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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2008-06-19 Daily Xml
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STATUTES AMENDMENT AND REPEAL (INSTITUTE OF MEDICAL AND VETERINARY SCIENCE) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 17 June 2008. Page 3294.)

The Hon. J.A. DARLEY (12:20): I rise to make a contribution to this bill. The Institute of Medical and Veterinary Science is internationally renowned for its pathology services and recognised for its great achievements within the research field. For example, the World Health Organisation recognises the IMVS as an international reference laboratory for tuberculosis. The clinical unit based in the Royal Adelaide Hospital, which provides services to patients with leukaemia and lymphoma, has gained both a national and international reputation.

The Hanson Institute established in 1990 provides not only research facilities for staff at the IMVS but also support for high standard researchers from numerous health care facilities in South Australia. The IMVS also supports the technological and service development of all pathology services, particularly in the areas of anatomical pathology, molecular pathology, immunology and haematology.

As demonstrated, the reputation of the IMVS is not only far-reaching but, perhaps more importantly, it boasts a stellar reputation at a local level too. The IMVS has managed to engage the support of general practitioners with its high-quality service, fast turn-around times and responsiveness to requests. This has raised millions of dollars for the service, moneys that did not have to come from the taxpayer. In the 70 years since the IMVS has been established, the service has been moulded and shaped into one of Australia's top four pathology and research services as judged by staff, publications and external peer review grants.

I have had the privilege and opportunity of working with Professor Brendan Kearney over the last 20 years when he was CEO of the RAH and, more recently, director of the IMVS. Professor Kearney is recognised worldwide as a leader in health administration and, under his leadership, RAH and IMVS have continued to gain a national and international reputation for service and medical research. Organisations strive to achieve what the IMVS has in regards to research results: community standing, reputation and industry respect.

The IMVS model of integrated service, education and research has been reproduced and emulated nationally and internationally. With a success rate such as this, it is to be wondered why the government seeks to abolish such a highly regarded institution. I understand that two other public pathology services, SouthPath and the Women's and Children's Hospital Division of Laboratory Medicine, have yet to establish a similar profile. Surely, the logical arrangement would be to bring the pathology services under the successful administration of the IMVS.

Experience has shown us that amalgamating services does not always lead to positive outcomes. The establishment of the Central Northern Adelaide Health Service (CNAHS) saw an increase in administration and management with no real benefit at the service level. Furthermore, the establishment of CNAHS effectively saw the abolition of the RAH as a legal entity. In the eyes of the government, the RAH does not exist as a legal entity. I would say that the majority of South Australians are not aware of this and, indeed, suggestions of a referral to CNAHS would be met with blank stares.

CNAHS does not have standing within the community. The RAH possesses such a strong identity and reputation that it is the RAH that stays strong in people's minds and not CNAHS. I anticipate the same occurring with the change from IMVS to SA Pathology. This begs the question: why sacrifice a successful operation for the sake of two less successful pathology services? Retaining the name for trading purposes simply reinforces the fact that the government recognises the respect and standing of the IMVS in the community. Amalgamating the services and restructuring the administration could seriously jeopardise this reputation.

I have taken the time to read many of the findings of and statements taken from focus groups consisting of staff from all three existing public pathology services. I found that participants in the focus groups were hesitant about the consolidation; however, they felt obliged to support it as it would allow them access to salary sacrifice. This is to say that, were it not for the offer of salary sacrifice, I do not believe that the staff would be as supportive as they are. I believe that there are alternatives to providing access to salary sacrifice without having to consolidate these three services.

I thank the minister and his staff for their assistance to me in regard to this bill. Whilst I now have a better understanding of the government's intentions and motives behind the proposed bill, I still hold some reservations about the outcomes should it be passed. Whilst I supported the health care legislation, I am disappointed at the manner in which the implementation of measures for that legislation have been handled by the top-heavy bureaucracy. Without further evidence that the same will not occur under this proposed legislation, I regret that I am unable to support the bill.

The Hon. G.E. GAGO (Minister for Environment and Conservation, Minister for Mental Health and Substance Abuse, Minister Assisting the Minister for Health) (12:25): As there are no other speakers, by way of concluding remarks I thank members for their contribution and take this opportunity to say a few words in response to some of the issues and questions raised during the second reading stage.

The amalgamation being proposed by this bill is not a grab for cash: it is about ensuring sustainability of the state's pathology services into the future, given a rapidly increasing demand for diagnostic pathology services and an ageing pathology workforce. This amalgamation improves the state's ability to attract and retain pathology staff in an environment of world shortages in some pathology disciplines, such as anatomical pathology, and will provide greater career opportunities for pathology staff while reducing the competition for staff between the separate existing services.

