Up until three years ago, Matthew J. Palazola, director of laboratory services for White Plains (NY) Hospital Center, thought that ordering and results reporting for his lab’s outreach program worked perfectly well.
“When the physician wanted a test, they drew a specimen, sent it over, we threw it on the analyzers, and produced a hard-copy result, which we faxed to the client, or called in if it was a critical result.”
But in 2006, he paid a marketing call on a 15-cardiologist practice that his lab hoped to take on as a client. “Basically, the chief physician said, ‘We’d like to do business with your lab.’ But his premium question was not ‘What’s your turnaround time?’ Or ‘What instruments are you using?’ It was: ‘How are you going to get the results into my electronic medical record?’”
“We had already purchased a product called CareEvolve but we were still in the early stages with it. I knew at that moment if we showed any hesitation or said we have to look into that, they would have said thanks but no thanks. So I said we have a system that is similar to our competitors’ that can get results into the EMR.”
He was sticking his neck out at that point, Palazola says, but as it turned out, he was right. And he credits the laboratory's move to CareEvolve for helping to bring about the stunning growth of White Plains’ outreach program: from $25 million billed in 2007 to $46 million in 2008.
Information technology has not just been instrumental; it’s been essential to their success. “If you go to a physician and say we’ll send results on paper, they will look at you like you have two heads, because they’ve done away with paper. If you’re not able to integrate with the practice management system, they’re not going to give you the business.”
Not every lab is likely to show results like White Plains. But even in uncertain economic times, an outreach program’s commitment to excellent IT could mean the difference between taking fire, or flaming out.
Kathleen Murphy, PhD, president of Chi Solutions in Ann Arbor, Mich., stresses the importance of laboratories’ enabling a competitive IT connectivity product before they enter the outreach market. “We have always recommended that, and these days you just can’t be in business without it. Or else what happens is the big national labs take all the good business from all the multiple-doctor groups, and outreach programs get stuck with the small doctor offices that are high maintenance, low profitability.” Rural area hospitals might be able to get away without sophisticated IT for a while, but if they want to expand, they will have to move in that direction.
In Chi Solutions’ Seventh Comprehensive National Lab Outreach Survey, released in 2008, volumes and revenues of outreach programs nationwide are showing healthy growth, and the majority of programs, 60 percent to 70 percent, say they are holding their ground in market share against the national labs and key local competitors.
But as in earlier years, lack of IT connectivity to clients was listed as the major competitive problem for laboratory outreach programs, cited by 22 percent of respondents. Nearly 59 percent still cite ineffective IS connectivity to physician offices as a primary outreach program weakness, though 33.7 percent now call it a primary strength of their program.
In the survey’s ranking of competitive success strategies for outreach labs, rapid turnaround time continues to be the leading factor, followed by excellent customer service and local reputation. But eight percent of survey respondents mentioned the next factor: presence of a consolidated EMR.
Other sources confirm the trend. The percentage of labs with a Web-connectivity system in place to send test results to their physician clients has doubled over the past five years, from 37 percent in 2004 to 74 percent in 2009, according to Laboratory Economics’ Third Annual Web-Connectivity and EMR Survey.
“We came in at a time when a lot of the older generation of physicians were not computer literate,” says Palazola. “But now you’re seeing a trend where your new medical students are coming in who, as children, had a nipple in one hand and some kind of electronic device in the other hand. So the comfort level is increasing as we go.”
“The fact that we were able to respond on the IT side was a critical component. You can’t say there’s only one element responsible for our tremendous growth, but at the top of the list is IT and information for the big practices.”
Recently, the White Plains lab transitioned to the CareEvolve system, a suite of order-entry and results-reporting modules developed by BioReference Labs, which is based in New Jersey, not far from White Plains. “Our biggest competitor up here was Quest Diagnostics, and they had an information system called Care360, which they put in the physicians’ office and it does ordering, printing requisitions—the whole nine yards. And we said whatever they’re doing is probably right, because for every one of our transactions they do 1,000.”
