Contract Failures in Diagnostics and Pathology

Over the years there has been a number of contracts in the area of imaging diagnostics and pathology where companies have failed to carry out the contract as required.

In June 2022, the private cancer diagnostic and treatment company Rutherford Health was placed into liquidation. This was only eight months after the opening of a new community diagnostics hub (CDH) within a partnership between the company’s subsidiary Rutherford Diagnostics and the NHS’s Somerset Foundation Trust (SFT), which was heralded as “game-changing” for the trust’s capacity to carry out diagnostics.

The new stand-alone CDH, opened by Sir Mike Richards, the author of the 2020 report that pushed the idea of CDHs to expand diagnostic capacity, was part of a five year partnership deal with SFT begun in July 2020 (with the option to extend to ten years).  The centre was to provide diagnostic services including Magnetic Resonance Imaging (MRI), Computed Tomography (CT), Ultrasound and X-Ray using equipment provided by Rutherford’s technology partner, Philips, in an effort to reduce the significant waiting lists for such procedures.

The Test & Trace system set up in the Covid-19 pandemic involved the awarding of multiple contracts to private companies for pathology – testing for the virus. Serco won many of the contracts, together with Sitel and several management consultancies. The entire test & trace system has been shown to be a failure on a grand scale.

A damning report from the Public Accounts Committee (PAC) in October 2021 stated that the test-and-trace system has failed to achieve “its main objective” to cut infection levels and help Britain return to normal. The report added that the failure was despite being given an “eye-watering” £37bn in taxpayers’ cash or 20% of the NHS’s entire annual budget over two years. More details of the system and its failures can be found in Test & Trace: a major failure of contracts in private companies and Covid-19 contracts with the private sector.

The Capita contract for Primary Care Services Support, which has failed in a number of areas (see GP Services) also includes a substantial amount of diagnostics support. In November 2018, it came to light that Capita had failed to send out nearly 50,000 letters as part of the cervical cancer screening programme and although the company discovered this issue in August 2018, it neglected to inform NHS England of the issue for two months.

In April 2018, it was reported that a consortium of NHS trusts, known as the East Midlands radiology consortium (EMRAD), is withholding money from GE Healthcare because a multimillion pound imaging system is still not working properly. The agreement was signed in 2014. There was widespread concern in 2017 over the performance of the EMRAD system, which frequently crashed leaving clinicians unable to see or share patient scans. In at least one case in Leicester, images were saved to a CD and sent by taxi to Nottingham. As a result of continued problems, University Hospitals of Leicester Trust announced in October 2017 that it would withdraw from the consortium and seek an alternative system.

In pathology the most widely reported problems have been with the company Viapath, established by Serco in partnership with Guy’s and St Thomas’ hospitals, In 2014, Viapath  was found to have overcharged the NHS for diagnostic tests. The venture has also been dogged by allegations of cost-cutting and clinical failings.  Internal documents showed amongst senior consultants who claimed that staff cuts and a lack of investment since privatisation left some laboratories close to disaster.

In internal emails clinicians said the company had an “inherent inability… to understand that you cannot cut corners and put cost saving above quality.” The trust and Viapath say the problems have now been resolved. But this only happened after the intervention of senior medical staff and changes to the structure of the joint venture that reduced Serco’s role.

See further reading below for more examples of contract failures.

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