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Laboratory services contract awarded

Laboratory services contract awarded
- significant savings will go back into healthcare -


The three regional DHBs in Auckland have entered into a contract with Labtests Auckland Ltd to provide community laboratory services in the region.

Spokesperson for the Waitemata, Auckland and Counties-Manukau District Health Boards, Garry Smith (CEO ADHB), says the contract was awarded after a robust tender process.

“We wanted to make sure that the service will meet the needs of the region and the evaluation criteria clearly reflected the DHBs’requirements, including service capability, quality, and value for money,”says Mr Smith.

The contract is valued at more than $560million over eight years. Hospital laboratory services are not included in the new contract.

“The contract represents savings on the current spend in excess of $15million each year which will go straight back to the three DHBs’to reinvest into other health services,” says Mr Smith.

The new provider will take over the delivery of community laboratory testing on 1 July 2007, allowing sufficient time for a seamless transition says Mr Smith.

“It’s important for the public, GPs and all referrers to laboratory services that the quality and timeliness of the service will not be compromised.”

Labtests Auckland is a trans-Tasman consortium comprising Healthscope Limited, Labtests Auckland Limited, Labtest Support Limited and employed pathologists/senior management. The major shareholder of Labtests Auckland is Healthscope Limited, a significant provider of laboratory services in New Zealand, Australia, Singapore and Malaysia.

The current provider is Diagnostic Medlab, which a subsidiary of Australian company, Sonic Group.

The three regional DHBs have been developing a regional pathology vision for the future and issued an RFP for a long term strategic partner to work with them to realise the vision. The existing contract with DML was due to expire 30 June 2005 and was extended by two years to 30 June 2007 to cover the period that the ARDHBs developed the RFP. A representative from Audit New Zealand was a party to the tender, ensuring that it was conducted in keeping with recognised good practice.

“Tendering commercial contracts such as this is not only sound business practice, it is essential when dealing with large sums of public money,” says Garry Smith.

“We need to continually ensure that we receive value for money and the quality provision of services, just as any commercial organisation would require.”

--

Background
In recent years, primary referred pathology services (community laboratory services) have been provided to residents of the three Auckland Regional DHBs (ARDHBs) by Diagnostic Medlab (DML), a subsidiary of Sonic Group, an Australian company.

The total number of community tests performed in 2004/2005 was 8.7 million for the metro Auckland region. 91% of these tests were performed by DML with the DHB hospital laboratories carrying out the remainder.

In line with best practice, proposals were sought via tender for a long term (5 years or more) partner to work with the DHBs to deliver referred pathology services.

A Discussion Paper on the central themes for the RFP (Request for Proposal) was circulated to over 100 interested parties and stakeholders in early December 2005. The finalised RFP documentation was issued on 8 February 2006 to the 11 providers who registered their interest as potential providers. The full RFP documentation (together with test volumes by type, provider and DHB for the last 3 years), the Discussion Paper and a draft Agreement are available on the website www.ndsa.co.nz (click on Regional Laboratory Project).

Labtests Auckland is a trans-Tasman consortium comprising Healthscope Limited, Labtests Auckland Limited, Labtest Support Limited and employed pathologists/senior management. The major shareholder of the Labtests Auckland is Healthscope Limited, a significant provider of laboratory services in New Zealand, Australia, Singapore and Malaysia. In New Zealand Healthscope owns and operates Northland Pathology Laboratory, a community laboratory that serves the Northland region. It also owns and operates veterinary testing laboratories throughout New Zealand, with laboratories in Auckland, Hamilton, Palmerston North, Christchurch and Dunedin. A major provider of private hospitals and pathology in Australia, the company was established in 1985 and listed on the Australian Stock Exchange in 1994.

ENDS

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