Predictably the industry declared war : "If you were previously bulk billed for pathology, you may have to pay for vital tests, services could close, and your health care will suffer," it warned its anxious clients.

That's why late last year the government quite reasonably decided to axe the $1.40 to $3.40 bulk billing incentive payment handed out to pathologists on top of the standard fee.

"There's just this big auto-analyser that you throw an extra test into, and it doesn't cost more or less anything to do the test."

The cost of testing has plummeted in recent decades. Former health department head Stephen Duckett says the bulk of tests are no longer done by individuals with test tubes .

Then, just as the government was at its most vulnerable late on Friday, it offered a deal. It would withdraw the petition if the government leglislated to help bring down rents.

The pathology giants typically pay highly for the right to set up shop inside doctor's surgeries; most pay 4 to 6 times the rent they would charged outside, just as other businesses pay dearly for the right to be inside shopping centres.

The government will defer its changes for three months while it sharpens up existing laws to ensure pathologists are charged "fair market value", which would be something of a dream for tenants of Westfield and Stockland.

As is always the case with rent controls, there will be consequences. The recipients of the rents (doctors) will be squeezed at the same time as the government is freezing their Medicare rebates.

A government with courage would simply force the pathology companies to bulk bill, in return for receiving public funds. And it would make them tender for the work. It's what the Grattan Institute recommended in February. Instead the Coalition's offering to help out in their negotiations with suburban surgeries and has thrown in a three-year veto over further changes to their rebates.