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3 June 2010

Wellington House

133 – 155 Waterloo Road

London

SHA Pathology QIPP Leads SE1 8UG

RE: QIPP – CLINICAL SUPPORT RATIONALISATION

WORKSTREAM – PATHOLOGY

Dear Colleague,

Following David Nicholson’s letter to SHA Chief Executives of 25 May, which

set out the final shape and scope of the National QIPP workstreams, this letter

provides some more information to help guide SHAs on the reconfiguration of

their pathology services.

The NHS Management Board has asked me to work with you to build up your

plans and to provide you with an outline of the national planning process and

timetable for change. They have asked us to share with you a national planning

template, which you might want to use regionally to supplement and guide your

SHA QIPP planning.

This builds on work, which has been carried out through SHA Medical Directors

and their nominated pathology leads, who should be able to work with you to

provide the information and expertise to guide your pathology modernisation,

and who should be working to a timetable of the end of June to carry out the

necessary planning. I will be providing a report back to the Management Board

on 14 July on the information that I receive by this date, and flagging any gaps.

Background

The Independent Review of NHS Pathology Services made a strong case for

consolidation of pathology to improve quality, patient safety and efficiency.

Characteristics of a good consolidated service would be end-to-end

management of the service (including transport and logistics, IT connectivity

and efficient and effective use of resources, including people) and the

concentration of non-urgent and specialist work in one or more centralised core

laboratories where throughput is sufficient to ensure high quality results. Only

tests/investigations requiring a rapid turnaround on clinical grounds would be

processed on site.

The case for consolidation is based on the activity and cost data collected from

a representative sample of NHS pathology pilot sites in England. Wide

variations between pilot sites were found. The main factors were scale of

operation (and the associated economies of scale) and the way in which staff

were deployed.

In some instances, the volume of more complex and specialist pathology work

undertaken on site is low, resulting in unusually high costs per test/case. A low

volume of complex investigations results in expertise being spread more thinly,

hindering specialisation and access to specialist expertise. Consolidating

specialist as well as routine services would enhance service quality and

improve cost-effectiveness. The Carter Review forms the basis of our work on

pathology as part of the QIPP workstream on Clinical Support Rationalisation.

Preferred Approach

The national pathology workstream plan, on which you have commented, sets

out a clear expectation that planning for change should be on the basis of a

consolidated service model, as set out in the Carter report. Within each SHA, a

‘core’ lab would process all routine, high volume pathology tests and bring

together specialist testing and technologies. ‘Hot’ labs would be provided on

acute hospital sites where clinically required. You should also consider the

appropriate provision of pathology testing for and in primary and community

settings. Your plan should provide details of the preferred approach, with

supporting evidence. It should also state when savings will be achieved and the

amount. If your approach is different from this, we would expect to see evidence

of how the annual savings would be realised.

I advise that plans for change would also seek to bring together molecular

pathology and genetics laboratories. This has the potential to benefit patients

through better use of the laboratory workforce and more effective uptake and

use of new molecular technologies and equipment. It will also provide better

value for money and support higher quality through concentrating expertise.

Delivering QIPP in Pathology Services

As you are well aware, there will be a zero per cent uplift in national tariff prices

and the uplift for the following three years will be maximum of zero per cent.

This uplift in 2010/11 includes an efficiency requirement of 3.5 per cent. A key

area to drive efficiency will be to consolidate pathology services as above to

deliver annual savings of up to £500 million.

Acute trusts should also introduce service improvement programmes

immediately to improve efficiency and productivity and deliver savings. We have

commissioned NHS Improvement to deliver a national LEAN programme to aid

you in implementing this aspect of your change plans for pathology. Evidence

from this programme shows that significant savings can be achieved by

implementing a LEAN approach within laboratories to strip out waste. We will be

in touch with you separately about the support we can provide to providers

within your SHA on implementing LEAN in pathology.

Workforce

There are potentially significant HR implications from service reconfiguration on

this scale within your health economies. Close workforce involvement and

engagement will be needed to minimise industrial relations issues. We would

draw your attention to the importance of these considerations as part of your

planning.

DH has published the Pathology Workforce Planning Tool (290828) which you

may find helpful to support workforce planning and re-profiling in your localities.

Procurement

A significant element of savings from pathology service reconfiguration will from

rationalisation of buildings, facilities and equipment. While we recognise that it

will not be feasible to suspend all procurement, we would expect you to review

new equipment procurements and building projects in the light of overall plans

for pathology reconfiguration across the wider local health economy. This will

provide better value for money in the longer term.

IT

The Carter Review also recognised the need for IT to support new ways of

working and to achieve an end-to-end pathology service. We will shortly send

you some additional information on mechanisms, which will assist in achieving

service consolidation in line with the approach outlined above. These will not

only achieve efficiency savings and safety/quality improvements but will be cash

releasing through reduction of unproductive activities.

Quality

Finally, I must emphasise that productivity gains are not at the expense of

quality in pathology. The NHS cannot afford to let quality drop in pathology

service provision if patients are to get the services they need. Consolidation of

pathology services provides the model to maintain and improve quality while

enabling financial efficiencies to be made.

We are also working with other QIPP workstreams on developments in

pathology, which have the potential to transform patient pathways and produce

savings in the wider health economy (eg new pathology tests that reduce

invasive diagnostic interventions). You may wish to consider such areas in

conjunction with commissioners and providers in your localities.

I look forward to receiving your pathology plans shortly. Please do not hesitate

to get in touch with me or one of my team to discuss your plans, if that would be

helpful.

Yours sincerely,

DR IAN BARNES

National Clinical Director for Pathology

National QIPP Workstream Lead