CEO SUMMARY: Internet-enabled lab test ordering and results reporting may help independent commercial labs and hospital laboratory outreach programs become more competitive against the two blood brothers. In eastern Pennsylvania, Clinical Laboratories, Inc. introduced Web-based lab test results reporting in July 1998. Since that date, sales are up and clients are happier.
HOSPITAL LABORATORY OUTREACH programs and independent labs constantly struggle to find effective ways to successfully compete against the two national lab companies.
That may change with the arrival of Internet-based laboratory information capabilities and services. One early leader in the race to gain competitive advantage from the Internet is Clinical Laboratories, Inc. (CLI) of Throop, Pennsylvania. Located near Scranton, CLI put its first Internet lab service into the marketplace in July 1998.
“We introduced Web-enabled lab test results reporting to our customers in July 1998,” stated Kuo Cheng, CEO at Clinical Laboratories in comments made at the Executive War College in New Orleans. “We have no regrets about pioneering this service. We find it easier to generate new clients for our laboratory. We also see a definite and measurable improvement in customer satisfaction and client retention.”
What makes the story of CLI particularly unique is the fact that this modest-sized laboratory company was able to create its product for Web- based lab results reporting as an in-house project. It took CLI only eight months to begin design work, complete beta site testing, and launch this Web-based product to its physician office clients.
More remarkably, CLI invested just $70,000 on hardware, software and programming. The current expense to maintain its Web-based results reporting capability is only $10,200 per year!
CLI’s accomplishment demonstrates that virtually any hospital laboratory outreach program or independent commercial laboratory can swiftly bring Web-enabled lab test results reporting to its physician clients for a modest capital investment. CLI’s accomplishment also demonstrates why the Internet may prove to be a competitive leveler within the clinical lab industry.
It was 1996 when Clinical Laboratories, Inc., guided by Managing Director Gary Ross, made the strategic decision to pursue Internet-enabled laboratory services. “We were convinced that the number of doctors using E-health services would grow exponentially,” noted Cheng. “We also believed that we needed to supplement traditional line printers and PCs for lab test reporting if we were to maintain our competitive edge in this region.
Used Off-The-Shelf Items
“In addition, we were confident that, by using off-the-shelf modular software, we could do this ourself,” he continued. “The major roadblock was getting our lab test data into a relational database. This was an important requirement, because our Web-based results reporting technology is not an integrated software system.
“Rather, it is a link between the clinical repository and the Internet vehicle which transmits the lab test data to the physicians’ office,” explained Cheng. “Thus, our necessary first step was to move our clinical data repository into a relational database.
“We did this by upgrading our out-moded LIS system,” he said. “In September 1996, we became the first lab user to install and operate SMS Corporation’s OpenLab. This was one of the first LIS products which incorporated a relational database for the clinical data.
“During the next year, we laid the foundation for our Web-based lab test results reporting capability,” Cheng observed. “We installed an internal 10/100 Base T LAN (local area network) that was Internet compatible.
Four Software Applications
“The other component of the physical infrastructure was four software applications: 1) business; 2) laboratory operations; 3) anatomic pathology (Tamtron PowerPath; and 4) e-mail,” he continued. “Once these were in place, we could begin to develop Web-based lab test results reporting capability. That effort began in December 1997.”
According to Cheng, there are several options to permit Web-enabled user access to lab test results. First, the lab can create an intermediate data repository to pull legacy data out of the LIS repository. Because it may only download new results every two hours, the intermediate data repository is not a real-time service.
The second option is using HL-7 to connect the intermediate laboratory data repository with the LIS repository on a real-time basis. For a small laboratory like Clinical Laboratories, Inc., this is a highly complex programming challenge.
It was the third option that CLI selected. This option links the intermediate data repository to an LIS repository that is organized as a relational data base. This permits real-time data access to new test results as they are generated within the lab. It also simplifies the programming tasks needed to establish Web-enabled lab test results reporting.
By using standard, off-the-shelf computer hardware and software products, CLI could rapidly develop its Web-based lab test query capability. Beta testing started in April 1998 and the product was offered to existing CLI customers beginning in July 1998.
“It is important to understand our strategy in the physicians’ marketplace,” noted Cheng. “First, we didn’t want to disturb existing procedures used by the doctors’ offices to receive lab test reports. So we designed our Web-enabled lab results query product to lay on top of the existing PC or line printer used in the doctors’ offices.
“This was a ‘no-change’ change strategy,” he explained. “The physicians and their staffs would continue getting lab test results in the traditional manner. But in addition, they could now use the Internet to access any test results they wanted, at any time.
“Second, we offered this first to physicians eager to adopt new technology and seeking the benefits of Web- enabled lab results query,” continued Cheng. “It was the ‘least resistance’ strategy. We would go where doctors were ready for this product. Once they had experience and provided testimonials, it would be easier and faster for us to introduce and install this product in other physicians’ offices.”
Acceptance by physicians was speedy and surprised the sales staff at
CLI. “Our experience is that, once a physician starts to use the Web to access his patient’s test results, he generally evolves to regularly, even exclusively, using this method to access lab results. If the physician never tries the Web, there is no regular use of this service.”
Feedback from the physicians led to a second version of CLI’s lab test results query system, implemented in April 1999. “We found most doctors were primarily using the Web to check results on their patients from the previous 48 hours,” Cheng recalled. “So we changed the screens. Now we highlight a list of each doctor’s patients from the past two days on the left of the screen. The physician can toggle back and forth between these patients and their test results.”
Another innovation to CLI’s Web-based results reporting product was spurred by several doctors. “We now have multiple physician clients who access their patients’ lab test results through wireless, hand-held devices,” explained Cheng. “We introduced this feature in January 2000, at the request of these physicians, who carry these devices from examination room to examination room in their offices.
