$560m laboratory contract will halve number of blood-test clinics

Dozens of blood-test clinics will be closed by the successful bidder for a $560 million contract to provide medical laboratory services in Auckland.

The region's three district health boards have awarded the eight-year contract to Labtests Auckland, which is 77 per cent-owned by Australian private hospitals and laboratories company Healthscope.

The present contract holder, Diagnostic Medlab - a subsidiary of Australian company Sonic Healthcare - will continue taking and processing blood and other medical tests until June 30 next year.

Labtests Auckland and the health boards emphasise that the present level of service will continue, but one of the biggest changes for patients will be a reduction from 85 to 43 in the number of collection centres, where patients have test samples taken.

Auckland board chief executive Garry Smith said last night that Auckland had far too many collection centres and 43 would be in line with international standards for its population size and other New Zealand cities.

"For example, we've got three within 1sq km in Howick."

The new contract would save the three health boards $15 million a year, which would be reinvested into other health services, he said.

Diagnostic Medlab chief executive Arthur Morris suggested the change of the contract risked driving pathologists to Australia or Britain, where salaries and job security were better.

"There's a worldwide shortage of pathologists. The majority of our recent employees have come from overseas. It's taken us many years to get a full complement."

His company, involved in medical testing in Auckland for more than 70 years, employs up to 40 full- or part-time pathologists and a total of about 650 fulltime-equivalent staff.

Labtests Auckland chief executive Dr Tony Bierre - an elected Auckland board member who ended active involvement in board affairs months before his company's bid - said that although his company would have fewer collection centres, they would be larger than the existing ones and conveniently placed.

He hopes to hire Diagnostic Medlab staff and is keen to negotiate over buying its central laboratory in Ellerslie.

"The final number of staff we will be employing has not been set, but we are looking at very similar numbers."

He said one area in which Labtests Auckland could make savings was in lengthening the turn-around times of non-urgent tests, which were sometimes done more quickly than necessary.

General practice groups fear the contract changes could lead to some testing costs falling on GPs' clinics, which they say would have to be paid for by increased patient fees.

Health boards around New Zealand are looking at changes to community laboratory services to try to contain annual growth in demand for tests of around 5 per cent.