Select Committee on Health First Report


VI PATHOLOGY AND PUBLIC PRIVATE PARTNERSHIPS

Pathology in the NHS

139. Our terms of reference extended to Public Private Partnerships. As we noted above, The NHS Plan outlined areas for further collaboration between the NHS and the independent sector. We chose to focus on pathology, one of the key areas where the Department anticipates growth.

140. The estimated total NHS expenditure on pathology services was £742 million in 2000-01, an increase of nearly £200 million on the figure for 1998-99.[231] The Royal College of Pathologists estimates that pathology consumes around 6% of the NHS acute services budget.[232] There are around 300 services in England, usually based in acute trusts, and about 1700 separate laboratories (principally haematology, microbiology, biochemistry, histopathology, immunology). Historically, pathology laboratories developed on-site in hospitals, serving local catchment populations. There are also approximately 250 private sector laboratories. There are a further 46 Public Health Laboratory services.[233]

141. Up to 70% of all diagnoses in NHS patients depend on laboratory tests, hence NHS pathology services are critical for the day to day evidence-based care of patients. Fewer than 5% of test requests ("hot tests") require a response within 24 hours. The NHS undertakes some pathology work for the independent sector, but very little NHS work is currently undertaken by the independent sector. In addition, the reprovision of laboratories has been included in a number of PFI projects. Only about 5% of pathology work undertaken in the UK is currently conducted by the private sector.[234]

142. In the light of new demands, in particular sophisticated new technology, a growing repertoire of high-technology tests, robotics and near-patient tests, there are growing pressures for pathology services to be organised to serve a larger population, perhaps equivalent to the strategic health authority size of around 1.5 million. The Royal College of Pathologists suggested that the status quo "hinders the optimal distribution of the pathology workforce, encourages duplication of expensive equipment in neighbouring institutions and fosters professional competition rather than collaboration".[235] The Doctors Healthcare Company, which owns The Doctor's Laboratory, the leading UK independent pathology services provider, suggested that pathology had suffered from "strategic neglect" in the NHS and argued that the NHS's laboratories "operate on a small scale, are fragmented, unmodernised, lack leadership attention, and find it difficult to change".[236]

143. Pathology is a rapidly expanding service, with a workload increasing at an annual rate of around 8%. In addition, the pressures of workforce shortages, as well as technology, are factors persuading some providers to look at the advantages of larger services. International comparisons suggest that UK laboratories are potentially inefficient, being too small to make effective use of new technology and improve labour productivity. The average NHS laboratory probably operates at only a fifth of the volumes of leading modern international facilities.[237] Technical advances in "near patient testing" and the introduction of desktop laboratories for GPs may significantly affect the traditional patterns of demand.

144. Over the last 20 years, capital investment in pathology has been poor as recognised by Audit Commission reports in 1991 and 1993 and the NHS Executive review in 1995.[238] In 1998, following the Comprehensive Spending Review, the Department initiated a ten year programme to modernise NHS pathology services but according to one of the largest private companies in this area, "the majority of NHS laboratories are still configured in the same way as they were 20 or more years ago".[239]

Modernising pathology services

145. The first indication of the Government's proposals to modernise pathology funds came in an announcement of a £20 million modernisation fund in 1998-99, and the establishment of a steering group to assess bids for funding.[240] A central instruction was issued to NHS Regional Offices to examine their pathology services and produce a co-ordinated plan to bring them up to date. These plans were returned by March 2001.[241] According to a Royal College of Pathologists' Discussion Paper, "central thinking in the Department was being shaped by policy makers in the Prime Minister's office and strategists from a variety of sources, including a Canadian company with much experience of configuring laboratory services in North America".[242]

146. In the first two years of the Programme (1999-2000 and 2000-01), 400 expressions of interest were received and £20 million was invested in 35 projects, looking at the adoption of advanced technologies in pathology and encouraging consolidation or reconfiguration of services. In 2001-2, a further £8 million is being spent supporting three or four larger reconfiguration projects exploring the development of managed clinical networks in NHS pathology services - moving from trust-based pathology services to those serving whole Health Economies, up to strategic health authority size (ie around 1.5 million). However, as Professor Lilleyman of the Royal College of Pathologists has noted, the modernisation programme has run into some difficulties.

    "First, initial bids showed just how un-modern some pathology services had become and that considerable investment was needed simply to bring them up to date. Second, the notion that capital might be more readily available from the private sector has not been greeted with universal enthusiasm. This is a disappointment to Government policy advisers who see public:private partnerships as an important part of the modern NHS - particularly in pathology. Finally, in late 2000, regional offices of the NHS Executive were each charged with producing a local modernisation strategy, and the perceived lack of consultation on this process has produced professional indignation in some parts of the county."[243]

147. We took evidence from two private sector pathology providers, Quest Diagnostics Limited and The Doctors Healthcare Company (TDHC), West Middlesex University Hospital (which had contracted its pathology services to Quest) the Royal College of Physicians and the MSF trade union.[244] We wanted to ascertain what the perceived advantages and disadvantages were of the contracting out of pathology services.