Free Wireless Connectivity
“We used an independent Internet service to link our clinical repository with their wireless devices,” he added. “It cost us nothing and was accomplished in days. I think it demonstrates how the Internet really does allow us to compete with the billion-dollar labs.”
The issue of Web-enabled lab test requisitions was deliberately made second priority by CLI. “When we started this almost three years ago, the technology and legal issues supporting Web-based lab test ordering were more challenging,” observed Cheng.
“There was the problem of authentication; i.e., do you really know who is on the Internet and ordering the test?” he said. “There was also concern that HIPPA policies on documentation were unresolved and evolving. So we decided to make Web-based lab test ordering a lesser priority.
Higher Utility For Physician
“Also, our experience tells us that Web-enabled lab test results reporting has higher utility to the physician than Web-enabled lab test ordering,” added Cheng. “That is because the staff usually processes test orders. But the doctor will personally use the Internet to access his patient’s lab test results.”
CLI has enjoyed direct economic benefits from its early implementation of Web-based lab test results reporting. “After a client begins using the Web to access lab results, we are often able to remove the line printer or PC from the doctor’s office. This saves us money.
“First, we want to give the patient the option of storing his medical records with us,” he explained. “We will offer an ‘electronic safe deposit box.’ Since lab data is a major part of his file, this is a natural tie-in.”
“Our client service reps now get fewer calls. Anecdotally, we believe active physician-users save about one hour per day,” said Cheng. “They no longer have to call and wait for the rep to access test results. They can use the Web to make direct inquiries. Test results are available almost the moment they come off the bench. Doctors working from multiple office locations also like this feature a lot.”
CLI is also using its Web-based lab results reporting capability to build its drugs-of-abuse business. “We match this capability with the fact that our lab is local to improve our turnaround time to getting drug testing results back to clients,” explained Cheng. “As a result, we see strong growth in revenues from this line of testing.”
Cheng believes mobile computing will have an exponential growth curve among doctors. “We see the healthcare marketplace moving rapidly past today’s stationary computers that sit on a desktop,” he predicted. “We expect that stationary computing will swiftly move to portable computing, linked by wireless services.
“To be ready for this, we are preparing to offer mobile computing services involving lab data,” said Cheng. “We also see increased patient involvement in their healthcare. To meet that demand, we are developing two products at our laboratory for patients.
“First, we want to give the patient the option of storing his medical records with us,” he explained. “We will offer an ‘electronic safe deposit box.’ Since lab data is a major part of his medical records, this is a natural tie-in.
“Second, our patients want more information about their lab tests,” Cheng stated. “Thus, CLI is preparing to offer expanded patient education materials. After all, who better to teach a patient about lab tests than the laboratory who performs those tests?
ISP Connection For Docs
“Third, we are an ISP (Internet service provider) to many doctors. We want to develop and expand this relationship,” he continued. “Our network of physicians is a lab asset that we want to protect and enlarge.”
THE DARK REPORT believes the experience of Clinical Laboratories, Inc. demonstrates that it is feasible for small-er lab organizations to use the Internet to their competitive advantage. It took CLI just $70,000 and eight months to get their solution for Web-based lab results reporting into the marketplace.
THE DARK REPORT recommends that both hospital lab outreach programs and independent commercial labs should move swiftly to capitalize on this market advantage. Like CLI, the nimbleness of smaller labs can be a sales advantage when competing against the national lab companies.
Being first to the market with added-value services allows regional lab organizations to increase market share and build a loyal client base, besides boosting revenues and operating profits.
CLI also recognizes an important shift in the healthcare market. Every laboratory’s network of physicians is now a target for the multitude of health-care E-commerce start-ups. By being first to offer the next generation of Web-based lab services, CLI is protecting its relationship with its physician network.
That was the strategy of Bio-Reference Laboratories, Inc. (BRLI) of Englewood Park, New Jersey. (See TDR, May 30, 2000). Both CLI and BRLI are in the forefront of recognizing that the relationship each has with its physician-clients is the real asset in the age of Internet-based healthcare services.
Shrewd laboratory executives and pathologists will come to a similar conclusion. Clinical laboratories will find that timely efforts to protect their physician networks will be the single most important business strategy of the next five years.
Web-based Results Reporting Proves To Be An Easy Sell With Physicians
GETTING PHYSICIANS AND THEIR STAFFS to accept Web-based lab test results reporting proved easy for the sales and service reps of Clinical Laboratories, Inc. (CLI) in Throop, Pennsylvania.
“It was easiest to introduce this to physician offices where they had computers and were already accessing the Internet,” stated Colleen Portanova, Marketing and Sales Representative at CLI. “We did a demonstration using our laptop computers. That generally opened the door for further conversation.
“The main thing that doctors seemed concerned about was security,” she added. “We had anticipated that concern, which is why we give each physician and each staff member an individual network password.
“We basically sold the benefits of this by characterizing it as an innovative free new service offered by our lab,” noted Portanova. “We emphasized that it is the same system used by our client service reps to access lab results—that proved to be a real stopper with the doctors and office staff. They could see for themselves that results were available in real time.
“Having Web-based lab results reporting is a definite sales advantage,” Portanova observed. “There is lots of competition for lab business in this area. We are the only lab with this system and it helps us to differentiate ourselves from competitors. Not only are we finding it easier and faster to bring aboard new client accounts, but the physicians are taking a more active role during the sales process.”
“In fact, many doctors now call us about opening an account,” enthused Portanova. “For example, they hear about the wireless Palm Pilots used by their colleagues. Overall, Web-based lab results reporting has really boosted our sales program.”