News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Pathology Laboratory Consolidation May Leave New Zealand Holiday Destinations with Limited COVID-19 Testing Capacity as Omicron Variant Arrives

Due to the national health system’s aggressive cost-cutting measures over the past 20 years, some regions of the island country now have only limited local medical laboratory services

It was in the early 2000s when different district health boards throughout New Zealand decided on a strategy of issuing sole source, multi-year medical laboratory testing contracts in their regions to cut lab test testing costs. Consequently, pathology laboratories that lost their bidding were forced to cease operations or merge with the winning bidders. At the time, New Zealand pathologists and laboratory scientists feared the government health system was undermining the financial stability of pathology laboratories and leaving portions of the country with limited testing capacity.

Now, arrival of the SARS-CoV-2 Omicron variant on the remote island nation may be creating a day of reckoning for that decision. In particular, “holiday hotspots” in New Zealand may be filling up with seasonal travelers at the exact moment a surge in COVID-19 testing is needed.

Holiday Destinations Lack Pathology Lab Capacity

Medical laboratory scientist Terry Taylor, president of the New Zealand Institute of Medical Laboratory Science (NZIMLS), fears some small-town tourist destinations do not have the local-based medical laboratory testing capacity to process a surge in PCR tests and will need to ship samples elsewhere, delaying the speed at which COVID-19 test results can be delivered in communities that attract thousands of vacationers during New Zealand’s summer from December to February.

“In these areas, those swabs that are taken will end up being sent to the mothership so to speak, so one of the larger laboratories that’s nearby those regions,” he told Checkpoint. “So, there will be delays when this starts to kick on.”

Taylor also pointed out that shifting lab work to larger medical centers creates capacity concerns within those facilities as well.

“I will reiterate, all of the big hospitals will obviously still be operating 24-hour services doing the acute work that’s coming through,” he said. “But be aware, we do everything. We don’t just do COVID testing, so sometimes things are just going to have to wait in those periods.”

Terry Taylor

“We’ve certainly got to get together now and come up with a plan that works so that we do not inundate our laboratories and therefore the other health services,” medical laboratory scientist Terry Taylor (above), president of the New Zealand Institute of Medical Laboratory Science, told Newshub. “It is really not an option to test everyone. We need to be looking at who we test, how we test and when we test,” he added. (Photo copyright: Newshub.)

In a statement to Checkpoint, the New Zealand Ministry of Health maintained COVID-19 testing remained a priority for the government over the Christmas and New Year period.

“The ministry works closely with DHBs (District Health Boards) and laboratories to manage demands for testing, and to reiterate the importance of processing and returning tests as quickly as possible,” the statement said. “It should be noted that samples of close contacts of cases and high-risk individual are prioritized by laboratories.”

Dark Daily Correctly Predicted Pathology Lab Losses

In 2009, Dark Daily reported on New Zealand’s use of contract bidding for pathology lab testing services in Wellington and Auckland in an effort to drive down costs. The winning labs agreed to roughly a 20% decrease in reimbursement rates.

At that time, Editor Robert L. Michel predicted the loss of established pathology providers and insufficient reimbursement rates could lead to scaled down testing menus, loss of skilled staff and a negative impact on patient care. He noted then, “New Zealand may become the first developed country in the world to learn what happens to the entire healthcare system when deep budget cuts finally leave medical laboratories with insufficient reimbursement.

“Such a situation,” Michel continued, “would likely mean that laboratory test providers in New Zealand would lack the funding and resources to offer physicians and patients a full menu of state-of-the-art diagnostics tests. It could also mean that medical laboratories would lack adequate resources and skilled staff to sustain the quality of test results at a world-class level of quality, accuracy, reliability, and reproducibility. In either case, the quality of patient care would be negatively affected.”

Fast forward to 2022, as the COVID-19 pandemic continues some New Zealand leaders fear the opening of Auckland’s border to summer travelers will lead to community spread of the coronavirus at a time when budget cuts have left these same regions with local pathology testing capacity that is insufficient to meet the needs of the surrounding community.

In fact, New Zealand’s first case of community exposure to the Omicron variant was reported in Auckland on December 29, 2021, a Ministry of Health news release noted.

“You’re going to see the virus seeded everywhere,” epidemiologist Michael Baker, Professor of Public Health, University of Otago in Dunedin, New Zealand, told The Guardian in mid-November.

Critical Supply Shortages as Pathology Testing ‘Crunch Point’ Reached

In the early months of the COVID-19 pandemic, New Zealand’s clinical laboratory system nearly reached a breaking point as a shortage of COVID-19 tests left the system teetering on the edge of collapse.

