CEO SUMMARY: This exclusive intelligence briefing predicts how specific new technologies may drive changes in the laboratory-testing marketplace during the next five years. The key message is that change is expected to be incremental, not disruptive—given the technology known to be in development at this time. But the more provocative insight relates to how even incremental change will create a labor challenge within the nation’s laboratories. The basis of laboratory medicine is shifting to new areas of science, requiring existing lab staff to acquire new training and experience.
CORRECTLY ANTICIPATING CHANGES in the test menu mix during the coming years is a key element of strategic planning for clinical labs.
To help laboratory directors and pathologists in this area of strategic planning, THE DARK REPORT was given per- mission to share the contents of an exclusive briefing on how new laboratory test technologies are expected to enter clinical use over the next few years.
At a strategic planning session conducted by the Board of Directors for the
American Society of Clinical Pathology (ASCP) during its annual meeting in New Orleans last month, Tim Orr provided a concise overview of the existing and projected market trends for different areas of diagnostic testing. Orr is the Vice President, U.S. Marketing for Ortho-Clinical Diagnostics (OCD), a Johnson & Johnson company.
“In looking at how diagnostic technology will affect clinical laboratories during the next decade, I have six fundamental points,” stated Orr to the ASCP board. “First, in mature areas of diagnostics, automation will be the primary driver of change. Second, clinical chemistry and immunoassay testing will be increasingly integrated onto single instrument systems.
“Third, expect molecular diagnostics to go mainstream, as technology becomes easier to use and test methods become more automated,” he continued. “Fourth, everything we see at OCD points to a slow (versus rapid or exponential) emergence of new, high-value tests during the next five years. Fifth, new diagnostic technologies will emerge at an equally steady pace during that same period.
“Sixth, in coming years, clinical laboratories will place greater emphasis on improving operational processes,” offered Orr. “As it relates to higher test quality, improved productivity, labor optimization, and improved service levels, operational excellence will become a distinguishing characteristic of the nation’s best-run labs.”
In reviewing different areas of diagnostic testing, Orr noted that, to date, home testing in the lab market has had little impact. Outside of glucose and pregnancy testing, the sales volume of home diagnostic test kits remains small. In a similar way, direct access testing (DAT) by consumers has yet to become a significant part of the overall market for laboratory testing. Laboratories offering DAT consider it a small part of today’s business, although it is expected that future consumer demand will increase.
Growth in POCT
Point of care testing (POCT) will continue to grow in importance relative to core lab testing. “In 1998, core lab testing and POCT testing was about $15 billion and $4 billion, respectively, as measured by manufacturers’ sales,” stated Orr. “Core lab testing is expected to grow about 2% per year, while POCT testing is growing at 12% to 16% per year. It is projected that, by 2008, core lab testing will increase modestly, to about $18 billion, while POCT will total $14 billion.
“These projections demonstrate that laboratories should plan to see more POC testing within the clinical communities they serve,” he said. “The numbers above demonstrate that the core lab will neither shrink in volume nor importance. Rather, the added value of doing testing at the point of patient care will encourage more testing outside the core laboratory.”
More specifically, Orr notes that ongoing miniaturization of diagnostic test devices will play a significant role in expanding the ability of POCT. Specific areas of ongoing technology development to watch are: micro-array, micro-fluidics (which support “lab on a chip” efforts), MEMS (micro-electrical mechanical systems), and wireless connectivity.
New diagnostic markers and molecular testing was addressed. “Without question, knowledge from the human genome is already generating new diagnostic tests,” noted Orr. “The expectation is that labs will see new markers emerge for diagnosis of cancer, diabetes, heart disease, Alzheimer’s, and CNS disorders. Alliances between lab test developers and pharma companies will lead to specific diagnostic tests married to specific therapeutic drugs.
Greater Role For Informatics
“What will surprise most laboratory directors and pathologists, however, is the importance of informatics in diagnostics,” predicted Orr. “This is happening on two levels. First, there are active and highly-visible efforts to eliminate paper records in healthcare. The goal is to capture clinical information digitally and make it feasible to move clinical data seamlessly among all types of providers and payers. Because laboratory data is the heart of the patient record, the informatics capabilities of individual clinical laboratories will become very important. Laboratories will find themselves handling more information and handling it in a different way than in the past.
