KEY POINTS:
Widespread jubilation greeted the High Court's decision yesterday that the Auckland medical testing contract cannot be transferred to a new company in July. The doctors and staff of the city's many testing centres will be overjoyed, general practitioners will be relieved that they will continue to receive, for the time being at least, a service they rate very highly, and most of the public will rest easier now that a cost-cutting exercise has been stymied.
But the public interest is not clear-cut in this case. The Auckland region's three district health boards decided to transfer the medical testing contract because they were convinced there was ample room for costs to be saved for an acceptable level of service. Ordinary experience would suggest they are right.
Medical testing centres are omnipresent in Auckland communities and general practitioners make generous use of them. Just about every diagnosis nowadays seems to require a referral for blood or tissue samples to be taken and further tests are usually required for comparison or confirmation.
The tests are free to the referred patient and the cost to the public purse must be considerable. Doubtless their diagnostic value is such that it would be irresponsible of doctors not to use them to the fullest, but somebody has to keep the expense within reason. That is the job of district health boards, and when the testing contract came up for renewal last year they awarded it to a newly established company, Labtests, formed, unfortunately, by a doctor, Tony Bierre, who had been a member of the Auckland District Health Board.
The High Court has found that Dr Bierre, as a board member, was intimately involved in the deliberations leading to the selection of a laboratory service provider. That is one of the reasons that Justice Raynor Asher has declared the new contract invalid. The other ground for the ruling is that the health boards, in Justice Asher's view, ought to have consulted the primary health organisations representing general practitioners in Auckland.
The possible conflict of interest is obvious. The district health boards were aware of it, according to the judge. They should have realised the information Dr Bierre acquired as a member of the Auckland board greatly advantaged the Labtests bid.
But the second ground for the court's decision is more problematic. District health boards are obliged by their statute to consult primary health organisations about possible changes to a laboratory service. The judge has found that a discussion document given to practitioners did not clearly signal the changes contemplated or give sufficient time to consider them.
Practitioners are not disinterested parties to the decision, either. They must consider patients' welfare above all other considerations. It is almost inevitable they will oppose any reduction in service, no matter how generous the public provision may be. If health boards are satisfied a lesser level of service can be provided at less cost and a reasonable medical standard, they ought to be able to justify that in spite of practitioners' opposition.
Boards must apportion their public revenue among all services they are obliged to provide and every saving in one is a potential boost for another. In this case their intent may have been good, but their methods were found wanting.
Laboratory tests have been costing the Auckland boards, or rather national taxpayers, close to $80 million a year. Dr Bierre's company has offered the board savings of $15 million a year. Despite the High Court's decision, savings of that scale cannot be dismissed lightly. The boards cannot probably now give Dr Bierre the contract but they can continue to pursue some of the changes, and savings, he proposed - and they must.
