Ak Regional DHBs to end Diagnostic Medlab contract

Media statement
Friday, 06 March 2009
Auckland Regional District Health Boards focus on patients as a priority

The Auckland Regional District Health Boards (ARDHBs) have given Diagnostic Medlab Ltd (DML) notice of termination for its Auckland community laboratory testing contract. DML’s $72 million per year contract will come to an end on 6 September 2009. From 7 September 2009 community laboratory testing will be provided by Labtests.

Over the coming months the ARDHBs will closely monitor Labtests progress with implementation. Ensuring continuity and accessibility of services for all patients and the medical community during the transition will be the priority.

The termination of the interim DML contract follows on from the Supreme Court’s dismissal on Thursday, 12 February 2009 of DML’s application for leave to appeal an earlier court decision that reinstated the Labtests contract, which was set aside by the High Court in April 2007.

The Supreme Court stated that it was not persuaded there was any arguable question of public or general importance which was likely to be determinative of the proposed appeal. It concluded that each aspect of the case ultimately turned on its own facts, and that the Court of Appeal had made no obvious error in its factual assessment. Accordingly, the criteria for leave had not been met.

The Supreme Court decision brings the legal uncertainty of the past few years to an end.

Considerable misinformation has been generated around the services that Labtests will be providing from September 2009.

The ARDHBs service requirements are that:

1. All patients within the Greater Auckland region have ease of access to collection centres
2. All doctors receive laboratory results in a timely manner to support good patient care.
3. All doctors have appropriate access to pathologists to support good patient care.

Labtests has committed to the ARDHBs that the collection centres will have more spaces for taking blood and many will be open earlier to reduce the delays patients currently experience. Labtests has also committed to ensuring results are delivered in a timely manner and that access to pathologists will meet doctors’ requirements.

These improved services to the region’s patients and medical community will be supported by a similar number of Auckland based Labtests staff to that of the current DML staffing levels.

The ARDHBs urge DML and its staff to work collaboratively with Labtests, so the people of Auckland are assured of access to a quality service. The savings of over $6 million per annum, the difference between the current DML price and the Labtests price, will be reinvested in to more healthcare services. These savings are due to a significant drop in profit margin by Labtests.

The Waitemata, Auckland and Counties Manukau district health boards are committed to ensuring delivery of a service of the highest quality to patients within the Greater Auckland region.

Frequently Asked Questions:

1. Has Labtests got enough staff to fulfil the service level agreement?
Labtests will be employing a similar number of staff to provide the service. It is hoped that the DML staff will bring their skills to the new services. However, Labtests does have global resources to draw upon should the existing DML staff members choose not to move to Labtests.
2. How will the new service affect patients and doctors?
The ARDHBs will ensure that continuity of service continues and that patient care is not compromised in any way. Labtests also has a rigorous training schedule and strategies in place to ensure that it has a fully trained workforce by the anticipated start date.
3. What happens if Labtests isn’t ready?
The ARDHBs will monitor Labtests progress with implementation. We have confidence in their abilities. However, if it becomes apparent that Labtests will not have a service in place for 7 September then the ARDHBs can, at Labtests costs, put in alternative provisions for any potential gaps.
4. What about accessibility in terms of collection centre opening hours?
Labtests plans to open many collection centres earlier. This should assist in reducing patient waiting times.
5. Will the number of collection centres be reduced?
Labtests is proposing a network of 53 collection centres – with more space and capacity than the existing network’s centres – which is being discussed with PHOs and general practice. However, the number of staff to collect samples will be similar. The Labtests’s collection centre proposal is for more collection seats to take blood, which the ARDHBs support.

6. How will the locations of collection centres be decided?
Labtests has conducted extensive analysis of the locations for collection centres. Labtests will discuss this with PHOs and GPs before confirming the final placement of collection centres.

ENDS