CEO SUMMARY: Integrated hospital systems, government health plans and private insurers can frequently threaten the status quo for commercial laboratories in both the United States and Canada. Motivated by the desire to offer greater value, two commercial lab companies in British Columbia collaborated to pool their lab test data in a system called “PathNET.” The goal of PathNET is to give physicians “universal access” to lab results, regardless of which lab actually performed the test.
IN THE CANADIAN PROVINCE of British Columbia, two laboratory competitors are collaborating to give physicians universal access to the lab test data generated by both companies. The service went live in February 2001.
The project is called PathNET. It is a legal partnership, 50% owned by BC Biomedical Laboratories and 50% owned by MDS Metro Laboratory Services. Together, both labs perform testing for more than 70% of the specimens originated by physicians’ offices within British Columbia.
This pioneering effort demonstrates that market forces within the healthcare system are already providing incentives for lab competitors to create universal physician access to laboratory test data. Both the motive and operation of PathNET mirror certain aspects of early attempts to pool lab test data in the United States, such as the Winona Project in Minnesota and HealthBridge in Cincinnati, Ohio.
Political And Social Forces
The unusual collaboration between competing commercial labs reflects political and social forces within the province. “About three years ago, legislation was introduced in the provincial government to shut down private lab testing,” stated Doug Buchanan, Managing Director at BC Biomedical Laboratories in Vancouver, British Columbia. “This legislation called for all lab testing to be done within public hospital labs. Public outcry and hundreds of thousands of patient signatures on petitions caused this legislation to be shelved.
“It was an unmistakable warning to private labs that some government officials would prefer to eliminate this part of the healthcare sector,” explained Buchanan. “PathNET is a strategic business initiative in response to this warning. Commercial laboratories want to manage lab information in a way that adds unmistakable value to British Columbia’s health system.
“Moreover, all providers and labs face a growing challenge,” observed Buchanan. “If we look at patient demographics in British Columbia and estimate demand for lab testing services as a function of age, the numbers are daunting. By the year 2010, we will need to do three times the volume of testing that is done currently.
“Within the provincial healthcare system, this is a challenge without answer today,” he added. “Funding is tightly constrained and planning for future healthcare needs is generally overwhelmed by the need to deal with current healthcare issues.
“Collectively, these are the trends and factors which encouraged BC Biomedical and MDS Metro to meet and explore ways that our labs could add value to the healthcare system and strategically position ourselves to be essential partners in providing healthcare to the province,” explained Buchanan.
PathNET is a 50–50 partnership. “Obviously issues of trust and control had to be overcome for this project to move forward,” he noted. “However, both labs recognized the market advantage that would result from pooling our physical resources. For example, between us, we maintain 120 locations throughout the province. This includes labs and bleeding stations [phlebotomy sites]. These are connected electronically and served by an extensive courier route infrastructure.
Faster, More Accurate Lab Info
“PathNET’s strength comes from this extensive pool of existing laboratory resources. PathNET’s service focus is to give doctor’s faster and more accurate access to lab test data. It immediately adds value to the healthcare community,” said Buchanan.
“By intent, the business organization of PathNET is designed to include additional laboratory partners,” he noted. “Also, by intent, PathNET is an open technology system. We anticipate that the PathNET umbrella will allow partnerships in three areas: information, technology, and business services.
“Information partnerships will include other laboratories which want to include their lab testing results,” explained Buchanan. “These additional participants will help defray the cost of the project even as they make the lab information data base more valuable to referring physicians.
“Technology partners will be those companies that help us at the physician’s desktop,” he continued. “A whole variety of services will be coming to the physician via the computer and Web access. We are actively meeting with these companies to discuss how to integrate our respective products.
“We expect our business partners to include companies we already work—such as IBM and Triple G (our LIS provider)—that can help us span the province’s vast geographical territory,” noted Buchanan.
“Our vision for PathNET is comprehensive, but the current emphasis is on the practical steps necessary to give physicians speedy, accurate, and detailed access to the lab test data of their patients,” he observed.
“That’s why PathNET is designed around these capabilities,” Buchanan added. “One, it needs to be integrated with everything else happening in our healthcare system. Two, it must be scalable to province-wide coverage. Three, it must provide both security and privacy.
Not All Docs Ready To Use the Internet
“WE’VE LEARNED THAT BRITISH COLUMBIA physicians seem to be, on average, a little behind in the quality of the computer systems other sectors have in their offices,” stated Douglas Buchanon, Managing Director of BC Biomedical Laboratories.
“”They are generally better-equipped at home,” he explained. “So we’ve configured PathNET to work with a minimal computing environment. Our goal was to maintain a good screen response rate, even at 28K BPS (bauds per second).
“Thus, we have a very “thin” product. It moves data over copper wires at a decent response time. Running at 28K, we’re getting screen refresh times of two to three seconds, for all screens. That’s for access to the full data base,” observed Buchanon.
“We do free installations of PathNET in the physicians’ offices,” he added. “Our goal is to get in, provide everything that’s required to dial in and access PathNET, do the training, and be out in 20 minutes!
“Our plan has always been to encourage the early-adopter physicians to begin using PathNet,” said Buchanon. “The number of users will increase until critical mass is reached and this becomes the accepted way.
Concept Is Validated
“Four, it must be simple and intuitive for physicians to use,” he said. “For us, this meant Web-based. It also has to fit within the structure of existing practice dynamics while having the potential to add value downstream.”
PathNET became operational earlier this year. The new company has teams in the field assisting physicians’ offices in the installation of the product and teaching both doctors and their staffs how to use the system.
“Conceptually, PathNET is a simple system,” said Buchanan. “It is open and non-proprietary. We use the British Columbia laboratory test standard, HL-7, and LOINC. This makes it possible for other labs to plug into PathNET.
