CEO SUMMARY: Across the nation, labs in hospitals and health systems are feeling pressure from shrinking lab budgets and the need to be a contributor to the integration of clinical care. At Henry Ford Health System in Detroit, the clinical laboratory and department of pathology have responded to these trends by identifying 10 ways to add value with lab testing services. In part two of this series, a pathologist at HFHS explains the value-creation steps numbered six through 10 and discusses how the lab collaborated with physicians to deliver measurable improvements in patient care.
Second of Two Parts
IN RESPONSE TO SHRINKING FEE-FOR-SERVICE payments, a handful of innovative clinical laboratories and clinical pathology departments are looking to cut costs and develop lab testing services that deliver more value to physicians, patients, and payers in anticipation of new payment models, such as bundled payments and budgeted reimbursement.
It should be recognized that the goals of cutting costs and adding value can be pursued simultaneously by clinical labs. For example, cutting costs by reducing the number of medically-unnecessary tests that are ordered also means that patients are not subjected to unnecessary blood collections. That is added value to patients. As well, health insurers also recognize the benefits that accrue from the reduction of unnecessary lab testing.
This duality in cutting costs while adding value can be seen at Henry Ford Health System in Detroit, where the clinical laboratory and department of anatomic pathology have identified 10 different ways that labs can add value. In part one of this two-part series, THE DARK REPORT presented the first five ways that labs can add value. (See TDR, August 24, 2015.) Here in part two, we present the second five ways to add value and the five most-common barriers clinical labs encounter when implementing these value-creation strategies.
In developing ways for the lab to transition from volume to value, the lab team at HFHS recognized that its lab testing services must also support the goals of their parent health system. “Within our health system, our lab’s value will be judged from overall clinical and financial outcomes,” explained Gaurav Sharma, MD, Senior Staff Pathologist and Associate Medical Director of the Core Laboratory, Quality Systems and Regulatory Affairs at the Henry Ford Health System. Sharma was speaking at THE DARK REPORT’s Executive War College in May.
Those second five strategies are:
6) Monitor and reduce defects
7) Improve supplier processes
8) Reduce unintended operating room testing
9) Reduce unintended inpatient testing
10) Reduce unintended testing in specialty clinics
1. Monitor and reduce defects
“The sixth strategy for value creation involves standardization throughout the lab organization,” stated Sharma. “An important part of this strategy is to work with your lab’s suppliers to reduce defects in every area of lab operations.
“Most studies show that about 80% of defects usually originate outside the clinical laboratory,” he added. “We devised a system where we have defined more than 100 defect types, covering pre-analytical, analytical and post-analytical aspects of testing.
“We use this classification to systematically capture, classify, track, study, and reduce defects,” noted Sharma. “Therefore, if a specimen is hemolyzed, we have a spe- cific code for that as a defect. If there is a problem at registration in the outpatient lab, that defect has a specific code.
“The laboratory should assist its users in identifying and tracking defects created in the pre-analytical phase,” noted Sharma. “Doing so reduces waste and improves patient care at the bedside and in the clinic.
Identify Sources of Defects
“This system means our lab team can identify the most important defects and pro- duce a profile for each business unit in the hospital,” said Sharma. “On the inpatient side, in general, we already knew the good players and the not-so-good players. However, we quickly recognized that it was also important to identify the good players and the not-so-good players on the outpatient/outreach side and work collaboratively with them.
“One important lesson we learned was that, even after all the not-so-good players are identified on the outreach side, it is unproductive to try to educate them,” he continued. “The lab staff cannot do this.
“Not only are there too many of them, but because they are on the outpatient side, it is difficult for the lab to exert much control over them,” explained Sharma. “Thus, our decision was to focus only on the problem units on the inpatient side. We prioritize our efforts by monitoring frequency of defects by units.
Once you bring value (and the data to back it up) into the argument, everyone
can recognize that fixing this source of defects not only makes life easier for pathology, but it also makes life easier for rheumatology, surgery, and other clinical services treating the same patients.
“For example, we had frequent problems entering patient data at registration in the electronic health record system,” noted Sharma. “Some patient information was incomplete and some patients were not registered at all.
“The most common source of defects (errors) was incorrect registration of patients in the new EHR system that had been installed by our health system,” he explained. “This became our top priority.
“We focused on this issue,” he noted. “By identifying and rectifying the causes of these errors, we reduced the rate of defects by more than 50% in three months. Next, we did the same with the middleware-to-EHR transfer defects and those problems have disappeared.
“What’s interesting about this effort is that each time we worked with the clinicians or with IT, their response was the same,” he recalled. “They would say that fixing any one of these problems would take too much time. They would also say that, ‘It’s not worth the time and effort.’
