SALES OF LIS SYSTEMS SLOWED DURING 1999 due to concerns about Y2K problems. But the real story in the LIS arena was the impending arrival of technology that takes advantage of the Internet and the Web.
Sales champs in THE DARK REPORT’s annual ranking of the Top Ten LIS Vendors for 1999 are Meditech and Fletcher Flora, in the categories of LIS sales to hospitals and non-hospitals respectively. In the category of new sales of LIS to hospitals, Meditech placed 100 systems in 1999. Second were Fletcher Flora and McKessonHBOC, each placing 87 and 78 systems, respectively.
Sales in the non-hospital category are primarily to independent clinical laboratories. First was Fletcher Flora’s 130 systems, followed by Schuyler House (66 systems), and Lab Soft (43 systems).
In total installed systems, Meditech dominates the hospital category. It has 1,132 LIS systems, representing more than 20% of the nation’s hospitals. Sunquest and Cerner followed with 981 and 675, respectively. Among non-hospital systems, it is Fletcher Flora, Schuyler House, and Hex Information Systems with 282, 216, and 121, respectively.
The number of non-hospital installations declined from 2,231 in 1998 to 1,699 in 1999. This demonstrates that consolidation and financial woes continue to shrink the number of independent laboratory organizations in the United States.
The declining number of LIS vendors is reflected in the 1999 numbers. That trend may continue as new information management technology continues to roil the healthcare marketplace.
This new information technology is hitting hospitals and clinical laboratories at an ever-accelerating pace. “Right now, the two hot trends in laboratory information systems are ASP and wireless personal digital assistants (PDA) that use browsers to access to lab results and order tests,” declared Bruce A. Friedman, M.D., Director of Ancillary Information Systems and Professor of Pathology at the University of Michigan Medical Center (UMMC). “ASP stands for application service provider. This is a software business model where the software vendor maintains the software on its own server and ‘rents’ the applications to its hospital customers who access them remotely.
“Basically, these technologies don’t require any infrastructure, such as a local large host computer or a computer network. They will allow laboratories to leapfrog the existing technology base,” he added. “Here’s an example. After speaking at an AACC meeting recently, a laboratorian from Argentina approached me. She helped develop a network of laboratories in Argentina that would like to derive benefit from this association.
“The ASP solution in this geographic context could potentially mean that the LIS/ASP vendor can install a single serv-to host all of the labs in Argentina. Then only a Web browser-equipped PC would be needed for any lab in the organizational network to access the master LIS software and become fully integrated.
“Wireless, hand-held devices are hitting the market just as quickly as ASP,” continued Dr. Friedman. “Right now, Detroit Medical Center (DMC) is prototyping the introduction of Palm computers. DMC’s information system vendor is exclusively Cerner. DMC’s first use of the palm units will be read-only, allowing the physician to download clinical data into his palm from any location within range of the wireless network.
“Another exciting application of this new information system technology is happening at Sunquest,” noted Dr. Friedman. “Their Clinical Event Manager (CEM) has a device that sits atop the computer hub.
Doctors Customize Rules
“CEM has rules that can be designed and modified by the physician-customers themselves,” he continued. “If a doctor wants only his stat results, and wants them at a certain clinic location on Wednesdays, CEM will push these results to him at that site via email, alpha pager, Palm PDAs with pager, or printer. Sunquest has already installed this CEM feature in nine sites. It has contracts to proceed for another nine.”
Dr. Friedman is probably the nation’s most knowledgeable expert on laboratory information system technology. He believes the Web-enabled age will hit the laboratory industry at light speed. “The low cost to implement and use a web-enabled lab information system will be the incentive that causes laboratories to rapidly switch to this technology,” predicted Dr. Friedman.
ASP Revenues To Boom
“In fact, the CEO of one major LIS company told me recently that, by 2002, 50% of his company’s sales will come from ASP services, not the traditional fat client model that we know today,” added Dr. Friedman. “This is a good indication of how swiftly this technology changeover will occur.”
Dr. Friedman is bringing innovations to his clinical laboratory. “Right now, we are working on a pilot project. We want to implement an application known as ‘web clipping’,” he said.
“At UMMC, we are installing 3-Com software on top of our Cerner database. This software will simply reformat existing lab data and download it to Palm VII wireless devices carried by our doctors. It takes our existing laboratory test results data and allows it to be accessed, on demand, by wireless units. We expect this feature to be running as a prototype in the next 60 days.”
THE DARK REPORT believes the laboratory industry is already in the early stages of an information management revolution. This revolution will run concurrent with the coming explosion in genomics-based assays and the ongoing miniaturization of test instruments.
For this reason, it is imperative that every clinical laboratory and pathology group practice immediately develop a business strategy for the Internet. All labs should seize this once-in-a-lifetime opportunity to be first to enhance the services they offer physicians, patients, and payers. Such proactive efforts can reward the enterprising lab organization with competitive advantage, increased market share, and greater profits