News

Abano confirm change of lab service provider in Nelson

Company Announcement

CLOSURE IN SIGHT AFTER 45 YEARS VALUED SERVICE FROM NELSON DIAGNOSTIC

Following the Nelson Marlborough District Health Board (NMDHB) meeting held today, the NMDHB has announced that a final decision has been made on the future of laboratory services for the region, with the confirmation that Medlab South has been appointed to provide all medical laboratory services. As previously advised, the current contract for Nelson Diagnostic to provide community medical laboratory services will finish on 30 November 2006.

The NMDHB had initially announced it was negotiating with Medlab South but, following extensive lobbying from the local medical communities, a final decision on the contract was deferred. Nelson Diagnostic agreed to extend its current contract to 30 November 2006 until a final decision was reached.

A large number of medical practitioners and patients expressed their deep concern through the media, including over 6,000 members of the general public, who signed a petition objecting to the NMDHB’s decision.

Alan Clarke, managing director of Abano, said: “Abano has today received confirmation of the outcome of NMDHB decision process. As previously advised in earlier announcements and in our recent annual report, this process has been underway for several months. We have been an integral part of the medical community in Nelson and Marlborough for over 45 years, and referring doctors, patients and the general public have already demonstrated their outrage at the initial decision to change the existing service and provider. We had hoped the NMDHB would take the views and opinions of these communities into account and are very disappointed with today’s decision.”

He continued: “We believe the process the NMDHB followed has been flawed from the start. Unions representing affected medical staff had advised that they were not consulted, and there are currently reviews underway by both the Office of the Auditor General and the Office of the Ombudsmen into the NMDHB’s handling of the tender process. We also understand that the Audit New Zealand report is still in draft form and has yet to be finalised.

“We have been informed that the Office of the Ombudsmen has invited the NMDHB to consider whether it is appropriate for it to make a final decision to contract with Medlab South while the Office of the Ombudsmen is investigating, and we are surprised that the NMDHB has proceeded to make this announcement.

“A decision of such importance to a community cannot just be about dollars and cents. Access to services, expertise, relationships with the medical community, employment for local residents and the retention of highly qualified pathology specialists in the region are all considerations that must be taken into the equation.”

He concluded: “We will be working closely with our staff to provide the support they will need at this difficult time, and to review all options, including legal appeals, for the business going forward. This is a very sad day for Nelson Diagnostic, its staff and the community it serves.”

As previously disclosed, Nelson Diagnostic is not a large operation in Abano’s portfolio. Annualised revenues are $3.3 million and it contributes around $0.4 million of operational Earnings Before Interest Tax Depreciation and Amortisation (EBITDA). It employs 42 local health professionals with an equivalent of 18 Full Time Equivalent (FTE) employees, including one resident clinical pathologist. The business has net assets of $0.5 million and, should the laboratory close, there may be a resulting maximum redundancy cost of approximately $0.5 million.

For more information, please contact:

Alan Clarke, Managing Director, Abano Healthcare Group Limited
Tel: 09 300 1412 or 021 368 818
alan.clarke@abanohealthcare.co.nz

Richard Keys, Chief Financial Officer, Abano Healthcare Group Limited
Tel 09 300 1413 or 025 828 368
richard.keys@abanohealthcare.co.nz

For more information on Abano Healthcare Group, please visit www.abanohealthcare.co.nz .

Notes:

Abano Healthcare owns 100% of Nelson Diagnostic Laboratory which operates in Nelson

Abano Healthcare also successfully tendered for the Community Pathology business in the Wellington and the Hutt Valley region through a joint venture company between Abano Healthcare and Sonic Healthcare called Aotea Pathology, of which Abano owns 55% and Sonic 45%

Abano Healthcare Group is New Zealand’s leading listed specialist healthcare investor and operator, with businesses in four sectors – audiology, rehabilitation, diagnostics and dental.

Existing subsidiary entities include:

  • Abano Audiology – Bay Audiology (70 percent), Dilworth Hearing (40% owned by Bay Audiology)
  • Abano Rehabilitation – Burtons Healthcare, Health Partners, Ranworth Healthcare (100 percent), Orthotic Centre (70 percent)
  • Abano Diagnostics – Medical Laboratory Wellington, Nelson Diagnostic Laboratory (100 percent), Aotea Pathology (55%), Ascot Radiology (40 percent)
  • Abano Dental – Lumino Care Dental (100 percent)

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