Executives and pathologists from many of the nation’s most prominent clinical laboratories are on their way to the Crescent City today to share best practices, hear case studies from innovative labs, and network
NEW ORLEANS—This afternoon, more than 900 lab CEOs, administrators, and pathologists will convene for the 28th Annual Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management conference. Three topics of great interest will center around adequate lab staffing, effective cost management, and developing new sources of lab testing revenue.
Important sessions will also address the explosion in next-generation sequencing and genetic testing, proposed FDA regulation of laboratory-developed tests (LDTs), and innovative ways that clinical laboratories and pathology groups can add value and be paid for that additional value.
All this is happening amidst important changes to healthcare and medicine in the United States. “Today, the US healthcare system is transforming itself at a steady pace,” explained Robert L. Michel, Editor-in-Chief of The Dark Report and Founder of the Executive War College. “Big multi-hospital health systems are merging with each other, and payers are slashing reimbursement for many medical lab tests, even as healthcare consumers want direct access to clinical laboratory tests and the full record of their lab test history.
“Each of these developments has major implications in how clinical laboratories serve their parent organizations, offer services directly to consumers, and negotiate with payers for fair reimbursement as in-network providers,” Michel added. “Attending the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management equips lab leaders with the tools they’ll need to make smart decisions during these challenging times.”
Now in its 28th year, the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management convenes April 25-26 in New Orleans. Executive War College extends to a third day with three full-day workshops: LEAN fundamentals for lab leaders, a genetic testing program track, and a digital pathology track. Learn more at www.ExecutiveWarCollege.com. (Photo copyright: The Dark Intelligence Group.)
Challenges and Opportunities for Clinical Laboratories
With major changes unfolding in the delivery and reimbursement of clinical services, clinical laboratory and pathology practice leaders need effective ways to respond to the evolving needs of physicians, patients, and payers. As The Dark Report has often covered, three overlapping areas are a source of tension and financial pressure for labs:
Day-to-day pressures to manage costs in the clinical laboratory or pathology practice.
The growing demand for genetic testing, accompanied by reimbursement challenges.
Evolving consumer expectations in how they receive medical care and interact with providers.
Addressing all three issues and much more, the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management features more than 80 sessions with up to 125 lab managers, consultants, vendors, and in vitro diagnostic (IVD) experts as speakers and panelists.
Old-School Lab Rules Have Evolved into New-School Lab Rules
Tuesday’s keynote general sessions (to be reported exclusively in Wednesday’s Dark Daily ebriefing) will include four points of interest for clinical laboratory and pathology leaders who are managing change and pursuing new opportunities:
Positioning the lab to prosper by serving healthcare’s new consumers, new care models, new payment models, and more, with Michel at the podium.
How old-school lab rules have evolved into new-school lab rules and ways to transition the lab through today’s disrupters in healthcare and the clinical laboratory marketplace, with Stan Schofield, Managing Principal of the Compass Group.
Generating value by identifying risk signals in longitudinal lab data and opportunities in big data from payers, physicians, pharma, and bioresearch, with Brad Bostic, Chairman and CEO of hc1.
Wednesday’s keynote sessions (see exclusive insights in Friday’s Dark Daily ebriefing) explore:
Wednesday’s keynotes conclude with a panel discussion on delivering value to physicians, patients, and payers with lab testing services.
Clinical Labs, Payers, and Health Plans Swamped by Genetic Test Claims
Attendees of the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management may notice a greater emphasis on whole genome sequencing and genetic testing this year.
As regular coverage and analysis in The Dark Report has pointed out, clinical laboratories, payers, and health plans face challenges with the explosion of genetic testing. Several Executive War College Master Classes will explore critical management issues of genetic and genomic testing, including laboratory benefit management programs, coverage decisions, payer relations, and best coding practices, as well as genetic test stewardship.
This year’s Executive War College also devotes a one-day intensive session on how community hospitals and local labs can set up and offer genetic tests and next-generation sequencing services. This third-day track features more than a dozen experts including:
During these sessions, attendees will be introduced to “dry labs” and “virtual CLIA labs.” These new terms differentiate the two organizations that process genetic data generated by “wet labs,” annotate it, and provide analysis and interpretation for referring physicians.
State of the Industry: Clinical Lab, Private Practice Pathology, Genetic Testing, IVD, and More
For lab consultants, executives, and directors interested in state-of-the-industry Q/A and discussions concerning commercial laboratories, private-practice pathology, and in vitro diagnostics companies, a range of breakout sessions, panels, and roundtables will cover:
Action steps to protect pathologists’ income and boost practice revenue.
