LIS Market Evolving To Serve New Needs

Changes, pressures on labs are driving decisions on new lab information systems

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CEO SUMMARY: Ongoing reimbursement declines, coupled with other key factors, are pushing labs to seek new capabilities for their laboratory information systems (LIS). Another influence is the growth of molecular diagnostic programs in hospital labs. Molecular testing places unique demands on an LIS, which may further motivate labs to acquire newest-generation IT solutions versus upgrading existing LIS installations.

CHANGES ARE OCCURRING to the market for laboratory information systems (LIS). Hospital laboratory customers are demanding new capabilities.

Several emerging trends illustrate these changes. Fewer laboratories are willing to undergo a disruptive upgrade or total conversion. LIS products that incorporate modern software technology are gaining favor over “legacy” LIS products designed years ago and still marketed by healthcare IT vendors.

One individual who has a unique perspective on the LIS marketplace is Gilbert Hakim, CEO of SCC Soft Computer (SCC), based in Palm Harbor, Florida. His company sells products for laboratory, radiology, pharmacy, and client accounts receivable/billing. THE DARK REPORT recently caught up to Hakim to conduct an exclusive interview.

Hakim points out that two specific trends are the major drivers of change in the LIS marketplace. “Neither of these two trends will surprise any pathologist or lab manager,” said Hakim. “However, these are the two trends having the most impact on the LIS marketplace.

“First is reimbursement. For the last 15 years it has been going in the wrong direction,” he observed. “For health systems, hospitals, and the laboratories which serve them, this creates sustained pressure to wring out every possible efficiency.

Inadequate Supply Of Labor

“Second is the dwindling supply of laboratory technical labor, even as lab test utilization increases,” Hakim said. “It is widely-recognized that the average age of medical technologists in the work force continues to increase. At the same time, training programs are failing to feed an adequate supply of new medical technologists into the profession.

“Together, these two major forces have brought about a dramatic change in one dimension of hospital laboratory operations,” commented Hakim. “Around 1992-93, only about 10% of the nation’s hospital laboratories operated some type of laboratory testing outreach program in their community. By 2005, that number had increased to around 50%.”

“This is no coincidence,” he added. “I believe that hospital and health system administrators recognized the reality of their situation. Much of their inpatient volume is paid on a DRG or capitated rate. These rates, like overall reimbursement, are shrinking. At the same time there are steady increases each year in inpatient volumes and inpatient test utilization.

“Within their laboratory, administrators recognize that labor costs are increasing. But they also notice that the laboratory has unused testing capacity, particularly in the second and third shifts. At some point, the logic of a laboratory test outreach program becomes undeniable—and economically attractive,” he noted.

Hakim also believes that the same factors have pushed hospital laboratories to also explore automation as a way to achieve greater efficiency. “All the factors I’ve described contribute to the increased numbers of both hospital lab automation projects and lab outreach programs across the United States in recent years,” observed Hakim. “It is those two operational needs which now create a new checklist of LIS functionality for laboratories.

Lab Operations Issues

“Having described what I consider to be the most dominant market influences changing the way laboratories buy and use LIS products, I’d like to discuss some operational considerations,” offered Hakim. “When soft- ware modules within the laboratory do not talk to each other, lab information must be manually mapped into the LIS and data repository. A number of good studies have demonstrated that costs are increased by a factor of 30% when a laboratory must manually track the same specimen across all the information modules in the laboratory.

“Let me be more specific on this point,” he continued. “Typically a laboratory information system must handle anatomic pathology, clinical laboratory, blood bank, and microbiology. The emerging field of cytogenetics intensifies this problem because it must pull in data from many sources to complement the laboratory test data and provide a diagnosis. Laboratory automation and robotics introduce additional elements which need effective integration with the LIS.

External IT Demands

“The above issues are internal to the laboratory’s operations,” stated Hakim. “Externally, the lab outreach program creates its own set of unique problems. The laboratory must present a unified, integrated report to the physician, on a timely basis and with the flexibility to customize formats to meet the preferences of individual physicians.

“I should add another source of pressure on the performance of an LIS suite in today’s marketplace. Hospital laboratory outreach programs must compete against the national laboratories. But national lab companies enjoy significant economies of scale and offer physician-clients integrated IT solutions. Effectively, they set the competitive bar which the hospital outreach program must meet and exceed if it is to succeed,” commented Hakim.

“These are some of the major reasons why a laboratory currently shop- ping for information technology products has a different type of shopping list than in the early 1990s,” he stated. “In today’s environment, a critical success factor for cutting-edge laboratories is to have an information technology (IT) infrastructure which can effectively support every need within the laboratory.

“Some examples are ordering rules, which today can number in the thousands. Many legacy LIS installations cannot support this function,” explained Hakim. “Another is the growing interest by many laboratories to implement auto-verification.

