Restructuring of hospital laboratories is an effort by government health programs to achieve economies of scale and, thereby reduce the cost of medical laboratory testing in England and Australia
Hospital-based clinical laboratories in both England and Australia are being closed by government health programs. These moves are intended to further consolidate medical laboratory testing into larger regional lab facilities and achieve lower costs through economies of scale.
This is being done at hospitals located in communities where the economies of scale don’t quite support the local provision of full-service clinical and pathology testing. Following announcements that a local hospital laboratory is to be downsized or consolidated, there is often pushback from community members and unions representing healthcare workers, including clinical laboratory scientists.
Restructuring of Clinical Laboratory Services in England
In England, for example, authorities announced plans to scale down services at the £10 million pathology laboratory at Queen Elizabeth Hospital (QEH). The 480-bed acute hospital is located in King’s Lynn, Norfolk County, in the east of England, about 100 miles northeast of London.
According to a recent story published in Lynn News, QEH is applying for a contract to analyze blood at a “super lab” in Norwich, the county seat, about 44 miles to the southeast. The change will mean the transfer of 96 pathology laboratory workers to the Norfolk and Norwich University Hospital (NNUH), beginning in December.
“We think this is very dangerous,” stated Mark Robinson, Regional Officer of Unite, in the Lynn News piece. Unite is the largest union in the United Kingdom and Ireland. Its members include England’s National Health Service (NHS) hospital workers, including medical laboratory workers. “The morale is shot to pieces,” Robinson declared.
Government Initiative to Transform Pathology Services in England
In 2006, one government report, called the Carter Review, recommended that clinical pathology laboratories in England be run as “managed pathology networks.”
“The standard ‘District General Hospital’ style of hospital trust, delivering a full range of services, will be increasingly unsustainable,” stated the Report of the Second Phase of the Review of NHS Pathology Services in England. This review was chaired by Lord Carter of Coles. “The data provided by the pilot sites point strongly towards the consolidation of services as a means of improving service quality and cost-effectiveness,” the report authors wrote.
In fact, the decision to downsize the medical laboratory at QEH is part of an effort to create a pathology network in this region. It is referred to as the Eastern Pathology Alliance. It comprises QEH, NNUH, and James Paget University Hospitals (JPUH).
“The N&N will be the ‘hub’ [of the regional pathology network], with QE and JPUH as ‘spokes’,” noted the minutes of a meeting of the JPUH Governors Council Performance Committee held earlier this year. NNUH would be the central laboratory and handle the majority of the more routine medical laboratory testing. JPUH and QEH would maintain “spoke laboratories” and handle more specialized tests.
Australia’s Media Report Medical Lab Consolidation Stories
In Maryborough, Queensland, Australia, about 160 miles north of Brisbane, the pathology laboratory at Maryborough Base Hospital is due to close by the end of the year. This was reported in a story published by The Frazer Coast Chronicle. The closure will mean the loss of six medical laboratory jobs.
The anticipated closure is a result of funding cuts by the Queensland State Government. Community, where union members are protesting the proposed downsizing of the hospital laboratory.
Another story, published at goldcoast.com.au, reported that the pathology laboratory at the Gold Coast Hospital is on the chopping block. With approximately 500 beds, this hospital is located about 50 miles southeast of Brisbane. Plans are to cut at least seven clinical laboratory jobs as part of the government’s effort to reduce health costs. Statewide, 105 clinical laboratory FTEs are to be axed by the end of the year, the story stated.
Pursuing Economies of Scale by Consolidating Pathology Labs
Dark Daily observes that, in both England and Australia, government-run health programs are becoming more aggressive with their cost-cutting efforts. The economics of a large-scale, high-volume medical laboratory almost guarantee that health program officials will want to further consolidate clinical laboratory testing from smaller hospitals, as a way to gain cost savings that result from the increased economies of scale.
However, ongoing reductions to medical laboratory budgets over a number of years in these nations will, at some point, starve pathologists and clinical laboratory administrators of the money and resources they need to maintain high quality and accurate medical laboratory testing services. The question that always surrounds these cost-cutting efforts is: Will they go to the point where patient care is negatively affected?
—Pamela Scherer McLeod