“Doing more with less” is becoming the mantra of pathology laboratory professionals across the nation, including those who manage anatomic pathology (AP) labs. Community hospitals of all sizes, rural facilities, teaching hospitals, reference labs, in-house specialty labs supporting dermatologists, urologists, and endocrinologists—all are being impacted by the rapid changes in the U.S. healthcare system. The demands are staggering. Labs are being asked to accomplish more with fewer resources, to do that faster, and to meet significantly higher quality standards. To thrive—or merely survive—labs will need to look at every aspect of their business carefully and make changes as needed. The smart use of technology can help labs make the most of their resources and address many of these issues head on.
Doing more . . .
Many healthcare experts predict that the number of tests performed in AP labs will increase dramatically in the years to come. In the hospital market, some labs may choose to become more aggressive in expanding their outreach business to augment in-patient revenue streams and thus spread costs over a larger number of tests. Others may experience a growth of in-house tests resulting from the merging and consolidating of hospitals and hospital labs to gain economies of scale. Regardless of the strategy chosen, the surviving central labs will need to build efficiencies to absorb the volume from the merged entities.
Hospital labs seeking to expand their outreach business will pose challenges to independent reference labs, as more clinicians sell their practices to hospitals and become hospital employees. In this scenario, the pool of independent clinicians who can refer business to specialty labs of their choosing will shrink dramatically. Patients, too, will have limited choice about where to obtain lab services. As part of this consolidation trend, larger reference labs will likely start acquiring smaller reference labs and/or the outpatient services offered by hospitals that have redirected their focus to specimens generated only within their facility.
. . . with less
All these trends result from the recent major reductions in lab reimbursements across virtually all testing categories. This includes cuts brought about by the Affordable Care Act as well as reductions in the technical component of Anatomic Pathology Code 88305, the systematic reduction in Medicare Part B Clinical Laboratory Fee Schedules, the effects of the recent government sequestration, and more.
In addition to these financial cuts, labs will have to deal with a shrinking pool of qualified workers as baby boomers age out of the workforce and laboratories are forced to compete with other industries for eligible and experienced replacements.
In sum, governmental, legislative, demographic, and economic factors imply lower profit margins for lab tests and labs themselves. Given this, many facilities will be searching for ways to cut costs and to make carefully considered choices. Planned and needed capital investments such as those associated with the purchase of a laboratory information system (LIS) will be an obvious target. For many labs, however, this may not be the wisest choice.
Leveraging an LIS
Carefully selected and appropriately implemented technology often can help to enhance productivity and eliminate waste, boosting profitability and maximizing staff time. LIS technology is becoming more robust, enabling some solutions to address a wide range of business as well as clinical concerns. Some LIS solutions incorporate features that can provide labs with a competitive edge through the use of sophisticated business intelligence tools. Many labs would be well served to consider purchasing an LIS if they do not already have a system in place, and others are encouraged to carefully evaluate existing technology to ensure their current LIS delivers the full range of features needed to further their goals. During these times of tremendous change, labs need to leverage technology to get ahead.
Know thyself
Before evaluating an in-house LIS or a new solution for purchase, labs must carefully and clearly define their market niches, because this focus will play a key role in the selection of the best LIS solution. All laboratories are in the diagnostic information service business, but not all labs are the same. That is also true of the various AP LIS solutions on the market. Not all are the same.
Labs should first focus on key marketing scenarios: Will the business consolidate to a central lab, or have satellite labs? Will the site focus on growing outpatient business, or serve only an inpatient population? Will test menus be all-encompassing, including molecular testing, or focus on a limited number of specialty tests, with affiliations to other labs for services not offered?
Next, labs should examine the reasons clients currently refer business to them, as well as how well their services meet their clients’ expectations. In particular, does a lab meet objectives on such important issues as turnaround time, zero errors, and informative and appropriately formatted reports? Finally, labs should examine future market drivers and anticipate needs and how they might impact the demand for services going forward.
LIS basics
With this accomplished, labs should seek out an LIS solution that will support workflow and business goals. Every AP LIS will provide some core functionality, but most labs will benefit from a more robust set of customized features to stay competitive in today’s environment. For an AP lab, an LIS should provide rapid accessioning, using unique patient identifiers embedded into bar codes and a seamless integration with the Hospital Information System (HIS), Electronic Medical Records (EMR), or a Practice Management System (PMS). Such interfaces to other systems will ensure that the appropriate test request is associated with the correct patient sample and that the location of the specimen is identified throughout the resulting process. Core LIS functionality also includes the ability to capture, document clearly and concisely, and efficiently distribute test results. While many solutions will meet these basic goals, only a few go beyond this to address more specialized needs. Finding such a solution that can support a specific lab’s workflow and business model can make a crucial difference between failure and success.
Business intelligence
In addition to core functions, an LIS should also provide some degree of business intelligence and analytics to help manage the lab’s performance. Many labs will benefit from specialized LEAN Process Management business intelligence tools, which will help identify new operational efficiencies and cut costs. These tools are built into only a few systems on the market today. They take advantage of data already captured in the system through many of the core processes. As business tools, not simply data mining tools, they provide the ability to analyze workflow, identify bottlenecks, and monitor turnaround time, waste, test volume, client exam volumes, and more. Labs can use this information to enhance in-house efficiency, boost customer service, maximize use of resources, address staffing requirements, and even plan and execute marketing programs.
Information exchange
Today, labs—like all medical practices—are in the business of data exchange. The ability to deliver clear, concise information in a timely manner to the growing number of software and hardware systems within the healthcare continuum a lab serves will be a necessity for survival in the near future; perhaps it already is today. This means enabling interconnectivity with all hardware and software systems in the continuum, with all the constituents that a lab serves, including private practices, hospitals and, soon, patients. Therefore, an LIS should be capable of pushing information to many types of IT systems, including EMR, HIS and other LIS solutions, as well as physician portals, iPhones, and Android Phones. Ideally, to avoid IT complexity, this should happen directly, without the use of middleware.
Modular, adaptable solutions
While some labs may not benefit from all aspects of this functionality today, their needs may grow in the future. Investing in a modular LIS solution with add-on components will allow the system to support current needs without unnecessary expenditures today, for functionalities that may be needed in the future. As a lab evolves to address a changing marketplace, new modules can be added as required, making the most of the lab budget. Also important is a flexible and adaptable solution that can be customized to a user’s specific needs. After all, an LIS should support existing workflow, not force users to conform to a vendor’s vision of AP lab practices and processes.
In today’s lab environment, regulatory, operational and business demands are constantly changing. LIS is an investment, and it should be chosen carefully. The right technology can solve a plethora of problems and create new efficiencies only imagined a few years ago. Spending the time, effort, and budget to seek out the right LIS for your lab will go a long way toward lightening the load going forward.
Rick Callahan, Vice President of Sales and Marketing at New Jersey-based NovoPath, has 15 years experience in medical IT solutions, particularly regarding pathology and radiology.
