This thesis examines New Zealand’s clinical laboratory services during the 1990s, a recent period of major neo-liberally driven health sector change in New Zealand. Internationally, although estimates of expenditure on laboratory services vary, the importance attributed to their pivotal role in health decision-making and expenditure is consistent. Consequently, changes impacting on the clinical laboratory system have the potential to resound throughout a national health service in unexpected ways. The 1990s New Zealand health reforms were characterised by a downplaying of the role of technical, scientific and clinical expertise in management decision making, a reduced role in management and planning for central government, and moves towards the creation of a ‘health market’ composed of consumers, rather than citizens. The transfer of occupational control from pathologists to managers in the clinical laboratory sector, and other attempts to contain state expenditure on clinical laboratories are monitored in the body of this thesis using both qualitative and quantitative data. Pre-reform weaknesses already present in the clinical laboratory service, particularly the dual systems for laboratory remuneration that hinge on specimen origin, were thrown into strong relief by the 1990s reforms. Furthermore, evidence gathered in this study suggests the reforms became counter-productive, even in their own terms. Thus, the change towards market controls not only destroyed strengths of the existing centrally controlled laboratory system, but also, by fostering a focus on outputs, greatly increased volume-driven state expenditure on laboratory testing. This occurred largely without improvement in disease ‘pick-up’ rates, avoidable hospitalisations, or cost-efficiencies. The internal market compromise proved powerless to avoid laboratory services monopoly development by foreign investor owned companies. As a consequence it neither indicated the most efficient test prices, nor engendered the physical laboratory amalgamations that have occurred overseas in the interests of cost-efficiency. The thesis concludes that the kind of structural reform introduced into the New Zealand health sector in the 1990s was a poor instrument for achieving cost effectiveness. Specific technological changes in laboratory practice, along with globalisation in health service provision, are identified as examples of design influences that will strongly re-shape the supply-side of New Zealand laboratory services. Their considered incorporation into a revived central, evidence-based, laboratory services redesign plan is strongly recommended. Unfortunately, the partially decentralised governance structure introduced by the Labour-led coalition in 2001 appears to have the potential to frustrate that recommendation.