“Currently we operate PathNET as a virtual private network. This gives it an extra layer of security,” he stated. “Ultimately, we will open this up and operate it over the Internet.
“One interesting aspect of our security is a feature we call ‘running audit’,” offered Buchanan. “We believe this system will eventually be accessible to physicians in emergency rooms, for example. That means PathNET needs to know, in real-time, which physicians are accessing patients and whether that physician has ever been one of that patient’s care team, based on past lab test ordering and reporting records.”
Since PathNET became operational in February, a growing number of physicians’ offices have begun to use the service. However, like the earliest Web-based lab projects in the United States, most doctors chose to only use limited features.
Acceptance By Physicians
“Once an authorized individual logs on, the first thing they see is an inbox,” explained Buchanan. “This lists all the patients for the clinic or a particular doctor, depending on which PathNET options were selected at installation.
“Not surprisingly, up to now, most users do one thing,” he noted. “They log on, select ‘print all,’ and then log off. In our pilot study, 95% of the people did not want to do anything more with the lab information—at this time. However, we know this will change, which is why we are building a variety of capabilities into PathNet.
“For example, patients with abnor- mal results are highlighted. Infor- mation can be sorted by a variety of factors. Historical lab test results can be viewed. These are just a few of the features available with this version of PathNET,” stated Buchanan.
For most laboratory administrators and pathologists, the intriguing feature about PathNET is the fact that it is designed to provide physicians with a single point of access to lab data generated by any laboratory participating in PathNET.
To accomplish this, PathNET had to deal with the “Tower of Babel” effect in the lab industry. Each laboratory has its own test catalog, test naming scheme, and ordering rules. Historically, this has made it prohibitively expensive and extremely difficult to create and maintain a useful common data repository for lab test results generated by different laboratories.
More Lab Relationships
“PathNET recognized this problem,” responded Buchanan. “Our solution was to establish standards in three layers: the business layer—which defines our basic system architecture; the messaging protocols—which define how information is actually communicated from system to system; and the universal test coding system to uniquely identify each test in a common way that can be recognized by all systems accessing the information.
“LTS (the provincial lab-test standard) is a standard that provides the platform for all of this,” he said. “It already operates at the business layer and was developed by the government of British Columbia with our involvement. The British Columbia Government is facilitating use of LTS throughout the province. In fact, there is evidence that the BC lab test standard may become a de facto standard for the business layer of lab information transmission and management in other parts of Canada.
Evolving Pricing Model
“I should emphasize that the LTS business layer is end-to-end; that is, it looks at how the information needs to be managed, controlled, exchanged, and transmitted,” explained Buchanan. “It goes beyond simple data exchange, and handles all the steps from ordering to results reporting.
“Another thing about LTS is that it is intentionally designed to work in both the central exchange model and the point-to-point model,” he added.
“Our next level of standards utilizes HL-7. This is a widely-supported standard and incorporates both clinical data and administrative data,” stated Buchanan. “It has templates which are easy to use and allows PathNET to send unambiguous messages between systems.
“Obviously, to have different labs share data is the big accomplishment. Our standard to accomplish this is LOINC, which stands for Logical Observation Identifier Names and Codes. Obviously, to develop a con- version table between our two labs would have been one approach.
“But our vision for PathNet extends beyond simply two labs that agree to exchange data. If we were to have 25 laboratories exchanging data in our province, that would require us to develop and maintain more than 300 conversion tables,” he noted.
“LOINC is a public domain data base that currently has 22,000 universal names,” added Buchanan. “It’s designed for universal exchange of data and does not require cross referencing of the internal coding systems used by each provider.
“Next, we needed to handle ordering tests. This is one function where LOINC doesn’t work well,” commented Buchanan. “A significant amount of testing is ordered as profiles and needs to be recognized by the lab as a group of tests. To supplement LOINC, we’ve worked with our government to create a separate order-test coding system for British Columbia. Because we are ahead of other Canadian provinces, we anticipate that this system may also become a de facto standard across the country.
“As you can see, creating PathNET was a challenge,” observed Buchanan. “Our two lab partners have invested considerable money and management time to bring it to its current level of functionality.
“However, our common vision is that PathNET becomes the standard which allows any laboratory in British Columbia to link in and provide its lab test data to physicians throughout the province. We foresee major benefits to this system and we are optimistic that other labs which join this venture will help share the cost,” stated Buchanan.
Labs Feel Market Pressure
The PathNET effort by competing laboratories in British Columbia to offer physicians a single access point for laboratory test data is a response to political and social trends in that province. It is further evidence in the real world that pressures in the healthcare marketplace continue to push both hospital labs and commercial labs toward increased collaboration.
From one perspective, the effort by BC Biomedical Laboratories and MDS Metro Laboratory Services to create PathNET demonstrates that competitors can work together to create new value-added services. The worth of PathNET is validated by the willingness of other labs to join and become partners. Efforts by provincial healthcare officials to support the implementation of PathNET further validates PathNET’s contribution to the BC healthcare system.
But from a wider perspective, PathNET demonstrates how traditional barriers that inhibited cooperative lab testing arrangements are crumbling. For a reasonable investment, BC Biomedical and MDS Metro have used existing information handling technology and crafted a unique laboratory services platform.
On one end, any physician can easily “plug-in” and gain access to lab data. On the other end, it is economically feasible for clinical labs of all types to map their data base and catalog to the PathNET engine and gain the benefits of universal access by physicians, patients, and payers.
THE DARK REPORT believes that PathNET is an example of the “enabling
tools” now emerging in the marketplace which will support new forms of collaborative lab testing ventures. More specifically, these types of tools will make it easier for regional laboratory networks to offer enhanced lab testing services.