Hidden Benefits
I have been following the DML/Labtests saga with interest. The media now seem to be fixated on the blood collection waiting times as if this is something other than a minor inconvenience. The DHBs have performance targets in place for waiting times and I’m certain that Labtests, once they have ironed out their initial, inevitable teething problems, will meet those targets easily. As the article points out, the problem Labtests has had initially is that they do not know to which collection depot people will go, as there are considerably fewer of them – a criteria set by the DHBs, I might point out, not by Labtests.
I am struck by the superficial nature of the media’s analysis of the benefits of the DHB’s switching to Labtests. The question is usually couched like this:
“When asked if the financial savings of the change were worth the upheaval, he [Auckland DHB chairman, Pat Snedden] said: “Time will tell … I think the changes will be beneficial.””
The constant impression you receive from the journalist question (and the non-informative answer by Pat Snedden) is that the only benefit from the change to Labtests is a relatively modest financial saving. This is simply not true.
- The change to Labtests has cause a radical revision and reformatting of all the processes used in providing a lab service. There is no doubt that Labtests will, once the kinks are ironed out in six months or so, provide a far more efficient service than DML. This is, I stress, not a reflection on DML staff, but a reflection on their management who appear solidly attached to old ways of doing this.
- The new contract means that all of Labtests equipment is state of the art. I anticipate better use of internet linkages, a wider range of tests available and more accurate versions of previous tests such as troponin (heart enzyme used for diagnosis of heart attacks). I also expect that the new equipment will better handle times of high load, reducing delays.
- Outside of Auckland, DML will be relatively intact. This means that, when this contract expires, we can expect true competition in the tendering process, keeping the cost of the service as low as possible.
These are just three benefits, off the top of my head, that have not been explored at all by the media, who appear to be happy to fight DML’s already lost cause.
When Labtests contract expires, I fully expect the media and all GPs to be singing Labtests praises and moaning about how a change back to DML will cause unnecessary upheaval.
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Sep 2 09 2:15 am
Not caring which way the contract went but bemused by DMLs response but curious why do you think they will be more efficent? Specimens come into the lab, anaylsed and results go back down the copper wire. Some less frequently ordered tests maybe speedier with new equipment but your bulk standard usual haem/ biochem/ micro repertoire arent going to be any quicker. From DMLs website they looked to be introducing a more sensitive version of Troponin. All the labs in NZ these days by and large do everything the same way. Apart from the cost saving Id be surprised if there was much other gains.
Sep 2 09 10:42 am
I like a lot of the stuff you post on your website, but in the case of the DML/Labtests issue I think you’ve got it dead wrong. Since I am a DML Haematologist I’m sure you will take that with a large pinch of salt, but you’re welcome to check with any experienced independent lab person as to the validity of what I say.
Firstly, you suggest that the DHBs will make sure that Labtests will meet waiting time targets. What are these targets? Why have they not made them public? Are they contractually enforceable? The original contract did not have any enforceable KPIs , merely a commitment to agree on KPIs during the first 2 years of service. A DHB executive explained to me that this was so Labtests would not be committed to anything they couldn’t deliver.
Your point 1 is difficult to comment on because it is so vague. What “old ways” are DML management wedded to? In what way has the provision of lab service been “reformatted”? This doesn’t make sense to me. On all benchmarking DML comes out as one of the most efficient labs in the Sonic group in Australasia. I’ve seen nothing about Labtests set up that is radically different; most of it looks less efficient to me.
Point 2 is simply wrong. The equipment used by Labtests is certainly no more “state of the art” than DML’s. They are using the same instruments as DML in Haematology (albeit in a less efficient configuration), a system DML in fact pioneered. In Biochemistry/Immunology they are using a system rejected 5 years ago by DML as being inadequate to meet the range and volume of samples processed. They have less capacity in haematology than DML and so are not well placed to handle times of higher load. They are in fact providing a narrower range of tests than DML and are sending tests to the hospital labs that DML used to perform. I would be interested to know in what way the troponin assay they’re using is “more accurate” than DML’s version and what the evidence for this is. It is likely, as with most labs, that Labtests is limited to a kit that is compatible with their technology.
Point 3 is also wrong. DML does not exist outside of Auckland and it’s parent company, Sonic Healthcare, is very unlikely to be interested in retendering unless there is a radical change in the current environment with its emphasis on cost over quality. You also seem unaware that it is the staff that are the most critical part of a well functioning and efficient laboratory and if DML falls over these will be dispersed to all parts. The chance of putting it all back together again will be minimal. I would also point out that the effect of these monopoly tenders for relatively short terms is going to be to encourage providers to minimise investment and cut corners. It will also be difficult to recruit staff into such an uncertain environment.
Sep 2 09 7:52 pm
Edward:
Thanks for taking the time to reply to my post in such detail. You are not the
first person to tell me I’m dead wrong, and you won’t be the last!
I confess, I posted this not out of any specific knowledge about
Labtests or DML, but out of frustration at the level of debate that is
being generated on the issue. My observations are based on typical
benefits of a start up company compared to a old established one.
Having said that, I find it hard to believe that Labtests would set up
an inferior system to the old DML one. Where would there competitive
advantage be? I suspect your judgement on this is tinged with
irritation at the massive upheaval, but I am prepared to concede lack
of hard facts on my part!
I was not aware that DML was only Auckland based (I thought they had
Hamilton labs as well. This makes the loss of it’s contract with the
DHBs fatal, rather than simply damaging. While I acknowledge you are
quite right in pointing out the essential nature of good staff, I
completely reject your assertion that Sonic would not be interested in
tendering in 8 years time. They are and will be in a much better
position to do so than Labtests ever was, having the parent company
resources to draw from. And huffing and puffing about “cost over
quality” is what cost DML the contract in the first place. If they had
taken the DHB cost concerns seriously in the first place, instead of
(foolishly) thinking that they had an unassailable monopoly, they
would not be in the pickle that they are.
I feel very sorry for the staff of DML. I think they had a good team
let down by poor upper management. And the more I hear from your CEO,
the more I know that, at least in this case, I am right.
Sep 3 09 1:45 pm
Hi Macdoctor: I have proudly worked for DML for over a decade and happy to declare my conflict of interest! You mention LTA “requiring a competitive advantage”- why? There IS no competition. Had LTA been allowed to enter the market and compete with DML (a situation I would have fully supported) then there would have been an incentive to provide “superior systems”. LTA would appear to have lots of whizzy gadgets, but it seems to me that all the technology in the world is not making up for the fact that the gadgets aren’t fully co-operating due to some fundamental flaws in LTA’s systems. Neither are the staff sufficiently qualified to resolve the issues. I would love DML to make a comeback in 8 years time, but by then I will have left the industry (I have post-grad qualifications in education) as will many of my experienced and qualified colleagues. I will be interested to hear your experiences as the LTA experiment rolls to a suburb near you!
Your wish will be granted on Monday. Labtests take over from DML for us then.