Medlab South loses Canterbury DHB Contract

Media Release

EMBARGOED UNTIL 5.15PM, MONDAY 12 DECEMBER 2011

Medlab South loses Canterbury District Health Board Contract

Brian Willcox, Chief Executive of Medlab South, confirmed today that Medlab South had been unsuccessful in the recent RFP process for the sole provision of laboratory services for the Canterbury District Health Board. Mr Willcox said that his staff were absolutely devastated by the news. “It has been an extremely difficult year for Medlab staff many of whom have had to cope with very stressed personal circumstances because of the earthquakes. They have also had to share a cramped and difficult environment with the hospital laboratory staff after our laboratory in Kilmore St was rendered uninhabitable by the February quake.” It had also been a very long process. We were initially told the process would take a month; it has taken ten months” he said.

The DHB used a “weighted multivariable analysis” process, also known as a “quantitative multicriteria assessment” model in analysing the responses. In the lead-up to the completion of the RFP process, the DHB declined, when asked, to advise the weightings it intended to use when assessing the proposals. When Mr Willcox asked the General Manger, Planning & Funding at the DHB why Medlab had been unsuccessful, he was told the evaluation panel felt that “the preferred provider had more to offer in terms of partnership, innovation and alliance structure.” They also liked the “structured governance model” put forward by the successful laboratory.

Medlab South has been providing community pathology services in Canterbury for more than 60 years.

It had nearly twice the market share of the other main provider and was the preferred provider of pathology services for the majority of the doctors, midwives and other referrers in Canterbury. “We have continued to provide the services since the earthquake at considerable financial cost but this seemingly did not count in our favour” he said. The decision will mean at least 145 Christchurch staff will be made redundant.

The DHB has said that the preferred provider does not have the staff to carry out the contract and admitted that the new provider will be looking to recruit around 100 of Medlab’s staff, which will be up to two thirds of the total staff required. “They don’t want us but they can’t provide the service without our staff” he said. “It’s very similar to the Auckland situation with the DHB taking the gamble that the new provider will be able to get the staff they need from the discarded laboratory.” That did not work out in Auckland and there may be a similar result here.

While there would be opportunities for some staff with the new provider and with the hospital laboratory, Mr Willcox said Medlab would also exploring options for jobs within the greater Sonic Healthcare Group both in New Zealand and Australia. “We have outstanding staff who would be an asset to our colleagues in Sonic.” He thought a number of key staff may take the opportunity arising from the earthquake and now the redundancy to leave Christchurch and look for a new life and career elsewhere.

Medlab’s other DHB contracts were unaffected by the Canterbury DHB decision he said.

ENDS

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