GSTS Pathology Inks Pathology Testing Services Pact with KingsPath in London
In the United Kingdom, clinical pathology laboratories are facing major changes in ownership, operation, and how they are funded. One very visible sign of these coming changes is the latest expansion in the nation’s largest public/private pathology testing joint venture that took effect just two weeks ago.
On September 24, Serco Group, plc, announced that KingsPath, the pathology service arm of the King’s College Hospital NHS Foundation Trust, was entering a pathology joint venture with GSTS Pathology. This partnership became effective on October 1.
Existing Pathology Joint Venture in London
GSTS Pathology is an existing 50-50 joint venture involving Serco and the pathology services of the Guys and St Thomas NHS Foundation Trust (GSTT). This partnership was established in 2009. It is based in London, employs 650 “medical, academic, technical, and ancillary staff” and performs 8 million pathology tests annually.
GSTS Pathology states that, with the KingsPath volume, it will perform 10 million pathology tests per year. The 10-year contract with KingsPath is estimated to be worth £300 million (U.S. $416.6 million) and Serco expects its share of the revenue will total £110 during that period.
Over the summer, GSTS Pathology also expanded its influence in pathology testing outside of London by entering into a Memorandum of Understanding with the Central Manchester University Hospitals NHS Foundation Trust. The trust operates five hospitals.
One objective of the collaboration between it and GSTS Pathology is to better integrate and consolidate medical laboratory testing services in the region. “Managed pathology networks” is a term often used in the United Kingdom to describe this pathology service model. Another objective is to expand the role of the trust’s state-of-the-art genetic testing laboratory that is located in Manchester.
These developments in the pathology laboratory testing sector unfolded even as the United Kingdom’s new coalition government announced ambitious plans to restructure the National Health Service. It released a White Paper on July 12 called “Equity and Excellence: Liberating the NHS”.
The Guardian wrote that the proposals made by the U.K.’s new coalition government “amount to the biggest shake up of the NHS in decades.” In its coverage of the July 12 news about the government’s plans to revamp the nation’s health service, The Guardian also stated that “The government today unveiled a radical, pro-market agenda in healthcare with proposals to encourage hospitals to increase private income and give GPs [general practice physicians] responsibility for ‘buying’ medical services [including clinical laboratory tests].”
In certain respects, the proposed make-over of the National Health Service in the United Kingdom may be as disruptive to the healthcare status quo in that country as enactment of the Obamacare health law is predicted to be for healthcare in the United States.
NHS Wants to Cut Pathology Testing Costs by £500 Million Annually
By creating pathology joint ventures between prominent hospital trusts in London and Serco, the NHS is sending a clear message to all the pathologists and clinical laboratory professionals across the United Kingdom. More private pathology service contracts may be forthcoming. This is consistent with a Lord Carter White Paper on pathology laboratory testing services which was published by the NHS in 2006 and called for savings and cost reductions in pathology of £500 million annually.
The Dark Report and Dark Daily have noted in past years that the United Kingdom has seen relatively little of the wide-spread and extensive medical laboratory consolidation and regionalization that took place in Canada and the United States over the past 20 years. In both countries, pathology laboratory consolidation generated significant cost savings, with varying degrees of disruption or service reductions.
Thus, in pursuit of a public goal of £500 million annual savings from pathology laboratory testing, the National Health Service may now be taking deliberate steps to achieve those savings. Whether this proves to be true or not, at a minimum, the NHS is sending an unmistakable signal to hospital laboratories throughout the nation that major disruptions to the medical laboratory testing status quo will happen.