The rent rip off that will see you pay 30 for a blood test

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The rent rip off that will see you pay $30 for a blood test  February 17, 2016 12:00am  Sue Dunlevy National Health Reporter News Corp Australia Network

Blood from a stone? Pathologists are having to pay exhorbitantly high rents in medicla centres. Picture: iStock

PATHOLOGY companies are paying 20 times the market rent to set up collection centres in medical centres and its one reason patients will pay $30 for a blood test from July.

The controversial rent agreements are driving up the cost of blood tests and placing doctors in a conflict of interest.

And companies are warning when they are coupled with $332 million government Medicare cuts that take effect in July patients will have to pay a new $30 fee for blood tests and Pap smears.

Diabetes testing could leave patients with a $400 annual bill, pathologists are warning.

Pathology companies have been paying the high rents to have their collection centres collocated in a doctor’s practice to ensure they get most of the business when a doctor orders a test.

The lucrative rent gives doctors an incentive to order unnecessary tests to give the pathology company enough revenue to pay the high rents that prop up the doctors business.

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This pushes up the cost to taxpayers who pay for the tests through Medicare.

Pathology companies have revealed the rent problem in a budget submission to the government and are asking for the practice to be stamped out.

Dr Nick Musgrave the president of Pathology Australia says rents equivalent to the Sydney CBD or Hong Kong CBD, are being charged in some cases.

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A pathologist handling a blood sample in a test tube. Picture: istock

Dr Musgrave says the Government has rules in place to control rents in the pathology sector, they should not be 20 per cent greater than the market rate.

However, he says “the government has never attempted to enforce these regulations” even though it receives information on the rent paid by every pathology collection centre.

Asked whether the rent agreements could represent a conflict of interest for medical practice he said “they are not transparent arrangements, it is not known to patients”.

He said in cases where there are exorbitant rental payments they “could be interpreted as being a commission”.

Since deregulation the number of pathology collection centres has more than doubled from 2500 to more than 5000.

“It’s a substantial cost burden.

“The number of collection rooms has gone well beyond what would be regarded as reasonable access.

The problem needs to be fixed so companies can weather recently announced cuts to Medicare payments for pathology due to take effect in July, Dr Musgrave says.

Nearly 98 per cent of pathology tests are currently bulk billed at no cost to the patient but from July, when the government cuts take effect, the industry is warning patients face fees of $30 for blood tests, Pap smears and diabetes tests.

Australian Medical Association GP spokesman Dr Brian Morton agrees there could be a conflict of interest in the high rents.

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A pathologist drawing blood. Picture: iStock

“There is a conflict but it is about the way it is managed. This occurs in virtually every aspect of medicine including the surgeon recommending you knee transplant,” he said.

An audit a few years ago found no evidence GPs with co-located pathology collection centres were ordering extra tests, he said.

There is “a degree of hypocrisy” in pathology companies complaining about the problem they created, he says.

The biggest pathology company, Primary Health Care, also owns multiple GP clinics and the second biggest company Sonic owns both the Independent Practitioner Network and pathology company Douglass Hanly Moir.

“There is no evidence of extra tests being funnelled but if there is Sonic and Primary Healthcare have to look at whether their own house is in order,” he says.

A spokeswoman for the Department of Health said it was “looking at options to ensure policy objectives and enforcement activities are aligned, including exploring ideas to enforce the existing framework.”

It was looking at working with the sector on developing a compliance strategy, the spokeswoman said.

Originally published as Pathology rent rip off costs you

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