Important developments in laboratory legal, regulatory, and compliance requirements.
New developments in clinical laboratory certification and accreditation, including the most common deficiencies and how to reach “assessment ready” status.
An update on the IVD industry and what’s working in today’s post-pandemic market for lab vendors and their customers.
Federal government updates on issues of concern to clinical laboratories, including PAMA, the VALID Act, and more.
Long-time attendees will notice the inclusion of “Diagnostics” into the Executive War College moniker. It’s an important addition, Michel explained for Dark Daily.
“In the recent past, ‘clinical laboratory’ and ‘anatomic pathology’ were terms that sufficiently described the profession of laboratory medicine,” he noted. “However, a subtle but significant change has occurred in recent years. The term ‘diagnostics’ has become a common description for medical testing, along with other diagnostic areas such as radiology and imaging.”
Key managers of medical laboratories, pathology groups, and in vitro diagnostics have much to gain from attending the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management, now in its 28th year. Look for continued coverage through social media channels, at Dark Daily, and in The Dark Report.
Prior to that, however, the FDA had already announced its intention to issue a proposed rule giving the agency regulatory oversight of LDTs.
“The FDA has continually supported the passage of the VALID Act by Congress,” attorney Charles Dunham IV, a Shareholder at Greenberg Traurig LLP in Houston, told Dark Daily. “In fact, there is speculation that the VALID Act will be attached to the Pandemic and All Hazards Preparedness Act as it moves through Congress.”
“The FDA may not actually proceed with promulgating rules to regulate LDTs if it is concerned it will not be successful in court if the rules are challenged, which would happen,” said attorney Charles Dunham IV (above), a Shareholder at Greenberg Traurig, LLP. Clinical laboratory leaders can learn more from Dunham during a panel discussion at next week’s 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management in New Orleans. (Photo copyright: Greenberg Traurig LLP.)
Arguments For and Against FDA LDT Regulation of LDTs
Supporters of the VALID Act contend that putting LDTs under FDA regulation will lead to improved patient safety and less review for low-risk tests. Their argument is that LDTs should undergo the same FDA review and approval process as other medical devices.
Hospital laboratory managers and pathologists—particularly in academic medical center laboratories—have largely opposed FDA regulation of LDTs. They prefer to keep the current setup under which lab-developed tests are validated under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). They argue that FDA intervention will slow down development of new tests.
In response, an FDA official indicated during the American Clinical Laboratory Association’s (ACLA) annual meeting on March 1 that the federal agency plans to issue a proposed rule to regulate LDTs, BioWorld reported. That rulemaking has not yet emerged. It’s possible the FDA will wait and see what happens in Congress with the VALID Act.
“Some legal experts have suggested that one significant new legal challenge FDA may face is the Supreme Court’s West Virginia v. EPA decision last summer that limited the ability of the EPA to cap power plant emissions by regulation due to the EPA’s lack of explicit congressional authority to do so,” said Gee, who also will appear on the Executive War College legal panel next week.
“The West Virginia v. EPA ruling provides support for those in the clinical lab industry who point to the FDA’s lack of clear statutory authority to regulate LDTs and therefore fundamentally disagree with FDA’s longstanding position that LDTs are medical devices subject to FDA’s authority to regulate,” he added.
Actions Clinical Laboratory Managers Can Take
Clinical laboratory managers who want to share their thoughts about the future of LDT regulation may want to take one or both of the following actions:
Contact their representatives in Congress.
Find out whether any trade associations they belong to have taken a position on the VALID Act.
Clinical laboratory professionals should monitor the VALID Act’s progress while also paying attention to industry groups and manufacturers that support or oppose the bill.
Doing so will provide a clearer indication of who has the most to gain or lose should the legislation be passed. Pathologists and medical laboratory managers should also remain alert for further efforts by the FDA to issue proposed rulemaking to regulate LDTs.
As a deployable medical laboratory, the 1st AML is designed to run field-based clinical laboratory diagnostics and conduct health threat assessments
Clinical laboratory professionals may be surprised to learn that the US Army has a deployable medical laboratory that is equipped to perform the same menu of basic lab tests as their labs here in the United States, but in support of army units deployed in the field. At the same time, the Army’s deployable medical lab has the added responsibility of testing for infectious diseases and chemicals/agents that could be used by terrorists or enemy forces.
“The 1st Area Medical Laboratory identifies and evaluates health hazards through unique medical laboratory analyses and rapid health hazard assessments of nuclear, biological, chemical, endemic disease, occupational, and environmental health threats,” according to an Army new release.
