KEY POINTS:
Privately owned Auckland maternity hospital Birthcare will be forced to bid against potential newcomers to renew its $3.8 million contract for statefunding.
The Auckland District Health Board will run a competitive tender for the primary maternity services provided by Birthcare Auckland at its Parnell hospital.
Board management cites new legal advice and the failed regional laboratory contract as the reasons for deciding to consult the public over the service and hold a competitive tender.
Birthcare has a 12-year lease on a floor and a half of the Parnell building and has spent $2 million fitting out the space it uses. Set up in 1995, the company also has a maternity facility in Huntly and a contract with the Waikato health board.
Co-owner Roy Younge said yesterday Birthcare had a good reputation and hoped to win the new contract.
Its current five-year contract with the Auckland board for 3600 post-natal stays and about 300 straightforward births a year expires next January but it is planned to extend this to June 2009 to allow for full public consultation on the nature of services to be purchased, followed by a tender process.
Maternity Services Consumer Council co-ordinator Lynda Williams said Birthcare was providing a good service. It exerted a restraining influence on the increasing rate of instrument deliveries and was New Zealand's first facility accredited under the Unicef baby-friendly scheme.
"It just seems ridiculous to be throwing a whole lot of time and effort down the drain in terms of putting it out to tender."
The board's planning and funding manager for children's and women's health, Carol Stott, acknowledged tendering risked causing instability.
"But we have to be assured that we are not closed off and that we are getting the best service we can.
"This is not because we have got any concerns about the service being delivered by the current provider."
The board did not run a competitive tender for primary maternity services when the current contract was agreed to with Birthcare.
"There had been an existing contract with Birthcare," Ms Stott said. "For whatever reason our legal advice at the time was that we were obliged to continue with that contract ... I think things change over time. Obligations become clearer."
The board needed to give the public the opportunity to say what services they wanted and then allow potential competitors of Birthcare to make bids.
"This all came up at the time of the DML [Diagnostic Medlab] contract, what our obligations are."
Auckland's three health boards signed a $70 million-a-year contract last year with new company Labtests Auckland for community laboratory services that were provided by DML. Justice Raynor Asher overturned the contract, following a High Court challenge by DML, ruling that the process was unfair and that the health boards did not fulfil their obligation to consult primary health organisations. Labtests Auckland is appealing.
The health boards negotiated an interim deal with Diagnostic which they said would save $10 million over 18 months, in contrast to savings of $15 million a year under the rejected contract.
