Clinical laboratory outreach program at Catholic Medical Center sees new lab competitors entering the Manchester market

DATELINE: MANCHESTER, NEW HAMPSHIRE—Here in the Granite State, clinical laboratories and pathology groups must respond to a growing number of healthcare market trends. This was obvious to your Dark Daily Editor during his site visit earlier this week to the medical laboratory at Catholic Medical Center, which is one of Manchester’s major hospitals.

Often, states with relatively small populations, like New Hampshire, Vermont, and Maine, have the luxury of watching the latest healthcare trends emerge first in the major urban centers like Boston, New York, and Philadelphia. However, the accelerating pace of change across all of healthcare is changing that situation.

In Manchester, New Hampshire, competition among hospitals in the community is quite intense. According to Roberta E. Provencal, Director of Laboratory Services at Catholic Medical Center, there is equally intense competition in the outreach market for both clinical laboratory testing and anatomic pathology services. “Manchester has about 110,000 people, and there are 1.3 million in all of New Hampshire,” observed Provencal. “Yet, even though these are not large healthcare markets, we have more lab competitors marketing to doctors’ offices in our city than at any time in the past 20 years.

More Competitors for Clinical Laboratory Testing

“At the same time that we have more lab competitors, they are marketing their services in different and unique ways,” she continued. “For example, the Rite Aid (NYSE:RAD) pharmacy chain here in New Hampshire is offering its customers free laboratory testing, which is provided by Quest Diagnostics Incorporated (NYSE:DGX) and Laboratory Corporation of America (NYSE:LH). We’ve never seen a pharmacy chain offer free medical laboratory testing before now.”

Visiting the clinical laboratory at Catholic Medical Center in Manchester, New Hampshire (from left): Robert L. Michel, Editor of Dark Daily; Amy Schultz, Laboratory Technical Operations Manager; and Roberta Provencal, Director of Laboratory Services.

Visiting the clinical laboratory at Catholic Medical Center in Manchester, New Hampshire (from left): Robert L. Michel, Editor of Dark Daily; Amy Schultz, Laboratory Technical Operations Manager; and Roberta Provencal, Director of Laboratory Services.

“Similarly, several major health insurance plans here in New Hampshire are taking more aggressive steps to get patients to use their network laboratories—usually one or both of the two blood brothers—and not use their local hospital laboratory,” explained Provencal. “One health insurer is even paying physicians $10 every time they get a patient to use its network laboratory provider and not go to a hospital lab like ours!”

These examples demonstrate specific ways that competition for clinical laboratory and anatomic pathology specimens is increasing. It shows how both national and regional medical laboratory organizations are scrambling to increase market share, protect revenue, and neutralize the sales effectiveness of competing labs in these local communities.

Using Lean Methods in the Clinical Lab and the Histology Laboratory

At the 330-bed Catholic Medical Center, laboratory management recognizes that it needs to raise the service bar to protect and increase its competitive position in and around Manchester. “We have a dual strategy here,” noted Provencal. “The internal focus is to contribute to advancing inpatient care here at CMC. The external focus is to build our laboratory outreach program in ways that reinforce our hospital’s mission and help improve our clinical laboratory’s financial performance.”

To aid in both strategies, laboratory administration has introduced Lean, Six Sigma, and performance improvement methods. Because Catholic Medical Center recently constructed a new laboratory facility, this allowed the laboratory’s Lean team to engage the architects during the design phase. “We took our architects on site visits to other clinical laboratories that actively use Lean and process improvement methods,” observed Provencal. “It helped them see how our process mapping and workflow redesign ideas functioned at other Lean laboratories.”

During the tour of the CMC laboratory, your Dark Daily editor saw the benefits of the Lean design in the layout and workflow in both the clinical laboratory and the pathology laboratory. In both labs, a small batch mindset helps move specimens so as to achieve very aggressive average turnaround times.

The Lean philosophy was most visible in the histology section of Pathology. Simple design elements, like negative air pressure in the grossing room, helped reduce the chemical smell that is common in anatomic pathology laboratories. The small-batch mindset was visible in the use of several new tissue processing systems by Leica, which provided Lean consulting resources to help design the layout and workflow in the histology laboratory.

Depending on the tissue size, a 2-hour, 4-hour, or 6-hour process is used and different batches are run continuously throughout the day. This allows the pathologists at Catholic Medical Center to report out a significant number of anatomic pathology cases by the end of the same day that the specimens were received.

“Our physicians recognize and appreciate the faster turnaround times our histology laboratory and pathologists now provide to them,” stated Provencal. “It is one way that we can leverage our position as the local laboratory in the community, offer added value services, and stay ahead of competing laboratories that are located many miles away from Manchester.”

Dark Daily wishes to thank Roberta Provencal and her laboratory team for the hospitality extended during this laboratory site visit. As the examples described above illustrate, even in regional markets with modest populations, competition for the laboratory test referrals of physicians is intensifying.

Your Dark Daily Editor,

Robert L. Michel

e-mail: rmichel@darkreport.com with your comments

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