According to Joshua Freeman, MD, Clinical Director of Microbiology and Virology at the Canterbury DHB, the “crunch point” arrived around March 20, 2020, when New Zealanders were being urged to get tested so the country could determine if there was community transmission of the virus, online news site Stuff reported.

Meanwhile, testing supplies such as reagents, plastic tubes, and pipette tips were in short supply globally and 13 regional labs were yet to be set up across the country. Even once the new laboratories, district health board testing centers, and mobile clinics were up and running, procuring needed supplies remained challenging, according to COVID-19 testing data from the Ministry of Health.

America also Struggled with COVID-19 Supply Shortages

While New Zealand’s mostly publicly funded universal healthcare system has been stressed by the COVID-19 pandemic, America’s private system has not fared much better. In the early months of the pandemic, personal protective equipment, COVID-19 tests, and testing materials also were in short supply in this country.

CBS News reported that the US was continuing to struggle with limited supplies of COVID-19 rapid antigen tests and long turnaround times for clinical laboratory polymerase chain reaction (PCR) tests as families gathered for the recent holiday season.

Thus, clinical laboratory leaders and laboratory scientists in this country should watch with keen interest at how New Zealand’s pathology laboratories fare as the Omicron variant further challenges the country’s testing capacity. 

Andrea Downing Peck

Related Information:

Testing Times: How a Health Workforce Jumped Up to Help Stamp-out New Zealand’s Coronavirus Crisis

Lab Boss Warns of COVID Testing Delays in Holiday Hotspots

COVID-19 Warning: Omicron Will Overwhelm Us Within a Week If It Takes Hold in New Zealand, Experts Say

Criticism of Laboratory Workers ‘Unfair’–Industry Leader

First Community Exposures from Border-Related Omicron Case

Ministry of Health: Testing for COVID-19

Testing Times: How a Health Workforce Jumped Up to Help Stamp-Out New Zealand’s Coronavirus Crisis

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

Why Public Disclosure of Anatomic Pathology Errors in Canada, But No Similar Events Reported in the United States?

As healthcare systems make patient safety a greater priority, the public reporting of pathology errors in Canada has no comparable track record in the United States

Errors in anatomic pathology  testing in the Canadian provinces of Nova Scotia and Saskatchewan made media headlines this summer. In each case, it was just a limited number of cases where errors at pathology labs resulted in inaccurate diagnoses and, in at least one case, a needless mastectomy for a patient.

At a time when health systems in Canada, the United States, and other developed nations are giving great emphasis to patient safety, disclosure of life-changing diagnostic errors to patients is appropriate. Consumers are holding physicians—including surgical pathologists—to a higher standard of care. (more…)

National Survey of Clinical Pathology Laboratory Executive Salaries to Be Presented at 17th Annual Executive War College on Lab and Path Management

Trends in salary, compensation, and benefits is nation’s oldest for medical laboratory CEOs, executives, and administrators

For the fourth consecutive year, a reliable national survey of compensation trends for clinical laboratory executives, administrators, directors, pathologists, and managers was conducted. The first findings of this survey will be presented on May 1 at the Executive War College on Laboratory and Pathology Management in New Orleans, Louisiana.

Slone Partners of Miami Beach, Florida, national recruitment experts for the diagnostic laboratory industry, and The Dark Report once again collaborated to produce what is fast-becoming the nation’s most comprehensive national survey of trends in compensation, benefits, and perks paid to senior executives, lab administrators, lab managers, pathologists, and Ph.D.s working in the United States. (more…)

American Pathology Partners Announces Acquisition of Laboratory Assets of Palm Beach Pathology

This is APP’s third acquisition of an anatomic pathology laboratory since 2008

Earlier today, it was announced that American Pathology Partners had acquired the anatomic pathology laboratory assets of Palm Beach Pathology, the private pathology practice located in West Palm Beach, Florida. No purchase price was disclosed.

Consistent with its business model, American Pathology Partners (APP) purchased the pathology laboratory owned and operated by Palm Beach Pathology, along with its staff and associated assets, such as courier cars and sales representatives. The six partner pathologists of Palm Beach Pathology continue to own 100% of their professional corporation. (more…)

Good News for Anatomic Pathology Laboratories: Tissue-Based Diagnostics Market Predicted to Double by 2016

Advanced histology staining equipment will capture a greater market share

There’s good news for anatomic pathologists in the forecast from one expert watching the U.S. market in equipment for clinical diagnostics. According to Winny Tan, Ph.D, a Senior Analyst with Frost & Sullivan, the increasing rate of cancer incidence in the U.S. will drive robust growth in tissue-based diagnostics.

She predicts that revenues from that segment will more than double by 2016, growing from the $1.029 billion in 2009 to $2.278 billion in 2016. Tan made her predictions in an article in the May 15, 2010 issue of Genetic Engineering News.