KEY POINTS:
The company that lost a multimillion-dollar medical testing contract says the decision was made to save money, rather than to maintain the quality of patient testing.
Lawyers for Diagnostic Medlab argued in the High Court at Auckland that the terms of the Auckland district health boards' contract with Labtests Auckland were contrary to quality standards the boards demanded when they opened the tender process.
Medlab also said Labtests' tender, which undercut it by $16 million for collecting and transporting samples, was too low, and did not allow for the cost of GPs taking samples in the absence of sufficient collection rooms.
It also said that the tender process was unfair as Medlab was not given the opportunity to make tender submissions based on a desired reduction in the number of collection rooms and staff.
Under the contract with Labtests, set to start on July 1, GPs would have to take many more medical samples, which would then be taken by commercial couriers to labs for testing.
The eight-year contract, with a two-year right of renewal, is worth $560 million.
Labtests plans to reduce the number of sample collection rooms from 80 to 43, and the number of collection staff from 293 to 161.
Medlab has taken the matter to the High Court, seeking a judicial review of the Labtests contract.
In submissions filed with the court, it claims a change to the collection system would mean:
* Patients having to travel further to have samples taken.
* Longer waits for service at peak times.
* More patients not bothering to have samples taken for testing.
* GPs being pressured, or feeling pressured, into taking samples without being compensated for the extra work.
"Fewer people will have tests, patients will have their diseases go undiagnosed (sometimes with serious and even life-threatening consequences), and the costs to the district health boards will go up as a whole," the submissions say.
In court yesterday, Medlab lawyer Jack Hodder said a shortage of testing services could become apparent from from the first day of the Labtests contract, as GP sample collections would not have increased, but the number of cases Medlab was dealing with the day before the new contract started would have to be taken up by the reduced service.
Medlab's submissions say: "Labtests will not (they say) be significantly changing the amount of collections done in collection rooms. Nor has anyone indicated that, somehow, volumes of samples are going to decline.
"The logical conclusion is that the same level of work will have to be done by about half the number of people who currently do the work."
The hearing, before Justice Raynor Asher, is expected to take two weeks.
