New management team could be in place by October 2017

Between £2m - £7m could be saved by running single pathology “hub”

Last year’s Carter Review called on trusts to consolidate or outsource pathology services if benchmarks are unlikely to be achieved

Four hospital trusts have set out plans to appoint a single management team to run pathology services as part of a scheme which could result in savings of up to £7m per year across their region.

The move, by four West Midlands trusts, would see the future development of laboratory services placed in the hands of the joint team.

Consolidating or outsourcing pathology services if national benchmarks are unlikely to be achieved was a key recommendation for trusts in the Carter Review, which said the NHS could save £200m in pathology provision.

The four trusts are:

  • Sandwell and West Birmingham Hospitals NHS Trust;
  • The Dudley Group NHS Foundation Trust;
  • Walsall Healthcare NHS Trust; and
  • Royal Wolverhampton NHS Trust.

The management team is expected to be appointed by members of the Black Country Pathology Steering Group, which was set up in October last year.

NHS Improvement highlighted potential savings via the consolidation of pathology services during last summer’s financial “reset”.

The trusts’ joint management team would be accountable to a board level oversight group with delegated authority, comprising all four of the trusts’ chief executives, medical directors - and a non‐executive director from Dudley Group Foundation Trust who will chair the group.

The steering group has also agreed a number of immediate efficiency actions.

These include:

  • Amalgamation of procurement functions and non-pay spend on consumables where possible in the short and medium term;
  • Joint rotas to address skills or capacity gaps;
  • Consolidation of referred tests across the Black Country, including bringing back testing that each laboratory currently refers out of the area, where this will “improve service levels or make better use of resources”; and
  • Consider the creation of a single histopathology service to establish equality of terms and conditions for staff across the Black Country and avoid “further unhelpful movements of colleagues” between Black Country services.

All four organisations combined currently spend around £37.2m annually on pathology services, according to laboratory consultancy firm LTS Consulting - which is working with NHS Improvement on a national benchmarking of pathology services.

A joint board report for the four trusts said. “Initial high level view of their data suggests that significant efficiencies can be achieved where groups of laboratories work together in a “hub and spoke” arrangement”.

The report estimated that the Black Country trusts could save between £2m and £7m per year by running a single “hub”.

However the trusts could also choose a “two hub” model, which is “less attractive financially, but may have other benefits”.

Neither option has yet been chosen, and trusts have not yet stated which hospitals could become the hub sites.

The trusts have agreed to commission LTS Consulting to conduct a four-week analysis “to inform a strategic outline case”.

This work is planned to be completed by the end of April, when a preferred option can be agreed and work can start on a business case.

The new management team could be in place by October 2017, the report said.

It said previous attempts to plan pathology services across the Black Country had experienced “difficulties in finding solutions that overcame established local interests and accountabilities”.

Walsall, Dudley and Sandwell and West Birmingham have already created an alliance to make efficiency savings and improve clinical sustainability.