He estimates that Quest and LabCorp together have 70 percent of the local lab testing market. “So we’re a small player in the big picture, but yet outreach is a good revenue source for our hospital.”
With CareEvolve, the lab is able to give the physicians real-time results. “They can trend the results, plot them on a graph—it has all the bells and whistles some people are interested in.” But he found a wide range of IT capability among physician practice clients. “They went from a full-blown EMR system to practitioners who had nothing, so the big challenge was setting up our interfaces to meet their systems. There were many different setups: They might have GE’s Centricity EMR and want patient data to flow into that system, or they might use an Orchard LIS because a lot of them have their own labs for basic hematology, chemistries, and urinalysis.”
In some cases, the solution involved going from White Plains’ chemistry system through the lab’s Meditech computer, through a “cloverleaf” interface engine into the CareEvolve system, which acts as middleware and routes the data into the physician practice’s lab system. “So there were many different permutations of ways to get things done.”
Among his lab’s outreach clients now are about six different EMR systems, and it has made project management a challenging component of his job. “We had a practice that just went live two weeks ago and they use a product called eClinica. We’ve never interfaced with them before, but you’ll find the EMR companies or practice management companies don’t respond to me necessarily. I’m not their client; that’s Doctor X who owns the system. If I need to adjust the way the HL7 messages are sent”—the standard for electronic communication of health-related data—“I may need to manipulate the clinical system. But I can’t tell people that has to be done today, because they don’t work for me.”
“So you’re really coordinating the different players, the Meditech, the CareEvolve, the physician practice’s system, to make sure the end result is a timely product.” What works best, he says, is to have the physician call the EMR provider and say, “Look, we need your help to get this project together.”
Technical problems do crop up, he says. “When we test the data, generally our chemistries and hematology results seem to go pretty easily. But when you start to get to text-based results, your challenges start to increase because of the way the interface handles them. What you see on your side might look good. But by the time it gets over to the physician practice’s system and they look at the report, they might see data that’s truncated, or have to scroll through a lousy report.”
Only recently, a connection appeared to be going perfectly well, but patients with a suffix to their name (such as “III”) weren’t crossing the interface. “What I’ve been emphasizing with my people is that they have to test to the nth degree. Not just names like Mickey Mouse or Donald Duck, but examples you might have in real live situations.”
It’s also important to form alliances, to establish a rapport with the physician’s IT crew. “In the practice we just went live with, the IT guy had a death in the family and wasn’t around and no one else can do that work. They can be an asset and an ally for you, but if you tick them off or try to bully them, you might be putting yourself up against the wall.” Similarly, it’s essential to establish a good relationship with the office managers. “You may think the doctors run the show, but it’s not true,” he says. And what the doctors want is simple: “a smooth operation where the data is going to get into their system in the way they want it. And where the patients aren’t getting billed because we made a mistake in registering them, that can be a big source of irritation.”
Like White Plains’ program, the outreach program at Phoebe Putney Memorial Hospital, in Albany, Ga., a metropolitan area three hours southwest of Atlanta, has come a long way since it started in 1996. “We had all paper requisitions, with paper results printed in the lab and hand-distributed to our clients,” says Lisa Robinson, MT(ASCP), laboratory information systems manager. “The only IT functionality we really had was in the billing piece because we could discount test prices. At the very beginning we did not even have a fax server.”
“When the laboratory purchased a Forward Advantage Communications Director, it allowed us to autofax directly from our system, but that was still crude and labor-intensive because we had to manually kick off the batches into our lab. We would be in the lab and say, ‘Oh, it’s 12 o’clock: time for Physician A to get his report,’ and we’d fax his results at certain times of day based on physician preference.”
