PART TWO OF TWO PARTS
CEO SUMMARY: In part one of this two-part series, we looked at how changes to healthcare in the state of Washington brought about the creation of PacLab Network Laboratories. In this concluding installment, we explore how PacLab is standardizing laboratory operations and information systems capabilities across the statewide net work. PacLab’s organizers demonstrate that cooperation between independent laboratories brings improved economic and employment benefits for employees at all sites. PacLab’s experience also demonstrates that regional laboratory networks can succeed, but only if member labs decide to cooperate and support the network’s joint service requirements.
MANY WOULD AGREE THAT THE Achilles heel of regional laboratory networks is their inability to get independent participants to cooperate with standardization efforts.
Such is not the case for PacLab Network Laboratories, a network of eight hospital laboratories and one independent commercial laboratory in the state of Washington. This regional laboratory network has achieved an extraordinary level of technical, operational, and information systems standardization.
These standardization efforts were supported by all the participating laboratories because PacLab’s leadership made a compelling case for standardization. Further, representatives from all nine laboratories participated in the design and execution of the various standardization initiatives.
“PacLab’s organizers recognized that our regional laboratory network could become a tough competitor only if we were able to seamlessly integrate our laboratories into a statewide provider system,” said Lawrence Killingsworth, Ph.D., Chief Science and Technology Officer for PacLab. “Given the fact that our constituent laboratories were nine independent organizations, this meant standardizing a variety of technical, operational, and informational capabilities across all laboratory sites.”
Killingsworth’s comments were made at last May’s Executive War College in New Orleans. He was describing how PacLab’s strategy of laboratory integration was necessary to develop competitive laboratory outreach services.
“During the time required to organize PacLab and bring it into existence, our participating labs began to agree that three things were necessary for PacLab to succeed as a regional laboratory network” explained Dr. Killingsworth. “First, we had to integrate laboratory operations so that physicians, patients, and HMOs in any region of the state would get identical laboratory services from any PacLab member.
“Second, it was important to implement improvements in the member laboratories to achieve maximum efficiencies and to avoid unnecessary duplication throughout the network,” he continued. “Third, laboratory testing is still about science. It was important to help each of our members stay at the leading edge of laboratory medicine.
“These three goals were supported by a shared value system,” noted Dr. Killingsworth. “Although the notion of shared values can get touchy-feely, it is essential that PacLab and its members have a common vision for their network. Establishing a shared vision was an important step that made our standardization efforts both easier and faster.”
Technical Operations Team
To address these goals, PacLab created a technical operations team, with Dr. Killingsworth as Chair and Gail Sorenson as Technical Director. To insure that all interests in the network were represented, each PacLab member provided laboratory supervisors to serve on the technical operations team.
PacLab’s goals for standardizing operations across all laboratory sites were ambitious. For that reason, PacLab proceeded step-by-step. “First, we surveyed all our members,” said Dr. Killingsworth. “Which tests did they offer? What methodologies and instruments were they using? As you can imagine, we found a fair amount of variability among our member laboratories.
“As this information was collected, we wanted to establish analytical correlation for all major analytes,” he added. “We quickly learned that existing test data sources, such as CAP surveys, were not sufficiently sensitive for our purposes.
“That led to a decision that PacLab would act as its own internal survey authority for this phase of standardization,” explained Dr. Killingsworth. “We sent a set of samples to all the laboratories for them to assay. When the data was returned, it was statistically evaluated, analyte by analyte. Our goal was to learn which analytes were within acceptable correlations and which were not.
“This information allowed us to create action plans for each hospital laboratory. As you can imagine, each lab had some analytes which correlated and some which did not. The action plan was to bring all our PacLab sites into acceptable comparability.”
This was a major undertaking, since PacLab included all high volume outpatient tests in the survey. Analyte correlations were done in the areas of chemistry, ligand assay, therapeutic drug monitoring, urine chemistry, urinalysis, hematology, and coagulation. “In fact, a statewide survey of this type is unprecedented,” added Dr. Killingsworth.
“Once we determined existing correlations for individual analytes across all the network’s laboratories, each laboratory implemented its action plan,” he said. “We then went back and reverified that all the lab sites were within acceptable comparability. This was done more than once and now periodic retesting occurs to all our facilities for major analytes. PacLab also has a standard protocol for corrective action when a particular analyte in a particular hospital lab falls out of compliance.”
PacLab’s Technical Standardization Areas
PacLab instituted an extensive standardization program involving all laboratory sites in the network. Few regional laboratory networks have accomplished the level of standardization which now exists at PacLab.
1. Analytical correlation on all major analytes.
2. Optimum and acceptable requirements for specimen collection, transport, and storage.
3. Normal (reference) ranges.
4. Reporting units
5. Fields reported for multi-parameter tests.
6. Interpretive comments.
7. Formulas for calculation of derived parameters.
8. Quality control procedures.
9. Proficiency testing programs.
10. Record-keeping protocols.
11. Introduction of new methods and equipment.
No New Instruments
One interesting aspect about this standardization project is that members were not required to get new instruments. “We were fortunate that a couple of major instrument manufacturers were used at most of our sites. But we still have variability of instrumentation within PacLab.
“In fact, we think it is important that any regional laboratory network, seeking to put out the same ‘brand’ of testing, do this type of study,” advised Dr. Killingsworth. “It is vital that your network establish the fact that all participating laboratories are putting out the same values for calcium, progesterone, and so forth, whether or not they use identical instrumentation.