“Equally important will be the lab’s ability to capture the high volumes of data coming from those new assays which are based on genetic and proteomic science,” he explained. “For example, new instrument systems will need to simultaneously measure tens, even hundreds of proteins for a single laboratory diagnosis. The Luminex system and Ciphergen’s protein chip are early steps in this direction.”
Orr then made a particularly interesting observation. “Mass spectrometry is an emerging area for clinical diagnostics. It is catching on for selected diagnostic applications. The fascinating aspect of mass spectrometry is that it is reagentless technology. It promises new capabilities in sensitivity and specificity.
“Having looked at the wide range of technology influences on the laboratory testing menu of the future, it is appropriate to step back and comment on the big picture,” commented Orr. “The evidence today indicates the diagnostic marketplace is moving forward in small steps. It is appropriate to view lab testing as moving forward by incremental improvements to existing technologies and methodologies.
Impact of MT Shortage On Lab Operations
WITH FEWER MEDICAL TECHNOLOGISTS (MT) available, laboratories face serious strategic challenges, which new diagnostic technologies may intensify.
“There is widespread recognition that the supply of trained technical labor is already inadequate,” stated Tim Orr, Vice President, U.S. Marketing, Ortho-Clinical Diagnostics. “That is why automation is increasingly viewed as a way to substitute for scarce labor. But molecular diagnostics and the need to generate and manage greater quantities of information will add to the problem.
“Today, the technical staff in most laboratories have neither experience nor training in molecular diagnostics. Moreover, most educational programs have yet to incorporate much molecular science into the curriculum,” said Orr. “Similarly, there will be a growing need for new skill sets to interpret genomic and proteomic diagnostics.”
(From a recent ASCP survey)
•10.9% in histo-technologist staff
•9.1% in histo-technician staff
•9.0% in phlebotomist staff
REFERENCE LABS & PRIVATE CLINICS:
•10.7% in cyto-technologist staff
•10.6% in phlebotomist staff
•10.0% in medical laboratory technician staff
•13.8% in medical laboratory technician staff
•11.4% in medical technologist supervisors
“Obviously the potential exists for some type of disruptive technology to emerge—a technology that would rapidly change both lab operations and clinical practices. However, no clear candidate is visible now that could cause such disruption,” said Orr.
“In fact, the past ten years provide us excellent insight into the current lab testing marketplace,” he explained. “During this time period, only about five to ten ‘new’ diagnostic tests have achieved wide-ranging success, as judged in both clinical terms and significant new volumes of specimens. Examples would include BNP, Triponin, PSA, HCV, and HIV.
Primary Challenge Ahead
“From my perspective, new diagnostic test technology will not be the primary challenge facing laboratory directors and pathologists during the next few years. It will be staffing issues,” declared Orr.
“First, does each laboratory have adequate numbers of technical staff to do the work?” he asked. “Second, and more importantly, does this staff have the specific scientific training and practical laboratory experience required to properly set up and perform diagnostic tests which utilize technologies that did not exist when most medical technologists were in school?
“If most improvements in diagnostic technology will be incremental, then laboratories have the time to pre- pare for new assays and new technologies,” he continued. “At the same time, these incremental improvements will add complexity into all facets of laboratory operations. That is one reason why I believe that the training needs for technical staff should be a strategic priority for every laboratory.”
THE DARK REPORT observes that Orr’s insights drive home a point that is often overlooked when laboratories undertake strategic planning exercises. The challenge is not new test technology which is expensive and complex. Rather, the challenge is whether the laboratory has incrementally advanced the technical skills of its staff, allowing it to capably deploy new test technologies as they are ready for “prime time.”
The business intelligence offered by Orr represents an analysis of the diagnostic marketplace made by one of the world’s leading diagnostic manufacturers. It is the type of intelligence not often shared with the general laboratory public. THE DARK REPORT would like to acknowledge the willingness of both the American Society for Clinical Pathology and Ortho- Clinical Diagnostics to share these insights with our clients.