The “thick client” system called Doctor Chart that Phoebe implemented in 1998 was an upgrade, but it meant the software resided on each workstation. “If you had 10 outreach clients, you had to load Doctor Chart into each of the workstations at their offices, so anytime there was a problem it required remote-controlling their PC and looking at it. Doctor Chart and the LIS Phoebe had at the time, StarLab, did not interface; we had to hook those together with another third-party software.”
When Doctor Chart upgraded to a “thin client” mode, the application resided on one server. “That was a very important implementation because it allowed electronic order entry from the client office,” Robinson notes. It was a feature that let Phoebe Putney compete successfully with the national labs, and though it required a lot of maintenance at the laboratory, “It looked pretty to the end user because they could log on, place an order, and get results on the screen.” However, Phoebe still had to keep its fax machine, the tool still used by the laboratory’s low-volume clients.
When Phoebe installed McKesson’s Horizon Lab and Horizon Outreach products in 2006, clients liked the continuity of service; any patient who had ever registered in the hospital system was included in the database and did not have to be re-input as in previous conversions. Outreach clients can get instant access to lab results without having to call the lab. “Once the test is completed in the lab, they can just pull up the system, type in the patient’s name, and they will be able to view or print the result,” says Mary McClendon, MT (ASCP), lab information systems analyst.
“They can also track every test result, so if, for example, the patient is a diabetic and they’re ordering an A1c every six months, they can go back and look at a year’s worth of results or two years’ worth, and they can graph those results for that patient within their system.” Some of their physician clients keep track of patient data using handheld MercuryMD units.
McClendon is especially pleased with the system’s capability as a troubleshooting and learning tool for outreach clients as far as 46 miles away. “If there’s a new person to train in an outreach client’s office, they can give me a call, I can dial in, and I can see what they’re doing on their screen. I can move the mouse around on their desktop, and I can give them instructions.”
“Our lab is the first where McKesson implemented what’s called ‘Reverse ADT,’ with Star patient care and passport,” Robinson notes. “That was a huge efficiency gain for us. What Reverse ADT does is take patients registered in Horizon Lab outreach, and that registration actually flows back to our Star patient care system, the owner of all registrations. And that had not been done before. What usually occurs is the outreach client puts in an order and the registration doesn’t go anywhere. Now all test database changes we make in Horizon Lab flow into outreach, so Reverse ADT and the combination of Horizon Lab and Horizon Outreach really provide a seamless, efficient registration.”
Rice Memorial Hospital, a 130-bed facility in Willmar, Minn., about 90 miles west of Minneapolis, is considerably smaller and more remote than White Plains, but its outreach program faces many of the same IT issues.
The outreach program, launched in 1995, was conducted all on paper until about 2005. “We had been on a DOS system while the rest of the world progressed. We purchased from Orchard Software Corporation that year both the Harvest LIS and another piece of software called Copia, the Internet connection that allows a client to place an order and retrieve their report remotely,” says LaDonna Hebrink, LIS coordinator. When there were no more paper orders to enter manually and results were available at the point of approval, turnaround times improved.
“At little additional cost, the software also serves as an interface engine and allows us to connect to other systems within the hospital, such as pharmacy and the dialysis unit,” Hebrink says.
Rice will install the Orchard AP module next, says Jason Mayer, director of laboratory services, which will mean a single accessioning system running through Copia for all services offered to clients. The AP module will also consolidate billing, while linking to Mediware’s blood bank software called HCLL. That, he says, “should pretty much finalize our system in-house.”
The laboratory has an interface to the hospital billing system for inpatients, “but we do billing for our outreach clients completely differently,” says Hebrink. “Our hospital accounting package has a facility bill but it’s a single line item, whereas the clients really want to see an itemized bill or details such as the patient’s birthday. But right now the system is somewhat manual, so that’s one of the opportunities we have to automate, and we’re looking at a product to take that on. At this point it’s the financial outlay that’s the holdup.”
