Presentation on pathology networks. Leaders in diagnostics conference. 7th November 2018

1. Latchmore Associates hugh@latchmoreassociates.co.uk +44 7775 627460 / +44 1425 654999
‘Some personal views on Creating Pathology Networks’
Drawing on 3.5 years at synlab, Latchmore’s 4 UK and 2 overseas pathology
network projects, observations from UK and international labs
Hugh Risebrow, CEO Latchmore Associates
November 7th 2018
- Is there anything wrong with the Status Quo?
- Systems thinking vs Silo Thinking
- The hub fallacy
- No ‘one size fits all’ approach
- 10 other observations on pathology network reconfiguration

2. Is there anything wrong with the Status Quo – largely single Trust pathology services?
Duplication of management/ specialist resources. Lack economy of scale….
Cost area % total Issue with single trust pathology service
Lab MES or equiv 23.7%
Lab other non pay 6.5%
Lab processing staff pay 45.3% Sub-scale for specialist tests. (Volume tests ?)
Lab management 9.1% Every lab reinventing wheel for SOPs, quality management, training etc
Send away tests 2.8% Poor prices. Multiple suppliers with high logistics/ admin costs. (Pre
NPeX) transcription costs/ risks
Consultants 4.4% Often single-handed sub-specialists. Lack of resilience. Issues with
recruitment/ retention in DGHs
logistics 0.9%
IT full costed 1.8% Network systems lower per Trust and enable results sharing
HR/ finance Overheads 1.8%
Estates at market rate 3.6% Specialist units often require large footprint
Not always in path budget
Lack of buying power. Large groups save up to 40%. High procurement
process costs

3. Systems thinking vs Silo Thinking
Pathology is a small but critical element of c70% of patient pathways ..
Systems Thinking Approach:
- Start with patient -> Optimise/ personalise pathway
- Pathology service meets pathway needs
- Pathology service flexes to changing need
- Pathway Outcomes ✅
- Pathway cost ✅
- Pathology cost may be higher ❔
Silo Thinking Approach:
- Save 5% of 3.5%
- Optimise pathology silo
- Fixed Target Operating Model
- Pathway Outcomes ❔
- Pathway cost ❔
- Pathology cost ✅

4. Systems thinking vs Silo Thinking – a (quite common?) example …
GP Local Lab
Before
- Samples collected by 1300 taken to local lab
- Results back by 4pm
- GP manages patients with unexpected results
GP Spoke Lab Hub Lab
After
- Samples collected by 1300 taken to spoke lab
- Samples spun and entered onto LIMS
- Samples sent in bulk to hub late pm
- Samples processed in hub
- Unexpected results sent to out of hours service
- OOH much less familiar with patients and more
likely to visit patients or send to A&E
Appears common in networks. Variations include a) not centrifuging or booking at spoke, and b) processing urgent
samples at spoke IF correctly labelled.

5. The hub fallacy – let’s consider the demand in an example 4 hospital network ..
1
10
100
1000
10000
100000
1000000
10000000
1
7
13
19
25
31
37
43
49
55
61
67
73
79
85
91
97
103
109
115
121
127
133
139
145
151
157
163
169
175
181
187
193
199
205
211
217
223
229
235
241
247
253
Network blood science tests pa
in network send away
Blood tubes per day (rounded)
Lab: A B C D Total
Top 40 tests Acute Urgent 1500 2000 2500 4000 10000
Top 40 tests Acute non urgent 1000 1250 1750 2500 6500
Top 40 tests GP 1500 1750 2250 1500 7000
# Tubes top 40 tests only 4000 5000 6500 8000 23500
Tubes requiring specialist 300 300 300 600 1500
Total 4300 5300 6800 8600 25000
C22m tests pa
C25000 tubes per day
183 tests in network (99.7% vol)
76 tests sent away (0.3% vol)
Top 40 = 96.4% vol

6. 0.00
1.00
2.00
3.00
4.00
0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000
Direct labour + MES cost/ test vs tubes/ day
We considered the labour + MES costs of a blood science lab providing the top
40 tests by volume
• Multi-disciplinary scientist
scenario
• (Sub-specialist scientists scenario
more extreme at right)
• Curve flattens c 8-10,000 tube/
day
• Curve rises slightly based on
empirical data c 15,000