148. All our witnesses were agreed that pathology services in the UK were in need of reform and reorganization. Ms Gail Wannel, Chief Executive of West Middlesex University Hospital NHS Trust, told us that "economies of scale" were being lost because of the fragmented nature of the current provision of pathology.[245] Not only did larger networks of providers offer cost savings, they also facilitated the presence of specialized pathology teams, in contrast to the present situation where some senior technical and clinical staff were engaged in a variety of functions, including pathology. Professor Lilleyman for the Royal College of Pathologists drew attention to the problems caused by "pockets of unsatisfactory service due to chronic under investment" and workforce shortages. He backed the calls for reform of pathology along the lines of larger networks, which he felt should be managed at strategic health authority level,[246] but was open-minded as to whether this required greater private sector involvement.[247] Ms Wannell too felt that there was an opportunity for "a variety of models" but that the NHS could learn a lot from the private sector in terms of the development of specialist services and off-site laboratories for cold [non-urgent] testing.[248]

149. We asked our witnesses whether private pathology provision in the NHS gave good value for money. Ms Ward suggested that it was difficult comparing the costs of private provision with those obtaining in the NHS, owing to the complexity of accounting procedures within the NHS.[249] What she felt was indisputable was that the costs of provision by her company were more transparent and that this improved accountability. West Middlesex recorded that the costs of its pathology services had fallen by ten per cent since it had contracted out services.[250] Ms Ward told us that the purchasing power of the NHS would suggest it might obtain more favourable rates than private clients.[251]

150. We also wanted to establish how turn round times in the private sector compared with those in the NHS. Ms Ward of Quest cited the example of cervical cytology tests at West Middlesex, where the turn round time had been reduced from 16 weeks to seven working days following substantial investment by Quest. Dr Prudho-Chlebosz of TDHC assured us that there was no discrimination in turn round times as between tests carried out for NHS or private sector customers: "it is more expensive to discriminate between private pathology and NHS pathology than to ensure that the configuration of the department is such that all work is put through quickly".[252]

151. We were also concerned that quality might be compromised in the search for efficiency, and that control over procedures might move out of the hands of clinicians; West Middlesex University Hospital NHS Trust assured us that its pathology service remained consultant-led.[253] Urgent tests are analysed in a small laboratory on the hospital site while "cold" tests are conducted in an off-site laboratory. West Middlesex had found quality systems to be "robust", equipment was updated more frequently and pathologists were freed from routine administrative tasks and able to focus on clinical issues.[254] According to Ms Wannell:

    "The facility and environment are much enhanced. We were sited in four different laboratories, two of which were in a dreadful state of repair. The equipment is enhanced and we have IT systems significantly enhanced now. They link to the GPs so there is rapid response. People are not hunting around for results, it is a lot easier on that side. In the transport system, we had had a situation where sometimes pathology was being collected in laundry vans. Now we have dedicated transport. The whole service provision has been enhanced tremendously. I think the GPs would say that as well."[255]

152. Ms Wannell told us that a crucial aspect of the contract was that it was "clinically led", and that it had been clinicians who had determined the balance of tests to be conducted on and off-site. Mr Spiller of MSF acknowledged that his union's experience of the main private sector pathology providers had been that they provided work to a high quality standard, though he felt that similar improvements could be made within the NHS with adequate investment.[256]

153. Given the consensus over the need for substantial restructuring of UK pathology we wondered why so little had been done to date. West Middlesex recorded that a disadvantage of their public private partnership with Quest had been that pathologists valued the NHS ethos and wanted to remain in the mainstream of UK pathology.[257] Dr Prudo-Chlebosz of TDHC thought that the reason the NHS had not moved more quickly to more rational structures in pathology arose from the historical background of pathology, the fact that it had traditionally been constituted as a number of small disciplinary areas. People entered pathology out of an interest in providing a clinical service to a local set of needs, not to institute structural change.[258] Mr Spiller of MSF felt that the Pathology Modernisation Programme was severely under-funded and that the debate was hampered by the almost automatic assumption that rationalisation and reorganization entailed involving the private sector.[259]

154. All sides to the debate accept the need for rationalisation and structural reorganization and we are attracted to Professor Lilleyman's suggestion that the new strategic health authorities are the appropriate level at which, or areas within which, new pathology networks can be organized. The evidence we have seen suggests that private sector providers have introduced greater efficiency without compromising clinical standards. This, we believe, is partly due to the fact that clinicians have been closely involved at every stage of the reorganization. We especially commend the model of having NHS consultant pathologists in charge of on-site laboratories where "hot" testing takes place, whilst off site laboratories are left to handle large volumes of cold testing.

155. We would agree with Mr Spiller of MSF and Ms Wannell of West Middlesex University Hospital Trust that a variety of models need to be tested, and it seems to us that many of the benefits being achieved by the private sector companies could be achieved within mainstream NHS provision if sufficient investment were made.


231   Newchurch Limited estimate. Back

232   Ev 154. Back

233   Official Report, 23 April 2002, cols 249- 50w. Back

234   Q659. Back

235   The Modernisation of Pathology: A Statement from the Royal College of Pathologists, para 1.4. Back

236   Ev 161. Back

237   Figures from Newchurch Limited. Back

238   Pathology Services and Management Review 1991 and Critical Path: An Analysis of Pathology Services 1993. Back

239   Ev 348. Back

240   The Modernisation of Pathology: A Statement from the Royal College of Pathologists. Back

241   Ibid. Back

242   The Modernisation of Pathology, para 1.2. Back

243   Bulletin of the Royal College of Pathologists, October 2001. Back

244   Since we took oral evidence, Quest Diagnostics has lost its contract for all pathology services across West Middlesex Hospital Trust: West Middlesex's services will now be provided by Hammersmith Hospital Trust. See The Health Service Journal, 21 March 2002, p.9. Back

245   Q562. Back

246   Q557. Back

247   Q553. Back

248   Q564. Back

249   Q631. Back

250   Q573; Ev 345, Ev 348. Back

251   Q589. Back

252   Q589. Back

253   Ev 162. Back

254   Ev 164. Back

255   Q682. Back

256   Q666. Back

257   Ev 164. Back

258   Q688. Back

259   Q690. Back


 
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Prepared 15 May 2002