New Zealand’s largest privately-owned medical laboratory, Awanui, reported a $16 million loss for the past year, a stark contrast to its $13 million profit the previous year.
The loss occurs as staff warn the health minister of the workforce being at a breaking point, risking patient safety, according to a report in state media. Despite the financial setback, Awanui maintains its financial solvency, supported by the board and investors.
The company blames general cost inflation, higher interest rates, and unfunded labour rate increases for its declining revenues. Recently settled industrial action resulted in a 5.5% wage increase and a $3,000 bonus for staff. Health NZ said Awanui’s performance meets patient needs and is actively collaborating with it to address workforce issues.
The financial report reveals a revenue drop from $385 million to $316 million over two years, with profits turning to losses and no dividends paid out in 2023.
State media also report staff have raised concerns about severe strain, inefficient operations due to understaffing, and equipment failures, leading to patient risks. While Health NZ negotiates contract renewals confidentially, the agency is reviewing commissioning arrangements for laboratory services.
Former Institute of Medical Laboratory Science president Terry Taylor said there was an urgent need for a revised model to allocate the $600 million spent on lab services effectively, warning that without a functioning pathology service, the health system itself is at risk.
What makes me think that there is much more behind this story?
No comment on the 20 plus million spent on rebranding, using a new name with no meaning