Private healthcare pushing Auckland labs to the brink

Rocketing demand from private health practices in Auckland has been pushing public pathology services to the brink.

The escalating pressure is complicating what was already a very difficult rescue job at one of the country's busiest labs, Community Anatomic Pathology Services, or APS.

Health authorities have been scrambling since getting a warning two years ago in a report now disclosed under the OIA:

"The service is in crisis mode and, without urgent investment ... there is a real risk that it will fail," said the 2021 report from consultants PwC to the then Auckland District Health Board.

"The changes required are of such urgency that it is recommended that they be placed at the top of the agenda."

APS was established in 2015 and is relied on by about a third of the population to test hundreds of thousands of tissue and anatomic samples a year, to detect diseases and serious conditions.

Te Whatu Ora told RNZ there had been a higher demand than anticipated.

"The overall increasing demand is greater than the capacity of the service."

Demand had leapt by a third between one quarter in 2022, to the same quarter in 2023.

One factor was an increased volume of private surgery being carried out by 600 specialists in the region and 2000 general practitioners, with up to 450 histology cases a day.

That is in part due to public hospitals outsourcing more operations to private surgeries as a way of dealing with demand for planned care. Those private practices then send their samples to APS.

The backlog has hit turnaround times for processing samples, which had been deteriorating.

"We recognise the concern and impact any delayed results can cause referrers and their patients," Health NZ said in the OIA response.

In its first six years since being set up in 2015, the lab "consistently" failed to achieve its turnaround targets, which went up and up.

But recently it has been turning that around. It was now regularly hitting the target to issue a final report within 15 days, in 98 percent of cases, and 90 percent within 10 days, the agency said.

However, it was still scoring only 71 percent, against a target to turnaround 80 percent of cases within five days.

A source familiar with the work said "the situation is much improved due to dispersal of work around city and country for now".

"The teamwork around the region has been a veritable lifesaver."

Health authorities are in the early stages of planning for the construction fo a whole new lab for APS to move into - which will add to costs.

"It is scheduled to go up to the Te Whatu Ora board in January. It's therefore too early to provide further details," said director of strategy, planning and purchasing for hospital and specialist services, Rachel Haggerty, in a statement.

Till it is built, APS must continue to deal with ongoing workforce shortages and a cramped, old lab where conditions got so bad from 2019-2021 that workers were exposed to cancer-causing formaldehyde in cramped workspaces, and flammable chemicals were stored unsafely.

It has improved safety since, and recent pay increase deals may help stem the loss of staff.

However, the threat it will be overwhelmed remains.

"Overall this laboratory is responding to increasing demographic growth across Aotearoa," Te Whatu Ora said.

Problems plagued the lab from the start

The 2021 report by consultants PwC showed it was set up in 2015 in such a rush and under such pressure, that for the next six years it suffered from a dearth of planning, auditing and lack of even basic quality controls.

"No service specification was drafted prior to, nor in the six years following, establishment of APS," the report said.

Te Whatu Ora said it has since adopted recommendations from independent occupational hygienist experts, made the work spaces safer and staff were using better respiratory PPE.

In the muddle of the overhaul of lab services nationwide after 2009, planners totally underestimated demand on APS, not to mention how cases would get more complex.

Usually labs that do both clinical and histology testing, rely on the former getting done quickly by machines on bloods and urine.

"Clinical pathology is highly automated and traditionally profitable, while the tissue testing work of anatomic pathology is almost wholly manual, labour-intensive, and therefore more costly," the PwC report said.

But the two types got split up in Auckland. This added to costs from having to duplicate administration. Costs were 20-40 percent higher than they could have been.

"Overall, this has resulted in an underestimate of the true costs required to run the service and an overestimation of the potential savings that could be achieved," the report said.

The funding model was broken and had to change, the report said, arguing effectively the public system was subsidising private patients.

The funding model had since changed, with allocations "now made on a needs-based approach, at a national and regional level", Haggerty said.

Despite the pressure, the lab's accuracy remains high.

The OIA response includes a rundown of incidents this year; these are occurring at a rate of about six a week, however, nearly all of them are minor, most commonly where the results of tests are reported back to the wrong GP or surgeon.

Because these had their own professional obligations of confidentiality, they "know the importance of protecting individual patient's privacy and alert us straight away to the error so the result can be re-routed promptly to the correct health professional".

A business case was being done to set up an electronic ordering system to cut down on manual processing errors.