CEO SUMMARY: Abaton.com was among the first companies to actually have Web-based information products linking hospital labs and physician offices. As early as 1997, the Allina Health System was working with Abaton.com to implement a laboratory test requisition/test results system using Web browsers. Centrex Clinical Labs is another Abaton client now implementing a Web-based, thin client solution.
IT’S A RACE TO BRING THE INTERNET to clinical laboratories and the physicians they serve. One early leader in this race is Abaton.com, based in Minneapolis, Minnesota.
Abaton.com offers Web browser- based clinical network applications that do more than just laboratory test ordering and results reporting. They can handle pharmacy transactions and develop a universal patient record.
During the past 24 months, Abaton.com installed at least one of its products in Allina Health System (Minneapolis), Norton Health (Louisville), Fairview Health Services (Minneapolis), and a clinic of the American Health Network (Kokomo).
In upstate New York, Centrex Clinical Laboratories is now rolling out the Abaton.com product to its physician office clients. This is the first use of Abaton’s ClinLabs.com™ system in a commercial laboratory.
Although Abaton.com is a young company, founded in January 1997, McKessonHBOC was impressed enough with Abaton.com’s Web-based clinical information products that it acquired the company last November. This acquisition demonstrates how important it is that traditional hospital IS vendors have a menu of viable Web-based products to offer their lab customers.
Thin Client Concept
“All of Abaton’s information products are built upon the thin client concept,” stated Donald Connelly, M.D., “The user’s ‘client’ PC only requires a browser to run the application.
“With a thin client, users don’t need to buy and install software at their location. This also eliminates the cost of maintenance and upgrades,”? continued Dr. Connelly. “We believe Abaton.com is the first operational provider of clinical information services to labs which is totally based on Internet technology.”?
Allina Health System was Abaton.com’s first installation. “We installed the results reporting and viewing product at Allina in February 1998,” stated Dr. Connelly. “In August 1998, Allina Labs rolled out order entry, one clinic at a time. Currently more than 20 clinics use the Abaton system, with more locations becoming operational each month.
“Every test result generated by Allina Labs, for both the health system’s inpatients and outpatients, is fed to the Abaton repository, he noted. “Since February 1998, about 48,000 new lab results have posted daily. Using a Web browser, any workstation connected to Allina’s intranet can order lab tests and view lab results.”
Using Hospitals’ Intranet
Because most integrated healthcare delivery systems already have intranets, Abaton.com usually runs over the hospital’s intranet rather than the public Internet. One reason for choosing this approach is concern about protecting the confidentiality of patient data on the Internet and changing federal guidelines on privacy.
“In contrast, Centrex is totally Internet-based,”? observed Dr. Connelly. “Its operational sites are using Web-browsers to access our server via the Internet. The federal government recently defined acceptable approaches for achieving data security. Abaton.com has implemented these new standards for Centrex.”
Electronic Test Ordering
Abaton.com’s ClinLab.com is a “browser-based laboratory order entry and automated results management system.” It lets physician practices electronically order tests, verify laboratory benefit eligibility and receive test results.
It verifies compliance with Medicare’s medical necessity rules for lab tests in real-time and supports the necessary documentation. The system has embedded display capabilities that consolidate test results over time and display them graphically.
“There is also a workflow management feature,” observed Dr. Connelly. “This allows users to designate how patient clinical data will be distributed and to assign follow-up tasks to specific individuals. Our system is designed by doctors to be used by doctors and this workflow feature has proved to be a hit.”
The modular design of Abaton.com’s product offerings is based upon the high demand for access to lab data. “It seems that, in every clinical environment, there is widespread agreement that access to laboratory test result data is necessary and worth pursuing,” said Dr. Connelly.
“That is why most integrated healthcare systems start with a laboratory test results reporting system,” he explained. “Later on, they may want to add a prescription writing system and finally a system for doing the ambulatory patient record.”
Abaton.com’s Roots Lie With Univ. of Minnesota
It was a group of clinical pathologists at the University of Minnesota Medical Center who did the development work which led directly to Abaton.com.
“As early as 1979, we were building information management tools that doctors wanted to use,” noted Donald Connelly, M.D., Professor of Laboratory Medicine and Pathology at the University of Minnesota and Director of Clinical Applications Design at Abaton.com. “In 1979, we had doctors on-line at one inpatient ward, linked by the Plato system, which allowed them to graphically view results.
“Our move up was touch-screen reporting, initiated in the neonatal intensive care unit in 1985,” he continued. “Clinicians loved this. In 1994, we saw the potential of the Mosaic Web browser. We used this, and HTML, to give our hospital access to lab results in late 1994.”
