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University hospitals merge labs in search of savings

Hospitals in Finland seek to gain a heftier diagnostics presence in order to compete better with international rivals.

File photo of blood samples in vials. Image: Emma Pietarila/Yle

A wave of laboratory mergers is taking place in Finland, with the aim of cutting expenses. The Eksote social and health care joint municipal authority in South Karelia is negotiating a deal with the Helsinki University Hospital (HUS) to sell off its laboratory and imaging operations.

"It looks as though prices in these larger units are much more reasonable than in our own unit," Eksote's CEO Pentti Itkonen says.

The negotiations have been coloured by the inclusion of two foreign-owned lab services companies in the bidding: the international provider Synlab Group and the Finnish-German firm Vita Laboratoriot. This marks the first known time that major international medical diagnostics companies have competed with a central hospital in Finland to buy laboratory divisions.

Domestic offer improved after foreign bids

Yle sources say that Eksote received a much better offer from HUS after the private companies were invited to submit tenders.

The interest of international laboratory chains in gaining a foothold in Finland's market is one reason behind the recent redistribution. Public health providers are looking to create large enough entities to compete against the prices international companies may offer.

"As a country of [just over] five million inhabitants, Finland is small in terms of laboratory automation. Even if all of Finland's laboratories were combined into one, it would be a small facility on the European scale," says Timo Keistinen, a medical advisor to the Ministry for Social Affairs and Health.

Splitting into eastern and western camps

Two separate camps appear to be forming in Finland as a result of the mergers: the unification of larger lab facilities in Oulu, Tampere and Turku in the west, and HUS absorbing other smaller labs in the east.

Fimlab CEO Ari Miettinen says the first exploration phase of a slated merge between Oulu's Nordlab, Tampere's Fimlab and Southwest Finland's hospital district has shown that synthesizing the three area' laboratory work would bring benefits.

"Cost reductions will be used to improve the operations and use capacity better," he says, adding that a merger would also solve the problem of dwindling experts in the field.

HUS has already absorbed the Carea labs in the south-eastern Kymenlaakso region and has submitted an offer for acquiring the Eksote operations. Negotiations are also underway with the Islab laboratory company in the eastern city of Kuopio.

The Helsinki hospital unit had earlier lost two possible merger opportunities to Fimlab in the regions of Päijät-Häme and Central Finland.

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