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A journey to Pathology 3.0: Pathology and Laboratory Medicine at the Strategic Inflection Point

Updated: Apr 28, 2020

Following the sobering RCPath Census Report on the current state of the UK Histopathology and, later the same week, the NHS Improvement’s progress report on pathology consolidation programmes in England, we have decided to share with the audience interested in Pathology and Laboratory Medicine the outlines of a few of our conceptual and strategic conversations. The aim is to initiate discussions about some topics relevant to our industry, drawn from our experiences as clinicians, leaders, managers, consultants and entrepreneurs and our shared passion for innovation. We believe that this is highly relevant because Pathology is hitting its strategic inflection point and the stakes are high. As Andy Grove, the former CEO of Intel pointed out in his 1997 classic, in the life-cycle of every industry, profession or business, inevitably comes the point when the fundamental ‘rules of the game’ change fast and forever. This event represents an existential challenge for many organisations who are late to spot the tidal wave or do not have the will and ability to “change the ways they think and act” and jump-shift their strategy, culture, operational and organisational models. However, for those who do, this represents the time of great opportunities. We believe that the current constellation of strategic drivers in the society, healthcare and laboratory industry presents a once-in-a-lifetime chance for Pathology and Laboratory Medicine services in the UK to leave behind the old paradigm and set their aspirations high. We want to describe this as the journey towards Pathology 3.0.

The current service model, Pathology 1.0, has long passed its shelf life. The service is fragmented. It relies on independent, multidisciplinary laboratories hosted by almost every acute trust in England, serving the mainstream needs of their host trusts and the associated primary care. The larger regional teaching hospitals may also host a range of regional or occasionally supraregional, specialist reference laboratory functions. In regards to their multidisciplinary nature, the laboratories can be viewed as diversified conglomerates of independent ‘service units’ (‘-ologies’ – e.g. biochemistry, haematology, immunology, microbiology, cellular pathology). Each of these units has a clinical and business-level strategy that is driven by its history and local or wider realities as well as discipline-specific traditions, objectives and norms. The overarching corporate-level strategy of acute trusts supports the service units and pathology in general by providing a platform for allocating resources and coinsurance of risks. The services of pathology laboratories are commissioned and internally funded in ways reflecting the evolution of local arrangements, and this approach extends to procurement, logistics, IT, commercial capabilities and workforce development. Irrespective of the local idiosyncrasies, there is one common denominator; due to the nature of the organisational, operational and financial arrangements of Pathology and Laboratory Medicine, services inevitably behave as corporate cost centres. They and their constituent ‘-ologies’ are de-facto ‘silos’ in the fabric of the clinical pathways, organisations, domains of care and the overall healthcare economy. Apart from the extrapolated contribution to the corporate financial targets, the clinical, operational and financial performance management instruments of Pathology and Laboratory Medicine services are inherently internally and process focused. The performance is evaluated as the function of the number of tests, their analytical quality, test repertoire, internal speed by which they are performed and provision costs per test items, and neither reflect nor incentivise value-added contribution to the strategic and operational needs of their clinical users and patient outcomes. All these factors synergistically contribute to the variations between the individual services, uphold their intrinsically transactional nature and adversely affect their ability to respond to the changes in the environment.

