“ There’s simply no
evidence that shows private pathology is more efficient.
BLEEDING OUR STATE DRY SA Pathology is being lined up for privatisation, and it’s a very bad idea On Tuesday 2 April 2019, the state government released the PricewaterhouseCoopers (PwC) report titled, Review of the commercial competitiveness of SA Pathology in a contestable market. The report contains almost impenetrable analysis on how the “business model” needs improving while saying absolutely nothing about how a more “competitive” service would benefit the community. The report found that SA Pathology is not in any position to be privatised, but only because “it isn’t currently competitive”. Since when does a public service that provides an essential community service need to be “competitive”? The reality is, it needs to be sustainable, but the government appears to be cutting costs to make the service more attractive to a potential buyer in a sell-at-allcosts mentality. While the report highlights areas where ‘staff operating costs’ could be reduced, it does not include any recommended staff
14
”
savings. The government, however, took the opportunity to pluck a number out of thin air, stating they wish to reduce the workforce by about 200 staff, an announcement without any supporting information or study into the effects on the system such cuts may have.
“ Constant concerns
started to arise about ACL’s business model and how its pursuit of profit impacted on the quality of services.
”
Treasurer Rob Lucas has insisted the government is trying to achieve efficiencies in order to save SA Pathology from privatisation, but there is little doubt that government handing the service over to one of the large private providers is a real possibility. Lessons from interstate If the government does its due diligence, it should forensically examine the recent history of privatised pathology outside of South Australia.
Public Sector Review Magazine | AUGUST 2019
In 2012, Bendigo’s public pathology services were privatised, with Healthscope Pathology awarded a five-year performance-based contract to run the service. The deal came with promises from the Bendigo Health bosses that all existing staff would be retained and services would be improved. “There will be no job losses for our staff and no loss of quality, decrease in service or additional costs to our community ...” they claimed at the time. Perhaps Bengido Health was taken in by the spin, but their trust in Healthscope to keep its word was misplaced. In 2015 Healthscope was acquired by leading private equity firm Crescent Capital Partners. This deal gave rise to the formation of Australian Clinical Labs (ACL), now the third largest provider of private pathology in Australia. ACL employs 3800 staff across 90 laboratories, 900 collection centres and 90 private hospitals in Victoria, SA, NT and NSW. These types of acquisitions are commonplace, meaning once dependable, secure public services are subjected to the whims of a market that prioritises profits over people.
