A major Australian multinational company is looking to make substantial profits from a new shared pathology network being set up to serve trusts and primary care in Hertfordshire and West Essex Integrated Care System.
Health Services Laboratories (HSL) has been appointed as the provider for this service, which is part of a national plan to merge the 122 individual pathology units that were operating within NHS Hospitals in England in 2017 into 29 networks.
The signing of the Herts and West Essex contract in March 2024 opened up a “pre-mobilisation phase”, establishing optimal joint governance frameworks across the ICS, followed by a 9-month “mobilisation” to prepare pathology staff and services for transfer over to HSL in 2025.
This will be followed by a 30-month “transformation phase” working towards the development of the new pathology operational model. Pathology staff will transfer under TUPE to the new provider’s employment, and maintain their full NHS pensions.
A new central laboratory is being built at Croxley Park in Watford to deliver most of the routine pathology testing, including pathology services for GPs and community providers, while the existing labs on each hospital site are converted to deliver essential on-site pathology services for inpatients and the emergency department. The new hub laboratory is expected to be operational in 2026.
Diagnostics privatisation – full briefing
New contract for private pathology provider despite cyber attack
But who exactly are HSL?
The HSL website states that Health Services Laboratories (HSL) is a partnership between The Doctors Laboratory, Royal Free London NHS Foundation Trust (the Royal Free London) and University College London Hospitals NHS Foundation Trust (UCLH).
The paragraph on The Doctors Laboratory (TDL) explains that it was established in 1987, and has grown:
“TDL is the largest independent provider of clinical pathology services in the UK, with two hub laboratories in central London and Manchester. The two hubs support TDL’s national network of laboratories throughout the UK. Their pathology services extend to hospitals, laboratories and clinical practice in the NHS and Independent Healthcare Sector.”
TDL hooked up with University College Hospital, London in 2003, and also with the Royal Free Hospital. And here they casually mention that that:
“TDL is owned by Sonic Healthcare Ltd, an Australian clinical diagnostics organisation.”
So who are Sonic?
The corporation’s website reveals that its history dates back to 1987 in Australia, but also shows that Sonic bought TDL back in 2002, merging it with Omnilabs in 2003 and from that base forming a “ground breaking partnership” with UCLH.
It now operates on three continents, having acquired other European and US companies, and delivered a £350m profit in 2023 on revenue of around £4.2 billion.
A Sonic statement in May this year reports that it has reduced its forecast profits this year to £816 million on revenue of £4.5 billion. One reason for the reduced forecast is stated to be initial losses on the UK Hertfordshire & West Essex NHS contract [£5.1m].
But there’s no need to pass the hat round for Sonic shareholders: the same statement goes on to assure anyone worried that:
“FY 2024 has also been a year of investment for future growth. In particular, the sizeable acquisitions of SYNLAB Suisse and Dr Risch (Switzerland), PathologyWatch (USA) and the Hertfordshire & West Essex contract win (UK), while initially earnings and/or margins dilutive, will all yield strong earnings growth and returns on investment into the future.”
The private pathology sector’s opportunity to take a profitable bite out of NHS revenues flows from the failure of successive governments to invest in NHS capacity, and the political choice to encourage private sector investment instead, despite the long term costs as the taxpayer forks out profits and dividend to private sector shareholders in Australia.
Dear Reader,
If you like our content please support our campaigning journalism to protect health care for all.
Our goal is to inform people, hold our politicians to account and help to build change through evidence based ideas.
Everyone should have access to comprehensive healthcare, but our NHS needs support. You can help us to continue to counter bad policy, battle neglect of the NHS and correct dangerous mis-infomation.
Supporters of the NHS are crucial in sustaining our health service and with your help we will be able to engage more people in securing its future.
Please donate to help support our campaigning NHS research and journalism.
Comments are closed.