A recent visit by the leaders of this lab unit to meet with their counterparts in Poland highlights the important diagnostic work the military prepares for by using this one-of-a-kind clinical laboratory model.
Col. Matthew Grieser (left), Commander of the 1st Area Medical Laboratory (AML) is shown above meeting with Col. Przemysław Makowski, MD, (right), Deputy Commander of the Military Preventive Medicine Center in Wrocław, Poland. Leaders from the US Army’s 1st AML visited military and medical officials in Poland. “It was a great opportunity to meet our Polish counterparts and to learn from one another,” said Grieser in an Army news release. “We intend to continue to strengthen this relationship … Poland is a great ally, and it was an honor to visit our counterpart organizations.” (Photo copyright: US Army.)
Role and Makeup of the 1st Area Medical Laboratory
The 1st AML traces its roots back to World War II, where it was one of 19 field laboratories spun up in 1944. It was deactivated after the Vietnam War and then reactivated in 2004. It is currently the Army’s only deployable field laboratory, according to the National Library of Medicine.
This specialized unit deploys worldwide to conduct threat detection and medical surveillance, according to the Army. For example, the military can send the 1st AML to locations where samples cannot quickly be transported to a fixed facility, or where there is a need for immediate hazard identification due to chemical or biological contamination or epidemic disease.
During the Ebola outbreak in Liberia in 2014-2015, the 1st AML operated four blood-testing laboratories and helped oversee two others manned by Navy personnel. The goal was to perform quick turnaround times to identify local residents who carried the disease, all while operating with extensive safety measures. More than 4,500 samples were tested during a six-month stay, Army Times reported.
Commanders from the 1st AML recently met with medical officials and chemical, biological, radiological, and nuclear experts from the Polish Armed Forces in the Warsaw area of Poland, the Army news release noted.
“It was a great opportunity to meet our Polish counterparts and to learn from one another,” said Col. Matthew Grieser, Commander of the 1st AML.
Maj. Suzanne Mate, the Chief of chemical threat assessment for the 1st AML, said meeting with allies helps to keep NATO ready for any contingency.
“It’s better to know your partners before you have to work together in a high-consequence situation,” said Mate in the Army news release. “We learned the strengths in different mobility platforms for laboratories and the capabilities within fixed scientific institutions to maintain standards and currency in chemical, biological, and radiological [CBR] investigations.
“This knowledge is invaluable when determining how to move a sample quickly and efficiently to characterize a suspected CBR threat when airlift resources are constrained or country treaties prevent movement activities,” she added.
Observant clinical laboratory managers will note similarities between their own jobs and those of the 1st AML. The military needs lab-based capabilities to perform a menu of diagnostic tests in support of Army units in the field and traditional clinical laboratories do the same in support of the healthcare providers they service.
Should this AI-driven technology prove viable in clinical settings, it could contribute to easing the shortage of qualitied phlebotomists for medical laboratories worldwide
Could phlebotomists one day be out of a job? If European medical technology company Vitestro has its way, that could someday become a reality in European hospitals and in clinical laboratories worldwide. Headquartered in the Netherlands, the company has raised EUR 12.7 million ($14,057,947.50 US) in Series A financing to bring to market “the world’s first autonomous blood drawing device,” BioWorld Med Tech reported.
According to Vitestro’s website, the “device combines AI-based, ultrasound-guided 3D reconstruction with robotic needle insertion, ensuring accurate and secure blood collection. The procedure is performed fully automatically, from tourniquet to bandage application.”
This is another example of how artificial intelligence companies are finding opportunities in staffing shortages the healthcare industry is experiencing globally. In this case, the novel technology could help address the lack of qualified phlebotomists. And clinical laboratories around the world could become the proving grounds for new AI-driven devices that end up replacing human healthcare workers.
“This financing round marks a new phase of growth for Vitestro which brings the company closer to its mission of improving the venipuncture procedure for hundreds of millions of patients per year,” said Vitestro CEO and co-founder Toon Overbeeke (above), in a press release. “We look forward to growing the business and transforming patient care with Sonder Capital, leveraging their expertise in successfully commercializing medical robotic technologies.” If proven viable, clinical laboratories around the world suffering from shortages of phlebotomists could benefit from AI-driven autonomous blood draw stations. (Photo copyright: LinkedIn.)
Next Evolution for Clinical Laboratories
According to the Centers for Disease Control and Prevention (CDC), there are 14 billion clinical laboratory tests ordered annually in the US and 70% of medical decisions depend on laboratory results. One of the more common clinical laboratory procedures—venous blood draws—is pivotal in clinical diagnostics, but a worldwide shortage of skilled phlebotomists is having an impact on this critical testing method.