7. The distributed network resulted in lower direct staff and MES costs (c11%*) and offered other benefits:
 Avoided building new hub lab
 Avoided relocating staff (or more likely redundancy/ re recruitment)
 Provided greater resilience
* Difference greater with sub-specialist scientist
(nb each network has different circumstances and needs to develop its own solution)
0.00
1.00
2.00
3.00
4.00
0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000
Direct labour + MES cost/ test vs tubes/ day Hub and spoke A B C D Total
Top 40 tests Acute Urgent 1500 2000 2500 4000 10000
Top 40 tests Acute non urgent 6500 6500
Top 40 tests GP 7000 7000
# Tubes top 40 tests only 1500 2000 2500 17500 23500
Tubes requiring specialist 1500 1500
Total 1500 2000 2500 19000 25000
Top 40 dir staff + MES/ test 3.60 2.80 2.46 0.98 1.43
Distributed Network A B C D Total
Top 40 tests Acute Urgent 1500 2000 2500 4000 10000
Top 40 tests Acute non urgent 1000 1250 1750 2500 6500
Top 40 tests GP 1500 1750 2250 1500 7000
# Tubes top 40 tests only 4000 5000 6500 8000 23500
Tubes requiring specialist 1500 1500
Total 4000 5000 6500 9500 25000
Top 40 dir staff + MES/ test 1.73 1.49 1.26 1.00 1.28
Weighted average costs

8. How we segmented the blood science workload *
1
10
100
1000
10000
100000
1000000
10000000 1
5
9
13
17
21
25
29
33
37
41
45
49
53
57
61
65
69
73
77
81
85
89
93
97
101
105
109
113
117
121
125
129
133
137
141
145
149
153
157
161
165
169
173
177
181
185
189
193
197
201
205
209
213
217
221
225
229
233
237
241
245
249
253
257
Network blood science tests pa
in network send away
* Some tests moved categories for pragmatic or clinical reasons
40 tests in all labs
96.3% b/s volume
Smallest lab c30/
day of ‘test 40’
75 tests in hub
3.4% b/s volume
‘test 75’ c10/day in
hub (economic to
run dailyO
144 tests only economic at supra network level
Gain volume or send away, or swap specialist
tests with other networks
Probably the most challenging aspect to gain
agreement on in UK or international labs

9. Acute site
High volume blood sciences
(+urgent PCR?)
Specialist blood sciences
Microbiology;
Cellular processing
Lower volume specialist
testing:
Immunology;
Molecular
GP samples
Lab to lab samples
Distributed Specialties
Off-site hub
On-site hub
Three generic lab configuration options, with broadly similar operating costs ..
- Many sub-options
- Optimum solution unique to each network –
no ‘one size fits all’
- Starting circumstances
- Distances/ travel times
- Need to re-use lab space
- Clinical specialties
- NHSI feel misunderstood. Open to all types of
network options, not wedded to ‘hub+spoke’

10. 10 other observations regarding lab reconfigurations
1. (Deming principle 8) Reduce fear of change – eg guarantee no compulsory redundancies
2. Appoint network management team at an early stage, to avoid ‘jockeying for future position’
3. Initially create IT interconnectivity/ single LIMS, and standardise equipment – Key enablers to
standardising SOPs, training, quality manuals/ systems and creating workforce mobility
4. MES by sub-specialty vs single lab MES ?
5. Large commercial labs have different views on tracks. Separate out track investment and
validate ROI
6. Centralising histo processing doesn’t require centralising consultants. Consultants can remain
with cut-up lab. Empirical data - forcing consultants to move will lead to resignations.
7. Significant capital not needed – buildings, equipment and LIMS can be procured on a ‘revenue’
basis
8. Evolution not revolution. UK and International networks which evolved steadily are more
successful than those which rushed to implement
9. Many specialist tests economical at ‘Supra network’ scale – consider swapping specialist tests or
developing niches Eg Sandwell (TMPT toxicology)
10.All other good project management principles apply. These are complex change programmes.