There is also a need to develop integrated approaches to training and logistics and the effective use of increasingly expensive diagnostic equipment. This amalgamation is consistent with the approach taken by other Australian states and with world trends in relation to the delivery of pathology services. The government is already providing an operating budget to the IMVS of approximately $40 million and budgets to the other services of approximately $30 million. If it were really a money grab, this sum of $70 million could simply be reduced.

The Hon. Michelle Lensink questioned what the impact on GPs would be. A lot of work has occurred around marketing. The department has utilised an external consultant to conduct a number of focus groups with general practitioners, and these focus groups indicated that GPs will support SA Pathology. The question of where the savings would come from was also raised. The following savings plan has been proposed by Professor Brendon Kearney, from the IMVS, for the pathology service: savings from expenditure reduction, $1.15 million; and savings from revenue growth, $1.2 million, which is a total of $2.35 million.

I was also asked about the average cost per test. I inform the council that the average cost per test is not an indication of the relative efficiency of the three service providers. The three services provide a different mix of testing to different client demographics. The IMVS costs per test are reflective of its performing a large number of low-cost automated tests from community GPs and include a high proportion of normal outcomes.

SouthPath performs mostly hospital tests, with a much higher proportion of abnormal results. WCHDLM performs very specialised paediatric tests using techniques specifically developed for minimum sized samples. SA Pathology will have the same level of transparency as all other government agencies with health or other portfolios.

Several members questioned whether there was any plan to sell the IMVS assets. I can inform the council that there is no plan by the minister or the department to sell off any assets from any of the three pathology entities. I repeat: there is no plan by the minister or the department to sell off any assets from any of the three pathology entities.

This will become an operational matter for SA Pathology. On the issue of training, the amalgamation of the three separate entities into SA Pathology will enhance the training of pathologists in South Australia, providing a more attractive environment for trainees with a substantially greater variety of workplace experience.

The claim has been made that IMVS staff want this only because of salary sacrifice, and that was raised by a number of honourable members. We would not want to be seen to stand in the way of important benefits for all employees at IMVS—pathologists and others—however, staff focus group feedback on the SA Pathology intranet site and at a large number of staff meetings all indicate that, in addition to the issue of salary sacrifice, the staff recognises the value in a single service and supports that such a service will provide benefits and better outcomes. However, from the government's perspective, the fringe tax benefit is an important but incidental benefit for employees of the IMVS.

I have also heard it suggested that all the services be brought in under the control of the IMVS. This would have two detrimental effects. Those who work for SouthPath or the Women's and Children's Hospital would have thought that their work, their culture, their aspirations and goals, their intelligence, their research activities and their creativity would have been treated as being of little or no value, while all those aspects of the IMVS would appear to have been given a high value.

All those who provide pathology services in South Australia would have missed out on the very good tax benefits associated with those who provide services to hospitals. There is a distinct financial advantage to them, and it is an advantage that we obviously want to keep. For those two reasons, we decided to bring the services together rather than have the IMVS take over the existing services. So, with those brief words, I commend the bill to the council.

The council divided on the second reading:

AYES (12)

Bressington, A. Evans, A.L. Finnigan, B.V.
Gago, G.E. (teller) Gazzola, J.M. Holloway, P.
Hood, D.G.E. Hunter, I.K. Kanck, S.M.
Parnell, M. Wortley, R.P. Zollo, C.

NOES (9)

Darley, J.A. Dawkins, J.S.L. Lawson, R.D.
Lensink, J.M.A. (teller) Lucas, R.I. Ridgway, D.W.
Schaefer, C.V. Stephens, T.J. Wade, S.G.


Majority of 3 for the ayes.

Second reading thus carried.

Committee Stage

Bill taken through committee without amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Environment and Conservation, Minister for Mental Health and Substance Abuse, Minister Assisting the Minister for Health) (12:39): I move:

That this bill be now read a third time.

The council divided on the third reading:

AYES (11)

Evans, A.L. Finnigan, B.V. Gago, G.E. (teller)
Gazzola, J.M. Holloway, P. Hood, D.G.E.
Hunter, I.K. Kanck, S.M. Parnell, M.
Wortley, R.P. Zollo, C.

NOES (10)

Bressington, A. Darley, J.A. Dawkins, J.S.L.
Lawson, R.D. Lensink, J.M.A. (teller) Lucas, R.I.
Ridgway, D.W. Schaefer, C.V. Stephens, T.J.
Wade, S.G.

Majority of 1 for the ayes.

Third reading thus carried.

Bill passed.

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