Awanui Labs this week acknowledged a difficult environment, but insisted it had an "adequate balance sheet" when asked if it was set to fold following the 2023 deficit.
Apex union advocate Sammy Heimsath said it was troubling to see Awanui — the provider of medical laboratory and pathology services in the South — so far in the red.
The recently-released financial statements of holding company NZ Healthcare Investments Ltd for 2023 showed a $16.4m loss last year.
By contrast, the company posted a $13.1m profit in 2022, and a $40.4m profit in 2021.
The pathology and laboratory sector was essential to a first world healthcare system, testing samples and supporting about 70% of clinical decision making in hospitals.
However it was bordering on a state of crisis, with Awanui Labs’ Invercargill service among the examples of this.
"It’s currently still operating its scientific and technical roster at 50% vacancy for nights and weekends, putting an incredible amount of strain on these workers."
Without "significant investment" in the workforce, people would have to accept diminishing services from New Zealand’s pathology and laboratory sector, and by extension, worse hospital services.
While Awanui-maintained services had not diminished, this was not what the union was hearing from the workforce, Mr Heimsath said.
"It’s just getting worse by the day."
The pay increase after Apex’s most recent negotiations was no more than a cost of living adjustment, and did not scratch the surface of the gap with public sector pay rates, he said.
Awanui was a private company, but was a contractor for Health New Zealand Te Whatu Ora (HNZ) in the South and some other locations.
HNZ needed to get active in constructing the future of the laboratory sector, he said.
Awanui Group chief executive Anoop Singh said yesterday the business was maintaining all services and facilities, and the financial result for 2023 did not impact its ability to deliver.
"Awanui Group remains financially solvent with an adequate balance sheet and net asset position and the management teams has the full support of its board and investors."
The loss was caused by general cost inflation, higher interest rates, and significant staff pay rate boosts, he said.
Funding from HNZ had not matched or covered this, he said.
He acknowledged the impact of a difficult environment for Awanui and the sector at large.
A letter from multiple Awanui staff to health minister Shane Reti last month also warned of a critical state of under resourcing impacting the service.
Neither Dr Reti nor HNZ answered the ODT’s question on whether they were concerned about the provision of services in light of the situation.
HNZ Southern group director of operations Hamish Brown said the organisation had no comment to make about the annual report and was liaising with Awanui as it normally did.
A spokesperson from Dr Reti’s office said he would not comment on the finances of a private company, but he understood HNZ continued to work closely with Awanui.
