Time for publicly run lab tests?

Kevin Hague has just posted about the LabTests problems on FrogBlog: LabTests problems no surprise. One thing which is not suggested in his post, but which would be a good idea, would be for New Zealand to get a public lab tests system.

It is really inexcusable that lab testing is ever private. When the government contracts out to private companies, it means that the government is paying that company to make a profit.

There are two situations when this can be a good deal for the taxpayer:

  1. when the company also provides services to other governments, and so can reuse expertise gained from doing it in another country.
  2. the government needs such a small amount of work that it is more efficient to share the resource with private clients of the provider.

In both of these situations, the losses to the taxpayer due to private profits need to be less than the benefits of the benefits of privatisation.

Neither of these situations apply to our laboratory tests (or our schools, or our prisons, for that matter). Laboratory testing needs to be local so that results can be back fast enough, and the government is the main consumer of laboratory testing. So there is no reason at all why the taxpayer should be paying to line the pockets of either LabTests or DML. If the laboratory testing systems go public, we can have cheaper healthcare, and have better healthcare too!