hc1, Visiun, and Viewics: Analytics Market Evolves

In last 36 months, three billion-dollar firms purchased or partnered with analytics companies

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CEO SUMMARY: To understand any development in the marketplace, it is best to follow the money. That Roche, Quest Diagnostics, and LabCorp spent money either to purchase or partner with a lab analytics company in the past 36 months indicates that these enterprises believe acquiring or working with lab analytics systems can deliver competitive advantage. Labs began showing interest in real-time analytics solutions during the 2000s as a way to improve productivity and cut costs.

MIDDLEWARE THAT PROVIDES CLINICAL LABORATORIES with realtime analytics is getting serious attention from a growing number of the nation’s largest laboratory companies. One sign that an era of real-time lab analytics may be dawning is that, over the past 18 months, three of the nation’s billion-dollar lab companies inked significant deals with a lab analytics company.

Just weeks ago, in December, LabCorp acquired Visiun, a company in Ann Arbor, Mich., that analyzes lab-performance data for hospital and health system laboratories.

Analytics Collaboration

That deal came just 14 months after Quest Diagnostics formed a strategic partnership in September 2019 with hc1, another lab data and analytics company. In this partnership, Quest and hc1 said they would work to enhance test-ordering stewardship by identifying inappropriate and inefficient testing to improve lab test utilization.

In an earlier deal involving a lab analytics company, Roche purchased Viewics in November 2017, a company founded in 2010 in Sunnyvale, Calif. Rebranded as Viewics Analytics, Roche Digital Diagnostics offers this company’s services as a part of Roche Diagnostics.

Hundreds of labs in the United States use one of the major lab analytics solutions to manage the operations in their labs. This trend is one that The Dark Report identified more than a decade ago. (See “New Study Demonstrates How Lean Labs Outperform Peers.” TDR, Jan. 21, 2008.)

Since then, some of the most innovative lab clients of hc1, Visiun, and Viewics have made presentations at The Dark Report’s conferences, the Executive War College and Lab Quality Confab. It was not an accident that third-party middleware analytics products emerged during the 2000s. Following the huge wave of hospital acquisitions and mergers in the 1990s (which was a reaction to the managed care contracting tactics of health maintenance organizations [HMOs]), from 2000 forward, multi-hospital health systems spent much capital and time to consolidate, standardize, and regionalize their clinical laboratory services across all testing sites.

The larger the core laboratory of a multi-hospital health system, the greater the opportunity to cut costs, raise productivity, and improve quality.

But waiting for the month-end reports that legacy laboratory information systems (LIS) provide was inadequate for labs that need real-time or near-real-time data to meet the challenges they face in today’s market. To solve problems and to identify opportunities to improve lab operations, lab managers need detailed data and management reports on operations by the hour, by the shift, day, week, and month.

Another early trend from years past reinforced the need for real-time operations and performance reports: the adoption of Lean and Six Sigma methods. That trend started in 2003, when three major hospital laboratory organizations became the first in the nation to use Lean to reorganize the workflow of their high-volume core chemistry, hematology, and immunoassay operations. Lean and Six Sigma methods deliver the greatest results when lab management can monitor workflow and individual work processes in real time. (See TDR, “How ‘Lean’ is Benefiting Early-Adopter Laboratories,” Sept. 8, 2003.)

What Comes Next?

It is significant that both Roche and LabCorp decided to acquire lab analytics companies and bring them in-house. Both Viewics and Visiun are pure lab analytics plays. In contrast, hc1 launched as a customer relationship management (CRM) tool that targeted clinical labs. In subsequent years, hc1 has expanded into additional healthcare sectors.

It is also interesting that none of the major companies selling laboratory information systems were acquirers of these middleware analytics companies, since those features would complement their LIS services. Sunquest Information Systems did acquire Data Innovations (DI) in 2015, but DI is known more for its interconnectivity solutions than for its analytics capabilities.

Using Lab Analytics to Respond to New Needs

ACCESS TO REAL-TIME OR NEAR-REAL-TIME ANALYTICS IS HELPING LABS in significant ways during the COVID-19 pandemic, particularly for reporting SARS-CoV-2 test data to federal and state governments. Last year, for example, the federal Centers for Medicare and MedicaidServices (CMS) required labs to report demographic data on patients tested forCOVID-19, said Visiun’s Founder and CEO Thomas Joseph.

Also, when CMS announced in October that it would change how it pays labs for COVID-19 testing, labs needed to report results in two new ways, he added.

On Oct. 15, CMS said it would cut what it pays on Jan. 1 from $100 to $75 for each COVID-19 molecular test (called a clinical diagnostic laboratory test or CDLT) when labs do not produce such results in 48 hours. (See “Medicare to Cut Payment for COVID Tests Starting Jan. 1,” TDR, Oct. 26, 2020.)

CMS also said it would add a $25 payment for COVID-19 CDLTs run on high-throughput analyzers if the laboratory completes each test in two calendar days or less and completes most COVID-19 diagnostic tests on high-throughput technology in two calendar days or less for all patients (not just Medicare members) in the previous month.

To comply with these two requirements, labs running COVID-19 CDLTs needed to develop new reporting systems, Joseph noted. “This two-tier reimbursement structure is difficult for labs because getting the extra payment depends on how quickly results can get returned to the lab’s clients and ordering physicians,” he said.

“For us, that required that we develop reports to help labs understand where they are in terms of their ability to recover that higher-tier payment for COVID-19 tests.”

Contact Tom Joseph at tom.joseph@visiun.com; Denis Burke at denis@visiun.com.

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