CEO SUMMARY: Always a good forum for discussion of laboratory industry trends, this year’s meeting in Las Vegas addressed government regulation, laboratory automation and everything in between. Here is a brief rundown on some of the more interesting insights and observations.
ONLY A LIMITED NUMBER of laboratory programs exist which address the management interests of hospital laboratory directors and administrators. One such important gathering is the American Hospital Association’s annual laboratory conference.
Held on March 6-7 in Las Vegas, almost 300 laboratory directors assembled to hear 21 presentations on the entire range of laboratory management issues. Some of the information was worthwhile and of interest to DARK REPORT clients and subscribers.
What you will read in the following pages are relevant insights which seem to accurately illustrate problems and solutions of common interest to proactive laboratory managers. This knowledge should be useful to you and your laboratory organization.
The AHA program had a working title of Integrated Health Care Strategies For Health Systems and Hospital Laboratories. David A. Anderson was the keynote speaker who opened the conference. He is a founding partner of Health Care Futures in Itasca, Illinois.
While employed by KPMG Peat Marwick, Anderson and Dr. Stephen Shortell of Northwestern University conducted a joint research project. The goal was to identify what key relationships were essential for clinical integration. They co-authored a book on their findings.
Anderson’s research is credible because it is based on the experience of eleven respected healthcare systems throughout the United States. (See map and sidebar on page 11.)
Basically, Anderson and Shortell determined that success in the managed healthcare world depends on clinical integration. “As we created diagrams of the key relationships within an integrated system,” stated Anderson, “we identified clinical relationships which were common to the successful systems. We found these relationships to be statistically significant.
“We discovered that, to create value, the real key is to achieve clinical integration, not operational integration,” he explained. “We know from our study that you cannot start from operational integration.”
Anderson offered several conclusions from the study. First, larger hospitals that create common pathways will end up with clinical integration. Second, larger hospitals that integrate data tend to have more clinical integration.
“It is a fact that organizations which grow one hospital at a time have a greater struggle to accomplish clinical integration,” said Anderson. “This is because they tend to maintain the status quo. Mergers of hospitals tend to expedite clinical integration because there are timetables to bring the different institutions together.”
Anderson described four barriers to clinical integration within a healthcare system. First, there are strategic barriers. The system must focus activities on strategically important issues facing the system. “Without strategic integration,” stated Anderson, “you tend to spend time on initiatives which do not serve strategic goals.”
Second, structural barriers must be identified. The overall organizational structure of task forces, committees, councils and work groups must be directed to foster clinical integration and best practices. “If the structural barriers are still in place,” he continued, “then efforts toward true clinical integration become isolated events.”
Third, cultural barriers consist of underlying beliefs, values, norms and behaviors within the system. “Too often an organization relies on a champion,” Anderson explained. “When the champion loses steam or leaves, things stop unless the organization’s culture rein- forces the goal of clinical integration.”
Fourth, technical barriers should be overcome by providing the necessary tools, training and skills to achieve clinical integration. “Without providing the technical support,” he observed, “it becomes difficult if not impossible to move the organization forward.”
Anderson stated that, during the last 30 years, the healthcare system in the United States has responded to two basic trends. “One was adapting to new healthcare technology. The second was responding to Medicare and its influence on healthcare practices.”
According to Anderson, aging baby boomers will not be the next major trend to shape healthcare. He predicts something different. “The most dramatic factor to which healthcare must respond is the growing ethnic diversity of the population. For example, in four years hispanics will become the largest component of Chicago’s population. California is already multicultural. These distinct cultural groups will require healthcare services which are sensitive to their lifestyles and cultural norms.”
High Cost of Hospital Beds
Anderson closed his remarks by noting the following statistic: the cost per hospital bed in the United States is $170,000. That is 62% higher than the next highest country—Canada!
“The question is this: Can an organized healthcare system respond to managed care?” asked Anderson. “Our research says that healthcare systems do have the capability to accomplish this. As they achieve clinical integration, they will become the vehicle to link the community with these forces.”