Lord Carter’s reports on pathology and operational productivity of acute hospitals highlighted a few significant shortcomings of Pathology 1.0 and the consecutive NHS Improvement-driven initiative for consolidation of pathology services in England had been established as the framework to address them in a programmatic and evolving manner.  In line with the mandate of the Lord Carter’s review and the NHSI’s strategy to improve the operational productivity and performance of the acute hospitals in England, the primary focus of the initiative is to understand and reduce the unwarranted variation in a way that aligns with the concepts from overarching NHS strategy. The former is utilising a systematic data collection via the Model Hospital tool, and the latter comprises a mandatory consolidation of Pathology and Laboratory Medicine services in twenty-nine pathology networks. The progress report shows that a year or so in the programme, most of NHS acute trusts hosting Pathology and Laboratory Medicine services have endorsed the idea and are making local and regional arrangements to enable its delivery. There is nearly universal recognition that the regional consolidation will provide a more optimal clinical environment for standardisation, continuous quality improvement, diffusion of innovation and workforce development, and the opportunity to reduce costs by aligning and standardising procurement, logistics, IT, estates and workforce. The timelines and roadmap to the maturity of the individual networks will undoubtedly be influenced by the legacies, availability of resources and competing priorities in their local healthcare economies. Irrespective of fundamental appreciation for local realities, and its learning and evolving approach, the programme in its current iteration still relies on target-based performance management, shows unwithering faith in the economies of scale and hence reinforces transactional nature and internal focus on the operational, analytical and technological aspects of Pathology. Although it undeniably accelerates the long-overdue removal of inter-organisational, ‘horizontal’ silos, the programme has not yet developed instruments to support the integration of Pathology in the healthcare ecosystem that spans across the boundaries of care, established pathology services’ cost-centres or synchronous and ‘metachronous’ system transformation programmes within or beyond Pathology. To be fair, this is not an oversight in the programme’s design, but the unavoidable consequence of the current legislative and policy framework governing the healthcare at its early stage of transition to the integrated care model. In summary, the current roadmap for the Pathology and Laboratory Medicine Industry in the UK – we refer to this consolidated model as Pathology 2.0 -  is undoubtedly the move in the right direction in comparison to the current, out-of-date Pathology 1.0, and probably a necessary stepping stone on the journey, but the ambitions could and should be set much higher.

Since 2016, NHS providers, commissioners and local authorities in England working together as forty-four Sustainability and Transformation Partnerships have been developing local solutions for improvement of health and care. Eight of those have been awarded the status of Integrated Care System, the prototype of the new healthcare ecosystem in which the local stakeholders assume collective responsibility for managing resources, delivering services and improving the health of the population they serve. This fundamental change in the ways that NHS works and interacts with the patients and many of its stakeholders provides the opportunity for shifting the Pathology paradigm from the transactional and inward-looking constraints of Pathology 2.0 to the value and outcome-based transformational service model that we refer to as Pathology 3.0. Since it is an essential component of practically every pathway and an episode of care, frequently pivotal for patient management decisions, Pathology is ideally placed to join-up thinking across the services, organisations and boundaries of care about optimising and personalising prevention, diagnosis, monitoring and treatment that are currently more often than not addressed in isolation. Pathology should proactively expand its traditional business model based on the volume and quality of analytics and diversify its preanalytical and postanalytical domains wherever the opportunity presents itself to add value to the clinical pathways and population health. Pathology 3.0 should leverage its transformative potential and facilitate better outcomes for the patients, their families and service users. This approach should also positively affect the bottom line of the system as a whole, not only focusing on the compliance with the cost centre-based targets by squeezing-out yet another 5% of its own 5% share. This shift from the penny-wise, pound-foolish to pound-wise approach requires a significant change in the ways that the performances of the Pathology 3.0 services are benchmarked and incentivised. The incentives for Pathology 3.0 should be linked to its contribution to system-wide outcomes, not just to its diligence or thrift. New, ‘silo-busting’ performance measurement instruments need to flag and reward the contribution to solving the most relevant system-wide issues such as reducing inequalities of access, management of chronic conditions and co-morbidities, prevention, improving cancer pathways and so on. As such, they need to move from the oversimplistic accounting models based on test volumes and take into account the whole new intangible asset economy. They also need to have a sufficiently local angle, to account for the realities and priorities of the local healthcare ecosystems. 

Journey to Pathology 3.0 will not be simple. It will have to balance between continuity of service and exploring new opportunities, which is strategically and culturally a very complex undertaking. It will require a distributed, system leadership, with a shared vision, commitment, the constancy of purpose, and ability to work across domains over which there is no direct control.


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