Cautious Optimism Seen At Dark Report’s Executive War College

Growth in precision medicine balances Executive War College attendees' concerns about cuts to lab budgets, test prices

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This is an excerpt from an 850-word article in the May 15, 2017, issue of THE DARK REPORT. The complete article is available for a limited time to all readers, and available at all times to paid members of the Dark Intelligence Group.

CEO SUMMARY: There are few places and times where a broad cross-section of leaders from all types of clinical laboratories and anatomic pathology groups come together to discuss the current state of the lab industry. At the annual Executive War College on Lab and Pathology Management, these leaders help to identify relevant innovations that can help labs succeed during healthcare’s ongoing transformation. Among the major clinical laboratory trends to emerge were the accelerating pace of integrated care, the growth of personalized medicine, and use of big data to guide physicians. 

THERE WAS CAUTIOUS OPTIMISM among the 900 clinical lab managers and pathologists gathered in New Orleans earlier this month for the 22nd annual Executive War College on Lab and Pathology Management.

The caution stems from recognition that the nation’s clinical labs and pathology groups face challenges from several sources, the most significant being the substantial revenue erosion coming from reductions to lab budgets and test prices.

The optimism springs from the growing awareness that now—more than ever—hospitals, physicians, and payers need the clinical expertise that only lab professionals can bring to diagnosis, selection of the best therapies, and patient monitoring. Research into the human genome, proteome, microbiome, and other relevant “omes” reinforced that optimism by fostering the development of new diagnostic assays that allow labs to deliver more value. Each generation of new assays is expected to have the capability to accurately detect disease and to improve therapeutic decision-making.

What is your outlook on the future of the clinical lab industry − optimistic or pessimistic? Please share your thoughts with us in the comments below.

For attendees at the Executive War College, the optimism outweighed the caution for a simple reason. They recognize that healthcare’s swift transformation requires a robust clinical laboratory and pathology service for success.

“By now, it is obvious to the clinical lab industry’s best strategic thinkers that this country’s healthcare system is moving at unprecedented speed toward: new models of care delivery, new forms of provider payment, and rapid growth in the use of precision medicine and the use of big data analysis,” stated Robert L. Michel, Editor-in-Chief of THE DARK REPORT during his speech on day one of the Executive War College. “Precision medicine cannot succeed without the provision of robust, high quality lab testing services.

Executive War College Michel interview
THE DARK REPORT Editor Robert Michel discusses value-based medicine’s impact on the lab industry. Click here for more.

Noted Michel, “Today, a small, but growing, group of innovative labs is breaking with tradition and doing radically different things. Their common goal is to get outside the four walls of the lab and engage with clinicians to improve patient care.”

One example of such innovation involves the lab divisions of five nationally-prominent health systems. They have organized under the name Project Santa Fe and are working individually and collaboratively to implement clinical programs that help physicians improve their use of lab tests and lab test data in ways that contribute to better patient care.

Value-Based Lab Model

The Project Santa Fe members are publishing the first of these clinical improvement studies in peer-reviewed journals. They have also articulated a value-based healthcare model for labs that they call “Clinical Lab 2.0.” More information about these developments is presented here.

Speakers explained all of these themes during the opening general session of EWC. First to speak was Shubham Singhal, Senior Partner and Global Leader of McKinsey and Company’s Healthcare Systems and Services Practice. He provided a strategic overview of the changes happening to healthcare in the United States.

Singhal discussed two trends that are having an effect on clinical labs. He said that “atomization of networks” was a major trend.

New Business Models

Singhal also explained how healthcare needs new business models and new regulations to make these models possible and how these models could affect labs. He also shared several examples of these new business models.

In response to Singhal’s call for new business models in healthcare and lab testing, Khosrow Shotorbani, CEO of Tricore Reference Laboratories of Albuquerque, N.M., introduced the concept of “Clinical Lab 2.0” that members of Project Santa Fe are developing.

“This is often described as the transition from volume to value because this trend will fundamentally change how all labs are paid,” said Shotorbani. “This shift from volume to value also will create new winners and losers in the clinical lab industry,” he declared. “Not every lab organization will take the timely action required to introduce the value-based lab testing services that hospitals, physicians, and payers will need.”

Lab administrators and pathologists who want to hear these sessions, and the more than 60 other EWC presentations, can obtain audio recordings online at:


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