paul britton | 25 april 2009

Reform of Laboratory Medicine Services:

Assessment of Teamwork’s Proposals and Consideration of Alternative Options

Paul Britton | 25 April 2009

2

Roadmap for Discussion

I. Terms of reference

II. Assessment of Teamwork report proposals

III. Potential options not considered

3





4

Controversy Surrounding Teamwork Report

■ Teamwork completed report in May 2007

■ Some Steering Group members disassociated themselves with report

■ No Steering Group members asked to officially ‘sign-off’ report

■ Report endorsed by HSE Board in May 2007

■ Report not published on HSE web-site until Feb 2009

Terms of Reference

5

Two Elements to the Commission

■ Assess the conclusions of the Teamwork report

■ Identify additional options for reform of medical laboratory services not considered within the Teamwork review

Terms of Reference

6

Focus of the ECH RKW Review

■ Methodology undertaken by Teamwork

■ Conclusions of the Teamwork report, specifically those relating to:

– Benefits and risks of the current system

– International best practice

– Evidence of costs / benefits for proposed new model

– Future clinical model of care for the Republic

– Proposed new system for laboratory medicine

– Action plan for implementing the new system

Terms of Reference

7





8

A Contrasting Methodology to Others

Assessment of Teamwork’s Proposals

“We were asked to prepare this report on independent basis without formal engagement

and consultation with the public, patients, staff and other stakeholders in laboratory

medicine services.”Teamwork Management Services

9

Lack of Stakeholder Engagement a Key Concern

■ Teamwork’s understanding of the existing service informed by limited site visits, data collection, fact finding interviews and published reports

■ Key concern is the level of stakeholder engagement in determining the proposed model

■ Arguably more extensive engagement necessary to provide

– better understanding of the current system

– inform the generation and testing of additional future models


10

Current System – Benefits and Risks

■ While identifying several benefits in the current system, Teamwork highlights the following problems:

– whole system quality of existing service not good enough

– limitations in the current organisation of hospital laboratories

– issues for the Public Health and Food Safety Laboratories


“The people we have met during this review have consistently recognised the need to change the way in which the current system is managed and delivered.”

11

Lack of Documented Stakeholder Views

■ Current issues with the service (local, regional or national level)

■ Service aspirations and vision for the future

■ Barriers to change (operational, logistical, political)

■ Opinions regarding visions for pathology service arrangement (both managerial and organisational)


To support this statement the report does not include any stakeholder views on the following:

Inclusion of this information (if made available) within the report may have demonstrated links between stakeholder issues with current service and future vision

12

What is International Best Practice?

Examination of current trends

■ Australia (Queensland, NSW)

■ Canada (British Columbia)

■ Germany

■ Japan

■ New Zealand

■ UK

■ USA


Global direction of travel

New system based on complementary

■ ‘Hot’ labs (acute secondary / tertiary)

■ ‘Cold’ labs (custom designed)

– Central

– Latest automation, robotics, IT

– Large volumes of routine samples

■ Point of Care Testing

■ Patient centred / networked services

■ Telepathology / new technologies &

techniques

13

Advantages of Separating ‘Hot’ and ‘Cold’


Teamwork provide several international examples of new lab systems based on advantages of separating ‘hot’ and ‘cold’ samples. Proposed benefits:

All samples

Cold samplesHot samples

■ meeting demands of acute patient

care

■ process ‘hot’ samples without

competing pressures of the routine

workload

Hospital lab can focus on:

■ More patient centred services (guaranteed

standard of service for routine care)

■ Total end-to-end quality assurance

■ Fast turnaround times

■ Rapid results reporting / paradigm shift in

productivity

■ Substantial economic savings

‘Cold’ lab free to provide:

14

Argument Lacks Supporting Evidence

■ Enhanced quality of patient centred service

■ Shifts in productivity

■ Economies of scale

■ Improved value for money

■ Workforce planning issues e.g. enhanced staff specialisation


While this model may represent best practice, the Teamwork report does not present a robust analysis of data to support assumptions, especially regarding:

Without supporting evidence, the (persuasive) benefits of hot/cold separation are harder to quantify and difficult to accept as widely applicable best practice worthy of implementation prior to robust testing and evaluation.

