Brian Rudman: Stop screaming and take your nice free-market medicine

Call me warped, but there's something hugely amusing about watching a free-enterpriser throw a tantrum over a lost contract. And the way two Aussie companies are squaring up over the right to analyse my bodily samples promises to be one of the more hilarious hissy-fits of the year.

Diagnostic Medlab, which claims to have been providing community medical laboratory services for Aucklanders going back to the year dot, is incandescent at losing the $560 million-over-eight-years contract to newcomer Labtests Auckland.

So grumpy, indeed, that it's circulating a scaremongering "important notice to patients" threatening that "you may not receive the same level of service", "your results may take longer to reach your doctor" and, horror of horrors, "your samples may be sent out of Auckland, possibly out of New Zealand, for testing"- unlike Diagnostic Medlab, which mails only the profits overseas.

Diagnostic Medlab also seems to be threatening to vindictively destroy its records, giving the warning that its loss of the contract will mean "the loss of patient history going back many years".

By miraculous coincidence, an anonymous DontRiskOurHealth website has started up, and a petition against change allegedly got 6000 signatures in two days.

I suspect that if I was greeted by a nurse with a blood-extracting syringe in one hand and a petition form in the other, I would take the coward's way out and sign too.

What the "important message" doesn't mention is that the Aussie rival's bid was more than $15 million a year lower than Diagnostic Medlab's price, and that is why it lost out.

As Auckland District Health Board chief executive Garry Smith pointed out in yesterday's Herald, that's 90 extra hip operations a month for the next eight years.

He might have also raised the question that if the newcomers can offer such a reduction in price, have Aucklanders been overcharged under the present system?

The furore also begs the question, what were the three district health boards supposed to do differently? Award the joint contract on the basis of nostalgia?

In this era of contracted services, public authorities are required to act like the private sector and conduct tenders on a competitive basis.

Would a stock exchange-listed company get away with awarding a contract on the basis that it had always bought from XYZ Ltd so it would be mean to stop now?

For this reason I find it curious that stockbrokers Ord Minnett regard the health boards' action as "curious".

No doubt it's nervous times for the shareholders of Sonic Healthcare, the parent of the failed tenderer. But you'd think brokers would be happy to see the hand of the market in action.

Whether it be for bus services, building state highways or garbage disposal, the awarding of contracts by public bodies is subject to the same rigorous process.

It was the free enterprisers who insisted that contracting these sorts of services out to private providers was the only way to drag New Zealand into the modern world. It's certainly the only way that tax- and ratepayers have of keeping a rein on costs.

And while I have no way of knowing whether the new boys can do the job, I have enough faith in the system to believe that among the boards and bureaucracies of the three health boards there are people who do.

They run one of the biggest and most complicated industries in town. We trust them to replace our hearts and our hips. I'm willing to have faith in their ability to continue collecting and analysing my blood.

* Talking of having fun ... Auckland City libraries are promoting a contest to encourage teenagers to read.

Participants "go into a weekly draw", says the press release, "to win lucrative prizes such as cool larva lamps, CD Discmans, beauty products and pizza vouchers."

Did no one think a book or a book token or even a newspaper sub might have made more sense?

And I'm glad that the larva lamps are cool. I wouldn't want to think the caterpillars and tadpoles within were made to suffer. That's unless the prize is really the better-known lava lamp, created in 1963 by Edward Craven Walker, to simulate volcanic flows.