St John of God sells pathology division to Australian Clinical Labs

easter_entitlementsSt John of God (SJoG) has announced that it is selling its pathology division to Australian Clinical Labs. It appears that the deal between SJoG and Clinical Labs includes some level of agreement that around 200 jobs will be cut in the next 12 to 24 months. Roughly a third of the workforce face losing their jobs for what are, to say the least, very spurious reasons.

While Clinical Labs is insisting that SJoG staff will either continue in their existing roles or substantially similar roles, the foreshadowed job loses means that job security has been trashed through the sale.

But the sale of SJoG’s pathology division to Australian Clinical Labs, or more accurately to Crescent Capital, a private equity firm, raises serious concerns about future standards in pathology in Victoria. And it comes as a massive blow to public pathology in Victoria’s hospitals with SJoG being the largest not-for-profit pathology provider that operates a significant number of pathology laboratories in Victorian public health services, including Barwon Health.

There is little comfort in having a private equity firm buying up the pathology division of SJoG especially as concerns are raised about the company buying up pathology providers as an attempt to become more profitable.

As this private equity firm attempts to increase its market share, real concerns must be raised about the likelihood of a dwindling scientific workforce and declining quality standards such as turn-around-times, and ultimately patient care. This is especially the case as concerns are raised about a company that has no experience in the pathology industry, its systems or the industrial instruments that cover pathology.

The prospect that is also raised in this sale is that pathology, a critical clinical service in public health, has been reduced to a commodity that venture capital companies will buy and sell as a routine part of the business of making bigger profits.

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