15

Lessons to be Learnt from Carter Review (i)

■ Observations appear to support Teamwork’s assumption that global direction of travel involves separation of ‘hot’ and ‘cold’ sample processing

■ Recommended pilot studies to determine optimal way forward in terms of quality and economies of scale

■ Likely that there may well not be any single solution (optimal model for reform)


16

Lessons to be Learnt from Carter Review (ii)

■ Needs to be scope for local determination that considers views of stakeholders and reflects local / regional circumstances

■ Identification of broader range of different organisational models and approaches would be beneficial (evaluate against one another)

■ ECH RKW view: same principles applicable to Republic

– Evidence base indicates the likely requirement for consolidation

– It would appear that there is no evidence of a dominant model to achieve this goal


17

Proposed New Model – Evidence of Costs & Benefits?

■ UCHL NHS Foundation Trust’s joint venture with independent service provider The Doctors Laboratory (significantly increased test processing; savings of £1M; origin unclear!)

■ NHS Greater Glasgow and Clyde health area’s seven year managed service contract with Abbot Diagnostics in 2005 (savings of £9M over 7 years; due to managed service contract / centralisation / combination?)

■ Lord Warner comment on the need to find substantial efficiency gains of at least 10% through new ways of working (by 2008/09)(not evidence!)


Cost saving examples provided by Teamwork are not compelling:

18

Difficult to Conclude that Savings are Achievable

■ Examples cited by Teamwork remain aspirational

■ Teamwork has not advanced evidence of

– costs of implementation

– actual savings

– payback period

■ Difficult to conclude (from these examples) that such savings would be achievable following implementation of similar models in the Republic


19

Proposed New System for Laboratory Medicine


■ System creates a single framework to oversee all laboratory medicine services

■ System makes use of

– Regional pathology networks (up to three)

– Appropriate point of care testing

– ‘Hot’ laboratories for acute hospital patient care

– ‘Cold’ laboratories for primary care

20

Clinical and Laboratory Model


21

Clinical and Laboratory Model (i)Assessment of Teamwork’s Proposals

■ 24/7 clinical services in the home

– Self care, chronic disease management, home telecare, “smart” homes, social housing schemes, primary care, community care, social care, ambulance emergency care management, etc

– Supporting laboratory medicine system: POCT (self care and emerg. assessment), Phlebotomy, Sample processing by the ‘cold’ laboratory

■ 24/7 general practice, primary care and community services

– Access to GP, nursing and community clinics, domiciliary services, support for self care, chronic disease, long term conditions, intensive case management, maternity and child health, mental health, special needs, etc

– Laboratory medicine in general practice, primary care and community: Phlebotomy and sample collection, POCT (routine and urgent), sample processing by the ‘cold’ laboratory

22

Clinical and Laboratory Model (ii)Assessment of Teamwork’s Proposals

■ Clinical services at the local hospital

– Specialty outpatient clinics, diagnostics, planned care, community beds (non-acute), 24/7 minor injuries and illness service

– Laboratory medicine at the local hospital: Point of care testing, phlebotomy, sample collection point, processing by the ‘cold’ laboratory

■ 24/7 acute clinical services at the regional hospital +/- tertiary specialties

– Provides treatment not provided at the local hospital and is supported by a national network of tertiary specialties. Some tertiary specialties may be collocated with the regional hospital, depending upon planning strategies

– Laboratory medicine services at the regional hospital: Phlebotomy service, sample collection system, ‘hot’ laboratory, urgent point of care testing. Clinical pathologists providing expert advice, direct patient care and operating across the clinical networks

23

Clinical and Laboratory Model (iii)Assessment of Teamwork’s Proposals

■ ‘Cold’ and ‘hot’ laboratories may be standalone or collocated

■ Clinical and laboratory services models will be supported by a range of specialised laboratories

■ There will be several acceptable combinations of functions, collocations and stand-alone solutions (all compatible within the overall model). For example:

– Both the ‘cold’ and ‘hot’ laboratory may each have specialised roles or qualify as a designated national reference laboratory

– Typically, the academic laboratory will be collocated with a regional hospital and its ‘hot’ laboratory

– National reference laboratories do not need to be collocated with hospitals, except where their function is critical to supporting a particular clinical service or where it’s logical to group similar laboratory functions together on one site

24

Flexibility Required Within Overall Visions


■ Laboratory medicine service must support the clinical vision

■ Clinical vision for the Republic has yet to be clarified and is likely to respond to specific variations in regional requirements

■ The overall clinical vision for Ireland should not necessarily predetermine the supporting laboratory medicine service model

■ Possible that local and regional variations in the supporting laboratory medicine service model may ultimately meet the goals of the clinical vision

25

Workforce Implications Not Fully Considered


■ Report states that implementation of new model will result in substantial reductions in number of medical laboratory scientists

■ Report recommends HSE establish review to investigate future workforce requirements to support new model (cart before horse!)

