Private health care giant MDS Inc. could face some major turbulence in upcoming lab restructuring talks in B.C., after a special research investigation found the company is a major financial backer of a controversial private hospital in Calgary that stands to benefit from Alberta premier Ralph Klein's bid to contract out surgeries. Details of MDS' role in undermining public Medicare in Alberta were released today in a report on company activities prepared by B.C.'s Hospital Employees' Union, an affiliate of the Canadian Union of Public Employees. HEU has learned that MDS is a major financial backer of the Health Resources Group, the operators of a private hospital in Calgary that is poised to cash in on Klein's surgical services privatization plan. Directly, and through venture capital funds it manages, MDS Capital Corp. has invested $3 million to the start up costs of HRG's hospital in Calgary. Three MDS representatives are on the HRG board of directors. "MDS' rapid growth has been fuelled by public health care dollars it receives through its lab testing operations in Canada," says CUPE national president Judy Darcy. "Now that company is using taxpayer dollars to engineer what amounts to a reverse takeover of our public Medicare system in Alberta." HEU spokesperson Chris Allnutt says B.C.ís government is very much committed to preserving Medicare, and has previously outlawed measures that Klein is now proposing. So with Victoria getting set to launch a major review of lab service delivery, "the revelation that the company will benefit from Klein's privatization efforts are going to have repercussions for its operations here," he warned. "Bottom line, it certainly has increased our resolve to prevent private companies like MDS from making further incursions into the public system," he said. In the B.C. restructuring talks Allnutt said his unionówhich represents 45,000 health care providers including lab staff—will press to reform lab services by bringing all diagnostic testing into the public health system. From a national perspective "it's critical that the federal government re-establish its moral authority to prevent the sell-off of Medicare to corporations like MDS," Darcy said. "Prime Minister Chretien must restore the billions of dollars his government has cut from the health care system." Since August, MDS and the Capital Health Region in Victoria have been involved in closed door talks on the possible privatization of hospital-based diagnostic laboratory services. HEU has energetically opposed privatization of lab services and has launched a campaign to stop such a development. HEU's report, Partnering for Profit, undermining Medicare: A comprehensive investigation of MDS Inc., also raises questions about whether MDS joint ventures to deliver lab services with public health authorities in Alberta and Ontario had achieved projected cost savings. The investigation also found that these joint ventures operated behind a veil of secrecy that prevented public scrutiny and accountability. The report can be downloaded from www.heu.org in Adobe Acrobat format.