Bendigo Health guarantees Loddon Linen jobs as expressions of interest sought for pathology services

Bendigo Health will be closing its linen service, Loddon Linen, in March and is seeking proposals from other suppliers to provide it with linen, chief executive officer, John Mulder, announced today.

“There will be a job for every member of staff who wants to remain part of the Bendigo Health team. We are a large organisation with many opportunities for retraining and redeployment.,” Mr Mulder said.

Bendigo Health also announced that it was seeking expressions of interest from pathology providers to offer comprehensive pathology services to Bendigo Health.

Mr Mulder said the two decisions have been made separately and for different reasons.

Mr Mulder said Loddon Linen will be closed because it is no longer a viable business for Bendigo Health and the 60-plus year old factory sits in the middle of the site for the proposed new world-class Bendigo hospital.

“We are serious about creating a tranquil healing environment around our new hospital and that would be difficult to achieve on an industrial precinct.

“Loddon Linen has been unable to retain existing contracts, losing the St John of God Bendigo linen contract in 2008 followed by the loss of the Royal Children’s Hospital contract in 2009. These contracts represented close to one third of the business turnover.

“The cost of production is too high compared with our private sector competitors and significant ongoing investment in equipment is required were the business to remain in operation. Such investment is unlikely to improve Loddon Linen’s viability.

“The cost of relocating the business to an appropriate industrial precinct in Bendigo was investigated and has been estimated at close to $20M. No justification could be established for this level of taxpayer investment,” he said

Mr Mulder added that it was a disappointing day for the business and its staff who have been providing a high quality service to Bendigo Health and its partners throughout the Loddon Mallee region for over 50 years.

“Those staff members who wish to leave when the service closes in March next year will receive a redundancy package. At present, there are 46 permanent jobs involved in the operation of Loddon Linen,” he said.

The move to seek expressions of interest for the provision of pathology services is a continuation of Bendigo Health’s decision to review its in-house service and should not be viewed as a decision to outsource the service to an external provider.

“Bendigo Health has an obligation to ensure that its services offer good value for money to the Bendigo community and this was difficult to do without considering alternative supply options,” said Mr Mulder.

“This exercise was never about saving money, it was always about providing the maximum range of quality services to this community with the money that we have available.

“Bendigo Health’s pathology services is of high quality but the cost is close to twice that paid for pathology services in most other regional centres across Victoria. There is no evidence to suggest that those other health services are receiving a lower quality of service, however one thing is certain, those communities are receiving many millions of dollars worth of additional services that the people of Bendigo are missing out on today.

“We need to get the best deal for our community, the best deal for those patients who are receiving care and the best deal for those patients presently waiting for care, who will benefit if we can improve our efficiency,” said Mr Mulder.

Bendigo Health continues to support the in-house team as it works to improve efficiency and convince the board and executive that a competitive in-house service is in the best interests of the Bendigo community.

“We continue to access our expert pathology reference group to ensure we are getting the best clinical advice when making decisions on this matter and the capacity to meet a strict service quality specification, prepared by that reference group, will be a key determinant in the final decision.” said Mr Mulder.

“The board of directors and executive team recognise the significant public interest in this issue. A petition with 4,600 signatures has been delivered to my office and every person who recorded their address has received a detailed response.” added Mr Mulder

Mr Mulder said he expected that the call for expressions of interest would attract proposals from other public pathology services and private laboratories.