Brian Rudman: Stop moaning, DML - they won, you lost

No one loves a whingeing loser. Especially one from Australia.

It's nearly three years since Diagnostic Medlab was beaten in the contest to provide community medical laboratory services for Aucklanders. The winning bid, from Australian newcomer Labtests Auckland, promised to do the job for more than $15 million a year less than its rival.

It was an offer too good for Auckland's public health authorities to turn down.

Veteran provider DML instantly spat the dummy, circulating a scaremongering notice to patients warning "you may not receive the same level of service", "your results may take longer to reach your doctor", and "your samples may be sent out of Auckland, possibly out of New Zealand, for testing".

It also warned of its intentions not to co-operate with the changeover, darkly muttering that it could mean "the loss of patient history going back many years".

DML also started a long battle through the courts that finally fizzled out a month ago when the Supreme Court refused to hear its appeal against an earlier judgment supporting the change of provider.

DML says the combined legal costs to both sides was $5 million to $6 million. To say nothing of the costs to Auckland's various health boards. Money that could have been better spent on healing Aucklanders.

Having lost the political battle, DML's lawyers and PR flaks are now trying to drum up a political row, rolling out medical spokesmen to try to bully Health Minister Tony Ryall into aborting the changeover. They suggest Mr Ryall should declare the contracting method used by the Auckland health authorities is against Government policy, "because the transition risks and economic costs of doing that are not justified".

Mr Ryall has wisely refused, saying the Court of Appeal has ruled the change of contract is legal.

Cynically, DML is helping create the "transition risks" it warned against, by playing hardball when it comes to co-operating with the new provider. It has rejected a request from the health boards, that it provide staff contact lists to the new provider so it can approach them with job offers and invite them to visit the new laboratories for familiarisation.

DML chief executive Arthur Morris says Labtests can recruit his staff through the internet or newspapers.

Dr Morris is also refusing to provide stored patient records and samples to the victor until an obviously "full service" has been established. He claims there is no legal obligation to do so earlier.

This is pure bloody-mindedness, which reflects badly on Dr Morris and his company, and potentially threatens the safety of sick Aucklanders dependent on a reliable laboratory service.

When DML started this marathon hissy-fit, I wrote how amusing it was to watch a free-enterpriser throwing a tantrum over a lost contract.

By now, the joke's starting to wear very thin. DML seems to have had the monopoly contract for so long its forgotten that in a competitive system someone has to come second. It's what competitive tendering is all about. Encouraging innovation and economic efficiencies and all that.

I'm all for eliminating the profit-taking middlemen, whether they be called DML or Labtests Auckland, and creating a publicly owned system instead.

But recent governments, both Labour and National are wedded to the belief that the provision of everything from public transport to urine testing is best left to private providers.

What they make in profit, we're told, is more than recovered by the greater efficiencies and innovations of the private sector. The other side of the coin is, that in return for gaining a temporary monopoly over the service provided, the successful private contractor has to accept the risk of sudden death at the next tender round.

As the Auckland lab contract shows, it can be a messy process. Unfortunately the victims are those caught in the middle, the 500 or so staff of DML, and if it all turns to custard, the sick of Auckland.

If Mr Ryall were to intervene at all, I'd have thought it would be to remind DML that it's not a good look for a minister in a newly elected National Government to start playing favourites and over-ride the disciplines of the competitive system.

He might also suggest it spare a thought for the patients of Auckland who, in years past, have so richly rewarded the company.