Playing Chicken

By Jim McVeagh 09/10/2009

Apparently, Auckland DHB is now going to play an expensive game of Chicken with Labtests. The Herald reports that “Auckland’s district health boards are considering bringing Diagnostic Medlab back into the provision of community laboratory services because of persisting problems with the newcomer Labtests”.

This is silly. If Labtests are providing an inadequate service, they need to be made to lift their game – if necessary, by legal means. Caving in to DML’s fantasies is not going to help at all. I am fairly certain that any attempt by the DHBs to move part of the contract back to DML will meet with an unpleasant legal response. I find it extraordinary unlikely that the DHBs have a clause in the contract which will allow them to do this unchallenged.

Besides, attempting to split the provision of lab services like this will undoubtably cause far more problems than it will fix. If part of the service (say histology) is transferred back to DML, GPs will now have two sets of forms and two lab numbers to remember. AFAIK, MedTech 32 allows only one lab number, so GP’s will have to remember to fill out manual forms for DML. Currently, only the cervical smears need this and it is already a nuisance. Other services will simply cause more confusion.

The other proposal of giving DML a region is even sillier. A good proportion of my patients live outside of the DHB area I am in. I may, or may not have to fill out manual forms for these people. Worse still, there are a group of people who might choose to get their blood test from their place of work. They now may also need a manual form. Or they may be turned away from the blood depot they choose. Or the blood test result may wind up in the same limbo to which many results with the wrong lab number have gone.

Frankly, the Auckland DHBs have made their bed and should simply lie in it. They have insisted on savings in laboratory testing and now they seem to be attempting to back out of it. This will only cost them every cent that they have saved and then some.

Personally, I would have abandoned the tender system and gone for a negotiated very low fee for service offered to both DML and Labtests with co-payments allowed. At least the cost-shifting to patients would be transparent and the Auckland DHB lab could have taken any people who could not afford even a small co-payment. Or the DHBs could have absorbed these co-payments for high user and community services card holders.

This would have allowed Labtests to enter the market more slowly, one region at a time, and also allowed proper competition. But, of course, competition is a dirty word to most of the people who serve on DHBs.

Ah well, only another 6 year and 8 months to go on the Labtests contract. Then we can try it the proper way.