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Revving Up Reform

At a Glance

  • Eight years on from Lord Carter’s report on improving cost-effectiveness and quality of pathology services in the UK, progress has been very slow
  • Demands for pathology services continue to increase, but many services are still not optimized to cope with the increasing workload
  • Collaboration between healthcare trusts and private sector partners has successfully facilitated cost-effective and streamlined services
  • Change needs to happen faster though and this can be driven by better communication and collaboration between pathologists, healthcare trusts, private partners and clinicians

The UK’s National Health Service (NHS) has changed a lot in the years since Lord Carter produced his ground-breaking reports on how pathology services in the country could improve cost-effectiveness and quality (1, 2). The pressures pathology services are under have increased considerably, with more tests being ordered and greater demands for cost savings as the NHS faces a protracted period with little real-term increase in spending. In some areas, new methods of delivering pathology services have been developed in response to the recommendations from Lord Carter’s independent panel, but in others, progress has been much slower. The difficulties in getting individual Trusts to collaborate to provide pathology services over a wider area has hindered development.


Could this be about to change? A roundtable chaired by Paul Briddock (policy and technical director at the Healthcare Financial Management Association) was convened to discuss the changes and challenges to pathology service reform. In general, participants thought that the current situation meant there were more reasons than ever for organizations to collaborate and reform services. Here, I present the key discussion points. And although the meeting addressed the situation in the UK specifically, there are many common themes that will strike a chord with pathologists around the world.

Save money, but increase productivity

The fact that the NHS needs to find an estimated £30 billion (around €38 billion) in efficiency savings by 2021 could be a strong driver for change, according to Roche Diagnostics UK managing director Christopher Parker. But, he asked, is pathology high enough on organizations’ priority lists?

Janet Perry, director of operational finance at Barts Health NHS Trust, thought it was: “In reality we need to be looking for efficiencies across the board – and that includes pathology. There is no area that can be viewed as a low priority for us.”

Perry added that there is more willingness to consider new and progressive ways of working in pathology services, such as collaborative partnerships, or contracting out services, than in other areas. However, one concern was that different models and options are still emerging and being implemented, making it difficult for organizations to choose one. “We need to ensure that there is a robust economic appraisal of all the options before deciding on our preferred option,” she said.

To the contrary, Colin Carmichael, business development director at Viapath (a pathology partnership involving several London NHS Trusts) felt, “On the provider side, pathology is quite low down the priority list of NHS Trust chief executives and finance directors, and is seen as an area where the difficulties of change are often greater than the financial benefits.” The perception was that change was taking far longer than Lord Carter had expected – but what, the panel questioned, are the barriers?

Drive and deliver

What would drive this sort of transformation in other areas? Linking pathology transformation into the broader challenges faced by hospitals is one answer. Alan Goldsman, director of finance at the Royal Marsden NHS Foundation Trust said, “We’ve spent time focusing on reducing the unit cost of pathology. Perhaps the reason we have not been successful is that we have not been looking for how we can use pathology to drive our quality, innovation, productivity and prevention targets. How can we put it at the center of what we do and help us to reduce waste?”

Lee Outhwaite, director of finance and information at Derby Hospitals NHS Foundation Trust, added, “The critical bit is getting the pathology team onside with how it will improve value, not just reduce cost. We need a much more general narrative about how we can drive quality up.”

Many pathology laboratories have made considerable efficiency savings since the Carter reports – but these savings may have reached their limit unless there is consolidation. Charlton said: “We’ve had some 21 percent of cost improvement programs with each lab making incremental changes and pretty much delivering on this. Now I think we’re at the point where we can’t make individual cuts anymore and that will drive collaboration.”

The panel agreed that successful collaboration needed a number of factors. One of these was executive buy-in and agreement on the direction of travel. All organizations involved needed to agree on what they wanted to achieve and how benefits should be shared – and to feel they were equal partners.

Timing was also important. There were dangers in putting off change until there was no option; this could lead to a negative approach, which might make the change sub-optimal. Trusts need to have a ‘burning ambition’ to change, said Briddock, rather than embarking on change from a ‘burning platform.’

Carmichael pointed to the failed collaboration in the Midlands that would have involved 40 clinical commissioning groups (CCGs). Individual CCGs have pulled out because of concerns over the clinical and financial benefits the changes would bring. However, in the East of England, three networks of Trusts have been created to deliver community pathology services, showing that partnership and collaborative working can deliver success.

