Genmed has been selected by Norfolk and Norwich University Hospitals NHS Foundation Trust as its preferred vendor-neutral managed services provider for laboratory managed services including the procurement of pathology equipment and consumables.
Serving a catchment area of about a million patients, laboratory medicine in the Norfolk and Waveney area is managed by the Eastern Pathology Alliance Network (EPA) – a joint venture established in 2012 between Norfolk & Norwich University Hospital, the James Paget University Hospital, and the Queen Elizabeth Hospital Kings Lynn.
Employing 400 staff, the EPA runs laboratories on the three hospital sites with procurement centralised for all.
Dianne Gibson, Eastern Pathology Alliance network manager, said: “The goal of the EPA is to provide a common pathology service across the network to deliver greater efficiency and cost benefits in response to Lord Carter of Coles’ recommendation that pathology expenditure should be reduced by between 10 and 20%.
“Our focus is to achieve this without comprising the quality of care for patients.”
Genmed will provide a managed service which continues to offer a centralised method for procurement, including running mini tenders, yet allows the EPA to choose best-of-breed technology from any pathology supplier it wishes to select without the tender and contractual process constraining this.
Furthermore, Genmed will work on the EPA’s behalf to drive costs down further to achieve greater value for money, as well as improving administrative efficiency while maintaining quality of service.
The trouble with pathology is it’s seasonal with peaks and troughs of activity
Gibson said: “Our previous managed service contract for pathology was signed in 2006 for a 10-year period and only covered clinical biochemistry and haematology.
“It was quite restrictive given we could only source equipment or services that we had specified in the original tender offer. It lacked the flexibility we wanted.”
The new umbrella agreement with Genmed is the reverse and enables the EPA to incorporate any pathology requirement under a managed service contract.
This means the scope will now be broadened to not only include clinical biochemistry and haematology, but microbiology and cellular pathology which will include in the region of 40 suppliers or more.
The type of equipment which will be procured by Genmed for the EPA covers clinical biochemistry and haematology analysers, toxicology analytical equipment such as tandem mass spectrometers, microtitre plate washers and readers, point-of-care devices such as glucose monitors, as well as all consumables needed like assay kits, tubes, cups, pipettes, diluents and so on.
The benefits to the EPA have been immediate as Genmed’s managed services are HMRC compliant for VAT recovery.
While it is early days in the relationship with Genmed, five sub contracts have already been signed for equipment which will result in a projected £264,000 cost saving in the first year on reduced consumables prices and VAT recovery with Genmed also negotiating better pricing for the EPA for these contracts.
Gibson said: “Genmed is providing the financing up front for pathology equipment and understand that we need to work within existing budgets plus make savings where possible. That’s why we’re adding in new areas like microbiology and cellular pathology into a managed service to benefit from the value Genmed provides and from the associated benefit of VAT recovery.”
All Genmed managed service costs are ‘smoothed’ with no big upfront investment required by the EPA. Billing is done quarterly, which also helps the finance department with its forecasting.
Robin Modak, Genmed’s chief executive, said: “The trouble with pathology is it’s seasonal with peaks and troughs of activity.
“We’ve agreed a quarterly billing cycle so the EPA avoids over or under spending during any given month which helps with their cash flow, plus we manage all the ordering, invoicing and reconciliation which reduces their administrative overhead.”