Earthquakes and New Lab Test Contracts Shake Up Christchurch’s Pathology Marketplace

It’s been a challenging year for this New Zealand city’s medical laboratory testing professionals

CHRISTCHURCH, NEW ZEALAND—Two private clinical laboratory companies in this city have had quite a roller coaster ride during the past 18 months. Included in the ups and downs were a series of destructive earthquakes, a new contract bidding cycle that eliminated one of the two existing private medical laboratory companies, and a lab acquisition.

For pathologists and clinical lab administrators in other countries, there are useful lessons to be learned in the aftermath of the Christchurch earthquakes. Among other things, one clinical laboratory company needed to move its testing facility six different times in a year! That’s because aftershocks and ongoing engineering inspections revealed significant damage to these different buildings at different points in time.

Two Major Earthquakes within Six Months in Christchurch

It was September 4, 2010, when a magnitude 7.1 earthquake rocked the city, causing considerable damage but no fatalities. Just six months later, on February 22, 2011, a magnitude 6.3 earthquake hit Christchurch. This second earthquake caused substantial damage and loss of life. For this event, experts noted that the “intensity and violence of the ground shaking was measured to be… among the strongest ever recorded globally in an urban area.”

 

Not only was the damage to buildings and infrastructure widespread in Christchurch, but 185 people lost their lives. Numerous and significant aftershocks have been recorded over the past 18 months. More than 20,000 homes were destroyed or damaged. In downtown Christchurch, it is estimated that 90% of the existing buildings will need to be demolished.

During his visit to Christchurch last week, your Dark Daily editor, Robert L. Michel, was able to interview the executives from the two main clinical laboratory organizations in the city. He conducted a site visit to the newest lab facility for the private clinical lab company. There was also a tour of the “red zone” in the core of Christchurch where the public is not allowed to go and where the demolition of damaged buildings is proceeding seven days per week.

Three Clinical Laboratories Provided Testing in Christchurch

Prior to the first earthquake, three major pathology laboratories provided services in Christchurch. Canterbury Health Laboratories (CHL), which is part of the Christchurch Hospital, handles inpatient testing and complex testing. Separate contracts to provide testing services to office-based physicians in the region where held by MedLab South (a business unit of Sonic Healthcare, Ltd. [AU: SH]), and Southern Community Laboratories (a business unit of Healthscope,Ltd. [AU: HSP]).

Following the February, 2011 earthquake, the District Health Board (DHB) in Christchurch decided to launch an early tender process for community lab testing—which describes the medical laboratory testing that originates from clinics and physicians’ offices. The DHB had two goals.

One goal was to contract exclusively with one private laboratory company to provide community lab testing. The second goal was develop a collaborative relationship with the lab company that won the contract tender and Canterbury Health Laboratories. This collaboration is expected to contribute to better integration and standardization of the clinical laboratory testing services provided by both lab organizations.

It was Southern Community Laboratories that was awarded the contract, which was effective on April 1, 2012. Once the contract award was announced last December, Southern made an offer to acquire MedLab South. That deal was approved by regulatory authorities and completed in recent months. This left Southern Community Laboratories as the exclusive private clinical laboratory provider in this region.

Following the February 22 earthquake, the buildings which housed the laboratories for MedLab South and Southern Community Laboratories were declared unsafe. In the case of MedLab South, the lab building was evacuated immediately and patient specimens could not be retrieved and moved to another location.

Into the breach stepped Canterbury Health Laboratories. Its laboratory facility survived the earthquakes in good enough shape to continue lab testing operations. It helped MedLab continue testing in support of physicians in the community. CHL also supported the effort to recall and redraw those patients whose specimens were unrecoverable because they were trapped in MedLab’s earthquake-damaged lab facility.

For Southern Community Laboratories, it was a similar story. Its laboratory facility was also deemed unsafe following the February 23 earthquake. However, several intrepid pathologists—in the company of engineers or building contractors—did get back in the building and retrieve patient specimens.

In fact, this aspect of the disaster’s aftermath offers a lesson for pathologists and clinical laboratory managers around the globe. Emergency protocols should anticipate how patient specimens should be handled if a laboratory facility is damaged or made inaccessible. That would include a priority ranking for retrieving specimens, since biopsies and tissue samples would be more difficult to recollect than blood and urine specimens. It should also identify how any patient redraws or specimen recollections would be conducted.

Clinical Laboratory Facility Was Moved Six Times

The anecdote that may be of keenest interest to Dark Daily readers is the remarkable challenges that Southern Community Laboratories had before it found a structurally sound building to house its laboratory. From the time its original laboratory building was condemned after the February 22, 2011, earthquake, the company moved lab testing operations into six different buildings.

In one case, building inspectors notified management on a Wednesday afternoon that the building housing the laboratory was unsafe and operations needed to be moved. Lab executives at Southern Community Laboratories announced this to the staff on Friday, just 48 hours later. By Monday, the lab facility was relocated into another building and was operational!

More needs to be said about the goals of the Canterbury District Health Board to use an approach called “alliance contracting” as the tool for bringing together the hospital-based laboratory (CHL) with the community-based laboratory (Southern Community). This is an effort to establish the type of integrated clinical laboratory service organization that is required to deliver proactive care across both inpatient and outpatient settings.

Clinical Lab Professionals Rose to the Challenge

Finally, the collaboration and the resilience of the pathologists, clinical biochemists, and laboratory scientists throughout these highly disruptive events in Christchurch reflects well on the laboratory medicine profession. There are numerous stories of pathologists and laboratory scientists who stood by and kept the laboratory safe and in operation dispute the turmoil and destruction caused by the earthquakes.

For anyone who would like to know more about the earthquake damage and recovery effort in Christchurch, this link is a good starting point. (Or copy this URL and paste it into your browser: http://www.nzherald.co.nz/christchurch-earthquake/news/headlines.cfm?c_id=1502981)

Your Dark Daily Editor,

Robert L. Michel

e-mail: rmichel@darkreport.com with your comments.

Related Information:

Canterbury lab learns hard lesson from quake

Southern Community Laboratories cleared to acquire Medlab

Canterbury’s community laboratories service provider confirmed

Auckland Hospital Laboratories Play Defined Role in Supporting Patient Care

Long-Awaited Lab Contract Transition in New Zealand Happens Next Monday

New Zealand’s Health System Walks Pathology/Lab Testing Tightrope

THE DARK REPORT: Aukland Health Board coverage