■ Unclear whether the report addresses the potential loss of ‘intellectual capital’ within the system (significant number of impending retirements)

■ Recommends review to

– Align future educational & training with new model

– Develop retraining programme for current staff

– Framework for uniform approach to post-graduate CPD

26

Complexities of POCT Implementation Overlooked


■ Significant potential for POCT to support the overall clinical strategy

■ Agree with the importance of POCT in realisation of the clinical vision

■ Teamwork report does not explicitly consider the complexities surrounding the successful implementation of POCT

■ Report does not address the potential additional costs associated with POCT implementation

27

‘Hot’ Laboratories


■ Report does not make recommendations on the capacity and size of ‘hot’ laboratories (only assumes variations in size & complexity)

■ Financial analysis not included within Teamwork report. Valuable to understand assumptions around:

– Non - routine activity retained within the ‘hot’ laboratories

– Any increases in cost per test associated with a reduced number of tests across which to spread fixed costs

– Any capital costs associated with the refurbishment of existing acute hospital laboratories to bring the estate up to the required condition

– The costs of maintaining a critical mass of staff within ‘hot’ laboratories following the centralisation of ‘cold’ testing

28

‘Cold’ Laboratories


■ Report suggests an immediate case for up to 3 ‘cold’ laboratories (1x serving Dublin, 1x serving the South, 1x serving the West)

■ Recommend further testing during development of business case for ‘cold’ laboratory procurement (surely should be done prior to this!)

■ Financial analysis not included within Teamwork report. Raises questions around following assumptions:

– What routine activity is relocated to centralised ‘cold’ laboratories

– The revenue costs associated with ‘cold’ laboratories

– Efficiency savings associated with reduced cost per test

– Capital costs (and cost of capital) allocated to the creation of laboratories

– Annual cost savings associated with the creation of up to three ‘cold’ labs

29

‘Cold’ Laboratories


■ Report lists criteria for consideration to determine location of ‘cold’ labs

■ Cost effectiveness of solution listed as important criterion

■ Teamwork note the possibility of locating ‘cold’ labs with an existing hospital laboratory. Were such options explored by Teamwork?

■ Would assume that such options would be required to be explored and evaluated in comprehensive option evaluation process

30

Were Other Options Considered?


■ Report does not present an option appraisal methodology that demonstrates the proposed model is best in terms of

– Cost

– Benefit

– Risk analysis

■ Centralisation of routine testing within existing labs with available capacity / appropriate estates solution?

– Would appear to be excess testing capacity within the system

– Discussed in next section

31

Action Plan for Implementation – Some Concerns


■ Teamwork report sets out comprehensive action plan to assist with implementation of new system (reasonable framework but some concerns)

■ Preparation and approval of business case for ‘cold’ laboratories

– Does the information to support robust business case for ‘cold’ labs currently exist?

– What is the level of confidence that business case for ‘cold’ labs will demonstrate improvement in quality of care, cost effectiveness and value for money

■ Has Teamwork prescribed a solution without necessary analysis of cost / benefits / risk?

32





33

Approach – Site Visits and Stakeholder Interviews

Potential Options not Considered

■ Overview of the existing laboratory medicine service at key locations

– Service arrangement

– Infrastructure condition

– Local issues relevant to effective service provision

■ Laboratory medicine service aspirations and vision for the future

■ Potential barriers to change (operational, logistical, political)

■ Opinions regarding visions for service arrangement nationally

34

Sites Visited & Interviews Completed


Interviewee HospitalDate visited / interviewed

Dr Gerard O'ConnorDr. Niall Swanplus others

Donal MurphyGerry McSweenyDr. Tom CrotteeDr. Donald McCarthyplus others

John GibbonsDr. Brian O’Connellplus others

Geraldine Crean Wexford General Hospital, Wexford 26 January 2009

Elizabeth Whitney St. Luke's Hospital 27 January 2009

Margaret MolloyDr. Maurice MurphyPatrick Mulhare

Thomas Cooke Barry JoyceTim Buckley

Jimmy Newellplus others

Laboratory Medicine Stakeholder Interviews and Site Visits

The Adelaide & Meath Hospital (incorporating the National Children's Hospital), Dublin

12 January 2009

St. Vincent's University Hospital, Dublin 13 January 2009

St. James' University Hospital, Dublin 13 January 2009

Waterford Regional Hospital 29 January 2009

University College Hospital, Galway 04 February 2009

Cork University Hospital, Cork 03 February 2009

• Following discussion with MLSA, the following visits / interview were completed

• Never the intention to visit all labs in Republic but rather a representative sample

35

Local Service Issues / Aspirations – Main Themes


■ General lack of certainty around emerging regional clinical (& laboratory) strategies