By 1996, current Abaton.com Chairman and CEO James Bradley entered the scene. Dr. Connelly and his colleagues needed more money to develop their software products. To obtain the necessary capital, Abaton.com was launched in January 1997. It signed its first contract with Allina Health In October 1997.
Complete The Installation
When a clinical laboratory decides to acquire a Web browser-based system for ordering tests and reporting results, it will need to do several things to complete the installation.
“First, the lab’s test catalog and ordering rules need to be mapped to our system,” said Dr. Connelly. “We use LOINC codes to map the 400 most frequently-appearing test results. This allows us to bring past results together, regardless of where the test was performed or whether it was part of a panel.
“Second, we develop an interface with our client’s LIS and in some cases, the LIS of the reference labs used by our client,” he continued. “Because this can be a challenge even with HL-7, we have a dedicated interface team.
The thin server business model, also known as ASP (application service provider) is a major threat to the established IS vendors.
“Implementation goes faster when the healthcare system has an existing intranet, because it generally means the laboratory organization is already familiar with networking technology and the benefits it brings,”? said Dr. Connelly.
Abaton.com seems to be capable of speedily installing Internet-enabled installations. Centrex Clinical Labs told THE DARK REPORT that its first user site was operational less than 18 weeks after the contract with Abaton.com had been signed. (See sidebar below.)
The much-awaited ability to match laboratory data with pharmacy prescriptions and other clinical data has yet to be realized by Abaton.com’s earliest customers—for a simple reason. “None of our first clients have implemented both the laboratory product and the pharmacy product in the same setting,” explained Dr. Connelly. “But this is being considered at three sites even now. We fully expect that effective blending of lab results and pharmacy information will generate worth- while improvements to clinical care.”
Early Leaders In The Race
Abaton.com is one of the early leaders in the race to bring Web-based laboratory test ordering and results reporting to the marketplace. With four major clients now up and running, Abaton.com’s early product placements illustrate that the market for Web-based lab services remains undeveloped.
On the other hand, the speed with which Abaton.com developed its thin client/Web browser product suite demonstrates how rapidly new technology is moving from theory to practice application. Here is a company that was incorporated in January 1997, had its first product go live in 1998, and was acquired by a large healthcare IS company (McKessonHBOC) before the end of 1999!
The thin server client approach is very conducive to the emerging software business model of ASP (application service provider). With the ASP model, the customer buys a service and doesn’t have to worry about the capital expense of a new computer system.
ASP is a major threat to established IS vendors. Companies such as Cerner, Meditech, Sunquest, and SMS, have substantial businesses based upon thick client technology.
There is conflict within these companies about how to transition to the thin client model without cannibalizing their existing revenues and profits. Any delays resulting from these internal debates will give nimble new entrants, like Abaton.com, a big head start.
Clients and regular readers of THE DARK REPORT know that we predict the transition to Web-based links between labs and physicians’ offices to occur in as little as 24 months. This will be a major shift in the competitive advantage that one lab has over another. The example of Centrex Clinical Labs demonstrates how quickly even a modest-sized lab company can implement Web-based services with its clients.
Centrex Happy with First Installations, Wants Competitive Advantage from Web
“WE HAVE ABATON.COM’S full clinical laboratory package now in place,” said Lee Barnard, Chief Information Officer at Centrex Clinical Laboratories in New Hartford, New York. “It’s tangible and it works!”
Centrex issued RFPs in February 1999 for a Web-based test ordering and results reporting system. “We signed our contract with Abaton.com in August 1999. In only 18 weeks, they had our first link operational and in clinical use,” noted Barnard.
“As of this date, we have one hospital using both test ordering and results reporting,”? he continued. “Two other sites utilize results reporting. Our strategy is to use Web-based test ordering and results reporting as a competitive advantage to attract new clients. We will also use it to defend our existing clients from competing labs.”
Centrex feels the cost of its Web- based capability is competitive with the current “thick client” technology. “I did a rigorous analysis of our return on investment,” noted Barnard. “Using a five-year payback and plugging in everything but the kitchen sink, we believe our cost per requisition will be less than 40¢. Higher usage volumes reduce this number even further.”
Centrex bought a license from Abaton.com for a specific number of sites. Thus, it has purchased this system for a fixed price and will pay an annual maintenance fee.
“Users already love this system,” stated Barnard. “In fact, once our clinical pathologists saw it, they insisted upon internal access to test results. They like the clinical view feature. We wired them in and they use it to view graphs and trends on individual patients.”
Barnard noted another benefit to the Abaton.com product that was unexpected. “It has a workflow management capability. This is valuable. It allows users to assign each task to a specific individual.
“For example, Nurse Mary might be designated as the one to view abnormal test results,” he explained. “Thus, each batch of abnormal test results will be flagged for her to review and handle. It works so well that we’ve put the workflow feature to good use in our own lab!”