Australia's private pathology providers given four-fold rise in Covid-19 test payment
Public pathology providers have criticised the government’s four-fold payment increase to private multinationals conducting Covid-19 testing, saying the public sector was receiving half the amount despite providing some testing services at a loss.
The private pathology sector, which is dominated by a handful of massive players, threatened to stop Covid-19 testing unless the government increased the testing subsidy at the height of the pandemic, the Sydney Morning Herald and the Age revealed on Thursday.
At the same time, the sector was pressuring GP clinics to accept a 50% rent reduction from co-located pathology services, a move that threatened to financially cripple GPs at a time of critical need.
Private pathology companies were subsequently handed a four-fold increase to the Covid-19 testing subsidy, from $24.40 per test to $100.
Public pathology providers currently only receive a $50 subsidy for Covid-19 testing, half that given to the private sector.
The Public Pathology Australia chief executive, Jenny Sikorski, said public pathologists were currently providing Covid-19 testing for rural and regional areas “at a loss”, unable even to cover their own costs.
Sikorski said that made it frustrating to watch such a significant subsidy increase handed to the private sector.
“The point that I would make is that there has been significant capacity in the public pathology sector to undertake Covid testing, and public health testing is part of our core function anyway,” she told the Guardian.
Sign up to receive the top stories from Guardian Australia every morning
“The concern that I’ve always had is that that capacity should be recognised and better utilised, and there shouldn’t be this $50 difference in the fee because public providers work in the Medicarefunded market.”
“The public – in terms of the patients and the taxpayer – I don’t think they benefit from the current Medicare arrangements for Covid testing.”
The government is considering extending the increased Covid-19 testing subsidy beyond 30 September, something Sikorski was supportive of.
But she said the current arrangement, which left some providers testing at a loss, needed to be fixed.
“Public pathology providers should be able to recoup their full costs for pathology testing, and we can’t through the Medicare arrangements.”
Australia’s private pathology sector – dominated by five big players – has suffered its own downturn during the pandemic, due to decreased GP visits and demand for other, non-Covid testing.
The Guardian revealed last month that major private pathology multinational Healius had requested huge rent reductions from small GP-owned clinics, which often depend on money from co-located pathology centres to remain viable.
The Australian General Practitioners Alliance, the peak body for GPowned clinics, said the rent reductions threatened to financially ruin many of its members.
Australian Pathology chief executive Liesel Wett said there had been no gouging, and that private pathology providers just wanted their costs covered, like any business.
“This is an expensive test – it is a molecular microbiology test that has three steps, and is a DNA test,” she told the Guardian. “It is very complex and requires the skills of experienced scientists and pathologists. And of course, our Collectors out in the field every day, to collect the sample (in full PPE, per patient).”
She said private pathology was doing the “lion share of tests” and did 45% of all Covid-19 testing in Victoria until May 2020.