How laboratories can drive a hospital’s strategic priorities

Dec. 22, 2016

Laboratory directors report that the majority of their facilities test negative for strategic influence. This needs to change, and the good news is, it can.

In 2015, some 250 clinical laboratory leaders participated in a survey examining areas of professional dissatisfaction. Surprisingly, their greatest concern was the level of respect and appreciation these laboratories received from their own hospital executives in the C-Suite.

Transcend the cost center mentality

According to many of the respondents, their department is often seen simply as a cost center that must be managed, rather than a vital voice in the development of the hospital administration’s strategic initiatives and best practices. Just 28 percent of those surveyed placed “day-to-day working relationship with C-Suite” in the top half of satisfied dimensions of their job, while only 29 percent of respondents placed “respect and appreciation by C-Suite of laboratory value and relevance to the hospital” in the top half.

In an optimal environment, top hospital administrators recognize and give voice to the imperatives of the lab. For example, the laboratory should be playing a significant role in operating reviews, contributing to annual strategic reviews; developing a departmental plan that ties into the overall health-system strategy; and setting, changing, or enhancing performance-monitoring metrics based on input from other departments it touches.

Laboratories should also have a “seat at the table” and be given an active voice in budget meetings, including annual reviews; decisions by capital appropriation committees; and certainly in laboratory redesigns. As in most medical departments, technological advancements occur rapidly in diagnostic medicine, and there is no better resource to help hospital executives understand the possibilities for improving diagnostic cost savings and related patient outcomes than laboratory administrators.

Speaking of costs, personnel management is a significant one, and those in the laboratory can work to help the C-Suite solve that complex equation. They should join in discussions about staff size or makeup, such as how many generalists are needed, as opposed to specialists. Health-system reorganizations, mergers and acquisitions, and integration of new locations or partners are all areas where hospitals can benefit from proactively including the voice of the lab.

Respond to the hospital’s pressures

Laboratory directors who show understanding of the diverse pressures that their health systems face are much more likely to gain the ear of those setting determining strategies, including budgets.

The Affordable Care Act (ACA) has impacted hospital financial modeling and is affecting every department and decision, and changes may be enacted soon. In addition, the 10th edition of the International Statistical Classification of Diseases and Related Health Problems (ICD-10) creates its own changes throughout the hospital, as do complex issues involving the Centers for Medicare & Medicaid Services (CMS).

There are several areas related to patient satisfaction and patient-care management that should be of interest to every hospital department—including the laboratory—as underperformance on those measures can lead to reduced profits and reimbursements. Enacting all possible precautions against medical errors is imperative, and with the laboratory taking an active role in myriad hospital procedures, perhaps no department plays as big a role in ensuring that appropriate safety measures are taken throughout a hospital system. These include providing a voice in the determination of unnecessary tests and procedures.

The increase of elderly and chronically ill patients in the health system is straining hospitals in every department. Not only do staffing shortages exist, but finding qualified labor remains a significant concern at the hospital executive level.

At no time has operational efficiency through productivity and financial management been as important to the success of a health system, so hospital administrators are keenly focused on just that. They’ve expanded the use of evidence-based practices to improve patient safety; they’re working to enhance their health system’s market position, aligning with best-in-class institutions; and they’re constantly negotiating technological advancements in IT system integration.

Find a voice for the lab

Regrettably, just 42 percent of survey respondents said they felt the hospital C-Suite viewed their laboratory as a strategic department. Only 51 percent said the hospital administration consults with their team when decisions that may affect the laboratory are made. What’s more, 64 percent said the laboratory has no formal voice within the institution’s strategic governance body. This communication void is what leads to the misperception that the laboratory is a cost center or just a “part of the problem.”

That’s not the reality as laboratory directors see it. Their departments do extremely important work and have the capability of leveraging that effort as a driver in administration’s strategic focus on achieving priorities and overcoming challenges.

Well-run laboratories drive efficiency through productivity and financial management. The modern laboratory can standardize practices and automate work processes. Laboratorians need not click through every test result before pushing to a clinician. Instead, the system can generate results and immediately submit them to the person in the hospital who needs that information. This allows laboratories to do more with less, letting laboratorians focus on sophisticated tasks that require their attention, while improving productivity throughout every department. The result of investing in such technology is a decrease in costs, as well as an increase in safety and in compliance with increasing government mandates.

Laboratories also help ensure that patients receive the right test at the right time, and therefore the best available treatment. Evidence-based practices critical to patient safety rely on diagnostics. If those diagnostics are slow or inaccurate, or if tests need to be repeated, patient safety and outcomes suffer.

Advancements in open middleware for laboratories have also made their results significantly more accessible to departments across health systems, allowing for access to the information clinicians need, exactly when they need it. With available technology, no longer should productivity slow because disparate IT systems across departments aren’t able to communicate with each other. Services related to cardiac care, renal care, and many other critical health issues all will benefit from the improved speed of vital diagnostic data, a capability that only promises to increase as new technology comes online and health systems grow. The net result is increased patient safety and satisfaction.

Now more than ever, hospital laboratory personnel have the opportunity—or rather, the mandate—to convey the story of their department’s value, so that it will be treated with the respect and significance it deserves by hospital administrators. In the face of cost cuts, consolidation, and other modern economic pressures, the future of the healthcare industry depends on it.

Michael S. Iskra serves as president of North American Commercial Operations at Ortho Clinical Diagnostics. He manages and directs Ortho’s customer facing organization, including sales, service, and regional marketing, as well as regional commercial support functions.

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