“Another major effort was our reference range study,” he went on. “We wanted to establish a statewide PacLab reference range. We accomplished this by collecting specimens at each of the partner hospitals, based on NCCLS guidelines for normal range studies. An analysis was done on the pooled data from all member hospital laboratories.
“Because we had already done our correlation studies, we understood variability (or lack of variability) across our member sites,” said Dr. Killingsworth, “our statistical analysis was much easier. We did parametric and non-parametric statistical analysis of the data and developed tentative reference ranges.
“These were taken to the technical operations committee,” he stated. “We had a data base of 40,000 outpatients. When we superimposed our tentative reference ranges over this data base, it allowed us to make some adjustments.
“As a result of this effort, we were able to develop statewide reference ranges for all our major analytes,” noted Dr. Killingsworth. “I believe a study of this type is unprecedented and it is a source of pride for the laboratorians who worked on this project.”
PacLab next developed network- wide toxic ranges for therapeutic drugs. A subcommittee of PacLab’s microbiologists are currently at work on standardization of infectious disease testing. “They have collected information on our high volume outpatient micro tests,” noted Dr. Killingsworth. “They are well along the way to standardizing all of our protocols for high volume outpatient microbiology testing.”
Lab Information Systems
Information systems is another area receiving major emphasis at PacLab. Because of the huge acquisition and implementation costs required to move to a common information system platform, PacLab chose another approach.
“The basis of our data network is an interface engine and a specimen routing computer,” said Dr. Killingsworth. “Our information systems partner is Sunquest. They worked closely with PacLab’s members to develop our IS capabilities.
“We wanted the interface engine to allow computers at the member hospitals to talk with each other and with the computer at Pathology Associates Medical Laboratory (PAML),” he continued. “PAML is the network’s reference laboratory. The interface engine uses an HL-7 client protocol and TCP/IP connections between laboratory sites.”
Achieving interconnectivity through the interface engine was the first objec- tive in PacLab’s IS strategy. “Phase one allowed us to offer client services and test reporting in a consistent manner at all member laboratories,” explained Dr. Killingsworth. “The next phase involves stacking additional components into our information system capability. This includes a master
patient index and a laboratory data server for operational storage of data.
“As these pieces are put into place, PacLab has the capability to mine laboratory data and produce utilization studies and outcomes information that has value to clinicians and managed care companies,” he added. “Within Washington state, it keeps PacLab at the forefront as a state-wide laboratory resource. Also, because we have access to hospital inpatient test data which is correlated across the system, we believe we have a competitive advantage on commercial lab competitors in our market.”
Specimen Tracking System
“Our specimen tracking computer is called the SMART System,” Dr. Killingsworth said. “It stands for Specimen Management, Routing And Tracking. It is the engine which drives our regional laboratory network. SMART routes specimens throughout the enterprise within each laboratory. It tracks the path of the specimen, triggers downloads for the analytical instruments, generates site-specific bar code for specimens, provides courier lists, and gives us transit time information for samples within the system.
“SMART is also capable of routing specimens around a downed instrument and sending them forward to another member facility for testing,” he added. “It is quite sophisticated and a valuable tool for PacLab. It gives us a high degree of control over specimens, even though independent member laboratories are performing the testing. It shows how a regional laboratory network can function while maintaining the fundamental autonomy of individual member laboratories.”
Since most regional laboratory networks cannot move past organizational talks, why has PacLab accomplished so much operational standardization among its nine affiliated laboratory organizations? “Don’t think this was easy and automatic,” responded Dr. Killingsworth. “We have worked through a number of difficult issues. But the critical factor is trust.
“There must be trust by all partners within the network. And trust is tightly linked to control. If a network lab does not trust its partners, it will not cede the network control,” explained Dr. Killingsworth. “In the case of PacLab, the critical success factor was trust by the highest decision makers at each partner hospital. From that trust came acceptance of PacLab’s need to control and direct certain aspects of technical and service operations at each member laboratory.
“Complexity plays a part in this,” he said. “Laboratory medicine is itself a complex field. A laboratory network is even more complex. It requires resources and management talent to pull the network concept together and make it work in the real world.”
In the first installment of this two-part series on PacLab Network Laboratories, THE DARK REPORT explored the reasons why nine independent laboratory organizations came together and formed this network.
New Lab Competitor
As a new competitor in the marketplace, PacLab has increased its member’s share of the market. It has generated a healthy increase in outreach specimens to its member laboratories. At the same time, PacLab is enabling its member laboratories to sustain a multi-year decrease in average cost per test.
These are worthy goals. But the importance of PacLab’s success at correlating all high volume analytes across all laboratory sites should not be underestimated either. By establishing statewide reference ranges and developing an integrated laboratory information system resource, PacLab is maintaining a competitive position as a first-rank laboratory services provider.
This means that PacLab should be a tough competitor in Washington for outreach lab testing. It also means that PacLab is well positioned as an integrated clinical resource that links hospital inpatient testing and physicians office testing.
Because clinical integration is definitely under way, PacLab’s members are establishing themselves as a relevant provider of laboratory testing for both integrated delivery systems and managed care provider panels.
PacLab’s successes should encourage other regional laboratory networks toward further operational and technical integration. PacLab demonstrates that cooperation among network laboratories can bring increased benefits to all members of a regional lab network.