Reinventing the lab sector
In our current environment, the Diagnostics industry is faced with increasing challenges that have an impact on how we operate (business models) and how we generate profit. Western European markets have seen caps on test volumes or decreases in reimbursement tariffs; Emerging Markets have partially enjoyed an increase in wealth but struggled in defining sustainable funding systems, many of which remain based on out-of-pocket payments.
“We must reinvent the way we add value to the healthcare system” says Jeremy Schubert, DVP Abbott Diagnostics, Latin American and Canada. “I don’t think people understand that although in-vitro diagnostics makes-up only 3%-5% of hospital costs it impacts 70% of all clinical decisions (1). Choosing the right test panel at the right moment can simultaneously and positively impact patient outcomes and overall cost. For example, Schubert quotes a recent CDC survey of primary care physicians suggesting that physicians often face uncertainty in ordering and interpreting clinical laboratory test (2). “However, we as lab professionals need to understand that just because testing is so important to the clinical process,that does not mean we are immune from commoditization or marginalization within the healthcare system”.
What can commercial laboratory providers and other industry stakeholders do to generate value towards patient, providers and payers?” We see a lot of labs asking for solutions or strategic roadmaps that will help them face test volume increases and technology shifts while increasing their flexibility to thrive over the long run”. Sometimes, lab management and their customer base area focused on an old model of Service Level Delivery (e.g. turn-around time) eliminating a variety of possibilities for the lab to create new and more meaningful downstream value. A laboratory that meets the so-called “Turn-around time” for 95% of its tests, might do great on the surface but may waste much of its working capital, manpower, or potential to create new value for the over-all system”.
Data management, clinical decision-making and operational dashboard tools are enablers that a number of players in diagnostics provide. However, these enablers are necessary yet not sufficient to enable labs to optimize operations in an adaptive way or create much needed new value that can impact downstream patient outcomes and cost of care. “Professional Services are a real gap in diagnostic. Abbott is heavily investing in a new model incorporating external assessment and input with internal interpretation and execution” says Schubert; “The combination of the right enablers, with external assessment and internal execution can have a massive impact on the labs ability to be a value creation engine and therefore become more relevant over the long-term”
More on this topic during the HBI 2017 conference…
(1) Source: Forsman, Rodney W. “Why is the laboratory an afterthought for managed care organisations?” Clinical Chemistry. 42(5), 1996. 813-816.
(2) Source: http://www.jabfm.org/content/27/2/268.full.pdf
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
