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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Biggest Opportunity for Clinical Laboratory Industry is Utilization Management of Lab Tests, But Only If It Is Done Well

Effective medical lab/physician collaborations to improve how lab tests are ordered and used can deliver big improvements in patient outcomes while reducing healthcare costs

Utilization management of clinical laboratory tests may be the single hottest trend in laboratory medicine today. Across the nation, medical laboratory scientists and pathologists are getting out of the lab to collaborate with physicians to meet the common goal of ordering the right test for the right patient at the right time.

“There are two urgent reasons why clinical laboratories and anatomic pathology groups are engaging with clinicians in projects to improve the utilization of lab tests and both involve money,” stated Robert L. Michel, Editor-In-Chief of The Dark Report. “First, an effective project to improve how physicians use lab tests can return immediate savings to both the lab and the parent hospital. Utilization management projects of this type have the goal of reducing or eliminating orders for duplicate tests, unnecessary tests, and outmoded lab assays. For hospital labs with shrinking budgets, the speedy savings that result from these lab test utilization efforts provide welcome relief.

Progressive Medical Laboratories Want to Deliver More Value

“Second, progressive medical laboratories that want to increase the value of their lab testing services to protect budgets and claim a fair share of value-based payments are going one step further,” explained Michel. “These labs are organizing collaborative projects with physicians and hospital administrators to leverage specific lab tests in ways that measurably improve patient outcomes while, at the same time, contributing to sizeable reductions in the overall cost per patient encounter.”

Today, almost every clinical laboratory and pathology group is under significant and sustained financial pressure. Payers continue to reduce the prices they pay for lab tests. Similarly, hospitals and health systems—facing flat or declining volume of inpatients—are pushing budget cuts across all their clinical service lines, including their labs. These trends force lab directors to pursue the twin strategy of cutting costs while increasing revenue.

Better utilization of lab tests is a business and clinical strategy that enables labs to meet both goals. When physicians do a better job of ordering the right test, and following up the lab test results with the right therapies, healthcare costs go down while patient outcomes improve.

Further, with Medicare and private health insurers continuing to move toward value-based reimbursement arrangements, any clinical lab that can step up and help its client physicians achieve documented improvements in patient outcomes has a legitimate claim to fair reimbursement under bundled and budgeted payment arrangements.

Keen Industry Interest in Utilization Management of Clinical Lab Tests

Proof of the keen interest that lab managers have in utilization management of clinical laboratory tests is the fact that a session on this topic was one of the best-attended at this spring’s Executive War College on Lab and Pathology Management.

Speaking first during this session was Tammy Fletcher, Administrator of Value-Based Services for Mayo Medical Laboratories (MML) in Rochester, Minnesota. As physicians and clinical pathologists at the Mayo Clinic develop and demonstrate clinical guidelines and protocols that utilize medical laboratory tests in the most effective way, Fletcher helps provide that information to client labs throughout the United States. This gives her a unique perspective on the best ways that lab managers can support successful lab test utilization management projects.


Tammy Fletcher (above), Administrator of Value-Based Services at the Mayo Medical Laboratories (MML), located in Rochester, Minn., is shown speaking at the Executive War College on Laboratory and Pathology Management last May. She is involved in helping the clinical laboratory clients of MML develop and implement effective utilization management programs to improve how physicians use medical laboratory tests. She will be speaking as part of a utilization management webinar that takes place on June 29. (Photo copyright: The Dark Report. Photo by Linda Reineke.)

Fletcher emphasized that, for utilization management initiatives to deliver optimal benefits, labs should follow a road map with five primary elements. They are:

  • Assess and assemble;
  • Message;
  • Education and guidance;
  • Analytics and evidence; and
  • Payer collaboration.

She emphasized that labs should understand how improving utilization of clinical lab tests helps the parent hospital and health system in two important ways. One way is to score higher in assessments by accrediting bodies. The second way is to deliver measurable improvements that meet and exceed the criteria of the health insurers that are key to the institution’s success, including Medicare and Medicaid.

