DHBs' Labtests decision due

Auckland's district health boards are now expected to reveal tomorrow if they have re-hired Diagnostic Medlab to relieve the pressure on its troubled rival, Labtests.

A source said last night that reaching agreement "is getting very close".

A decision was expected this afternoon but a press conference has now been scheduled for 10.30am on Tuesday.

Since the transition to Labtests, DML has kept on more staff and collection centres than it needs in the hope that it would be asked to take back some of the $70 million-a-year community laboratory work it lost in August and September.

DML has retained more than 20 of the 80-plus collection centres it ran before the transition.

After the Herald revealed on Friday that the three DHBs were looking at giving DML some of the work it had lost, Auckland board chairman Pat Snedden confirmed there had been talks with both lab companies.

"As part of options we have been exploring there have been discussions with both Labtests and Diagnostic Medlab ... about the shifting from Labtests to Diagnostic Medlab of some volumes amounting to less than 10 per cent of the business," Mr Snedden said.

Senior DHB representatives were expected to finalise the plans yesterday, but Mr Snedden would not speak publicly ahead of an announcement.

Ten per cent of Labtests' daily patient load would involve testing up to 1000 people.

It is understood the talks have canvassed options like shifting one geographical area, or possibly all of the region's private hospital testing, to DML.

The DHBs repeatedly stated the controversial change to Labtests would result in no reduction in the level of service, despite the cost cut of around $15 million a year, compared with the payments to DML before July 2007. Sceptics were told the savings would come from Labtests' taking less profit.

It is not clear yet how the DHBs would carry out any partial transfer back to DML and the duration of the arrangement, but some welcome the idea of a dual-provider network, such as in Christchurch.

The Labtests contract gives it the exclusive right to the Auckland community market, but also allows the DHBs to terminate any service if they consider Labtests is not meeting a "material responsibility". The process can take up to 60 days, or less if patient safety is thought to be at risk, and can involve referral to an expert if there is a dispute.

Labtests declined to comment on the negotiations last night, but said no formal notice had been issued to it under the contract by the DHBs.

Last month Mr Snedden said that although Labtests had "the will and ability" to deliver on its contract, if it could not, the boards would use their powers under the contract.