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A north London acute is outsourcing its pathology services to a public-private partnership in a deal worth £105m.

Whittington Health Trust has signed a contract with Health Services Laboratories that will see the firm run its pathology services for up to 10 years from this April.

This puts it in line with its fellow acutes in the North Central London Integrated Care System, which also get pathology services from HSL. It is the latest in a succession of trusts to look to the private sector for pathology services, including a collaborative of Yorkshire trusts that last year awarded a £475m contract to Abbott Laboratories.

NHS providers are continuing to reorganise their pathology services as part of a long-standing drive by NHS England to form pathology networks, to gain greater economies and efficiencies from operating at scale. The networks were a “core recommendation” in Lord Carter of Coles’ 2016 landmark review of hospital productivity.

HSL, which includes Lord Carter as chair of its board of directors, is a partnership between The Doctors Laboratory, a private pathology service provider, The Royal Free London Foundation Trust, and University College London Hospitals FT. TDL has the majority voting rights and the ultimate controlling party, according to documents lodged with Companies House, is Australian firm Sonic Healthcare.

It was the only bidder for the contract. The trust’s pathology services were originally put out to tender in December 2022 as a joint procurement with Royal National Orthopaedic Hospital Trust, also in the NCL system. That original tender was for five years, with the option to extend for up to five more, and costed around £70m, with WHT constituting £50m. RNOH decided to withdraw from the process while WHT continued.

WHT said the cost disparity is because it increased the volume of activity it anticipates will go through the service following a review. It also said the total cost in the original notice corresponded to just the initial five-year period covered by the prospective contract, not including the potential five years of extensions. Meanwhile, the sum in the contract notice agreed with HSL covers the full 10 years, including possible extensions.

The partnership already provides histopathology to WHT following a separate arrangement in January 2023. It also provides pathology services to the three other NCL acutes – RFL, UCLH and North Middlesex University Hospitals Trust – as well as Cambridgeshire Community Services Trust.

Last year it hoped to add the three acute trusts in the Hertfordshire and West Essex Integrated Care System. It won the 10-year, £500m contract to provide their pathology services. But a legal challenge by an unsuccessful supplier last year means it has not yet been able to go ahead and begin delivering services.

A WHT spokesperson said: “In line with NHSE’s mandated plan to establish pathology networks across NHS trusts, we can confirm that our pathology service will move to Health Service Laboratories from April 2024. Joining a network of pathology services means our highly skilled workforce can work effectively to deliver improved diagnostic services for our patients.”

Source: HSJ

Date: 24 January

Posted in News on Jan 24, 2024

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