With the announcement of its completion of a EUR 12.7-million Series A financing round to bring the “world’s first” autonomous blood draw device to market, Vitestro seems poised to impact both the shortage and the job prospects of existing phlebotomists. This financing round was led by San Carlos, California-based Sonder Capital and included investors with experience in the clinical laboratory and medical technology industries.
“Automating this ubiquitous procedure is the next evolution for clinical laboratories, allowing them to improve quality of care for patients while building a more sustainable operation,” stated Andy McGibbon, Managing Partner at Sonder Capital in a March press release.
According to Investopedia, Series A financing refers to “an investment in a privately-held start-up company after it has shown progress in building its business model and demonstrates the potential to grow and generate revenue. It often refers to the first round of venture money a firm raises after seed and angel investors.”
Vitestro says it will utilize the capital from this financing round to accelerate production development, prepare market authorization in the European Union, and initiate production.
Vitestro’s autonomous blood drawing device prototype (above) has been tested on more than 1,000 volunteers and patients. Vitestro plans to continue its studies on the device this year and anticipates entering the European market with the device sometime in 2024. Development of this technology is something that phlebotomists and clinical laboratory managers will want to track. (Photo copyright: Vitestro.)
Coming to a Clinical Laboratory Near You
“Medical robotics will make optimal outcomes available to everyone. I strongly believe Vitestro will set the world standard in autonomous blood drawing,” said Fred Moll, MD, Managing Partner of Sonder Capital in the press release. Moll, who has been heralded as the “father of robotic surgery,” was also appointed as a non-executive board member of Vitestro. Moll co-founded Intuitive Surgical, Inc., Hansen Medical, Restoration Robotics, and Auris Health (acquired by Ethicon, a Johnson and Johnson company).
On April 12, Vitestro announced that leading Dutch clinical laboratory OLVG Lab will be the first healthcare provider to begin using their blood-drawing device. A number of hospitals, clinical laboratories, and blood drawing departments are preparing to use the device and OLVG Lab plans to have the system fully operational by late next year, according to a press release. OLVG lab provides laboratory services to hospitals, clinics, and care providers in the greater Amsterdam area.
“Robotization has become an important topic in diagnostics. Vitestro’s technology will improve the standardization and optimization of the sampling procedure. And it helps solve staff shortages in our blood drawing department,” said Anja Leyte, director of OLVG Lab, in the press release. “But more importantly, the patients are also very positive. Our staff are really enthusiastic as well and can’t wait to start using this breakthrough technology in our healthcare.”
Vitestro’s device is still in the testing phase but could prove to be very beneficial to clinical laboratories and help alleviate the shortage of trained phlebotomists. An automated blood draw machine might also improve the consistency of the blood draw experience for both patients and healthcare professionals.
Proposed regulation to limit rate increases during health crises gets pushback from staffing agencies and travel nurses who disagree with salary restrictions
Hospitals across the nation are seeking relief from skyrocketing costs due to increased demand for temporary workers—especially travel nurses. This has led organizations like the American Hospital Association (AHA) to step in and call for legislators to cap spiking salary rates. Many clinical laboratories report similar increases in salaries following the outbreak of SARS-CoV-2 for medical technologists (MTs), clinical laboratory scientists (CLSs), histologists, and other skilled positions. This increase in salaries of lab scientists was mirrored by an even greater increase in the cost of travel MTs.
According to analysis conducted by Becker’s Hospital Review of hiring data from Vivian Health, an online job placement website for healthcare professionals, “Average weekly travel nurse pay climbed from $1,896 in January 2020 to $3,782 in December 2021, a 99.47% increase.”
A prior study by Kaufman Hall and Associates, LLC., found rates for temporary workers almost 500% higher than pre-pandemic times. While numbers are trending downward, it’s clear that rates are still high enough to cause alarm, KFF Health News reported.
“During the pandemic there were staffing companies who were making a lot of promises and not necessarily delivering,” Dave Dillon (above), VP of Public and Media Relations at Missouri Hospital Association, told KFF Health News. “It created an opportunity for both profiteering and for bad actors to be able to play in that space.” (Photo copyright: L.G. Patterson/Missouri Hospital Association.)
AHA Alleges Price Gouging
Demand for temporary healthcare workers surged during the COVID-19 pandemic, and, because supply was limited, salaries for temporary workers—such as travel nurses—soared as well. This dramatic increase in hospitals’ costs prompted the AHA in 2021 to send a letter to the Federal Trade Commission seeking relief for healthcare providers from what the organization called “anticompetitive pricing by nurse-staffing agencies.”
