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Biomnis National Healthcare Conference22nd March 2012

Réunion mensuelle DSC - BIOMNIS 15/09/2009

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Biomnis HQ Lyon

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What is Diagnostic Pathology (Laboratory Medicine)?

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Allergy Human Genetics

Antenatal diagnostics Immunochemistry

Autoimmunity Infectious serology

Clinical trials Microbiology

Cytogenetics Oncology

Endocrinology Reproductive Biology

Genetic FingerprintingSerological Markers

(Trisomy 21)

Haematology Specialised Biochemistry

Haemostasis Toxicology - Drug Levels

Histopathology Virology

Biomnis Test Menu > 2,500 parameters

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Trends in Global Diagnostic Pathology services

ü. More than 70% of diagnostic decisions based on a lab test

ü. Lab test results are the major contributor to patient records

ü. 65 year olds account for x6-9 more lab tests per head

ü. It is estimated that pathology testing in US will increase c.90% by 2017

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In countries with ageing populations, there will be considerable pressure on Diagnostic Lab services due to ageing populations

and increasing reliance on lab diagnostics

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Global Drivers of Change in Laboratory Medicine•. TECHNOLOGY

•. Consolidation of IVD industry•. More complex tests : Molecular Diagnostics/ POCT /”Lab on a chip”/Microchip

sensor implants•. Personalised medicine•. ICT :UHI

•. DEMOGRAPHICS - Ageing populations and lab testing

•. STANDARDISATION & REGULATION - ISO 15189

•. CHRONIC DISEASE STATES - Diabetes /Obesity

•. GLOBAL SKILL SHORTAGES - Pathologists and Medical Scientists

•. OUTSOURCING - JV’S, MSC’s, PPP’s

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Outsourcing on the Agenda?

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U.SGermanyFranceCanadaAustraliaNew ZealandSpainBrazil

30%-60 % or more Independent

Lab Sector involvement in Public sector contracts

Ireland & UK = < 5%

Independent Pathology Providers (% Total Market)

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International Cost Comparison

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COUNTRY POPULATION (m)

TESTS/YEAR (m)

PATHOLOGY SPEND PER CAPITA (€)

TOTAL ANNUAL

PATHOLOGY SPEND (€)6

COST/TEST (€)

Ireland 4.4 77 107 469m 6.09

USA 300 4,500 80 24,000m 5.33

England 51 700 67 3,400m 4.86

Australia 23 N/A 39 900m < €3*

NZ (Auckland)

1.4 N/A 27 N/A €2.60

Table 1.: International Clinical Pathology Costs per Capita and Per Test.

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International Cost Comparison

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COUNTRY HEALTH SPEND PER CAPITA (€)6

PATHOLOGY SPEND PER CAPITA (€)

% (PATH/HEALTH)

Ireland 2,536 107 4.2

France 3,038 92 3.0

England 2,216 67 3.0

Germany 2,566 67 2.6

Australia 2,486 39 1.6

USA 5,400 80 1.5

New Zealand 1,817 27 1.5

(from World Health Statistics 2009 :W.H.O.)

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•. Long history of outsourced provision of healthcare services in France

•. Private market c.€4.4bn , Public c. €2.8bn (2009)•. Reimbursement paid for by Government

• Cost borne by the social security system for biomedical analyses depends essentially on the rate which the State decides to pay for each analysis, that rate being the same for all laboratories, irrespective of the actual cost of providing that service

•. Current transformation process of French diagnostic market•. 3,500 “Laboratoire de Ville” consolidating via acquisition•. Mandatory ISO 15189 accreditation for biomedical laboratories by 31st October

2016•. Recent ECJ ruling (Commission v France)

Pathology Services in French Healthcare Market

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•. There have been significant developments in pathology in the UK in the last 36 months. OJEU tenders have been issued for private sector support to a number of NHS Trusts and other public sector bodies .

Major Public/Private Partnerships•. Serco /Guys and St. Thomas = GSTS

•. GSTS /Kings College Hospital•. Labco /Sodexo = IPP

•. Biomnis /Assura –Stockton

•. The UK is clearly now seeking to increase the role of independent providers in pathology to reduce the burden on public sector services. Tables 1 and 2 suggest that per capita pathology costs are lower in countries that have a significant independent sector involvement in pathology service provision.

