The SA Government has now ruled out the privatisation of SA Pathology, the agency which tests South Australians for coronavirus, after earlier indicating it was considering outsourcing the service.

Key points: Health Minister Stephen Wade said the agency had become more cost-effective

Health Minister Stephen Wade said the agency had become more cost-effective Premier Steven Marshall has lauded its role in preventing the spread of coronavirus in SA

Premier Steven Marshall has lauded its role in preventing the spread of coronavirus in SA SA Pathology has conducted 45,000 coronavirus tests in the state since February

SA Premier Steven Marshall last week said privatisation was unlikely because of its "world class" response to the coronavirus emergency, but stopped short of a guarantee.

Health Minister Stephen Wade today said the State Government had now ruled out the prospect of outsourcing the service.

"The Government is putting to bed the option of outsourcing pathology services," he said.

"Twelve months ago we put out the challenge to SA Pathology to not only continue their high quality services but also to do so in a more cost-effective way.

"Over the past year there has been a clear improvement in costs and, at the same time, they've been able to either maintain or improve service levels."

In the 2018 State Budget, the Marshall Government warned SA Pathology that it could be privatised unless it achieved savings of more than $100 million over three years.

However, Mr Marshall today said the agency had delivered on its cost reduction target of $7.3 million and was well on the way to delivering a year two cost reduction target of $18 million.

Premier Steven Marshall has lauded the work of SA Pathology amid the COVID-19 pandemic. ( AAP: David Mariuz )

He also lauded its central role in preventing the spread of coronavirus in South Australia.

"SA Pathology has stepped up to the plate during the coronavirus pandemic and provided South Australians with a world class COVID-19 testing service that has reduced the spread of the virus and saved lives," Premier Marshall said.

Last week, Mr Marshall refused to rule out privatisation, but described SA Pathology clinical service director Dr Tom Dodd as an "absolute hero" for his role in SA's coronavirus fight.

"We should be doing everything we can to acknowledge the work that he and his team are doing at SA Pathology — they are world-class," Mr Marshall said.

Stay up-to-date on the coronavirus outbreak Download the ABC News app and subscribe to our range of news alerts for the latest on how the pandemic is impacting the world

Mr Wade said the service had led the nation in its response to COVID-19.

"SA Pathology will continue in public hands and continue to … be the preferred provider for pathology services," he said.

Health Minister Stephen Wade said SA Pathology has led the nation in its response to the virus. ( AAP: Mariuz )

"South Australia has led the nation in terms of the number of tests undertaken and our testing rate is among the highest in the world."

Employee association Professionals Australia said it was the right move, but was still concerned about potential future job cuts within SA Pathology.

"This service has never been fit for privatisation and we've learnt that through this COVID-19 crisis," SA director Sarah Andrews said.

"We're really concerned about future budget cuts. We're worried that that will mean loss of jobs within the laboratories, to medical scientists and technical officers."

Labor welcomes commitment to 'critical essential service'

State Opposition leader Peter Malinauskas said he "absolutely" welcomed the "decision of Steven Marshall to reverse his view on privatisation".

"This is a critical essential service," he said.

Since February, there have been 45,000 coronavirus tests conducted in the state by SA Pathology.

Chief public health officer Nicola Spurrier yesterday said the state's two most recent cases were people aged in their 20s and 60s, and were not linked to two repatriation flights that had landed in Adelaide this week.

The new cases bring the state's total to 437 cases, however 86 per cent of people — or 376 cases — have now recovered.

Dr Spurrier said five patients remain in hospital, with two men in a critical condition in intensive care.

Four people have so far died from coronavirus in the state.