Lab testing innovator Tony Bierre's re-invention

Dr Tony Bierre is remembered as the man accused of abusing his position on the Auckland District Health Board (ADHB) to secure a $560 million laboratory contract for his company in 2006.

The incumbent, Diagnostic Medlabs (DML), challenged the decision and a three-year court battle ensued with Dr Bierre's outfit, Labtests, finally securing in 2009 the contract it had originally won.

By that time he had sold out of it, but his name and reputation had already been dragged through the mud.

He even launched a defamation action against outgoing Prime Minister Helen Clark, but dropped it after she apologised.

That was early 2009.

Dr Bierre has since had his name cleared and re-invented himself with a boutique radiology and pathology lab which he claims is more accurate and efficient than the public system.

'It was messy'

Dr Bierre was on the ADHB when the company he started, Labtests, won a three-year, $70 million a year contract to provide services to the city's three district health boards.

That contract was said to save $16 million a year.

Moves like this were not just happening in Auckland – district health board nationwide were looking for ways to save money, Dr Bierre says.

"That was a very appropriate thing for DHBs to do, and they did it successfully in many parts of the country.

"It was only really in Auckland where the incumbent thought it was so protected from the process occurring elsewhere in the country because it had a monopoly here."

DML took it to the High Court, where they argued Dr Bierre's "conflict of interest" was not properly handled and Labtests only won the contract because of insider information.

Justice Raynor Asher agreed, overturning the contract in March 2007.

By the end of that year Dr Bierre sold out of Labtests, but the company was already appealing Justice Asher's decision.

The Court of Appeal found Justice Asher was wrong on every point.

Dr Bierre had used no insider information, had taken steps to minimise any potential conflict of interest, and the incumbent was not at an informational disadvantage.

Still, the smear tactics had already damaged Dr Bierre's name and brand.

"I think it was damaging.

"The DHB was convinced with good advice that they had done everything properly, that there was no misuse of information, that I had declared a conflict of interest at all times, and I had excluded myself from the decision making around the process.

"That was borne out in the findings in the Appeal Court, and the subsequent refusal by the supreme court to look at it, because they thought the Appeal Court decision was very thorough and correct," he says. 

"The reason the DHBs used a competitive tendering model was a way of getting value for money for the taxpayer. You can't criticise them for doing that.

"It was messy because the incumbent, DML, which lost through its own ineptitude, decided to fight it."

Dr Bierre wouldn't go so far as to say he's glad to put those days behind him, simply saying the journey was "worthwhile".

A wealth of experience

Dr Bierre graduated from Auckland University's school of medicine in 1977 and trained as a surgical pathologist in Auckland before gaining his specialist surgical pathology qualification in 1983.

He spent the next two years at hospitals at Duke and Harvard Universities in the US, before being appointed consultant surgical pathologist to the Royal Melbourne Hospital in 1986, and later at the Royal Hospital for Women in Sydney in 1988.

He returned to New Zealand in 1989, joining Diagnostic Laboratory in Auckland as director of surgical pathology and cytopathology.

He stayed there until 2003, when he left to get an MBA from Otago University, and set up Labtests.

'We have got things wrong in New Zealand'

Dr Bierre says in New Zealand there needs to be a clearer distinction between the different aspects of lab testing.

"If you look at laboratory medicine, about 95% of it can be done very effectively with big automatic factory-style operations.

"The blood tests can be done like that. That's how they're done overseas. That's how you get high quality and low cost."

But non-automated aspects such as cancer diagnoses are intellectually and labour intensive, and do not suit large, "factory-style" operations, Dr Bierre says. 

While other countries have separated those two aspects, in New Zealand they tend to still operate together.

"I'm saying we have got things wrong in New Zealand, and that's based on a lot of experience."

A year ago, Dr Bierre started Biosopy Solutions, which he describes as a new concept in lab testing in New Zealand.

It is a small operation, run out of a house in Remuera, which combines radiology and pathology services.

Its customers are mainly patients of private specialists.

He purposely located it in Remuera's "medical mile" because that's where the surgeons are.

"I spent quite a lot of time practicing in the US and in Australia. I saw things there 20 years ago which I thought were innovative approaches, and I've yet to see them implemented in New Zealand." 

Dr Bierre says one of the reasons there are problems with cancer diagnoses in New Zealand is that the differences between the various aspects of laboratory medicine are not recognised. 

"We're essentially following what's happening overseas.

"With diagnostic centres like the one we're in, they tend to be relatively small, co-located with other health facilities such as theatres and where surgeons operate, and we think that should be the model for New Zealand.

"In New Zealand, we tend to have labs as part of big factories, removed from where the patients actually are, and we don't see any sense in that."

Dr Bierre says having a smaller, narrowly-focused operation means his staff can spend more time on each test, ensuring greater accuracy and timeliness.

That, he says, is what patients want and need.

callison@nbr.co.nz