Top laboratory management requires top business skills

Clinical Laboratory Value Pyramid Level Four relies on a culture of productivity

Every lab organization should aspire to achieve the attributes of Level Four: Use Benchmarks to Achieve Best-in-Class because this is the level of performance where the lab is delivering optimal clinical value at highest quality and lowest cost. This is an effort in which the business skills of laboratory management come to the fore.

It is also where the lab organization will realize maximum financial success, precisely because it delivers added value that differentiates it with its customers, including patients, physicians, parent hospitals, or payers.

Pathologists and executives in laboratory management who are studying the laboratory value pyramid are reminded that the essential foundation for the success of the level four lab is the ongoing use of a quality management system like ISO 15189, supported by effective use of Lean and Six Sigma techniques.

Business Skills

 Another distinguishing characteristic of the level four laboratory is that everyone engaged in laboratory management have the same business skills expected of managers in the nation’s most successful companies. Managers use these skills to achieve stretch goals and create a culture of productivity and contribution across the entire lab team.

Level four managers understand how to make the financial case and demonstrate ROI for capital requests, along the information that supports the clinical care case for these capital investments. These are the resources every lab needs to deliver the advanced clinical services that contribute added value to stakeholders.

The end state for level four of the value pyramid is achieved when the lab organization can show these characteristics:

  • Your lab’s practices and competencies are recognized as best-in-class by your peer groups and third party reviewers from outside your parent organization.
  • Your lab is managed with business best practices across all operational activities in support of delivering value to clinicians. This performance is documented by performance metrics that equal the external benchmark data of the nation’s other best-in-class laboratory organizations.
  • Your lab is sophisticated in its use of information technology. It is capable of assembling clinical data with lab test data and using algorithms to identify ways to help physicians use lab test data to improve patient outcomes and reduce the cost of care. It has the metrics to document these improvements.
  • Your lab managers are engaged to consult with other hospitals and systems to help them replicate what you have done within your institution.
  • Your lab is recognized as among “the best in the business” because of how your lab team uses all the attributes from the first three levels of the laboratory value pyramid.
  • Examples of world-class laboratory management can be found within prestigious institutions like Mayo Clinic, Geisinger Health System, Stanford University Medical Center, Vanderbilt University Medical Center, Massachusetts General Hospital, and Cleveland Clinic.
  • Extra credit! Your lab has created the database structure that allows it to mine the value of lab test data and deliver that value to stakeholders, including physicians, parent hospitals, patients, payers, and employers.

Because the level four laboratory is a learning organization and organized around the continuous improvement mindset, it has no limits to the value it can deliver. More specifically, the level four lab that has mastered the skills of meeting customers’ expectations and using quality management methods to sequentially raise the quality of lab testing services while reducing the cost of those services can be expected to enjoy sustained success.

This success can be measured by regular increases in specimen volume, adequate revenue and budgets, and recognition by physicians, patients, and payers in the community that it is the preferred provider of lab testing services.

Probably the most significant differentiator of a level four lab is its sophisticated use of information technology, particularly to analyze lab test results and clinical big data. As the transformation of healthcare proceeds, labs are uniquely positioned to analyze lab test data in conjunction with other types of clinical data and develop actionable intelligence for physicians that improves patient outcomes.


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