Speakers lay out clear path for medical laboratories at the 11th Annual Frontiers in Laboratory Medicine

DATELINE: Birmingham, England—Pathology laboratories in the United Kingdom are undergoing change at an unprecedented pace. The impetus for change comes from both a shift in how medical laboratories will be paid, as well as the regional integration of medical laboratory services, which is occurring in communities throughout the nation.

These two powerful trends were given strong emphasis by speakers during the first day of the 11th Annual Frontiers in Laboratory Medicine (FiLM) conference, Jan. 29 and 30. What makes these two trends quite profound is that one trend revises—in a significant manner—how pathology laboratories will be paid going forward. In turn, that affects the ability of individual medical laboratories to access needed capital to acquire new instruments and new diagnostic technologies.

Regional Rationalization of Hospital Laboratory Consolidation

The other trend involves multi-laboratory consolidation and integration. This trend significantly transforms how these pathology laboratories are organized and how they deliver medical laboratory testing services.

Taken together, both trends will dramatically reshape the status quo in how pathology laboratories are organized and financed. The scope of the coming changes was a major topic for the presentations delivered from the FiLM podium yesterday.

On the subject of laboratory consolidation, regionalization, and integration, Dr. Ian Barnes, BSc, MSc, PhD FRCPath, CSci, National Clinical Director for Pathology for the National Health Service (NHS), offered some basic data to illustrate how this trend is accelerating.

“During the years 2000 to 2008, on average, about 15 to 20 pathology labs were involved in some form of merger,” he said. “Since 2009, between 25 and 30 pathology labs were engaged in these mergers.

“At the start of this process, there were about 300 pathology laboratory organizations in the United Kingdom,” noted Barnes. “Currently, that number has shrunk to around 200 and ongoing merger activity is expected to further reduce that number, possibly to as few as 30 pathology laboratory organizations.”

Menu of Medical Laboratory Tests

Barnes and several other speakers further observed that there would be ongoing efforts to balance and fine tune the menu of medical laboratory tests performed by the remaining pathology laboratory organizations. This would happen in order to better support clinical needs, while striving to optimize the cost-effectiveness of the labs performing those tests.

It was a spirited discussion about the future of pathology laboratory testing in the United Kingdom yesterday at the opening session of the Frontiers in Laboratory Medicine (FiLM) conference. From left: Mark Newbold, CEO, Heart of England Foundation Trust; Graham Atkinson, Transitional Director, NHS Commissioning Board, NHS North West; Sir Professor John Burn, Professor of Clinical Genetics, Institute of Genetic Medicine, Newcastle University; Dr. Ian Barnes, National Clinical Director of Pathology, NHS; and Dr. Michael Thomas, President, Association for Clinical Biochemistry.

It was a spirited discussion about the future of pathology laboratory testing in the United Kingdom yesterday at the opening session of the Frontiers in Laboratory Medicine (FiLM) conference. From left: Mark Newbold, CEO, Heart of England Foundation Trust; Graham Atkinson, Transitional Director, NHS Commissioning Board, NHS North West; Sir Professor John Burn, Professor of Clinical Genetics, Institute of Genetic Medicine, Newcastle University; Dr. Ian Barnes, National Clinical Director of Pathology, NHS; and Dr. Michael Thomas, President, Association for Clinical Biochemistry.

In his presentation, Graham Atkinson, Transitional Director, NHS Commissioning Board at NHS North West, tackled the complex subject of commissioning and how pathology laboratories can deliver innovation and add value to clinical care. Commissioning is the term used in the United Kingdom to describe the process of issuing requests for proposals and awarding contracts.

How Money Flows Through the Healthcare System

The NHS is restructuring the way money flows through the healthcare system. The goal is to encourage more innovation and faster implementation of useful new medical technologies. The NHS is encouraging providers, such as primary-care physicians, to “commission” pathology lab testing and other medical services through the competitive bidding process.

Atkinson noted that the big challenge for all healthcare providers in the United Kingdom would be to provide more medical services in the face of flat budgets. Atkinson said that the government projects no annual growth in healthcare funding over the next eight to 10 years. Yet during that same period, pathology labs and other providers will need to accommodate a 5% per year increase in demand.

Insights from Day One of Frontiers in Laboratory Medicine

For Dark Daily readers in other countries, there are several relevant insights to be gained from the healthcare reforms now unfolding in the United Kingdom and discussed yesterday at this FiLM Conference.

• One, the need to curb and control spending on healthcare in the United Kingdom is the trigger for much of the deep reforms now unfolding in this country. On this point, this country is experiencing the same pressures common to developed nations throughout the world. Foremost of these pressures is increased demand for healthcare services and inadequate funding to pay for these additional procedures.

• Two, the ongoing pace of consolidation, regionalization, and integration of pathology laboratories in different communities throughout the United Kingdom mirrors similar efforts that occurred in Canada, New Zealand, and the United States over the past two decades. It demonstrates that healthcare policymakers continue to recognize that consolidation of clinical laboratory testing into ever larger medical laboratory facilities is still a reliable way to improve productivity and lower the average cost per test as a result of economies of scale.

• Three, healthcare policymakers in both the United Kingdom and the United States have issued definitive calls for hospitals, physicians, and medical laboratories in their respective countries to adopt the principles of continuous improvement. They want healthcare providers to foster a culture of innovation and become more nimble at implementing new technologies.

What was clear by the end of the first day of Frontiers in Laboratory Medicine is that a cycle of continual change is underway within the National Health Service that is without precedent. Each speaker recognized the significance of new legislation and various initiatives announced by the NHS.

For pathology laboratories within the United Kingdom, there is much uncertainty as to how events will play out. Greater use of commissioning for the purchasing of pathology laboratory testing means that many pathology lab organizations face uncertainty, both in how they should bid for these contracts, and in how contract awards will be made by the commissioners.

This is where innovation comes into the picture. Speakers at FiLM emphasized the importance for clinical biochemists, pathologists, and other laboratory scientists to engage with the clinical community and ask how they can best meet the needs of the clinicians they serve. They advised that pathology labs need to step up the value they deliver as one way to differentiate themselves during the commissioning process.

As a reminder, FiLM is an annual conference that is co-produced by the Association for Clinical Biochemistry (ACB) and The Dark Report.

 

Your Dark Daily Editor,

Robert L. Michel

 

Related Information:

Pathology Laboratories in the United Kingdom to Be Challenged by New Reimbursement Models and the NHS’ Latest Call for Faster Innovation

In the United Kingdom, Pathology and Medical Laboratory Testing Face Tough Challenges as the NHS Implements Reforms and Budget Cuts

British Health Service Budget Cuts Mean Less Funding for Pathology Laboratories

Proactive Healthcare Emphasized as United Kingdom Works to Reform Healthcare System and Clinical Pathology Laboratory Testing

Clinical Laboratory Innovators Gathering for “Frontiers in Laboratory Medicine 2010” on January 26-27, 2010