■ HSE not engaged sufficiently with laboratory medicine stakeholders

■ Most hospitals experiencing increasing levels of testing within context of hiring restrictions, budget

cuts, and length of the current working day

■ Significant amount of pay costs is typically allocated to on-call costs

■ Existing infrastructure of some labs restricts delivery of efficient service

■ Many hospitals experiencing space constraints within existing infrastructure

■ Most hospital labs currently have spare analyser capacity to handle additional workload

■ Unsatisfactory end-to-end information systems and the lack of a unique patient identification system

as significant barriers to provision of an efficient service

■ Lack of demand management initiatives

■ Silo mentality of existing laboratories is typically a barrier to consolidation and rationalisation

■ Some lab managers have limited authority to effect the required service change

■ Laboratory medicine often has a lack of quality assurance control over hospital POCT

36

Existing Hospital Locations & Lab Sizes


37

Data Availability to Support Option Evaluation


■ Collection and analysis of information from selection of hospitals

– Inform existing service evaluation

– Support indicative financial appraisal of alternative models

■ 2005 national activity data collected during Teamwork review used to:

– Provide a more robust data set for evaluation

– Project activity and cost information to inform option evaluation

■ Caveats associated with this approach discussed in ECH RKW report

38

Additional Options Identified & Modelled


■ Options for evaluation were based on the following:

– Inputs from laboratory medicine stakeholders

– Relevant experience / best practice from other sources

■ Indicative high level quantitative evaluation of options has been modelled. Output from which includes:

– Conversion of activity projections to estimated space requirements

– Development of high level building costs

– Development of high level equipment costs.

39

A Framework for Evaluation…Not the Answer!


■ Intention of this quantitative analysis is not to provide a definitive evaluation of potential options

■ Developed a modelling framework which could be used to undertake a more robust evaluation of options in the future

■ This would be based on a comprehensive data set and significant input from stakeholders

40

Options Identified


■ Option 1 - Three regional laboratory medicine networks each with centralised routine testing (as per the Teamwork review proposal)

■ Option 2 - Three regional laboratory medicine networks (each with centralised routine testing at regional hospital laboratories)

■ Option 3 - Four regional laboratory medicine networks (Dublin x2, Cork x1 and Galway x1; each with centralised routine testing at regional hospital laboratories)

■ Option 4 - Six regional laboratory medicine networks (Dublin x4, Cork x1 and Galway x1; each with centralised routine testing at regional hospital laboratories)

41

Options Identified


42

Options Identified


43

Options Identified


44

Options Identified


45

Baseline for Analysis


■ Options for laboratory medicine service arrangement must

– be driven by future clinical service arrangements

– support the respective clinical visions for the Republic in general and specific regions

■ Important elements to consider include:

– A new National Paediatric Hospital on the Mater hospital site in Dublin

– Development of the new National Maternity Hospital on the Mater site

– A new regional hospital in the North East (potentially located in Navan)

– Location of the regional Cancer Centres and respective cancer networks

– Proposals for development of Academic Health Centres

– Recommendations to establish a unified and integrated Public Health Microbiology and Public Analyst Laboratory service

46

Predicted Future Hospital Configuration


47

Baseline for Analysis – Activity & Costs


Metric Unit

2005Demand increase (05 to 06)



2008

WorkloadBiochemistry & Immunoassay tests 47,176,764 10% 51,894,440 10% 57,083,884 10% 62,792,273 Haematology - routine tests 7,679,215 10% 8,447,137 10% 9,291,850 10% 10,221,035 Immunology tests 461,821 10% 508,003 10% 558,803 10% 614,684 Microbiology - bacteriology tests 2,379,912 10% 2,617,903 10% 2,879,694 10% 3,167,663 Histopathology (inc. non-gynae cytology) requests 316,419 10% 348,061 10% 382,867 10% 421,154 Cytology requests 176,623 10% 194,285 10% 213,714 10% -

Total 58,190,754 64,009,829 70,410,812 77,216,808

Workload sourceA&E tests / requests 5,552,782 10% 6,108,060 10% 6,718,866 10% 7,368,320 Inpatient tests / requests 22,887,728 10% 25,176,501 10% 27,694,151 10% 30,371,102 GP tests / requests 18,450,094 10% 20,295,103 10% 22,324,614 10% 24,482,538 Outpatient tests / requests 7,132,193 10% 7,845,412 10% 8,629,954 10% 9,464,135 Other tests / requests 4,167,957 10% 4,584,753 10% 5,043,228 10% 5,530,713 Total 58,190,754 64,009,829 70,410,812 77,216,808

