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Privatising pathology

Why are labs being put out to tender? Is “creeping” privatisation a problem for pathology, or can it be beneficial?

Scientist: iStock

Graham Clewes looks at how the situation has developed over recent years and asks whether consolidation and networks are the future...

Privatisation in the NHS is not particularly new, but the scale and breadth of the process is causing concern in some quarters.

Dentists, opticians, pharmacists, and arguably GPs, have long been privately-run businesses that operate without the strict NHS structure, but still provide core NHS services, often free at the point of delivery, to patients.

Since Tony Blair’s Labour government poured money into the NHS, with much of it flowing out to private firms to cut waiting lists and widen patient choice, the use of private organisations in the NHS has become commonplace.

By the time the Conservative/Liberal Democrat government came into being, £4.1bn (or 4%) of the total NHS budget in England went to the private sector in 2009-10. By 2015-16, the figure was £8.7bn, or around 8% of the total budget.

Increased use of the private sector by the NHS is often described as “creeping” by critics and, despite the introduction of clinical commissioning groups, led by GPs, more and more money flows from the NHS to private firms.

 

Improving services?

Consolidation of NHS pathology services is also nothing new. In the second part of his two-part review of NHS pathology services, published back in 2008, Lord Carter of Coles argued that the case for consolidation was based on measurement of activity and cost data collected from a representative sample of NHS pathology sites (see box, overleaf).

Lord Carter claimed at the time that consolidation was necessary to transform pathology services so that they could respond to the challenges of innovation, system reform across the NHS and reform of the workforce.

“Consolidation provides the means of improving service quality, responsiveness and cost-effectiveness by enabling resources to be reinvested in pathology services,” he wrote.

Although his report called on the Department of Health to develop commissioning guidance for pathology services, and to consider producing a model contract, there was no specific suggestion that the private sector should be more widely involved.

The two reviews, published in 2006 and 2008, recommended the introduction of a “hub and spoke” network of consolidated specialist pathology services, with satellite laboratories. Several pathology networks have since been developed.

UK pathology in numbers
It’s not only financial issues are that exerting pressure on pathology services. Charity Cancer Research UK’s recent report says pathology services in the NHS are at a “tipping point”. It found that a growing and ageing population means more patients require biopsies and blood tests, but pathology services are not increasing in line with need (see the January issue of The Biomedical Scientist for more information). 

 

Consolidation and networks

In June last year, NHS Improvement wrote to all trusts in England calling 
for a number of measures to be taken, including back office and pathology consolidation, to help cut the financial deficit in the provider sector.

The Royal College of Pathologists President, Dr Suzy Lishman, responded 
by arguing that pathology is the delivery of clinically relevant scientific information and opinion, rather than a “back office service”.

“Consolidation has not always provided the predicted benefits and has been detrimental to services in several instances,” she said, citing the example of Cambridge University Hospitals Foundation Trust’s decision to leave a pathology network it hosted.

Dr Lishman said that all trusts had explored networking and consolidation for a number of years, with significant savings having already been made. But a one-size-fits-all instruction to consolidate could in fact harm services and cost more money in the long term.

A Nuffield Trust report on the future of pathology services, published last summer, says locally developed networks should aim to improve quality and efficiency through economies of scale by using large capacity automated systems, faster turnaround times linked to connected IT, a centralised workforce, streamlined logistics and centralised skills and expertise.

It proposed that a network could be located on one site, spread across a number of locations, or laboratory provision could be outsourced. It identified that existing networks have had varied success and said successful networks have been developed locally and moved forward only very slowly.

It also argued that the effectiveness of a network should be as important a motivation as efficiency gains, and emphasised that any changes must be led by clinical or scientific staff, rather than being “imposed” by managers.

 

Expertise and technology

Denise Cooke is Pathology Clinical Governance, Quality and Service Improvement Lead at Surrey Pathology Services and is based at Frimley Health 
NHS Foundation Trust.

She works as part of one of the country’s largest pathology networks 
– Berkshire and Surrey Pathology Service. For her, there have been huge advantages in working as part of a pathology network, as well as some challenges. 

  Activity cost

 Variation in cost of routine pathology investigations:     

  • Biochemistry: from £0.50 per test to £2.80, with a median cost of £1.00     
  • Microbiology: from £4.00 to £9.40, with a median cost of £6.10     
  • Haematology: from £1.50 to £3.70, with a median of £2.40     
  • Histopathology: from £21.40 to £73.40, with a median of £48.10
  Source: Report of the Second Phase of the Review of NHS Pathology Services in England.

She says: “The advantages are the huge exposure and opportunities to work with expertise, technology, skill, knowledge and understanding that you just wouldn’t get working in a smaller environment.

“It’s a chance to work with a whole different raft of expertise and equipment, with better succession planning and opportunities to say that we have huge potential among the staff here so we can look after it and drive it.”

The network has worked hard at creating the right forums to ensure engagement among staff and has kept lines of communication open and focused on understanding how to progress almost to a virtual environment with clinicians and management who work across sites.

“This is not something that happens overnight and we have had to work at it,” she says. “As well as focusing on moving a bunch of work from one place to another, it has been about how we engage everything that is connected to that service and making sure there is flex in the system to adapt and respond.”

 

Vision for the future

One of the authors of last year’s Nuffield Trust report, Sasha Karakusevic, says it is difficult to reach a conclusion on whether consolidation or use of the private sector for pathology services will be successful in the medium to long term.

“What matters most are effective relationships and a clear vision for the future,” he says. “Whether an area wants or needs a private partner will depend on local circumstances. If you go private, you are probably looking for capital investment, focus and specialist expertise.”

The key question in how pathology structures are set up has to be whether the arrangement chosen maximises value for the patient and for the system, he says.

If you go private, you are probably looking for capital investment, focus and specialist expertise

“The history and local context of each part of the NHS is surprisingly diverse and that makes it very difficult to advocate a single replicable model that could work across the country,” he says.

“It’s perhaps worth thinking about pathology as being the heart of the system. A healthy heart leads to a healthy body and certainly a transplant shouldn’t be the first line of attack. In my view this is increasingly so with the rapid development of genomics, near patient testing and bio-informatics.

“Clinical decision-making is going to become even more sophisticated and the need for integrated, real-time support will increase. This doesn’t mean that only NHS in-house services will work. Boards need to think carefully about the level of investment and expertise that will be needed to operate at the leading edge of pathology practice and whether they can achieve this on their own. About the only thing that is certain is that the status quo isn’t likely to be the right answer.”

 

Public sector ethos

Denise Cook accepts that new ways of working are essential for pathology services, but she believes strongly that the NHS can provide the service itself.

“The big difference with an NHS-led pathology service is the add-ons you get with it,” she says. “So you absolutely get a clinically-led service and that is not something you have to contract for or buy, that is just the nature of the beast. 

“On top of that you get all the other things the NHS offers; so there is a very supportive training and education programme, lots of learning opportunities and organisational skills development.

“And then there is the ethos of it. The public sector is about doing good for the public, it is about making good use of taxpayers’ money for the public good. It’s not to say there’s not room for both the private and public sector in pathology, because I think there is, but there is a different ethos in the private sector.”

She concludes: “I’d say 99.9% of people working in NHS pathology don’t do it for the money – they have some connection with the NHS and what it strives for and its reason for being.” 

 

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