There are always technical issues with IS, Mayer says. “We are trying to put together an EMR interface with another client, and a lot of times we’re at the mercy of their EMR capabilities on what they can actually get to us. We try to make it as streamlined as we possibly can, so it’s frustrating that we still have to have ‘workarounds.’” A chronic issue for the outreach program, Hebrink reports, is the need for a unique identifier for patients. “It would be really nice if there were an identifier that stayed with the patient across all facilities. Right now the one we use is the one you’re not supposed to, the SSN.”
Whenever a laboratory is considering new IT, two key considerations should be kept in mind, Mayer believes: How will it help make us more efficient or automate something we’re doing manually, and how is it going to help our outreach clients? “They’re only going to use the technology if it’s easier than filling out a piece of paper, so we have to make sure they see the benefits, which is why we are working with our clients to get EMR interfaces.” Rice currently has four client EMR interfaces.
How is Rice preparing for an economic downturn? Mayer says, “As our smaller outreach clients get pressure from their administrators to save a buck, obviously we’ll have pressures on us to match the larger companies’ pricing to keep business. That’s where I think our biggest threat is coming from, so we need to continue marketing the customer service that sets us apart from our larger competitors.”
The environment is somewhat less competitive for Jefferson Regional Medical Center, a 400-bed facility in a suburban area south of Pittsburgh in the Monongahela Valley. That’s an area with about 50 percent Medicare patients and one of the highest per capita bed rates in the country, says Michael Berman, MD, vice director of the Department of Pathology. He estimates that Jefferson’s outreach program serves about 20 doctors’ offices for anatomic pathology and about 20 to 30 practices for clinical pathology. “We would do outreach whether we had IT or not. We’d certainly want IT to help in any way it can, but we’re using it more as a tool than as a driver.”
On the AP side, “we were already somewhat saturated; we had captured who we could capture,” but since the laboratory added the Impac PowerPath AP module and its Internet reporting module, the physicians have access to better results.
“It’s a way for the physicians to get results online, and it also includes an archive concept so they can go back and see any of their reports from us back to a certain date. But even though the doctors think it’s cool, in the long run I don’t think it’s going to be a major player, because No. 1, doctors don’t want to physically have to do something like go online. They want everything to go to them. For example, our reports, which are auto-faxed to their offices, will then autopopulate into their electronic records without their having to do anything.”
The system is not problem-free; sometimes there are clunky fax machines in the doctors’ offices that stop working, or are so slow they time out before results can finish transmitting, says Judy Thompson, MT(ASCP), laboratory informatics manager. It’s very common, too, that the laboratory quickly faxes a result to a physician, but when it arrived the doctor was at a different office from where the medical records are located. “So instead of calling their office, they call us. But I think that will probably go away as they become computerized in their offices,” Dr. Berman predicts.
In another community where there was more competition, “there is absolutely no doubt in my mind our IT would help us garner market share,” he says. In the clinical pathology area, the advantage is that if clinicians see patient “Mrs. Smith” all the time for blood work, and now she is in the hospital, they will have access to her outpatient data. “If we tie them to us electronically, all the data becomes part of the record, so they have continuity of care between the inpatient and outpatient side.”
Through Jefferson’s hospital information system, Invision, made by Siemens Medical Solutions, the majority of staff physicians have access to the entire EMR in their offices. “The next step,” Dr. Berman says, “is connecting physicians by way of their handhelds. There’s already a pilot for that starting up called Windows Mobile. Right now it’s a work in progress. The only thing they’ve done with physicians is guide them, if they’re buying a smartphone, toward the ones they already know will work. The main issue for a handheld is a practical one—that is, having a screen that’s able to display data in a way that makes sense to you.”
Though Dr. Berman supports more electronic capability, he expresses reservation about one prospect. “What I think will come soon is that the physician office, maybe because of the interfaces we’re talking about, will have the ability to ‘order’ a specimen on their side. In other words, they can start the process with us.”