“But because our lab team had data from our defect management efforts, we could show the value of fixing these defects,” emphasized Sharma. “Once you bring value (and the data to back it up) into the argument, everyone can recog- nize that fixing this source of defects not only makes life easier for pathology, but it also makes life easier for rheumatology, surgery, and other clinical services treating the same patients.
7. Improve supplier processes
“Identifying and correcting defects in processes is the seventh strategy,” stated Sharma. “To address this value opportunity, our lab identified defects in supplier processes, particularly in surgery. When the surgery department implemented the new EHR system, the majority of specimens that came from surgery needed cor- rection during accessioning, regardless of the specimen type involved.
“Sometimes an operating room nurse working with a new system won’t know how to correctly identify the specimen,” he noted. “Because the EHR system default is ’tissue,’ we started getting specimens generically labeled as ’tissue’ at our accessioning window.
“Our lab contributed to fixing this situation by using our defect management system,” continued Sharma. “The lab team began counting the number of defects in the main hospital and in our community hospitals. As an example, in our main hospital, we identified 187 defects involving patient registration in the EHR in January. Each of those defects requires considerable re-work in both the OR and the lab.
“After counting the defects, the next step in our defect management system is to do a systematic root-cause analysis and then take corrective actions,” he noted. “Each time this was done, we shared the data with the OR.
When the staff from the OR and the lab met in March, we complimented them because they had already reduced their defects from 187 to 129,” said Sharma. “They liked the fact that we had accurate data and it showed improvement. This data demonstrated that they were making the corrections. We did this with each category of defect. Within six months, the EHR defects related to surgical pathology disappeared.
8. Reduce unintended operating room testing
“The operating room is also involved in value-creation strategy number eight,” continued Sharma. “I recommend that pathologists or lab directors review the OR order sets at their hospitals and health systems.
“We discovered an opportunity with our order sets because a senior surgeon called me to ask why he had received a high number of acid-fast bacilli (AFB) cultures for his patients. “When we researched the root cause of this error, it was learned that any- time a physician did an incision and drainage, the nurse would ask what testing to do,” stated Sharma. “The physician would often say, ‘everything’ and the nurse would then use an extensive order set for microbiology testing.
Collaboration with OR Staff
“Once the problem was recognized, our lab team started collecting data and asked the OR staff—along with a multidisciplinary team—to collaborate with us to help solve the problem,” stated Sharma. “This is an important lesson because it is a reminder that informatics and workflow problems cannot be solved by either the lab or the physician acting alone. It is often necessary to get the EHR staff, the analytics staff, and the finance department involved.
“In studying this source of errors—unintended test orders for AFB—we learned that, after the EHR upgrade to Epic, there were multiple preference settings for AFB testing,” he recalled. “Our hypothesis is, after the implementation of Epic, the number of orders for AFB cultures increased due to the use of default order sets and ‘easy buttons’ in the ordering interface. We are still investigating this possibility.
“Our goal was to reduce the number of AFB cultures and stains on surgical specimens so that our lab performs only those that are medically indicated,” said Sharma. “To determine an appropriate intervention, we collect data on the built-in ordering options from where these orders originate and the specimen types,” he noted. “We do this by speaking with the trauma surgeons and to other specialists.
“In fact, AFB testing could be the tip of a very large iceberg,” said Sharma. “We may find other examples of lab test ordering rules that need review and revision.
9. Reduce unintended inpatient testing
“Our ninth strategy is a broader approach to reduce unintended inpatient testing,” explained Sharma. “The lab team began work on inpatient testing after a project to manage our send-outs and molecular tests was completed. (See the first five ways to deliver lab value in TDR, August 24, 2105.)
“And, just as with the AFB cultures, we convened a multidisciplinary team,” he added. “This team included internists, pathologists, clinical chemists, the EHR and analytics staff, and finance staff.
“Most lab professionals recognize that—because of built-in order sets— there are a substantial number of unnecessary tests ordered for hospital inpatients,” pointed out Sharma. “Our laboratory’s goal is to decrease the number of unnecessary lab draws for hospital inpatients.
“On this point, our hypothesis is the same as with strategy number eight: The number of unneeded tests is due to the use of default order sets and easy buttons in the ordering interface that residents and providers use,” he emphasized.
“To determine an appropriate intervention, we are collecting data on ordering options, locations, and specimen types,” he said. “Then the lab team will adjust for patient acuity and study the outliers. We want to encourage mindful ordering among staff and residents to reduce testing volumes and generate relevant results.
“This ninth way to add value is a relatively new strategy for us and it requires us to collect the data needed to identify the different sources of defects,” commented Sharma. “Our expectation is that the lab will generate significant positive improvements similar to the results we’ve produced with our other lab projects to increase value.
10. Reduce unintended testing in specialty clinics
“Our tenth way to add value has much in common with numbers eight and nine,” stated Sharma. “It is a useful approach to reduce unintended special testing that originates with allergists and geneticists.