Utilization Management Successes at Minneapolis Health System

Next to speak was Bobbi Jo Kochevar, MBA, MT (ASCP), Director of Diagnostic Services at North Memorial Health Care in Robbinsdale, Minnesota. Her clinical laboratory serves multiple hospitals and an integrated health system. Thus, the lab team has the opportunity to develop utilization management projects that can involve providers in inpatient, outpatient, and outreach settings in ways that contribute to improved patient care.

Bobbi Jo Kochevar (above), MBA, MLS(ASCP), is Director of Care Coordination for Diagnostic and Therapy Services at North Memorial Health Care in Robbinsdale, Minn. In recent years, she and her clinical laboratory team have conducted several utilization management projects involving how physicians order and use medical laboratory tests. These projects have improved patient care while significantly reducing billing denials. Kochevar will be sharing the lessons learned and successes of her lab team’s utilization management projects during Dark Daily’s upcoming webinar on June 29. (Photo copyright: The Dark Report. Photo by Linda Reineke.)

What caught the audience’s attention during this session was Kochevar’s demonstration of how the clinical laboratory was able to engage clinicians in utilization management projects targeting use of such assays as homocysteine and Enterobacteria phage T4 in ways that improved patient care while also meeting payer criteria. The result was improved patient outcomes and a substantial reduction in billing denials because more claims were properly documented at first submission, thanks to improved physician adherence to both the clinical protocols and to documenting compliance to payers’ requirements.

Many Labs Working to Improve Utilization of Medical Laboratory Tests

Because utilization management of lab tests is now a high priority at most clinical labs and pathology groups, Dark Daily is hosting a special webinar that features Tammy Fletcher and Bobbi Kochevar as the speakers titled, “Simple, Swift Approaches to Lab Test Utilization Management: Proven Ways for Your Clinical Laboratory to Use Data and Collaborations to Add Value.” The webinar takes place on Thursday, June 29, 2017, at 1PM EDT.

This is a must-attend for clinical pathologists, lab managers, and lab scientists who wants to:

  1. Develop their skills and knowledge in how to design an effective utilization management (UM) project; and
  2. Learn the best method for encouraging physicians and administrators to launch a winning collaboration and implement a UM project.

Fletcher will identify best practices in utilization management projects that she has learned from her work within the Mayo Clinic and with hospitals and health systems throughout the nation. She will discuss the five elements of the utilization management roadmap.

Nine Foundational Competencies in Utilization Management

Most importantly, Fletcher will describe the nine foundational utilization management competencies in detail. These range from leadership support and operations bandwidth to clinical content and knowledge diffusion. You’ll learn the essentials, as well as receive practical advice on specific pitfalls to avoid.

Kochevar will provide you and your lab team with the practical lessons learned from doing multiple, effective utilization management projects within her integrated health system. This is useful, handy knowledge that you can apply immediately.

An important topic that Kochevar will cover involves the five categories of lab test utilization. She will explain what needs to happen differently if a utilization management project is targeting repetitive or duplicate testing versus contraindicated screening and testing. Kochevar will help you understand how to customize a utilization management project to best address the different concerns and patient care improvement opportunities associated with each of the five different categories of lab test utilization.

The webinar on utilization management is ideal for clinical pathologists, lab managers, and anyone working on utilization management teams. It will help beginners understand the basics of working with clinicians on projects to improve lab test utilization while providing actual case studies and advanced techniques for intermediate and advanced practitioners.

To see the agenda and to register, use this link (Or copy and paste this URL in your browser:


—Michael McBride 


Related Information: 

Simple, Swift Approaches to Lab Test Utilization Management: Proven Ways for Your Clinical Laboratory to Use Data and Collaborations to Add Value

Increasing Costs for Genetic Tests are Busting Lab Budgets

Lab Test Utilization Delivers Big Gains at Cleveland Clinic

As Medical Laboratory Test Utilization Grows, Health Insurers Develop Programs to Manage Rising Costs

Naval Medical Center Study Reveals More than One-third of Genetic Tests are Misordered; Clinical Laboratories Critical to Improving Lab Test Utilization

Big Crowd of Pathologists and Clinical Laboratory Leaders Converges on New Orleans to Learn about Healthcare Trends, New Medical Laboratory Technologies

Speakers during the opening session discussed the major changes happening in healthcare today, along with insights about the new ‘Clinical Lab 2.0’ concept

DATELINE—NEW ORLEANS: This was a week of revelations and strategic insight for more than 900 clinical laboratory administrators, pathologists, and medical laboratory suppliers now attending the 22nd annual Executive War College on Lab and Pathology Management.

