SA Pathology spared privatisation for at least a year

SA Pathology should not be privatised for at least a year, a consultants’ report into the troubled service recommends.

• Privatising SA Pathology a ‘weird experiment’: AMA boss

SA Pathology should not be privatised for at least a year, a consultants’ report into the troubled service recommends.

Its future has been under a cloud for years, with previous recommendations to sack hundreds of staff and a warning from Treasurer Rob Lucas in the last State Budget that it needs to save millions of dollars in costs or face privatisation.

The PricewaterhouseCoopers report, commissioned by the Government last September, says the service should be given 12 to 18 months to meet savings and efficiency targets before any move to contract out its work to private operators. It recommends another review after that period and “if insufficient progress has been made at that time, Government should reconsider a potential move to contestability’’.

Health Minister Stephen Wade. Picture: AAP Image/Kelly Barnes

The Advertiser has obtained excerpts from the report, which is due for imminent release.

Health Minister Stephen Wade, pictured, has not commented but the Government is expected to accept the recommendation to put off privatisation for now.

The PwC report notes that SA Pathology would be “unlikely to be sustainably competitive in a contestable environment without extensive changes to its operating model, putting the organisation on a more commercial footing and improving performance’’.

In a scathing critique, the report states: “Financial management capability and commercial understanding appears to be limited, as demonstrated by overall financial performance, an inconsistent understanding of delivery costs across services and an absence of a clear and consistently understood financial baseline.

“This is restricting good commercial oversight, effective decision making and close management of efficiency initiatives.”

Unions and the Opposition have warned that privatisation would lead to delays in test results, while Australian Medical Association state president Associate Professor William Tam told a parliamentary inquiry such a move would be a “weird experiment”.

However, unions have conceded the service needs to become more efficient.

SA Pathology’s recent troubles include bungled prostate tests in 2016 wrongly suggesting cancers had returned after surgery in some men, and blood and tumour tests delayed or lost last year under its over-budget computer system.

It is currently without a director, deputy director or clinical director.