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The State Government is refusing to disclose details of unsolicited bids received by the Office of the Coordinator-General from companies pitching proposals for the privatisation of government assets or other business “opportunities.” Nor will it rule out that one of the proposals relates to the privatisation of pathology services.

Early last week the Minister for State Growth, Matthew Groom, told Parliament the Office of the Coordinator-General is currently considering an unsolicited proposal from a company for “medical services” and another for “a software solution for government.” Groom was responding to a question by the Leader of the Tasmanian Greens, Cassie O’Connor, about the unsolicited bid by a private tourism developer for the Hunter Street School of Art in Hobart.

“I make no apologies for the fact this Government is open for business and open to ideas,” Groom proclaimed.

Is it a private pathology company pitch?

Last week Tasmanian Times revealed that the private pathology company Diagnostic Services and its parent company Sonic Healthcare are major donors to both the Tasmanian Liberal Party and the federal Liberal Party.

In its mid-February 2015 submission on the Hodgman Government’s ‘Rebuilding Tasmania’s Health System’ Green Paper Diagnostic Services CEO, Dr Lawrie Bott, outlined a range of areas in which the company could expand its involvement in Tasmania’s public health system from the use of its courier service, its pathology sample collection service, back-office software systems and pathology testing.

The day after Groom told parliament that the Coordinator-General had received a private bid for “medical services” the Labor Party’s Shadow Minister for Health, Rebecca White, asked the Minister for Health, Michael Ferguson, whether the proposal to related to private pathology services.

“At this moment there are no plans to outsource any more public pathology services to the private sector,” he said.

White then turned her attention to Groom, asking whether the proposal received by the Coordinator-General for “medical services” related to pathology services.  Groom went far further than Ferguson in his interpretation of the Government’s policy. “It is a principle with the unsolicited bids process that no bid can satisfy the criteria for progress if it is inconsistent with the Government’s policy.  As the minister has just made clear, it is the Government’s policy there will be no further outsourcing of pathology services,” Groom said.

Diagnostic Services – the largest provider of private pathology services in Tasmania – said it is not involved in any unsolicited bid. Dr Bott told Tasmanian Timesthat neither of the proposals to the Coordinator-General for “medical services” or software services came from Diagnostic Services.  Bott suggested that the proposal could be something to do with the Federal Government’s roll-out of the e-health electronic records system.

However, Dr Bott declined to discuss why Diagnostic Services and Sonic Healthcare contributed $36,500 to the Tasmanian Liberal Party in the 2013/2014 financial year and a further $400,000 to the federal branch of the Liberal Party. “I don’t want to comment on that,” he said.

Even though Diagnostic Services hasn’t submitted a proposal, other pathology companies may have.

What “medical services”?

The office of the Coordinator-General declined to comment. “We don’t handle media inquiries,” a spokesperson said.

A spokeswoman for the Tasmanian Government ruled out providing details of the bids on the grounds that “the whole point of the unsolicited bid process is that its initial stages can be undertaken in confidence in order to protect intellectual capital.”

However, the Unsolicited Proposals Policy and Guidelines released by Department of Treasury and Finance in January this year do not preclude basic information about proposals being publicly disclosed.

Groom told Parliament last week that the unsolicited “medical services” proposal is “currently being considered” while he described the “software solution” proposal as being at “a very preliminary stage” of assessment.

In moving a motion last week urging public consultation before deals involving the sale of public lands via the unsolicited expressions of interest process, Tasmanian Greens Leader Cassie O’Connor flagged concerns about the secrecy surrounding the activities of the office of the Coordinator-General.

The office, she argued, has:

“the door wide open to the white-shoe brigade and the red carpet rolled out to make the glide that bit easier through the process - out of sight, out of mind.  It is secrecy, lack of accountability and a complete lack of transparency.  All of it is happening behind closed doors under a majority government, because that is what majority governments do.  It is a recipe, regrettably - and I use this word very judiciously - for corruption.”

The leader of the Labor Party, Bryan Green, noted that “very specific questions were asked today [Wednesday] about whether a statewide service for pathology was the unsolicited bid. They skirted around the answer.” Green, noting the Tasmanian Times article from early last week, argued it was important that “there is transparency” around what medical services Groom was referring to.

For his part Groom avoided discussing exactly what the bids were for. Instead he proclaimed that the process was all about allowing proponents to have “a discussion with the government about an idea that we have not thought about, that might involve some commercial sensitivity.”

The Community & Public Sector Union (CPSU) – which has members in the pathology sections of both the Royal Hobart Hospital or Launceston General Hospital – is concerned the proposal relates to pathology services. On Thursday the CPSU contacted the Interim CEO of the Tasmanian Health Service, CEO Dr Anne Brand asking her to confirm that they have no intention or plans on privatising pathology services.

“At this point we haven’t had a response. However, if they aren’t considering it, then we would expect a prompt response,” said Tom Lynch, the General Secretary of CPSU.

Bob Burton is a Hobart-based Contributing Editor of Tasmanian Times.

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•Anonymous in comments: Just to give some context as to why pathology is so profitable, and why these companies are so interested in capturing public hospital services: A typical test is prothrombin time, used in many common situations. This attracts a schedule fee of $13.70. Because of the highly automated processes involved, it costs a pathology provider less than $1 to perform the test. Allow another $1 for ancillary costs (probably an overestimate). This amounts to a pretty tidy profit margin on a very, very common test.

EARLIER in this series of articles on TASMANIAN TIMES ...

• October 27: The private pathology industry emerges as major Tasmanian Liberals donor

• October 28: Who’s a Liberal donor gonna call? Rentbusters!

• October 29: What happens if a major political donor doesn’t disclose?

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