Ireland Is Restructuring National Lab Test System

Government health program plans to integrate, consolidate, and regionalize lab testing services

CEO SUMMARY: Working from a consultant’s report and recommendations based on studies dating back to 2006 and 2007, Ireland’s Health Service Executive is moving forward to effect a comprehensive reconfiguration of clinical laboratory testing across the nation. This may be the first time that the government health program of a developed nation has attempted to consolidate, regionalize, and integrate all the laboratory testing services within its borders.

WITHOUT MUCH NOTICE from the international laboratory medicine community, on February 25, 2009, Ireland’s Health Service Executive (HSE) publicly announced plans to restructure, consolidate, and regionalize laboratory testing services across the entire nation.

Last week, THE DARK REPORT made its first visit to Ireland to learn more about this far-reaching effort to revamp pathology testing. Internationally, this is currently the most ambitious attempt to overhaul the entire laboratory medicine system of one nation.

The stated goal is to realign the existing laboratory testing service so that it can support current and future best practices in modern medicine while generating worthwhile savings because of consolidation and rationalization. This ambitious agenda will require many of the nation’s existing hospital-based laboratories to close or downsize.

The HSE acknowledges that the restructuring will be extensive. Current plans call for the nation’s 46 hospital laboratories to be reduced by an unspecified number. At the same time, up to three new, stand-alone laboratory facilities would be constructed, primarily to provide high volume, routine testing to general practice clinics. Much of this routine testing is currently performed by the same hospital laboratories slated to be closed or downsized.

In that February press release, the HSE stated it intended to proceed with a “programme to modernise its Medical Laboratory Services, as part of its ongoing transformation of services.” This will involve implementation of “a unified, co-ordinated [lab testing] service which will dramatically improve quality and turn-around times in these essential diagnostic services.”

Consultant Was Selected

First steps to study a nationwide scheme of laboratory test restructuring were taken mid-decade. The HSE contracted with Teamwork Management Services Limited, a consulting company based in England. Teamwork reported on its findings and recommendations in May 2007. Its report was titled “Implementing a New System of Service Delivery for Laboratory Medicine Services.”

That same month, the HSE board endorsed the Teamwork report. However, not until February 2009, when HSE issued the press release, was the Teamwork report made available to the general public by posting it on the HSE web site.

There is one interesting criticism of Teamwork’s report on laboratory restructuring. None of the members of the steering group—including Irish pathologists and laboratory scientists—who interacted with Teamwork consultants during the study period were asked to officially endorse or “sign off ” on the findings presented in the document.

To Build Three “Cold” Labs

Probably the most controversial element of this laboratory restructuring plan is the decision to construct up to three “cold” laboratory facilities. “Cold” is used to describe routine testing that can be performed and reported in four or more hours.

Teamwork consultants define the “hot lab” as “a laboratory facility that processes all samples generated by patients attending the regional hospital, out patients and when admitted for emergency care or complex planned care.” Hot labs must provide faster turnaround times and be located close to the point of patient care.

Many laboratory professionals in Ireland are not in agreement that the construction of free-standing “cold” laboratories is the best way to meet the needs of a rapidly-evolving healthcare system. Moreover, a study of the consultant’s report reveals that this recommendation was not based on site visits to the world’s best-performing laboratory facilities.

Instead, the consultants quote a range of published studies and news stories on laboratory operations. Some of these citations are as old as the mid-1990s and thus do not reflect latest-generation lab testing systems and management models.

The argument will be most familiar to pathologists and lab managers in the United States and Canada. Can a hospital laboratory serve the general practice clinics in its community better than a stand- alone commercial laboratory competitor?

Vigorous Competition

In both countries, there are cities where hospital laboratories compete vigorously and successfully against commercial laboratories. Moreover, the most innovative models of integrated diagnostics (pathology testing and radiology imaging) just now entering the marketplace demonstrate the potential for a well-run hospital laboratory to be a true force for integration of diagnostics, of clinical care, and of healthcare informatics.

One practical concern expressed by pathologists and laboratory scientists in Ireland is about the tender process which will be used to organize the design, construction, and operation of the “cold” labs. There is a widespread perception that government health officials will create specifications for the tender that will exclude Irish laboratory organizations as successful candidates for a tender award.

