Wellington, July 7 NZPA - A government decision to stop hospitals charging for laboratory tests ordered by private specialists will rob the public health service of millions of dollars, opposition parties say.

The previous government allowed three district health boards -- Capital and Coast, Hutt Valley and Tairawhiti -- to charge for the tests and had intended extending that to all of them.

Health Minister Tony Ryall said today that wasn't going to happen, and the three who were charging would stop doing it when their contract arrangements expired over the next two years.

"This decision means the country returns to a single policy on privately referred lab charges," he said.

"For many years patients' lab tests ordered by private specialists have been publicly funded, just like medicines prescribed by private specialists."

Mr Ryall ordered a review when he became health minister and it found that patients who didn't have insurance cover or who had chronic or complex conditions unfairly faced big bills for lab tests.

"Some of those patients subsequently chose to delay, reduce or even forgo the tests they needed," he said.

"While there were savings for DHBs charging for these tests, I've been advised a national roll out of the policy would force up insurance premiums across the board."

Labour's health spokeswoman Ruth Dyson said it amounted to subsidising private health providers.

"Private specialists are in fact private business owners and it should not be up to taxpayers to subsidise their business activities by funding diagnostic services," she said.

"This decision represents a real financial and ethical blow for the public sector."

Ms Dyson said it was estimated that in Wellington private specialists would order lab tests worth about $7 million a year.

A spokeswoman for Mr Ryall said the figure was $1.4 million.

The Green Party said private health providers were being subsidised at the expense of the public health system.

Mr Ryall's announcement was welcomed by the New Zealand Medical Association (NZMA) and the College of GPs (RNZCGP).

NZMA chairman Peter Foley said it had always opposed the arrangement where a few DHBs were on a separate charging regime.

"In a country of 4.4 million people we need national consistency of access to services so that all patients, no matter which DHB they live in, have the same level of funded support," he said.

RNZCGP president Harry Pert said the "poor decision" taken by the three DHBs had a significant impact on the provision of safe healthcare.

Southern Cross Healthcare said Mr Ryall's announcement would be a relief to its members.

The health insurer said that between December 2007 and December 2009 the amount it paid out increased from $15,343 to $549,531 on claims that rose from 665 to 9072.

"The majority of these claims came from the Wellington region -- the first DHB to introduce the charges," Southern Cross chief executive Ian McPherson said.