KEY POINTS:
Arthur Morris was a happy, relieved man yesterday. So were the 650 fulltime-equivalent staff at Diagnostic Medlab, which has been doing medical testing in Auckland for more than 70 years.
"There was widespread relief. There are no drinking sessions or popping of champagne around the buildings but people are relieved the decision has come," Dr Morris said.
"Going to judicial review is always a major undertaking. Although we felt we had several good points to put before the courts, we weren't pessimistic, but we weren't over-optimistic."
The decision by Justice Raynor Asher yesterday to declare invalid the awarding of the region's medical laboratory testing contract to start-up competitor Labtests effectively threw Dr Morris' company a lifeline.
"It means that there's an opportunity to be involved in a future tender process."
The decision was the culmination of a concerted campaign to win public support for medical testing to remain with Diagnostic Medlab (DML).
Dr Morris accepts he got the ball rolling, starting with petition notices in the company's 84 collection centres.
"But I think there was almost an instantaneous reaction from community healthcare providers with concerns over service delivery in future."
Before long, the Medical Association, GPs, pathologists, surgeons and other medical professionals had joined the fray, overwhelmingly in favour of retaining Diagnostic Medlab.
An independent survey of Auckland GPs in November found 90 per cent in favour of sticking with DML. Many felt the three Auckland health boards acted without consulting them.
The intensity of feeling prompted Harbour Primary Health Organisation, which represents 27 medical and specialist groups, to ask for the opportunity to present its case during the judicial review.
Justice Asher's judgment was damning of the health boards and of Labtests chief executive Tony Bierre, who was an Auckland District Health Board member at the time.
He found Dr Bierre had breached the Health and Disability Act and the Crown Entities Act 2000.
"... Dr Bierre was making use of information that he had acquired in his capacity as an ADHB member that would not have otherwise been available to him. He knew, but DML did not, that the [health boards] considered DML was making super profits, and that it wanted a radical new structure plan from which it could extract savings of up to $20 million per annum."
Justice Asher found the health boards' knowledge of his conflict and their consequent inaction made the process procedurally unfair.
In accepting a bid from a party in which Dr Bierre had a financial interest, the health boards had made a serious procedural error.
DHBs face financial fallout
Uncertainty surrounding the future of medical laboratory testing services in Auckland has triggered political calls for accountability, as concern grows that district health boards are now exposed to significant financial risk.
The High Court's decision to scrap a contract awarding testing services to Australian-owned company Labtests is set to put the Government under pressure in coming days.
Health Minister Pete Hodgson said yesterday that the immediate focus must be on securing a deal to ensure laboratory services would continue after July 1.
But the likelihood that the people brokering that deal would be the same ones who were heavily criticised in yesterday's court judgment has been slammed by National's health spokesman, Tony Ryall.
Mr Ryall said there needed to be accountability for the botch-up which has left health boards exposed to the risk of hefty compensation claims from the testing companies involved.
He said the chairs of the health boards involved should be in the firing line, and Mr Hodgson himself should take some responsibility.
Mr Hodgson yesterday faced his first parliamentary question about the issue, and sidestepped a request to declare his confidence in Auckland District Health Board chairman Wayne Brown.
He said his confidence in all of the boards would hinge on their ability to pull together a new deal to secure services from July 1.
- Paula Oliver