“When the lab team looked at testing in specialty clinics, it found a lack of criteria for advanced ordering options for allergy testing and germline testing,” he observed. “As described earlier, the goal of our lab is to reduce inappropriate testing. Thus, we brought together allergists, pathologists, chemists, geneticists, oncol- ogists, the EHR and analytics teams, and representatives from finance.
“Our hypothesis was that esoteric tests often are easy to order but difficult to select in the correct clinical context,” explained Sharma. “Also, these lab tests are often ordered as part of a protocol, and they may be frequently redundant. Our aim was to standardize protocols and limit ordering to specialists. We are early in this project and still collecting data on the benefits that will result from smarter use of lab tests by the medical staff.
“Another example involves cystic fibrosis testing,” he continued. “In our clinical practice, the pathologists cancel about 15% of cystic fibrosis results because there is no additional benefit of repeating a cystic fibrosis screen if you already know that the expectant mother is either a carrier or not a carrier.
“But it is surprising how many orders are still received because they are part of order sets sent for pregnant patients,” continued Sharma. “When these tests are unnecessary, it wastes money and resources in the lab.”
Sharma considers all of these efforts to be works-in-progress. “Remember, there is regular turnover in medical staff even as advances in medical knowledge trigger a change in treatment protocols,” he said. “There is also the ongoing introduction of new lab tests. Thus, we are constantly challenged to refresh and update our efforts to deliver more value using the 10 ways that we identified.
“The good news is that as we implement each of these 10 lab value strategies, we are learning that, in a value-reimbursed paradigm, labs and pathologists will be rewarded for the quality of tests— not the quantity of testing,” concluded Sharma.
Henry Ford Lab’s 10 Ways for Labs to Add Value
IN THE FIRST OF THIS TWO–PART SERIES, the first five value-creation strategies developed by the lab at Henry Ford Health System were described. (See TDR, August 24, 2015.) The 10 ways to create value with lab testing services are presented below:
1) Choose the right technology to reduce length of stay.
2) Question the need for expensive tests.
3) Create an institutional test formulary.
4) Demonstrate the financial efficacy of the lab’s interventions.
5) Understand the downstream implications of lab decisions.
6) Monitor and reduce defects.
7) Improve supplier processes.
8) Reduce unintended operating room testing.
9) Reduce unintended IP testing.
10) Reduce unintended special testing.
When Implementing Lab Test Utilization Programs, Most Labs Will Encounter at Least Five Challenges
INEVITABLY, LABS WILL ENCOUNTER barriers when implementing lab-test utilization management programs, stated Gaurav Sharma, M.D., Associate Medical Director of the Core Laboratory, Quality Systems and Regulatory Affairs at the Henry Ford Health System in Detroit.
“While opportunities abound for improving lab operations and reducing unnecessary use of lab tests, every lab will encounter significant barriers that must be addressed,” he said. “Probably five types of challenges are the most prevalent.
“The first challenge is the most common,” noted Sharma. “Clinicians will say: ‘We have never done this before and the labs are disconnected from patient care.’ The way for the lab team to survive this challenge and succeed in engaging clinicians is to first to have a lab test formulary. Then the lab team must deliver a consistent message and ensure that physicians are involved in the process of developing guidelines for standardizing how lab tests are ordered.
“The second challenge is similar,” continued Sharma. “Physicians will say, ‘What do you know about this? You don’t see patients!’ They take care of patients while we take care of specimens. But for us the specimen is a patient. Your lab team must deliver this message consistently to your clinical colleagues.
“When making your case, limit your opinions and use data to support your argument,” he recommended. “We know which specialties create the most errors. Present that data. Data that shows how patient care can be improved is always powerful in these situations.
“The third challenge involves communication failures,” he said. “We keep our message positive and start by telling a physician that a particular test is unnecessary and suggest alternatives. If the clinician disagrees with our recommendation, we share formulary documentation with them and if they still disagree, we offer to escalate their concern by presenting it to the formulary committee. Because we work on well-defined criteria and determinations, we are able to involve and consult with peer providers and administrators.
“To meet the fourth challenge of engagement, we co-lead the formulary committee with our providers, so that the lab test formulary for all of our inpatient, outpatient, and operating room patients is provider-led,” he added. “Our lab is a key member, of course. As a result of this structure, they feel empowered and engaged with the formulary. Otherwise, providers will feel disempowered.
“The fifth challenge is the lack of EHR tools to facilitate lab test ordering,” stated Sharma. “Physicians need answers to three questions when ordering tests: ‘What is the right test? How do I order the test? And where do I get my results?’ That’s it!
“Our lab is developing ways to help physicians get the right answers to these questions at the moment when they are ready to order lab tests,” concluded Sharma. “Not only will this reduce the number of wrong or unnecessary tests that are ordered, but it will also contribute to improvements in the quality of patient care.”