The laboratory testing sector has slated the government’s “Darwinian” District Health Board contract process and warns of a shrinking market where companies are not willing to invest in their own assets.

At an address to shareholders last week, Abano Healthcare (ABA) managing director Alan Clarke said the company was not willing to invest in its Wellington subsidiary Aotea Pathology because of the “Darwinian” DHB tender process.

Labtests has lost 10% of its market share to rival Diagnostic Medlab after Auckland’s three district health boards stepped in to improve its dismal performance, admitting the move from one large provider to another may have been “a bite too large.”

Effectively a penalty for Labtests, after months of complaints and questions of quality control, the arrangement is part of a wider raft of changes including key performance indicators for both companies.

Auckland District Health Board is keeping a lid on any questions before its announcement tomorrow morning on its plagued community laboratory testing contract.

A joint arrangement could see Diagnostic Medlab win back some laboratory testing work from rival, Labtests, which won the $560 million contract for community laboratory testing in February.

The Australian parent company of troubled Auckland laboratory testing company, Labtests, has taken over its leadership.

Healthscope chief operating officer of pathology Paul Waterson has stepped in from Labtests’ chief executive Ulf Lindskog, the company said in a statement this afternoon.

The move comes after extensive complaints about the lab testing company and claims the public was at risk, prompting health and disability commissioner Ron Paterson to take the matter to health minister Tony Ryall, according to media reports.