CEO SUMMARY: It is predicted that use of digital pathology will create new care models in the profession of anatomic pathology. An early example of this trend can be found in Bellingham, Washington. Here, the 10 pathologists of Northwest Pathology are using a digital pathology system to provide frozen section and surgical pathology services to a rural hospital located more than 600 miles away in Alaska. This arrangement gets high marks from the hospital, as well as its physicians and patients.
IT’S A BRAVE NEW WORLD IN PATHOLOGY when pathologists working in Washington can remotely provide the full range of surgical pathology services to a rural hospital in Alaska. Credit digital pathology as the technology which makes this long-distance arrangement successful.
For more than two years, Northwest Pathology in Bellingham, Washington, has been the pathology service provider to rural Ketchikan General Hospital in Ketchikan, Alaska. The use of digital pathology to support this unusual clinical relationship has been given wide coverage in local and national news outlets.
Pathologists in Washington are using a sophisticated digital pathology system to remotely provide a full range of surgical pathology services to Ketchikan General. Both parties to the arrangement say it has been successful at making clinical care available to patients in this rural area.
But there is more to this story than the simple use of digital pathology to provide surgical pathology services across state lines. The 10 pathologists at Northwest Pathology have a sophisticated business understanding of the market. They are willing to pioneer the use of digital pathology to support an innovative strategy to position the group for long term success in the competitive marketplace.
Last May, at the Executive War College on Laboratory and Pathology Management, Berle Stratton, M.D., FCAP, a cytopathologist with Northwest Pathology, laid out the group’s strategy and details about using digital pathology to provide pathology services across state lines.
Discussions for One Year
“In recent years, our group has provided onsite coverage at 49-bed Ketchikan General Hospital,” he said. “Once or twice each month we would send a pathologist there. Pathologists in our group would take turns rotating up to Ketchikan.
“Typically, the pathologist’s trip to Ketchikan would consume two days that week,” explained Stratton. “Although Northwest Pathology was eager and capably provided on-site service, there were challenges to supporting this relationship— both in the travel to and from Ketchikan, as well as the need for the Bellingham office to cover the work of the pathologist who was out of the office. Additionally, Ketchikan General Hospital was paying the travel expenses.”
To address these challenges, Stratton said that his pathology group spent more than a year looking at different service models they could use to deliver top-flight anatomic pathology services to the hospital in Ketchikan.
Digital Pathology Solution
“Digital pathology quickly emerged as a promising solution,” noted Stratton. “It was vigorously studied and debated within our pathology group. We quickly recognized that the test volumes from intraoperative consults originating from Ketchikan Hospital were not enough to fully support the economics of using digital pathology.
“On the other hand, our pathologists recognized how our group is positioned to serve many of the communities in Alaska and the Pacific Northwest by using digital scanning and digital pathology systems,” he continued. “We had already eliminated lots of paper within our lab by our use of computers and our LIS (laboratory information system). So we felt we had the foundation of an information technology platform already in place. Thus, moving to digital pathology would simply be an extension of what we already do.
“We decided to take the plunge and lease a digital pathology system from Aperio Technologies, Inc.,” stated Stratton. “Our monthly cost is in the range of $3,500 per month and the specimen volume generated from Ketchikan General Hospital does not fully cover this cost.”
However, this forward-looking pathology group was willing to make the investment to provide a higher level of service to this rural hospital while managing physician time more effectively. “Northwest Pathology views its contract with Ketchikan General Hospital as strategically important,” noted Stratton. “We are also considered other business relationships that could leverage our abilities with digital pathology and could allow us to serve new clients in communities.
“For our group, being able to offer telepathology is an important marketing tool to have in our quiver,” he explained. “Although Northwest Pathology already served the Ketchikan community, we now provide a value-added service of telepathology 40 hours per week. To further enhance our service to a valued client, we are willing to fund something that will not pay for itself. We view it as the cost of doing business.
“But there is more to this analysis than simply cost-versus-revenue,” commented Stratton. “Telepathology gives us a way to approach a potential new client that is a critical access hospital or a smaller client that is not a critical access hospital.
“The geographical location of these potential hospital clients could be anywhere,” observed Stratton. “They could be in Alaska, in Nebraska, or in Maine. It doesn’t matter. In this way, digital pathology positions us with an effective service edge—both now and for the future.”
The working relationship between Ketchikan and Bellingham is straightforward. It shows how digital pathology is already contributing to new business models in anatomic pathology that can benefit community hospital-based pathology groups.
Frozen Sections or Cytology
“At its own expense, Northwest Pathology installed an Aperio scanner at the hospital in Ketchikan,” observed Stratton. “For intraoperative frozen sections or cytology preparations, a histotechnologist uses this scanner to make whole slide digital images.
“Next, the technologist uses a secure Internet connection to make the images available to the pathologists at Northwest Pathology, in Bellingham, which is 600 miles to the south of Ketchikan, in Washington State,” he noted. “This gives our pathologists immediate access to the images. They can convey a timely and accurate diagnosis to the surgeon at the remote hospital.
“The strategic aspects of this operation are important to us because we do all of the anatomic pathology for Ketchikan General Hospital,” Stratton explained. “The number of intraoperative consults from Ketchikan General has approximately doubled in the year since we introduced the digital pathology-based service.
“This shows how the hospital has the opportunity to retain or enhance those procedures for the physicians involved and the administration at the hospital,” he said. “If we didn’t provide this service, those surgical patients may have been sent to another facility. That’s a huge benefit for that hospital.
