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An Australian health company has stepped up its ownership of medical laboratories here as it tries to win back a $560 million contract for pathology services in Auckland.
Healthscope, Australia's second largest private hospital operator, announced yesterday it had acquired 100 per cent of the shares in New Zealand Diagnostics Group, which has an annual revenue of about $47 million.
The purchase of NZ Diagnostics, the second largest private pathology group in the country behind Diagnostic Medlab, in effect makes Healthscope the second major provider in the country.
Last year Auckland, Counties Manukau and Waitemata district health boards gave an eight-year, $560 million pathology contract to Healthscope-owned company Labtests Auckland, dropping long-term provider Diagnostic Medlab.
Labtests was to provide all of Auckland's medical laboratory services from July this year and planned to slash the number of collection centres across the region from 85 to 43.
The move outraged many health professionals, who argued that Labtests had no experience in the Auckland health service market.
The contract was invalidated in a High Court judgment. An appeal by Labtests against the decision is to be heard in the Court of Appeal at Wellington next May.
Healthscope managing director Bruce Dixon said: "The NZDG acquisition provides a further opportunity to establish Healthscope as a significant player in the New Zealand pathology market."