“At Elmhurst Memorial Hospital in Elmhurst, Illinois, a dual initiative to implement auto-verification and pre-analytical automation reduced the number of FTEs needed in these functions by 14.5, allowing the lab to reassign these med techs to higher-value responsibilities within the lab. Total savings of $3 million per year were generated from these two projects,” noted Hakim. “This illustrates how effective deployment of new information technology can generate substantial benefits for the laboratory.

Molecular Diagnostics Creates New Demands For LIS Capabilities

WHEN HOSPITAL LABORATORIES decide to launch a molecular diagnostic testing program, they generally find their existing LIS (laboratory information system) is inadequate to support molecular testing.

“There are essential differences between a cytogenetic/molecular laboratory and a traditional clinical laboratory,” observed Gilbert Hakim, CEO of SCC Soft Computer (SCC). “A molecular IT (information technology) system must do more than simply collect laboratory test data when the test cycle is completed.

“Molecular testing has stringent testing protocols that must be precisely followed,” he explained. “Thus, the molecular IT system must actually track the individual specimen through each step of the test protocol and guide that specimen across each instrument used in the test protocol.

“Effectively, the molecular IT system is performing a ‘chain of command’ function that is missing from the traditional LIS,” Hakim observed. “Additionally, molecular testing has the potential to increase dramatically the volume of data which must be captured, stored, and evaluated. The IT system must accommodate this need.

“Because genetics technology is evolving so rapidly, any viable molecular IT technology must allow the software system to evolve in tandem with the testing technology it manages,” Hakim said. “Our product has a feature called ‘Agile Programming.’ It allows the flow of code to be changed by the laboratory end user. It also allows the lab user to change test protocols in response to new IVD technology. By design, this product allows the laboratory user to adopt the system to its newest test technologies without upgrades.”

SCC hopes to seize the high ground as “first to market” with a lab information system designed specifically to handle molecular diagnostics testing. SCC believes it is the only IT vendor that currently has a live installation operating in a hospital’s genetics laboratory. It plans to introduce this product into the laboratory marketplace in coming months.

Artificial Intelligence

“Information technology that incorporates artificial intelligence (AI) has the potential to increase a laboratory’s capacity to handle specimens by 300%, without any increase in FTEs,” he explained. “AI can flag lab test results and take direct action. AI can detect errors often not visible within a laboratory operating with manual procedures. AI can competently handle the mix of specimens coming from inpatient and outreach sources. These specimens have unique needs for turnaround times and other variables.

“In contrast, inpatient-only LIS installations, particularly those dating from the early 1990s, often cannot support a laboratory outreach program,” continued Hakim. “Even if they do, they often offer only minimum flexibility.”

Throughout this interview, Hakim has provided lab administrators and pathologists with valuable insights about how and why the marketplace for information technology in the laboratory is changing. His work with laboratory clients throughout the country has given him a unique perspective. It’s allowed him to observe how laboratories are responding to trends like declining reimbursement, inadequate numbers of med techs, and the need to assertively pursue cost reductions and economies of scale.

Hakim links the growth of hospital-based laboratory outreach programs and pre-analytical automation during the past ten years to these trends. THE DARK REPORT observes that this aptly confirms that laboratories are responding to market forces. For example, despite the extensive efforts by vendors to introduce total laboratory automation (TLA) beginning in the mid-1990s, laboratories have naturally gravitated toward the use of automation in pre-analytical, the source of as much as 50% of a lab’s labor costs.

Parallel Trend in IT

Viewed from this perspective, a parallel trend is unfolding in how laboratories use information technology. As explained by Hakim, laboratories are under ever-growing pressure to provide enriched laboratory information services to referring physicians, payers, and patients. This situation pro- vides an opportunity for IT vendors with products that incorporate the latest, Internet-friendly, wireless-compatible software systems.

Lab managers and pathologists should use these insights to craft a business strategy of flexibility in their information technology. This will allow the laboratory to perform at a high level, while supporting the capability of deploying relevant new IT systems as they become available.

Hakim Shares Some Advice For LIS Upgrades

SCC SOFT COMPUTER’S CEO Gilbert Hakim shared some advice for laboratories looking to upgrade their LIS.

“When looking at different LIS products, it is important to understand what level of technology is used by the system,” he offered. “In the 1980s, that technology was MUMPS. In the early 1990s, the technology can be described as ‘thick client server.’ From about 1999-2000 forward, the technology is CORBA (Common Object Request Broker Architecture).

“CORBA is technology which allows the system to multi-task. It does this by incorporating middleware solutions to handle specific functions,” commented Hakim. “That is one of the great features of a CORBA-based LIS. Think of it like a structural framework. It allows the laboratory to plug middleware modules into the IT framework as the lab needs to add functionality or upgrade the performance of a specific module.

“At SCC, our term for this is ‘Dynamic Push Technology’ (DPT),” he said. “It is the type of information system which can competently integrate outreach specimens with the inpatient specimen flow. It can multi-task, receiving information even while evaluating and directing work flow through the laboratory.”

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