“It’s also value-added in the community,” continued Stratton. “Patients who might have needed to travel for certain medical procedures can now stay in Ketchikan and be close to home and family. Telepathology represents an incremental improvement to quality and patient satisfaction. It’s one way our pathology group supports patient-centered care.
“Now, even though our consultation volume has doubled, these are small numbers for frozen sections and cytology,” Stratton continued. “But for the hospital, small numbers of additional surgeries and a small number of more complex surgeries can be significant because Ketchikan General is a critical access hospital.
“Critical access hospitals are reimbursed on a cost basis, and rates for these hospitals are higher than the DRG (diagnosis-related group) rates that most hospitals receive,” explained Stratton. “Therefore, retaining or enhancing those surgeries is significant for Ketchikan General.
Low Volume, High Quality
“As mentioned, the volume is not great,” he said. “But we offer fast turnaround time because the scanning and transmission of the digital images adds only five or six minutes to the time it would take to view those images locally.
“Physicians at the hospital are most supportive of the digital pathology arrangement,” he said. “For one thing, it increases the number of hours per week available for them to schedule procedures with anticipated intraoperative consultation. It also allows pathologist intervention for procedures when the need for intraoperative consultation had not been anticipated. This is patient-centered medicine, and it also boosts their productivity.
“Several marketing aspects of this digital pathology arrangement are significant for us,” commented Stratton. “One, the hospital is pleased that we have installed this equipment in their hospital. Two, the hospital and medical staff are happy as they retain patients who remain in the community for their care.
“Three, the patients are pleased with it as well,” he said. “They recognize that it enables them to get treatment in their own local hospital and avoid lengthy travel to another hospital in a bigger community.”
It didn’t take long for the word about the digital pathology arrangement to make news headlines. “As soon as we implemented this system in Ketchikan, there were newspaper articles published throughout Southeast Alaska,” recalled Stratton. “The work that we do for the Ketchikan General Hospital created a lot of buzz for Ketchikan and it created quite a bit of coverage about how an urban pathology group could work with rural hospitals in southeast Alaska to enhance patient care.
“Without having us to do this work, the hospital could lose those patients to another facility in another town in Alaska or to another facility in Washington State.” he added. “That’s significant for them.
“Because each of us traveled to Ketchikan regularly, we are all licensed to practice in Alaska, as required by the state, to remotely interpret specimens originating from Alaskan patients,” he noted. “We are also fully credentialed and privileged to practice at Ketchikan General, as required by the hospital medical staff bylaws. It is important to note that licensure requirements for remote pathology interpretation vary by state.
“Although quality of care is paramount to us, our decision to engage digital pathology to support this client relationship was also justified on strategic and customer-service grounds,” Stratton commented. “First, we enhance service to a valued client in an important rural community. Second, we have a strong footprint in Southeast Alaska. Further, by working this way, we can support the strategic interests of the hospital. In summary, telepathology represents an incremental improvement in our stewardship and service rendered to Ketchikan and Southeast Alaska.”
Other community hospital-based pathology groups should study the successful use of digital pathology by Northwest Pathology. First-mover and early-adopter pathologists will likely gain competitive advantage when they deploy digital pathology in intelligent ways, such as Northwest Pathology has done to support Ketchikan General Hospital.
Digital Pathology Helps Pathology Group Improve Clinical Services Across State Lines
DIGITAL PATHOLOGY WAS AN EFFECTIVE WAY to improve service with its rural hospital client in Alaska, even if, in the short term, the economics don’t fully balance out for the pathologists at Northwest Pathology, located in Bellingham, Washington.
“From the start, we recognized that reimbursement from the small number of frozen sections generated by a 49-bed rural hospital in Alaska would not fully cover the monthly cost of leasing a digital scanner for that site,” observed Berle Stratton, M.D., a cytopathologist with Northwest Pathology. “But we view this initiative as part of our strategic relationship with the hospital. This is where our quality stewardship comes into play.
“As a pathology group, we believe it is important to improve quality and service in a way that distinguishes our laboratory,” he said. “Another consideration was to raise our value to this community and improve the value we deliver to that hospital on a daily basis.
“For these reasons, this system promotes our strategic and quality interests even if the finances don’t quite pencil out on the intraoperative consultations that we do,” he observed. “If you compare only the revenue we get for intraoperative consults versus the cost of doing telepathology, we don’t recover the cost for that clinical service. But that is only part of the total relationship our pathology group has with the hospital.”
Stratton pointed out that the intraoperative consults (frozen sections) are the service anchor which supports the entire relationship Northwest Pathology maintains with the hospital. “For our client, Ketchikan General Hospital, intraoperative consults enabled by digital pathology is a value-added service that helps the hospital build patient volume and generate revenue. For us, our level and character of service distinguishes Northwest Pathology as a valued partner to critical access hospitals and other smaller enterprises.
“We continue to go to Ketchikan once a month to be a part of the medical staff meetings, for inspections, and to foster our relationship with the administration, the medical staff and the lab personnel,” noted Stratton. “However, before implementing digital pathology to support intraoperative consults, we often needed to go a second time in a month. Thus, use of digital pathology has eliminated those second trips. That is a direct economic benefit for the hospital, which pays for this travel, and our group, which must cover for the pathologist who is out of our office during the two days of travel.”