News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Repositioning the Clinical Laboratory as a Strategic Pillar of the Value-Based Healthcare Organization, Consistent with Clinical Lab 2.0

Panel of experts in healthcare and the clinical laboratory market identify key trends and discuss how innovative medical laboratories are adding value—and getting paid for that value

Effective clinical laboratory leadership in today’s value-based healthcare system means demonstrating value within an integrated delivery network. After all, as fee-for-service payment for clinical lab tests gives way to value-added reimbursement arrangements, all medical laboratories will need to justify their share of a value-based payment.

But how can clinical laboratories alert physicians and their parent hospitals to the real value they offer to improve patient outcomes and reduce healthcare costs? Though lab leaders may understand their medical lab’s complexity, accessibility, and impact, the question is how to direct the effort. The answer lies in a risk that some laboratory directors may not have considered.

Value-based healthcare systems include hospital-based medical laboratories as an essential part of their integrated health system. And, to lower the cost of care, healthcare systems involved in value-based care know they must become better at coordinating care and offering precision medicine services to their patients.

Year-by-year, more integrated health systems are learning how to eliminate gaps in care and become more proactive in delivering care that helps keep patients healthy. However, the task of leveraging the clinical laboratory in a strategic approach to demonstrating value in those health systems remains daunting. One of the goals of the Clinical Lab 2.0 model developed by the Project Santa Fe Foundation clinical laboratory organization is to demonstrate how labs can achieve two goals:

  • Create added-value services that improve patient care; and
  • Have health insurers, accountable care organizations (ACOs), and health networks pay remuneration to the clinical labs for those added-value services.

Pathologists, Clinical Chemists, and MTs Leave Thy Medical Labs

Expert panelists of a recent webinar hosted by Dark Daily and sponsored by Sunquest Information Systems suggested ways that clinical laboratories could better position themselves to be an asset for their organizations. One way to do this is to get their clinical pathologists, PhDs, and medical technologists out of the lab and engaged with physicians, nurses, and other clinical staff in specific ways that influence the healthcare organization’s overall performance in delivering better patient outcomes at less cost.

“If your pathologists aren’t sitting on the medical informatics committee or the clinical quality-improvement committee or any one of the myriad things at the enterprise level, that’s going to be a risk for you,” said Michael J. Crossey, MD, PhD, CEO and Chief Medical Officer for TriCore Reference Laboratories, during the webinar “Listen, Learn, Lead: Uncover Ways You Can Position Your Lab as a Strategic Pillar of the Healthcare Organization.” 

“Our labs have to be equal partners instead of recipients of where things are going,” he stressed. “We need to be, if not in the driver’s seat, at least in the front seat.”

The expert webinar panelists included:

Mark Dixon (above), President of the Mark Dixon Group LLC, moderated the webinar, which was sponsored by Sunquest Information Systems  and The Dark Report, sister publication of Dark Daily. Dixon has more than 30-years’ experience as a health system CEO and COO. He said TriCore and other labs are succeeding at value-based healthcare using methods that are well-defined and available for all clinical laboratories to learn. For example: TriCore has found that certain health insurers are willing to not only pay their laboratory differently, but also meet with the lab’s pathologists and leaders to negotiate value-based care arrangements. (Photo copyright: Mark Dixon Group.)

Fundamental Changes That Will Impact All Clinical Laboratories

The panel speakers discussed how clinical laboratories can strategically position themselves to be successful in today’s evolving healthcare industry. They predicted several fundamental changes would take place or continue. These changes include:

  • A continued shift away from pure fee-for-service payment (volume) to value-based reimbursement that rewards improved patient outcomes;
  • More discussion regarding prevention of illnesses, chronic diseases, and personal responsibility;
  • More focus on primary care and proactive care;
  • Rapid advances in science and technology that will spark development of new healthcare applications;
  • Continued trend toward consumerism, as more patients pay a larger portion of their healthcare expenses and shop for hospitals, doctors, and labs; and
  • Intense cost pressure on healthcare organizations and their medical laboratories.

It was noted during the panel discussion that, even as the US spends more than any other country in the world on healthcare, it has some of the worst overall outcomes.

Customers Rapidly Becoming Stakeholders

“I always think in terms of stakeholders and the number one stakeholder for any clinical laboratory or healthcare system is always the customer,” said Peters. “The lab’s customer is the ordering physician. So, it’s important that labs ‘speak their language’ and understand that the physician’s customer is the patient.”

Clinical laboratories also must be aware of what a particular healthcare system is trying to accomplish. “Lab leaders should stay in constant touch with where the market is, where the system is, and where reform is,” said Oravetz. “And realize there are things that can be done today to set up for what’s coming tomorrow.”

Terese said that for a clinical laboratory to survive during this rapid transformation of the US healthcare system—or at least continue to thrive—it needs to engage with the strategic and clinical initiatives guiding every health system around the country. “There is tremendous opportunity for clinical laboratories to not only support that transition, but to actually help drive it,” he said. “There’s nothing wrong with thinking of your medical laboratory as a leader of these initiatives, versus just as a follower of what the organization is doing.”

Key elements of the webinar that will be of interest to clinical laboratories include:

  • Examples of clinical laboratories navigating the transition from volume to value-based care;
  • Discussion and update on fundamental changes coming to the US healthcare industry that impact clinical laboratories;
  • The case for demonstrating the value of clinical labs to healthcare organizations; and
  • Eight ways to elevate the value of clinical labs within an integrated healthcare network.