Trusts need to have a 'burning ambition' to change [...] rather than embarking on change from a 'burning platform'.
Power of partnership

Private sector partners have successfully facilitated collaborative, cost-saving and streamlined services. One example of this is in the North East of England where three Trusts, The Queen Elizabeth Hospital in Gateshead, City Hospitals Sunderland NHS Foundation Trust, and South Tyneside NHS Foundation Trust, have worked together with Roche Diagnostics to create a hub and spoke model with ‘cold’ work – up to 80 percent of all the pathology needed by the three Trusts – carried out at one centralized site.

The Queen Elizabeth Hospital in Gateshead was chosen as the centralized site, with the other two retaining facilities to process their own urgent work but sending non-urgent work to Gateshead.
Gaining agreement on the model took a lot of work, and meant overcoming the presumption that the largest site – South Tyneside – would be the site for non-urgent processing. “We made sure that clinical representation was not related to size,” said Chris Charlton, pathology services manager at Gateshead Health NHS Foundation Trust. “No one site or discipline had more dominance. This took a huge commitment from each of the sites, but it got us through the hardest part of the process.”
New state-of-the-art automated facilities have been developed and installed at Gateshead to cope with the centralized workload and allow faster testing that should result in long-term cost savings for all three Trusts.


Marcus Thorman, chief finance officer at Imperial College Healthcare NHS Trust, outlined his Trust’s plans for collaborative working with other local Trusts. “Pathology has been seen as something to deliver significant savings for organizations into the future. And if we collaborate, we think we can save more.”

Carmichael asked whether those collaborations being developed at the moment would have enough leadership and drive to push them forward. In many cases, it was easier to get agreement about a generic solution rather than an actual model of delivery. It could be challenging to achieve rationalization with many partners involved. Chairman Briddock added all partners needed to change their perception to see the hub as ‘our hub’, even when it is not in their own Trust.

Pathologists have to be more at the center of things – they need to move out of their backrooms and into the clinical diagnostics environment.

How many partners is too many? Peter Ridley, director of finance at Royal Surrey County Hospital Foundation Trust described a pathology service venture with just one other Trust: “This was more manageable and enabled us to prove the concept as a 50:50 venture and then add partners.”

Who pays the bill?

The panellists could also see changes on the horizon that will influence how pathology services develop. One of these is the increased interest of CCGs, led by general practitioners, in what they get from pathology services for the money they pay. Primary care accounts for half of the total cost of such services – estimated to be between £2 billion and £2.5 billion (approximately €3–€3.5 billion) a year. Outhwaite described it as a ‘disruptive innovation’, which had led many areas to think of broader reform.

The question of how pathology is paid for is one area that might benefit from reform. Do payment systems help or hinder transformation of pathology? According to Briddock, “In some places there are simply no incentives for acute providers to work with primary care to manage demand. In fact, a cost per case basis for direct access pathology often means that looking to reduce demand will reduce margin for the acute provider. But we need to take a system-wide approach to getting the right tests done to support optimal patient care.”

Trusts are also becoming more concerned about demand management and ensuring that each additional test adds to the clinical picture. Barts Healthcare had tried ‘internal recharging’ so that the cost of tests was charged to the clinical group that requested them. Perry said the Trust had now suspended the process. “The aim had been to ensure departments controlled their usage of pathology, but it did not provide any incentive for pathology to work with the clinical groups to help reduce demand.”

However, the panel agreed that understanding the value of tests throughout the patient pathway is important. Goldsman said the real benefits would come from a dialogue between pathology practitioners and frontline clinicians about how services could change. For example, the projected cost of cancer drugs in the UK was expected to double by 2021 compared with 2010. But many of the drugs under development would only benefit patients with certain genetic characteristics, so testing would be vital.

He said, "Pathologists have to be more at the center of things – they need to move out of their backrooms and into the clinical diagnostics environment. They should be involved side-by-side with clinicians – that is what will transform our services.”

To conclude, three key themes emerged. Firstly, change needs to happen more quickly, potentially drawing on some of the examples of successful collaborative partnerships. Secondly, an effective dialogue between pathology providers and clinicians is essential for effective reform management. And finally, there are great opportunities for NHS organizations to bring pathology into the heart of the patient pathway and generate benefits for everyone.

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  1. Lord Carter of Coles, “Report of the Review of NHS Pathology Services in England” (2006),
  2. Lord Carter of Coles, “Report of the Second Phase of the Review of NHS Pathology Services in England” (2008),
About the Author
Jane Kirkup

Jane Kirkup is Senior Market Manager, Roche Diagnostics, West Sussex, UK.

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