A presentation made later on the same day by Bruce Friedman, M.D. on Laboratory Information Technology: Organization Integration echoed the themes presented by David Anderson. Dr. Friedman, who is Professor of Pathology at the University of Michigan, pointed out that the healthcare industry uses the word “virtual” to describe organizational initiatives which do not involve a merger of assets.
Need To Integrate Data
“With hospitals seeking consolidation of their laboratories and the need to integrate data,” observed Dr. Friedman, “I believe that we will see the emergence of the true ‘virtual laboratory.’ This will be the only organizational form that is fluid enough to adapt to changes in the organization, new testing technology and the evolving demand for healthcare services.”
According to Anderson, aging baby boomers will not be the next trend to shape healthcare. He predicts something different.
Contrary to the paradigm, Dr. Friedman believes that both the laboratory professional and the clinician are prepared for the “virtual laboratory.” “This concept is not a radical shift in thinking,” he explained. “Laboratories already have a history of outsourcing reference and esoteric testing.
“New testing technology will bring rapid changes to the capability of laboratories. Regardless of the aliases such as POCT and AST, the common theme is the telescoping of testing from the analytic phase into the pre-analytic phase.
“As the laboratory diffuses into testing nodes spread throughout the integrated system,” continued Dr. Friedman, “information technology is the enabler for the virtual laboratory. But this will not evolve without the notion of strategic direction.”
Dr. Friedman’s reference to strategic direction dovetails precisely with David
Anderson’s study conclusions. His prediction is that lab information systems will be essential in expediting clinical integration within a healthcare system.
Laboratory automation guru Rodney S. Markin, M.D., Ph.D. discussed current developments in laboratory automation. Dr. Markin developed a line of automation equipment at the University of Nebraska Medical Center, where he is Professor and Vice Chairman of the Department of Pathology and Microbiology.
Dr. Markin noted that there are four prime vendors for automation equipment: Autolab, BMC/Hitachi, Coulter/IDS and LAB-InterLink. Among them are 13 laboratory sites in the United States and Canada where this equipment is either operating or under installation. This compares with Japan, where 141 laboratory sites are using automated equipment.
The four vendors mentioned above have developed complete transport and automation solutions. “Instrument manufacturers are beginning to deliver instruments with varying capabilities for connecting to automated transport lines,” said Dr. Markin. “Johnson & Johnson’s 950AT and 250AT offer connectivity through both hardware and software. Bayer, Chiron, MLA, Coulter and Dade each have instruments with the capability to work within automated laboratory systems.
Workcell instrumentation is another form of automation. “More laboratories can benefit from this type of equipment, since smaller volumes of specimens make this equipment cost-effective,” he explained. “There are four vendors with workcell solutions already in the marketplace. The firms are Johnson & Johnson Clinical Diagnostics, BMC/Hitachi, Sysmex and Coulter/IDS. Workcells can initially be used in modules. They can be later expanded as the laboratory installs automated transport lines.”
Dr. Markin did not speak about the economics of automated systems currently installed and operating. There is little published data from which to judge the financial performance of this technology in actual use.
During the two-day program, attendees seemed upbeat. They were almost exclusively from hospital-based laboratories. The general impression was that they were holding their own against both managed care and commercial laboratory competitors.
Another surprise was that most of the hospital laboratory directors I spoke with who operated outreach sales programs indicated that they were doing well. Although there is a tendency to overstate success at such meetings, these laboratory directors could provide numbers and statistics to illustrate the growth of their outreach testing volumes.
The consistent theme which underlay most speeches as well as the conversations during breaks was that of consolidation and integration. Currently 77% of the hospitals in the United States have common ownership or an affiliation.
This is why consolidation and integration is widespread. Laboratory administrators are being asked to combine their laboratory operations with those of the affiliated hospitals.
Shift to Outpatient
At the same time, hospitals are trying to adapt to the shift from inpatient to outpatient. They are seeking ways to link every aspect of clinical services. Throughout this entire process there is an emphasis on cost savings.
Another notable fact about this gathering is that there were few attendees from commercial laboratories. Despite the fact that the big three national laboratories are promoting outsourcing and joint ventures, only the Nichols Institute Division of Quest Diagnostics was present with a display. It will be difficult to forge such relationships if the commercial laboratories do not interact with hospital laboratory directors at these gatherings.