkachuk, MD, Chief Medical and Quality Officer

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Doug-Tkachuk-thumbLifeLabs Medical Laboratory Services (LifeLabs) is Canada’s largest community-based medical diagnostics lab. Its presence is most predominately felt in the country’s two largest provinces, Ontario and British Columbia. LifeLabs processes over 50 million laboratory tests for more than 10 million patients and 20,000 physicians across the provinces of Canada annually.

LifeLabs (formerly known as MDS) has been around for over 50 years, and it continues to grow. Recently, LifeLabs purchased its largest competitor in British Columbia, BC Biomedical Laboratories.

Intrinsic to its mission is a drive for quality, service, and efficiency. These are goals that LifeLabs’ owner, Borealis Infrastructure, the sole investment arm of OMERS, has tasked Doug Tkachuk, M.D., chief medical and quality officer, with accomplishing.

Dealing with different markets

Because most of Canada’s healthcare delivery system is based on the single-payer model, the first step to providing laboratory services in a province, Tkachuk said, is to form a contractual agreement with the provincial ministry.

“Those contracts give us licenses and those licenses allow us to carry out medical diagnosis,” he explained.

It’s challenging providing lab services in Canada since provinces differ in the method behind their delivery system. For example, Ontario runs under a capped regulated system, so the percentage of market share is allocated to three large labs, with all three taking on volume risk. In other words, they are paid the same regardless of the number of patients walking through their patient centers.

“As a result, we’re a fairly cost-effective solution for increasingly fiscally restrained governments in the provinces,” Tkachuk said.

Five percent of Canadian healthcare is spent on labs. Because of Ontario’s capped system, labs are one aspect of the healthcare system that has become disproportionately smaller to the cost of other healthcare providers. British Columbia, on the other hand, is still based on the fee-for-service model, although it has soft caps for volumes, meaning LifeLabs needs to operate efficiently in B.C. as well.

Tkachuk explained that under Ontario’s system, LifeLabs has become a partner with the ministry in controlling appropriate lab utilization. When the fee-for-service model, where the providers take on the volume risk, is replaced, he said, the lab is obligated to order tests appropriately, administering only the ones that are absolutely needed.

The capped system has been in place in Ontario for a number of years, and Tkachuk emphasized the importance of service-level agreements that spell out the items important to the patients and the regulators, such as patient access and wait times.

“The caveat for cap systems to work and work well is if both the government and the lab providers  agree on those basic lab services and performance expectations, such as turnaround times, patient access, and quality,” he added.

As someone who has worked and trained in the United States, Tkachuk is familiar with both systems. He readily admits that Canada still benefits enormously from being situated beside the U.S. Sometimes, it’s more cost-effective to take a one-off lab test for extraordinarily rare conditions and run the results in the States, he said.

An unsustainable marketplace

In trying to keep pace with the demands on healthcare, the Ontario government continues to struggle with the needs of its population. It’s predicted that half of all money spent by the government in the coming years will be on healthcare.

“That dot is unsustainable,” Tkachuk said. “It also squeezes all of the other non-healthcare-related expenditures for the government, like education and taking care of the poor and the elderly. As a result, we face enormous pressure from our funders (the government) to be more and more efficient.”

Furthermore, the single-payer system struggles to be adaptable. For instance, the test menu has not been able to keep pace, Tkachuk observed, and has not kept up with modernization, meaning the most sophisticated tests remain off the public menus and on the private side.

In an effort to tackle expenditures and enhance efficiency while improving quality, LifeLabs has taken on a number of initiatives. As mentioned above, LifeLabs is working with the government and physicians to control “utilization.”

For example, not every healthy male at the age of 40 needs a full annual physical exam. In fact, some tests should only be given when clear medical guidelines are met. These tests shouldn’t be ordered just so physicians can check off every box on a lab test, Tkachuk contends.

“We work hard to be a trusted partner with the government,” he said. “We try to merge cost effectiveness and delivering quality. We try to never compromise quality, while staying a trusted partner to our single-payer systems. What that essentially means is that we strike fair compensation agreements for lab services and we adhere to service-level agreements around patient access, quality, and turnaround times. We are emphasizing more quality around the pre-analytical side.”

LifeLabs has also pursued other initiatives to improve efficiency and quality. One of LifeLabs’ goals has been to improve tube-spin times or how quickly it transfers tubes into the lab and obtains a turnaround on the results. It has also begun monitoring on a real-time basis how long patients wait at their service centers, and it has begun to allow patients to book their blood testing in advance online. LifeLabs is also looking to improve the way it conducts colon and cervical-cancer screenings.

“Colon cancer and cervical cancer are cancers that can be prevented by appropriate population screening,” he said. “Labs have a big part to play in preventing colon and cervical cancer.”

LifeLabs has  been working with Cancer Care Ontario to validate new kits and ways of confronting cervical cancer. Instead of doing multiple tests on women 25 and older, for instance, it has been using Pap Smears as the primary HPV triage tool.

“More testing isn’t necessarily better,” Tkachuk concluded. “More testing can lead to unwanted work-ups and complications for patients, so appropriate lab-test utilization is good for patients and it’s good for payers.”

-by Pete Fernbaugh

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