CEO SUMMARY: Debate has dogged the subject of laboratory automation since its earliest days. That was true during the early 1990s in Japan. It was true in Canada and the United States throughout the 1990s. It is still true in this decade. That is why it was startling to hear a founding father of clinical laboratory automation declare that automation had taken Japan’s laboratories down a “harmful” path.
PROBABLY THE SINGLE BIGGEST SURPRISE of the “Fifth International Conference on Laboratory Automation and Robotics” was the moment when one of laboratory automation’s most venerated pioneers raised doubts about the long-term value of laboratory automation.
That moment came near the end of the presentation made by Jutaro Tadano, M.D., Ph.D. Dr. Tadano was a member of the so-called “Gang of Four,” the name given to the four Japanese pathologists who were first to design and introduce automated systems into their laboratories during the early 1980s. Currently he is Managing Director of the OGATA Institute for Medical & Chemical Research , located in Tokyo, Japan.
Dr. Tadano’s presentation was titled “The History of Laboratory Automation in Japan: The Endeavors and Achievements.” He was summarizing the evolution of laboratory automation in that country and discussing the outcomes which resulted from widespread introduction of automation into laboratories throughout Japan.
“Today, as I look back, it can be said that the Gang of Four had a harmful effect on laboratories in Japan because of their development of TLA (Total Laboratory Automation),” declared Dr. Tadano. “It’s been harmful because these automated systems were developed and implemented with one primary goal in mind: to drive improvement in laboratory productivity. Laboratories did not place equal or greater focus on physicians and patients.”
Emphasis On Process
Tadano was very specific in defining the harm laboratory automation had done to laboratories in Japan. “Process innovation definitely increased the sample throughput in laboratories across Japan and caused a cost reduction in specimens handled,” he noted. “However, this brought unintended, negative consequences for laboratories.
“Automation did increase productivity [and lower operational costs], but this allowed the national health system in Japan to reduce the amount of reimbursement paid for laboratory testing services,” explained Dr. Tadano. “Over the years, the national health service reduced reimbursement by amounts proportional to the lowered costs that resulted from automation.”
Dr. Tadano provided a specific example of the negative financial effect. “In 1986, reimbursement for the 10 items in a chemistry panel was 4,800 yen ($44.00). By the year 2006, this reimbursement had dropped to 1,300 yen ($12.00),” he said. “That is a 73% reduction!”
According to Dr. Tadano, the emphasis by laboratories on process innovation and automation to lower the direct cost of handling and testing specimens caused another damaging outcome to laboratories. “Because of the large scale cost reduction achieved by laboratories during the past 25 years, hospitals cut the laboratory budget,” he stated.
“Collectively, these actions have been harmful,” continued Dr. Tadano. “Lowered reimbursement by the national health service and reduced laboratory budgets within hospitals are starving laboratories in this country of capital.”
Dr. Tadano’s next statement was direct, even blunt. “Because of these factors,” he declared, “many laboratories in Japan are in the process of decline!”
This is a remarkable declaration from an individual who lived a life committed to process innovation and using laboratory automation to improve the productivity, quality, and overall performance of laboratory automation. But Dr. Tadano had a larger purpose in pointing out why he believed the drive to automate laboratories in Japan had missed the mark.
“Clinical laboratories can apply technical innovations down either of two paths,” noted Tadano. “Technical innovation can be used to streamline w ork processes. This triggers improvement in throughput and improvement in the productivity of labor in the clinical laboratory.
Creating Added Value
“The other path for technical innovation is to use this technology to improve products,” he continued. “These products create laboratory data of high value—which directly improve the intellectual productivity of doctors.”
With these remarks, Dr. Tadano drew a bold line between the use of technology to streamline internal laboratory work processes and the use of technology to improve the ability of clinical laboratories to produce high-value lab information of the type that helps physicians deliver high-quality healthcare outcomes to their patients. (See chart on previous page.)
“The goal of clinical laboratories should be to use product innovation to improve the intellectual productivity of physicians,” explained Dr. Tadano. “We should be changing laboratory data from a [simple] signal to information that has high value to the physician.
“This creates a different mindset-for the clinical laboratory,” he added. “It calls for the laboratory to be a supplier of medical information. This should be the new emphasis for clinical laboratories.”
New Mindset For Labs
This statement clearly demonstrates the evolution in Dr. Tadano’s thinking. Whereas he spent most of his career viewing one primary goal of laboratory management to be the improvement of operational work flow and process innovation, he now recognizes that this mindset was counterproductive to the laboratory profession over the long term.
With the perspective of 25 years experience, Dr. Tadano now urges laboratories to recognize the importance of directing innovation primarily at delivering higher value information to the physician. Innovation of this type will reframe and enhance the contribution clinical laboratories make to the healthcare system.
Dr. Tadano’s presentation was a remarkable acknowledgement that, regardless of the significant benefits that resulted from an intense drive to cut operational costs, improve produc- tivity, and reduce errors in the work processes of clinical laboratories, clinical laboratories in Japan missed the opportunity to contribute even more value to physicians and patients.
The informed opinions of Jutaro Tadano, M.D., Ph.D. deserve a more detailed hearing. His experience and insights into the value of laboratory automation and the operation of clinical laboratories is both unique and invaluable.