Abano's pathology business signs $26m contract extension

Abano Healthcare Group’s Wellington-based pathology business, Aotea Pathology, has signed a one year contract extension, worth just over $26 million. The existing community pathology contract it holds with the Hutt Valley and Capital & Coast District Health Boards (DHBs) will now expire in October 2015.

Aotea Pathology has been working closely with the DHBs for the past year and has collaborated as part of a working group set up to identify the optimal pathology and laboratory service solution for the wider Wellington region.

The contract extension has been agreed to by Aotea Pathology to allow the review to progress while providing surety of service for patients and referrers.

Aotea Pathology has provided the community pathology service to the wider Wellington region for over 80 years. More than 2.2 million tests are carried out each year, with patient samples collected through a network of community rooms and medical collection points. These samples are then analysed at Aotea Pathology’s state of the art laboratory in central Wellington by a team of New Zealand’s leading pathologists and scientists.

Managing director of Abano, Mr Alan Clarke, said: "The DHB review is important to ensure that there continues to be a professional, high quality medical service for the greater Wellington area, which provides best value for money.

"We hope that this may lead to longer term contract tenure which would be to the benefit of all parties. It would allow Abano to increase its investment into delivering this world class pathology service, and importantly, to offer the employment stability and security required to recruit and retain world class pathologists and laboratory staff in New Zealand."

He continued: "Aotea Pathology’s long history, deep understanding of the needs of the local communities and strong relationships with local referrers, patients and the DHBs provides us with unique insights into the Wellington pathology sector. We are pleased to have been able to share our knowledge with the DHBs as options are considered as to how pathology services can best be provided to patients in the region.

"The organisation is fully certified by IANZ and their innovative approach and introduction of initiatives such as electronic test ordering are important factors in achieving the outcomes of the NZ Triple Aim of better care for patients and communities and best value for the money invested. As a leader in the industry, they continue to innovate with best practice, processes and technology.

"An Expression of Interest has now been released by the DHBs and we are looking forward to continuing to fully engage in the process to ensure the future of a professional and expert pathology service for people in the wider Wellington region."

Abano has a 55 percent shareholding in Aotea Pathology, which is a joint venture between Abano and Sonic Healthcare which holds the remaining 45 percent. The business is part of Abano’s diagnostics sector which also includes Insight+Ascot Radiology in Auckland. The sector provided 16 percent of Abano’s Group gross revenue in FY13.