Rather, a general sentiment among laboratory professionals in Ireland is that the design of the tender will favor lab companies like Quest Diagnostics Incorporated or Sonic Healthcare, Ltd. It is pointed out that the cervical cancer screening contract tender, by its design and requirements, effectively excluded any Irish lab from winning part of that testing volume. In fact, Quest Diagnostics did win that tender and has tested 100% of Ireland’s Pap smears since July 1, 2008. (See TDR, August 31, 2009.)

Of course, the controversy about the “cold lab” proposal doesn’t stop there. A number of Irish lab professionals believe that the process which generated the conclusion that cold labs were the best solution for Ireland was incomplete, flawed, and biased. The critics note the lack of transparency in the process to date as well as the lack of significant input by the Irish pathology establishment at key stages in this process.

This criticism is confirmed by a statement on page 7 of the Teamwork report. The authors wrote that “We were asked to prepare this report on an independent basis without formal engagement and consultation with the public, patients, staff and other stakeholders in laboratory medicine services.”

Concerns about the flaws in the process used to support the recommendations for laboratory restructuring and consolidation caused Ireland’s Medical Laboratory Scientists Association (MLSA) to commission a consulting company to do an independent assessment of the HSE’s plans for reforming pathology services across the country. EC Harris LLP pro- duced that analysis in April 2009.

Based on a study of these documents and observations made during its laboratory site visits in Dublin, Ireland, last week, THE DARK REPORT can offer a few insights about this situation. First, in Ireland over the past two decades, laboratories have not been given capital at a rate comparable to what is provided to labs by government health systems in other English-speaking countries visited by THE DARK REPORT in recent years.

Labs Have Limited Capital

Thus, in a situation acknowledged by both government health policy makers and laboratory professionals, Ireland’s laboratories have not had access to the capital required to acquire and operate each “next generation” of laboratory instruments and automation as it reached the clinical market.

On one laboratory site visit, for example, a laboratory manager told THE DARK REPORT that the annual budget for the clinical laboratory did not include a line item for a capital account. This is different than in the United States and Canada, where laboratory operators (and the government health programs) acknowledge the need to allow for capital (and depreciation) so the funding is available to allow the laboratory to regularly update its equipment and systems.

Similarly, the Irish system has not provided sufficient capital to allow hospitals, laboratories, and general practice clinics to acquire and deploy each generation of enhanced information technology as it was introduced into the market. For that reason, laboratories still deal with much more paper than would be seen by busy labs in the healthcare systems of other developed countries. In the hospital labs visited last week, the LIS systems in use were often installed in the late 1980s and early 1990s and had not been upgraded regularly.

Two other observations are of particular interest to pathologists and laboratory managers in other countries. First is that neither Ireland’s government health program nor its laboratory testing profession seem to recognize the potential of quality management tools such as Lean and Six Sigma.

Missing in both the Teamwork consultant’s full report on laboratory restructuring and the MLSA’s assessment of the HSE’s plans was any mention of how Lean, Six Sigma and similar quality management techniques could be used to achieve the goals of the Irish health system in a controlled, rapid, and cost-effective manner.

Given the fact that many pathology laboratories using Lean report improvements of 40% and 50% in turnaround time, quality, and staff productivity, with comparable levels of cost reduction, it seems odd that the HSE leaves this action option unmentioned and unaddressed.

Second, with all the examples of “best practices” laboratories that exist in developed countries around the world, it seems odd that the Teamwork consultants—and the pathologists and laboratory scientists participating on advisory committees— were not allowed to travel to these labs and conduct site visits. Many clinical lab organizations have developed effective solutions to the same challenges now facing labs in Ireland and the study team has missed an opportunity to avoid “reinventing the wheel.”

Laboratory Restructuring

In 2008, the Irish health program broke new ground in laboratory medicine and operations by outsourcing 100% of cervical cancer testing to an overseas laboratory company. Now Irish health officials are poised to restructure the nations’ entire laboratory testing infrastructure based on a consultants’ report and recommendations—and without the significant consensus of pathology leaders in support of the announced plans. It is a bold restructuring of laboratory services and is certain to be closely watched as it moves forward from concept to implementation.

Restructuring Lab Testing in an Entire Nation: Is it All About the Lowest Cost Per Test?

TO EVALUATE THE EXISTING CLINICAL LABORATORY TESTING STRUCTURE IN IRELAND, consultants at Teamwork Management Services Limited developed this table. It shows how the population of Ireland is served by 46 hospital laboratories of various sizes. Laboratory tests provided to general practitioners represent about 50% of the test volume performed annually in Ireland.

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