In January 2022, about 200 House members urged then White House COVID-19 Response Team Coordinator Jeffrey Zients “to investigate reports that nurse staffing agencies are taking advantage of the COVID-19 pandemic to increase their profits at the expense of patients and the hospitals that treat them,” an AHA new release noted.
In an AHA House Statement titled, “Pandemic Profiteers: Legislation to Stop Corporate Price Gouging,” the AHA wrote “Our concerns range from potential collusion to increased prices way beyond competitive levels and/or egregious price gouging and the impact these behaviors could have on efforts to care for patients and communities.”
Temporary nurses make up a large portion of staff nationwide with 1,760,111 employed nationally as of September, according to Zippia research. With some nurses commandeering $40,000 signing bonuses and pay rates up to $10,000 a week for ICU nurses during the height of the COVID-19 pandemic, the significant impact of these rate hikes cannot be ignored.
“We have received reports that the nurse staffing agencies are vastly inflating price by two, three, or more times pre-pandemic rates, and then taking 40% or more of the amount being charged to the hospitals for themselves as profits. This situation is urgent and reliance on temporary workers caused normal staffing costs to balloon in all areas of the country,” Representatives Peter Welch, D-VT, and Morgan Griffith, R-VA, wrote in the letter submitted by the AHA to House members.
States Take a Stand
But nothing was done at the federal level to cap rates for travel nurses, so hospital organizations in 14 states lobbied legislators to cap rates at the local level. However, this has proven to be problematic.
At this time, at least 14 states have proposed legislation that impose limits on what temp nursing services can charge and what stipulations they must follow during a crisis. Navigating this patchwork of state laws could be challenging for both hospitals and temporary nurses.
Some states are taking sterner measures, KFF Health News reported:
Missouri regulators proposed legislation that would allow felony charges to be brought against healthcare staffing agencies that raise prices during emergencies.
Texas lawmakers proposed legislation that would administer civil penalties against agency price-gouging—laws which the state does not have on the books at all—and also would allow fees up to $10,000 to be assessed per violation of the proposed law.
New York proposed amendments to legislation that would cap the amount temporary staffing agencies could charge.
Nurses, Staffing Agencies Tell Their Side
The implementation of new laws to protect hospitals from alleged temp agency price gouging presents new challenges. One issue is state-to-state competition.
“It might become difficult to hire travel nurses, and some states could face a lower-quality hiring pool during a national crises if the neighboring state doesn’t have strict measures,” Hannah Neprash, PhD, Assistant Professor, Division of Health Policy and Management at the University of Minnesota, told KFF Health News.
And financial handcuffs may not sit well with staffing agencies that feel misunderstood by hospital organizations pushing for regulation. According to KFF Health News, “Typically about 75% of the price charged by a staffing agency to a healthcare facility goes to costs such as salary, payroll taxes, workers’ compensation programs, unemployment insurance, recruiting, training, certification, and credential verification, said Toby Malara, a Vice President at the American Staffing Association trade group.”
Malara added, “hospital executives have, ‘without understanding how a staffing firm works,’ wrongly assumed price gouging has been occurring. In fact, he said many of his trade group’s members reported decreased profits during the pandemic because of the high compensation nurses were able to command,” KFF Health News reported.
Not surprisingly, many nurses have also come out against government regulation of their wages.
“Imagine the government attempting to dictate how much a lawyer, electrician, or plumber would make in Missouri. This would never be allowed, yet this is exactly what’s happening right now to nurses,” Theresa Newbanks, FNP, a nurse practitioner who is affiliated with several hospitals in multiple states.
Creative Responses Required
Increases in both rates and legislation continue to spur creativity among hospitals needing to fill shifts, support staff, and prevent worker burnout.
The American Hospital Association December 2022 Task Force noted this in their “Creative Staffing Models” paper. The AHA cited telehealth visits, technical support, and working with non-traditional partners as beneficial ideas. These were also noted as meaningful ways to recruit and retain staff.
Other hospital systems have even created their own staffing agencies. Allegheny Health Network (AHN) developed a variety of systems where nurses can work a single weeklong assignment, multiple-week assignments, or transfer to other facilities, Kaiser Health News reported. While these staffing scenarios make up a small percentage of the hospital staff, it’s a worthwhile addition to increase options for nurses.
Staff turnover for RNs increased from 8.4% to 27.1% last year, as reported by the 2022 NSI National Healthcare Retention and RN Staffing Report. Finding solutions to staffing shortages—and consequently increased temporary nursing cost—is crucial because burnout is still a problem, just as it is in clinical laboratories and pathology groups.