% of workloadA&E 10% 10% 10% 10%Inpatient 39% 39% 39% 39%GP 32% 32% 32% 32%Outpatient 12% 12% 12% 12%Other 7% 7% 7% 7%

Total 100% 100% 100% 100%

CostsTotal costs (pay & non-pay) € 328,418,926 370,292,339 417,504,612 469,307,651 Average gross cost per test € 5.64 5.78 5.93 6.08

Inflation rate 2.5%

2008 Cytology values have been excluded from analyses due to recent outsourcing to independent sector

Activity and Cost Projections Total activity (all laboratories)

48

Capital Cost Estimates for Options


■ Indicative capital cost estimates for each option have been modelled using the following:

– Conversion of activity projections to estimated space requirements

– Development of high level building costs

– Development of high level equipment costs

■ For each option, can anticipate level of investment required in new and/or refurbished buildings and equipment

■ This includes cost for centralised routine testing facilities and for the reprovision of hospital based facilities in line with clinical reconfiguration strategies

49

Projected Annual Costs for Options


Annual Costs (€m) Option 1 Option 2 Option 3 Option 4

Current cost of testing 469 469 469 469

Central lab testing costs 149 149 149 149

Cost of (new) capital 10% 6.3 5.3 7.0 5.3

Fixed cost % (of total routine testing) 15%

Total cost (before efficiency savings) 498.0 474.6 476.3 474.6

Efficiency saving required 28.7 5.3 7.0 5.3

Efficency saving (% of current cost) 6.1% 1.1% 1.5% 1.1%

Capital Cost (€m) 63.0 52.7 69.6 52.7

50

Assumptions for Annual Cost Projections


■ Current costs for medical laboratory services

■ Annual cost of routine testing assumes work would initially transfer at current average gross cost per test

■ Capital costs do not include land acquisition or disposal

■ The annual cost of capital is calculated at 10% to include capital charges (or equivalent) and depreciation

■ For option 1 it is assumed that an element of the costs of transferred workload would remain fixed within the hospital based laboratories

■ Capital cost assumptions for upgrading facilities at UHG, CUH and St. James’ require clarification

■ Capital costs do not include the cost of the required IT systems or transportation systems to support the networks

■ Assume economies of scale would be achievable for all options

51

Issues not Addressed in Model


■ Staffing complements (numbers and mix) at the different laboratories

■ Variations in types of ‘hot’ labs at each regional hospital

52

Recommendations & Next Steps


■ At this stage it would appear that all options considered are worthy of further investigation to determine which option provides the best solution in terms of clinical outcomes, value for money and sustainability

■ Recommended that the modelling framework should be applied as a tool to further investigate and evaluate alternative options

■ This should be driven by locally validated data that will enable calibration of key modelling assumptions

■ All this should be considered within the context of barriers to implementation such as staffing issues and enablers to service reform such as IT systems and effective transportation systems

54

‘Cold’ laboratory

■ Refers to the development of centralised laboratories designed to process high volumes of routine or cold samples, both for blood sciences, microbiology, histology and cytology generated by general practice, primary care and community care. These laboratories will include automated sections, with cross discipline working. They are supported by dedicated logistics solutions for timed sample collection, transport, tracking and delivery. The standard turnaround time for the automated test repertoire is typically less than 4 hours from receipt of sample. The cold laboratory may be standalone or collocated with a hot laboratory. It may also be responsible for more specialised esoteric tests or national reference functions, depending on how the National Laboratory Medicine Services strategy co-ordinates its approach in these areas of its business.

55

‘Hot’ laboratory

■ A “hot” laboratory describes the laboratory facility that processes all samples generated by patients attending the regional hospital, outpatients and when admitted for emergency care or complex planned care. There is cross disciplinary working in place, during normal working hours as well as out of hours, with full advantage been taken of common analyser platforms to support common working practices. The distribution and authorised use of urgent point of care testing represents additional “remote laboratory capacity” designed to optimise patient care at the bedside, at the same time as sensibly relieving the need for the laboratory itself to do the analyses. A larger hot laboratory may have additional responsibilities, for example, when collocation is essential to support specialist clinical services on site, or it may attract larger laboratory roles, such as been collocated with a cold laboratory, being selected as one of a small number of specialised referral centres for a defined range of additional esoteric tests, or being appointed as a national reference laboratory, depending upon how the National Laboratory Medicine Services strategy coordinates its approach in these areas of its business.

paul britton | 25 april 2009

Documents

current system benefits

teamwork reportteamwork

terms of referenceii

potential options

lack of stakeholder

key concern teamworks

republicproposed new

service local