Essential insight into England’s biggest health economy, by Ben Clover


How the big trusts work together – or don’t – is a big issue in the capital.

South of the river there seems to be some friction around how the two biggest trusts – King’s College Hospital Foundation Trust and Guy’s and St Thomas’ Foundation Trust – work together.

HSJ reported last week about the disputes between the two haematology departments, and the problems that King’s financial mess had caused for the development of a joint haematology institute based there.

Since then the troubled organisation’s report into how its deficit came to be more than triple what was predicted (£38.8m to £129.6m) has belatedly appeared (nine months after its completion, and with a reminder that the trust said it would make it public).

The report, by PwC, has a lot to say (a savings taskforce that cost more than they saved, overstating the amount of bone marrow transplant work it would do by £6m, a £28m increase in staff costs) but there is a strand that is perhaps telling about how King’s works with its neighbour to the north.

Although a lot of the report was redacted one of PwC’s recommendations was that the trust “evaluate its relationship with Viapath and determine whether the relationship works”.

Viapath is the trust’s pathology provider and its pathology staff were transferred to it in 2010.

Who owns Viapath?

King’s owns one-third, Serco another third and Guy’s and St Thomas’ the remainder.

It is not clear from the document what prompted PwC to make this recommendation, but it sounds like the consultants thought the relationship could be better.

Indeed, their analysis said: ”The Viapath contract is coming to an end, which represents an opportunity for the trust to retender at more competitive prices. Internal benchmarking versus an inhouse provision and NHS Improvement Carter analysis have shown a significant opportunity to reduce costs by c£4-5m”.

Other parts of the report make reference to costs increasing more than expected when Viapath took over pathology services at Princess Royal University Hospital in Bromley (King’s other main hospital site). There were indications that an increased volume of tests was also unwelcome, although the arrival of new bacteria that needs to be routinely screened for may explain some of that.

Viapath also came up in the most recent meeting of the Guy’s and St Thomas’ board, which was presented with a report on the company being threatened by the Medicines and Healthcare products Regulatory Agency for not replacing an important IT system fast enough.

King’s would only say that the pathology contract for south east London was currently being tendered and that “the trust has a good relationship with Viapath and has trust representation on the Viapath board”.

The contract comes up in September 2020.

Who is awarding the London (and south east) mega-tender? Er, the trusts themselves, including King’s and GSTT, who are shareholders in the incumbent.

Lewisham and Greenwich Trust is another large south east London provider that earlier this month indicated it would not be taking part in the tender, preferring a wholly NHS provider.

For all the expense of central regulators, and complaints about their dead and stifling hand, the alternative is very convoluted commercial arrangements involving subsidiary companies that may yet involve spending a lot of money on lawyers.