Coronavirus: pathologists’ push ‘sends test costs soaring’

Taxpayers stand to waste hundreds of millions of dollars on ­inefficient testing because of the powerful pathologist lobby, experts say.

‘These 10 million tests will allow our state and territory public health units to be able to test right through 2020’: Minister for Health Greg Hunt. Picture: AAP

Taxpayers stand to waste hundreds of millions of dollars on ­inefficient testing for COVID-19, according to doctors and industry experts who say cheaper antibody tests for COVID-19 are being overlooked because of the powerful pathologists­ lobby.

The mass rollout of pathology-based swab tests for the virus — of the sort mining magnate Andrew Forrest announced this week that he had sourced from China — will cost up to $2bn and fail to determine how widespread the virus is in the community, experts say.

The 500,000-plus COVID-19 tests done so far have been polymerase chain reaction or “swab” tests, costing about $200 each — including a new, ­super­charged $100 Medicare rebate to pathol­ogists — according to ana­ly­sis seen by The Weekend Australian.

Cheaper point of care tests — which can be performed on the spot, without sending the swab to a pathologist — determine from antibodies that develop about seven days after infection whether someone has had the virus.

Federal and state health ministers have plans to test hundreds of thousands of Australians in the coming weeks using PCR tests, broadening the eligibility to those with fewer coronavirus symptoms.

Jonathan Cohen, a GP in Victori­a with significant experience in pathology, said that PCR tests should be carried out in conjunctio­n with “rapid antibody tests, which are vitally needed to collect data about wheth­er a perso­n has been exposed”.

Mr Forrest announced that his charity Minderoo Foundation had sourced 10 million PCR tests from the Beijing Genomic Institute.

“These 10 million tests will allow our state and territory public health units to be able to test right through 2020, to provide us with the capacity to contain, suppress and defeat the virus,” Health Minister Greg Hunt said.

Pathology giant Sonic Healthcare, which this week won a government contract to test residents of aged-care facilities, stands to make an extra $20m from undertaking 300,000 tests, according to Morgan Stanley. “The government plans to increase capacity to facilitate a further 10 million tests. Assuming Sonic’s 20 per cent ­market share, this equates to an extra $153m in revenue,” it said.

Xavier Lawrence, chief executive of MDSolutions, which distributes point of care tests, said: “With the money being spent on testing 10 million largely asymptomatic people, a small allocation could be made for POC — roughly $40 total for a kit and testing fee.”

The federal government ordered­ 1.5 million POC tests in March, which were listed by the Therapeutic Goods Administration. On March 27, the Medicare schedule fee for private pathology testing was increased by 250 per cent to apply retrospectively from March 13.

On April 4, the Royal College of Pathologists recommended against using POC tests.

Throughout last month, state health authorities banned or advised­ against using POC tests, which have been used successfully in ­Europe and the US to work out how far COVID-19 has spread.

“There’s no reason why people shouldn’t be able to buy antibody test kits at the pharmacy and test themselves, which would save the government a lot of money,” said Stephen Duckett, health program director at the Grattan Institute.

“Pathology is a powerful oligo­poly of a few large companies,” he added.

Nick Demediuk, another GP in Victoria, said pathologists had long “hampered” use of POC tests in other areas of medicine, such as diabetes and HIV.

“The pathologists act in their ­financial interest, protecting their turf,” he said. “They bring object­ions — such as the GP can’t perform the tests adequately — which aren’t true,” he added.

The cost of a PCR test, including $48 for the GP, is $197, according to detailed modelling provided to The Weekend Australian.