From the opening keynote presentations to the lab management case studies that closed out day two of this important conference, attendees had the opportunity to learn about the strategic drivers in the American healthcare system, along with case studies by innovative clinical labs that are succeeding in reducing costs, boosting quality, and contributing to improved patient outcomes.

The opening keynote presentation at this year’s Executive War College was, “Disruptive Forces Reshaping the Healthcare Industry.” It was an incisive perspective delivered by Shubham Singhal, Senior Partner and Global Leader of the McKinsey and Company Healthcare Systems and Services Practice. (more…)

Further Advances in the Healthcare Price Transparency Trend Reveal Why Physicians Are Supportive; Hospitals and Medical Labs Are Slow to Post Their Prices

Blue Cross Blue Shield of North Carolina expands a website that allows consumers to check the prices charged by physicians; Clinical labs are watching the price transparency trend

Once again, a major health insurer has raised the stakes on transparency of the prices charged by physicians, hospitals, clinical laboratories, and anatomic pathology groups. Blue Cross Blue Shield of North Carolina (BCBSNC) recently expanded a website for its members that lists what the insurer pays to different providers for various clinical services.

The database is searchable. Members have been able to access it since January of 2015. The website lists 1,200 non-emergency procedures, along with the average price that BCBS pays for each one.

Physicians Also Want Price Transparency

Consumers want more transparency of the prices charged by providers. But they are not the only group pushing for it. In a surprising twist, physicians in North Carolina were supportive of having their prices posted on a public website. (more…)

Healthcare Big Data Drives a New Round of Collaborations between Hospitals, Health Systems, and Care Management Companies

Recently-announced partnerships want to use big data to improve patient outcomes and lower costs; clinical laboratory test data will have a major role in these efforts

In the race to use healthcare big data to improve patient outcomes, several companies are using acquisitions and joint ventures to beef up and gain access to bigger pools of data. Pathologists and clinical laboratory managers have an interest in this trend, because medical laboratory test data will be a large proportion of the information that resides in these huge healthcare databases.

For health systems that want to be players in the healthcare big data market, one strategy is to do a risk-sharing venture with third-party care-management companies. This allows the health systems to leverage their extensive amounts of patient data while benefiting from the expertise of their venture partners. (more…)

Speakers from UCLA, Alverno Clinical Laboratories, and TriCore Reference Labs Discuss the Creation of Value-Added Lab Services at 20th Annual Executive War College

Primary themes were healthcare’s transition away from fee-for-service and how innovative medical laboratories are delivering more value with lab testing services

NEW ORLEANS, LA.—Two clear themes for clinical labs and pathology groups emerged from yesterday’s opening presentations at the 20th annual gathering of the Executive War College on Laboratory and Pathology Management.

Transitioning from Fee-For-Service to Value-based Reimbursement Programs

Theme one is that the pace of transformation within the U.S. healthcare system is accelerating. In his opening remarks, Executive War College Founder Robert L. Michel warned medical laboratory professionals that they must not allow their lab organizations to be unprepared or unresponsive to the changes now unfolding across the nation’s healthcare system.

In particular, Michel reminded the more than 850 lab executives and pathologists in the audience that fee-for-service payment for clinical laboratory tests and anatomic pathology services will not remain the dominant form of reimbursement for much longer. “This market trend is aptly described as ‘volume to value,’” noted Michel. “For decades, labs maximized revenue and operating profits by maximizing the volume of specimens that they tested. Those days are coming to an end. Healthcare will increasingly want lab testing services to be high value. These lab services will be paid as part of a bundle, or included in the different forms of global payments and budgeted payments that are made to integrated care delivery organizations, such as ACOs and patient-centered medical homes.” (more…)