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Home / New Zealand

MPs express alarm at lab service cost-cutting

By Martin Johnston
Reporter·
17 Dec, 2006 04:00 PM3 mins to read

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KEY POINTS:

Health boards' money-saving is threatening Auckland's present level of community laboratory testing, MPs say.

A parliamentary health select committee report says it is "seriously concerned" the region's community medical laboratory services are at risk.

"Some of us remain unconvinced that projected savings of $15 million a year will
be achieved without cutting services."

Auckland's three district health boards have awarded an eight-year contract worth more than $560 million to Australian-controlled Labtests Auckland from next July.

Existing contractor Diagnostic Medlab gets the boot.

Nearly half of the country's 21 health boards are changing laboratory services, commonly moving to a sole supplier and in some cases replacing in-house hospital services with a private contractor.

Medical and scientific groups have criticised the changes by health boards, which are trying to rein in laboratory costs.

Many fear that forcing down costs and the instability caused by the changes will encourage pathologists and laboratory scientists - said to be in short supply - to leave the country.

In Auckland, GPs have objected to plans for them to take over more of the blood testing now done at Diagnostic's collection centres.

Waikato is the latest board to announce changes. It has chosen Pathlab Waikato as its preferred supplier over its other community contractor, Medlab Hamilton, and is now negotiating details for a new contract.

The select committee noted that the start of the new Auckland contract was still more than six months away.

"[But] the evidence we have heard gives us serious concerns whether the new laboratory service will be able to process 10,000 patients and 35,000 tests per day from the outset.

"If it is unable to do so, we believe this could have serious implications for the delivery of laboratory-testing services [in Auckland]."

Some of the MPs were concerned by the "inadequacy" of contingency planning in the event Labtests could not start as planned on July 1, the "lack of national co-ordination" across laboratory services, the lengths of sole-supplier contracts being offered, and regional variations in contracts.

But the Auckland board's chief executive, Garry Smith, yesterday dismissed the committee's concerns about the change to Labtests.

"Everything is well on schedule: The building is being altered, the equipment is ordered, the computer system is being configured at the moment and installed in February.

"Labtests still wish to be commissioning from May, so there will be two months of building up to [July 1]."

Waikato board spokesman Philip Renner would not give details of negotiations with Pathlab. Nor would he comment on Medlab's claims about the changes, including that many of its 215 staff would be"lost to the region".

Medical Association chairman Dr Ross Boswell said Waikato was copying an "unfortunate" trend which was likely to force down staff numbers by cutting costs. "New Zealand may well lose pathologists and scientists that we can ill afford to lose."

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