CEO SUMMARY: This year’s Executive War College on Laboratory and Pathology Management proved to be a high-energy event. A record 900 attendees showed up and responded enthusiastically to visions and predictions of a post-COVID-19 healthcare system that hungers for large volumes of lab test data. Speaker after speaker emphasized that clinical laboratories willing to be innovative will enjoy more revenue from the added value they deliver.
IT IS TIME FOR CLINICAL LABORATORIES TO PUT THE COVID-19 pandemic in the rear view mirror? Most speakers and attendees at this month’s Executive War College on Laboratory and Pathology Management would say “Yes!”
“The general consensus that emerged at this year’s event is that the pandemic itself is no longer the dominant factor in the management of clinical laboratories,” stated Robert L. Michel, Director of the Executive War College and Editor-in-Chief of The Dark Report.
“Rather, the nation’s more innovative clinical labs and pathology groups are now responding to several powerful trends in healthcare that the pandemic accelerated,” he continued. “These trends represent opportunities to deliver more value, develop new streams of revenue, and increase the profitability of the lab—whether an independent lab company or the laboratory operated by a not-for-profit hospital system.”
In particular, four trends identified and discussed by multiple speakers represent the best opportunities for lab administrators and pathologists who want to position their respective lab organizations as essential clinical contributors. They are:
- Consumers becoming more proactive about their care, including use of telehealth services, ordering and/or buying their own home test kits, and wanting full access to their complete medical record.
- Disruptive new players in primary care, including national retail pharmacy chains.
- Importance of access to data to support healthcare big data at the macro level and precision medicine at the micro (patient) level.
- Swift adoption of services incorporating artificial intelligence (AI) across the full span of healthcare operations and clinical services.
In her keynote address at the Executive War College, Lale White, CEO at XIFIN in San Diego, said increased use of artificial intelligence will lead to greater aggregation and analysis of clinical lab data.
“AI allows your lab and others to process unstructured data,” she explained, referring to digital information that is typically difficult to analyze because it is not assembled in a predetermined data model. One example of unstructured data generated by labs are the pathologist notes in an anatomic pathology diagnostic report.
White said an underlying challenge for clinical labs when using these AI-powered technology innovations is to obtain the substantial storage capacity to handle the needed computing power and scaling. “This challenge requires a cloud storage strategy,” she added.
AI, Cloud, and Data
Another keynote speaker agreed. Pathologist and physician scientist Jason Hipp, MD, PhD, Chair of Computational Pathology and AI at Mayo Clinic in Rochester, Minn., said AI, the cloud, and data are all technology factors influencing lab diagnostics. “AI requires adequate storage and lots of data to be practical,” he explained.
To illustrate the large volumes of data generated by labs, Hipp described how Mayo launched a project to digitally scan 25 million tissue samples on glass slides—some more than 100 years old. As part of the endeavor, the medical center wants to digitize five million of those slides within three years and put them in the cloud.
Next, Hipp described how his computational pathology team at Mayo Clinic is a bridge between pathologists and the data science engineers who develop AI algorithms. Both sides must collaborate to move AI forward, he commented, yet many labs have not yet developed those important relationships.
“We want to embed both sides into the workflow,” Hipp said. “We need the data scientists working side by side with the pathologists. That practical part is missing today.”
Another area of interest in lab management is compliance with federal and state laws. Probably the single biggest issue in that regard is what type of sales commissions can by paid by clinical laboratories and providers that complies with federal law. This because there is conflicting language on this matter in the federal Anti-Kickback Statute (AKS) and the federal Eliminating Kickbacks in Recovery Act of 2018 (EKRA).
This issue was addressed by attorney David Gee, a Partner at Davis Wright Tremaine in Seattle. Speaking to attendees at a legal panel during the conference Gee noted that there is the potential for labs to run afoul of EKRA.
Gee suggested to that it is time for clinical lab managers and pathologists to rethink percentage-based compensation arrangements. EKRA generally prohibits payments of sales commissions that are based on the volume or value of patient referrals from the sales representative’s client. (See TDR, “Labs Should Be Cautious about ‘Surprising’ EKRA Ruling,” Feb. 22, 2022.)
“I’d tell sales directors that it’s a new day and to move away from percentage-based commissions,” Gee advised. “There are other ways.”
For example, a lab could instead institute a sales bonus based on meeting a predetermined threshold of clean reimbursement claims, which hinges on the types of clients a sales representative brings to the laboratory, suggested Gee.
Optimism About the Future
One factor that many attendees commented about was how optimism was bubbling throughout the presentations, as well as in the informal discussions that took place in the hallways and during the conference. “Lab professionals gave their all during the past 30 months of the pandemic,” Michel observed. “Now that the worst of the SARS-CoV-2 outbreak seems to be behind us, many lab leaders are ready to again focus their lab organizations on helping physicians improve patient care.”
Michel commented on the themes presented by White and Hipp. “Both of these experts emphasize that labs should use informatics—in other words, the design and study of digital technology to help patients—as the platform to support collaboration with providers and insurers,” he noted. “This is a demonstrated way that a clinical laboratory can deliver more value from its test data and be paid more for that additional data.
In Healthcare, Data is King
“Across the entire spectrum of healthcare providers, data is quickly becoming king,” Michel said. “As a result, expect a wave of products and solutions labeled by their developers as artificial intelligence.
“Innovation just doesn’t happen during testing and diagnoses,” Michel concluded. “My advice to savvy clinical laboratory directors is to take stock of your lab’s business operations, look for opportunities to improve or simplify processes, and then prioritize how to make those changes.”
There are other technologies under development that have the potential to substantially transform clinical lab testing as it is done today. For example, one session was delivered by Babson Diagnostics, of Austin, Texas. Babson is developing methods to collect blood specimens that would not require a trained phlebotomist to do a venipuncture.
Another session was delivered by Clarapath, Inc., of Hawthorne, N.Y. This company is working to automate up to 20 separate histology processes in one system. These presentations gave the 900 attendees at this year’s Executive War College a first-hand look at disruptive technologies that may soon be ready for clinical use.
Role for AI Across Many Clinical Lab Activities
ENHANCEMENTS TO THE PROFESSIONAL AND TECHNICAL COMPONENTS of anatomic pathology will herald a more modern approach within the profession.
Labcorp in Burlington, N.C., is using artificial intelligence (AI) to re-evaluate how both clinical laboratory and anatomic pathology processes will operate in the future, with an eye toward greater efficiency, said Stan Letovsky, PhD, Vice President for AI, Data Sciences, and Bioinformatics.
“If pathologists want to grow and improve their revenue, they have to be more productive,” Letovsky told attendees at the Executive War College.
Anatomic pathology’s technical component of the future, as outlined by Letovsky, will be centralized and highly automated. It will include routine digital pathology imaging and large-scale data storage. Artificial intelligence-powered analysis plug-ins will integrate with other technology in the practice.
Meanwhile, the professional component will feature the ability for primary and secondary anatomic pathologist reviews to migrate throughout a healthcare organization based on available capacity. Another benefit is that AI-based annotation will increase a pathologist’s productivity.
“Labcorp is applying AI models across the enterprise,” Letovsky said. “We’re committed to continued investment in this technology.”
Competing labs should take note of Labcorp’s investment in artificial intelligence and the company’s ongoing deployment of AI throughout its clinical laboratories and anatomic pathology labs. This is market evidence that the rapid advances in technologies used in AI are now capable of improving lab operations and contributing to better diagnostic accuracy.