“You can gain a certain amount of patient safety by that, because they could potentially produce the label at their end and we could ensure the specimen is labeled appropriately and notify them if it doesn’t show up promptly. The caveat is that right now we really don’t want them accessioning or having any entry into our system. I’d like to see the technology improve on the ‘inbound’ side to be sure they can do the work right.”
On the other hand, in any marketing of health care when you tie someone in electronically to you, you’re getting their business, he concedes. “The easier you make it, it just becomes second nature for them to use you.”
Even though Concord, Calif.’s MuirLab, the laboratory outreach program of John Muir Health, is in the high-tech corridor east of San Francisco Bay, “physician practices were at first slow to adopt EMR systems,” says Michael Tarwater, director of laboratory information systems for John Muir Health. But now the pace has picked up with most new requests calling for sending out results electronically.
“For the hospitals, the lab is fully bidirectional. For its own physician groups, the lab is in the process of implementing fully bidirectional interfaces, and soon it will be accepting electronic orders from outreach practices,” he says. “The science for getting electronic orders in from those clients is harder, because you need to maintain an enterprise number for patients and match it up, and sometimes it’s difficult with demographic information from outside the system.”
He finds that physicians affiliated with John Muir Health want integrated lab information provided to their handheld PDAs—such as iPhones, BlackBerries, and Palms. “Physicians now need the ability to interact with lab information with both traditional stationary and mobile presentation tools. PDAs are becoming very popular ways to see both inpatient and outpatient information rendered.”
Muir is now changing its entire outreach billing system (to McKesson’s Horizon Lab Financials), with the focus on getting clean orders up front. “If we can do that, there is much less work on the back end, much less of a rejection rate,” Tarwater says. On that score, one of the major challenges he sees ahead is molecular testing. “We are really looking at a strategy for how to work with all the new molecular tests that are coming online, some of which are pretty pricey. We want to make sure, particularly from an outreach standpoint, that if we’re going to perform them, the insurance provider is going to pay for it. So we may look at doing some real-time eligibility authorization.” Muir is working with McKesson on this now.
The economy is sure to have an impact on Muir’s IT, Tarwater says, but not because of shrinking volume. He predicts testing volume will actually rise but the payer mix may change. “If we’re going to see more self-pay orders, then ability to collect becomes more difficult, so write-offs tend to go up.”
The biggest issue his laboratory faces is the growth of information. “There are so many different tools coming onboard for physicians and how they integrate that into their workflow in a meaningful manner. Their patients want information via the Web, they want real-time results, to communicate electronically with the physician, to correspond with the lab via Internet, so how does the physician integrate that into their workflow? We are working on how to facilitate that.”
Muir’s billing challenges, and those of the other outreach programs, are not unique, Chi Solutions’ Dr. Murphy says, because lab billing is the most complicated in the hospital. “It’s not for the faint of heart; there are so many variations with ABNs, medical necessity guidelines, all kinds of things that can result in a bill not even going out in the first place or payment being denied.”
Chi Solutions typically recommends that hospital outreach programs outsource their billing to an experienced lab billing company. “In addition to relinquishing a difficult-to-understand field to experts, this allows the lab to segregate outreach revenues from outpatient revenues. That way you can do a true profit and loss on lab outreach,” Dr. Murphy says. “Outsourcing gives you a clean revenue stream; you know what’s the gross, what’s the net, what’s denied, and you know it by client, so you can work on clients that consistently give you incomplete or inaccurate information.”
Right now, it’s a buyer’s market for hospital outreach programs, Dr. Murphy notes—perhaps a sign that some are faltering in the rocky economy. Still, hospital outreach always has the advantage over national labs of being able to provide better turnaround. “And perhaps even more important, given equal services, there’s generally a preference to support the local hospital.”
Too often, outreach programs just haven’t known how to capitalize on that fact and make it a serious business, she says—but they should. “As long as the lab provides good services, as long as patients have good access to patient service centers, and the IT systems are responsive to physician needs, the outreach programs will still have the advantage.”
Anne Paxton is a writer in Seattle