The experts on this special discussion panel agree that US healthcare and the clinical laboratory marketplace is in a time of transition. Pathologists and medical laboratory scientists have an opportunity to position themselves as leaders and changemakers to the benefit of patients, as well as their parent hospitals and health networks.

This free webinar can be a critical tool for leadership training within every clinical laboratory. It can be used to give lab managers and lab staff fresh insights into the changes happening in healthcare. Insights that can guide strategic planning and inspire laboratory-led projects to collaborate with physicians and improve patient care.

Download this webinar for free by clicking here. (Or, copy and paste this URL into your browser:

—JP Schlingman

Related Information:

Free On-Demand Webinar: Listen, Learn, Lead: Uncover Ways You Can Position Your Lab as a Strategic Pillar of the Healthcare Organization

Ochsner Accountable Care Network Recognized Nationally for Quality and Efficiency

Defining Value—The Foundation of Outcomes-Based Risk-Sharing Agreements

Value-Based Contracts with Risk 3 to 5 Years Away for Providers

Humana’s New Oncology Value-Based Care Program Includes Quality and Cost Measurements of Provider Performance, Clinical Laboratories, and Pathology Groups

Medical Laboratory Middleware Provider Data Innovations to Be Sold to Roper Industries, the Owner of Sunquest Information Systems

Following the acquisition, Data Innovations will become a business division of Sunquest and the two companies will work to integrate their clinical laboratory information systems

There’s more change in the clinical laboratory marketplace. Yesterday it was announced that Data Innovations—a major player in medical laboratory middleware systems—had been acquired by Roper Industries, Inc. (NYSE:ROP), the owner of Sunquest Information Systems.

Executives at Roper Industries said that Data Innovations will become a business division of Sunquest. The acquisition is expected to close in February, subject to regulatory approvals. Roper also announced yesterday that it was acquiring SoftWriters, a company that sells software for long-term care pharmacies.

In its press release, Roper said that “the combined purchase price for these two acquisitions is $450 million. …The Company expects the three acquisitions to contribute approximately $100 million of annual revenue and provide over $110 million of gross cash tax benefits.” (more…)

Business Intelligence Comes to The Clinical Laboratory Industry – Finally!

Business Intelligence software now allows for real-time data capture, analysis and evaluation of medical laboratory operations

For clinical laboratories and anatomic pathology groups across the nation, the latest use of middleware is for business intelligence. This is a brand-new trend, as only first-mover and early adopter medical laboratories have acquired and currently use some type of middleware solution that delivers business intelligence.

One-by-one, laboratory informatics companies are crafting middleware products specifically designed to deliver business intelligence to their customers and clients. Business Intelligence (BI) is a computer-based approach to collecting and analyzing business data. A flurry of activity in the laboratory informatics sector reinforces the importance of health IT and healthcare analytics in an increasingly competitive medical laboratory testing market. (more…)

Data Innovations Receives FDA Clearance for Its Instrument Manager Software

Dark Daily was recently forwarded a press release entitled Data Innovations Receives FDA Clearance for Instrument Manager. Our first response was to wonder why Data Innovations decided to pursue FDA clearance for Instrument Manager.

After all, in general, laboratory middleware does not require FDA clearance. Furthermore, many laboratory middleware and laboratory information systems (LIS) companies have criticized the FDA whenever, over the past decade, that the federal agency suggested that FDA clearance of laboratory middleware and laboratory information systems should be required. The FDA reasons that regulation is necessary because those products, in effect, practice medicine by providing guidance to pathologists and physicians, which affects patient care.

Dark Daily asked Gregory Vail, CEO of Data Innovations, why the company decided to make the move to get FDA clearance. Vail gave us several reasons:

FDA clearance is required for software used in blood banking and the company’s partners and customers increasingly want to use Instrument Manager in that environment.
Obtaining FDA clearance of the company’s software is a demonstration of Data Innovations’ commitment to the quality process. This extends beyond the development of the software, and includes the procedures and systems that must be put in place throughout the company, such as a CAPA (Corrective and Preventive Action) system.
FDA clearance is of great benefit to the company’s FDA-regulated partners (like in vitro diagnostics manufacturers). It means that, not only is the software FDA-cleared, but also that Data Innovations is FDA inspection-ready.
FDA clearance raises the bar for middleware products and helps the company claim a leadership role in that market.

Our follow-up question to Vail was whether he felt that FDA clearance should be required for laboratory middleware and laboratory information systems in general. “My opinion is that the sophisticated ways in which labs now use middleware and LIS functionality are likely to encourage more regulation,” he responded. “For example, the increased amount of automated functions, such as auto verification, being performed by the software, illustrate how both [laboratory middleware and laboratory information systems] impact patient safety every bit as much as an FDA-regulated laboratory instrument that is used to initially produce a result.”

Pathologists and laboratory administrators should take note of Vail’s observation. He offers a good reason why the FDA would be motivated to bring middleware and laboratory information systems under some form of review and clearance for use in the clinical marketplace. The integration of laboratory informatics is likely to further reinforce this position at the FDA. For example, one reason Vail’s company pursued clearance for its Instrument Manager product is because some laboratory customers wanted to use it in their blood banks. Further, the FDA’s active interest in regulating In Vitro Diagnostic Multivariate Index Assays (IVDMIAs), which incorporate sophisticated software algorithms to generate a test result, may further encourage the agency to require review and clearance for middleware and LIS products.

Related Articles:

Here’s a listing of Pathology Informatics Standards and Web Resources that includes regulations governing laboratory software, prepared by the Association for Pathology Informatics