Diagnostic Pathology in UK NHS

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•. Provision of laboratory medicine mainly via public system•. Irish population of 4.4 million. 77 million clinical pathology tests are performed

annually at a cost of €469 million. (2008) •. Biomnis Ireland c. 2m tests per year (2011)

•. HSE Service plan 2012•. €750m in cuts •. No explicit mention of laboratory medicine

•. Regional (x4) service plans - 3-8 % cuts in current spending

•. Lab medicine services under continuous pressure to deliver cost savings

•. Dept. of Public Expenditure & Reform - Radical thinking on outsourcing

•. Laboratory modernisation /Teamwork report (2007)•. Internal reconfiguration preferred after public and private market soundings exercise

carried out in late 2010www.biomnis.ie

Current Status in Ireland

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Diagnostic Pathology in Ireland - Modernisation

10 Principles

q. Accreditation & Qualityq. Clinical inputq. Networkingq. Demand Managementq. ICT Connectivityq. Work Practice Reformq. Core Lab Automationq. Better Phlebotomy and Sample Transportq. Improved Cost/Workload Modelq. Regulated POCT

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The HSE’s Clinical Strategy & Programmes Directorate (DSCP) has established a

National Clinical Programme in Pathology with the initial objective of implementing a

National Pathology Network.

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Diagnostic Pathology in Ireland - Modernisation

•. The NPN will re-organise lab services at regional level into Clinically responsive Co-operative Hubs doing hospital and GP work

•. Hubs will receive Cold Work from a Regional Network of Spokes with Hot Labs or POCT as required

•. Adoption of the Hub-and-Spoke model also brings more tests in scope1 with higher savings potential.

•. Changes in staffing levels, skill mix and work practices will also apply throughout the whole system

•. Regional Network Governance will be drawn from participating Hubs and Spokes, and will be under central direction of the national network

•. Clinical cover, good logistics, and accreditation will be easier in this model

•. Clinical, Quality, and Efficiency Targets will have to be met

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•. Serves a population of 9 million in the Köln area, in competition with 5 other private labs.

•. GP work (Private insurance) and the hospital pathology for about 23 hospitals in the area. Mostly public and voluntary hospitals. •. The hospitals have no labs, only POCT. All work is sent to LK, including blood

bank.

•. Contracts generally for 5 years or more.

•. Change in model to central outsourced lab 5-6 years ago-Hospitals running out of money & decision to outsource non-frontline services e.g. cleaning, catering and eventually pathology .•. A lot of resistance from hospital consultants initially. •. Early retirement incentive scheme for technical staff to avail of and also TUPE in

certain instances.

•. Reckoned that the centralisation of laboratory services yielded saving of over 60%

Outsourcing Germany - Wisplinghoff, Koln

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Outsourcing Germany – Wisplinghoff, Koln•. Payments from insurers (private work) and public hospitals (fees paid on

case basis-negotiated directly with hospital)

•. 24 hour working day, 7 days a week. Shift system.

•. There are two core labs: one which runs the GP work and one which runs the hospital work

•. Processes 16/17 million clinical chemistry (chem and endo) tests per year.

•. TAT (guaranteed in SLAs): < 1 hour for STAT, <2 hour for routine (TAT from arrival of sample in lab reception).

Germany does not have a Unique Patient Identifier

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•. New Zealand has a population of 4.4 million, with 1.4 million (32%) living in the Auckland Region. This region consists of urban, suburban and semi-rural communities, and covers an area of 600 km2.

•. All GP work outsourcing to independent sector has been in operation in New Zealand for over 40 years

•. Labtests was awarded the procurement contract for provision of all primary care pathology services to the Auckland Region in 2006. This contract was fixed at NZ$560 million (€310 million) over 8 years i.e. €38 million p.a. for 1.4 million people.

•. Labtests manages the entire pre-analytical, analytical, referral and post-analytical processes for all primary care samples (all tests) from the Auckland region.

Outsourcing New Zealand

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•. There is one central laboratory in Auckland : fully automated, 10, 000 patient samples per day ( c. 14,000,000 tests per annum).

•. 56 sample collection centres in the Auckland region . Home visits are also arranged for sample collection from patients too ill to travel.

•. Labtests has its own dedicated courier service, with real time GPS tracking, operating on a hub-and-spoke model.

•. Laboratory monitors key performance indicators and issues monthly reports (http://www.labtests.co.nz/News-and-Updates/KPI-Results.aspx).

•. The cost per test is about €2.60. This cost includes sample collection, transport and all logistics and result delivery systems.

Outsourcing Auckland New Zealand

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Conclusion•. Global model of diagnostic pathology delivery is very much a mix of public

/private models •. Managed Service contracts•. PPP /JV •. Full outsource

•. Ireland and UK historically out of kilter

•. UK has undergone radical change in procurement of pathology services in last 3 years

•. Ireland currently moving toward an internal reconfiguration /modernisation of pathology services but ,

•. Ageing population•. Increase in chronic disease states•. Rationalisation of lab services /labour & skill shortages

Will mean that public/private outsourcing initiatives need to be considered………………….. “going forward…………”

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…..not going backwards!”

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Go raibh mile maith agaibh!

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