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Commerce Commission Pathology Decision

5 October 2005

Commerce Commission Pathology Decision highlights inconsistency & uncertainty in DHB funding arrangements

The decision on 29 September by the Commerce Commission to decline a clearance application has implications for the future funding and delivery of pathology services to the community not only in the Otago/Southland region but across the whole country according to the New Zealand Association of Pathology Practices (NZAPP).

Dr Paul Ockelford, NZAPP Chair representing all NZ community-based pathology providers, said today that until the reasons for the Commerce Commission decision are known (in 3 weeks time), the whole process for negotiating DHB funded community pathology services across the country is in limbo.

Dr Ockelford said that until the situation is clarified and resolved, NZAPP calls for a moratorium on all other negotiations currently underway between DHBs and community pathology providers. "We are also seeking an emergency meeting with the Minister in order to establish a process to resolve the impasse" Dr Ockelford said.

"In the Otago/Southland tender process, the two community pathology providers successfully responded to a RFP from the Otago and Southland DHBs that encouraged a cooperative and joint venture approach. The successful tenderers and the DHBs have subsequently seen this proposal rejected through the intervention of another Government Agency (Commerce Commission). This demonstrates that the process is seriously flawed and needs to be resolved at the highest levels of Government to ensure continuity and standards of service" Dr Ockelford said.

Dr Ockelford expressed the hope that the local situation in Otago/Southland, where the DHB and community providers had reached mutual agreement on a sensible way ahead, would be allowed to proceed as soon as possible.

"However it is now apparent from information drawn from other regions and from NZAPP member practice feedback that the processes for negotiating future funding and delivery of community pathology around the country are inconsistent leading to the potential for differing levels and standards of pathology services for patients."

"Pathologists are the 'invisible' specialists of the health system" Dr Ockelford continued, "performing over 20 million pathology tests on New Zealanders each year to allow GPs and specialists to detect, diagnose and treat disease. A high quality pathology service underpins the entire health sector and is an essential component in the front line of medical care."

NZAPP will be meeting urgently with DHBNZ and will also brief other medical & health groups to explain what has happened & the potential consequences for pathology and other health services across the country.

"Clearly there has been a failure of the system and there is an urgent need for clarity, procedural fairness and certainty" Dr Ockelford said.

NZAPP is proposing that a resolution of the impasse be achieved through: Safeguards for patient service standards & delivery; National negotiating guidelines for DHBs; Agreed standards for integration of community and public pathology services where appropriate; Ensuring genuine separation between provider and purchaser at DHB level; and Contestability between community and public pathology providers to ensure fair & reasonable competition

"NZAPP will do everything in its power to ensure continuity of service and a quick resolution of the current unacceptable situation" Dr Ockelford concluded.

ENDS

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