To many laboratorians, creating a molecular service may look like a gargantuan and high-risk task—one that won’t make money. That was the fear of some administrators at William Beaumont Hospital in Royal Oak, Mich., when Frederick Kiechle, MD, PhD, used $200,000 worth of laboratory equipment to start a molecular probe laboratory there in 1991.
But that molecular laboratory became one of the most successful in the country, and Dr. Kiechle is now leading development of a similar service at a Florida hospital.
In fact, says Dan M. Hyder, MD, medical director of the core laboratory, flow cytometry, and molecular diagnostics at Southwest Washington Medical Center, Vancouver, Wash., “The fastest-growing, most profitable area in laboratory medicine right now is molecular diagnostics.”
Dr. Kiechle is the first to admit that it wasn’t exactly easy to make a go of it 16 years ago. The molecular service relied mostly on Southern blotting, which is laborious, he says. “It takes three days to get the assay completed and the results reported, and if you muck it up, it takes another three days to do it again.”
“I told the hospital administration that the molecular laboratory would lose money for three years,” he recalls. When it was still losing money after five years, he started getting in trouble. What saved the molecular service was a PCR royalty agreement with Roche Diagnostics in 1995, and the availability of Abbott
Diagnostics’ ligase chain reaction. “We introduced testing for Chlamydia and Neisseria, and with our outreach testing the volume shot up and our molecular laboratory became profitable.”
The molecular lab’s volume rose from 307 tests and a menu of two in 1992, to 47,450 tests and a menu of 30 billable procedures in 2005, and continues to grow at a fairly rapid rate. “But we were definitely on the ‘bleeding edge,’” he says. “I don’t think we would have made it if something hadn’t come along to replace the Southern blot.”
Now Dr. Kiechle has begun a similar program at Memorial Healthcare, a six-hospital, 1,700-bed system in South Florida, where he became medical director of clinical pathology in 2006. And the issues are quite different. “There are many more varieties of test platforms available, the tests can be done at much greater speed, and everything about it is just much better—it’s easier to get your feet on the ground.”
The first phase at Memorial, now in progress, has included introducing five analyte-specific reagent, or ASR, assays for viruses on Memorial’s Roche Diagnostics LightCycler, which performs real-time PCR. The next phase will be methicillin-resistant Staphylococcus aureus screening. And they’re trying to decide which of two primary methods to go with. “We’re going to need a way to do enterovirus rapidly as well. There are a lot of papers published that show if you do the test in real time you can save the hospital money by reducing length of stay,” Dr. Kiechle says.
The send-out solution for enterovirus and other microbes is “sort of crazy,” he says. “The turnaround time is a couple of days, and the results are not really clinically useful in terms of getting a meningitis patient out of the ER.”
Because of that, a laboratory that is sending out 10 enterovirus tests before creating a molecular service might get 100 orders for the test when it brings it in house. “The problem is the laboratory needs to offer the test 24/7, because patients with enterovirus can show up anytime.”
The next phase will be introducing what Dr. Kiechle calls the “money losers”: tests like HIV viral load, HCV viral load, HCV qualitative, HBV viral load, and HIV and HCV genotyping assays. “You almost never get paid what you’re paying for the test. But you have to offer tests that lose money, because if you don’t, you’re throwing money right out the door. My whole concept is losing less money—for example, only losing $10 instead of losing $20.”
“If you do the test in house, you’re obviously going to get a better deal on reagent pricing and you won’t have markup and shipping costs, and so on.” HIV viral load and HCV viral load, he points out, are reimbursed by Medicare at approximately $120 and $60, respectively, but each assay costs more than $120 to perform.
In a study of his own, he found that a hospital laboratory could save $575,000 a year by simply bringing in house 15 different assays, molecular and nonmolecular, and making a few other changes.
For almost every infectious agent the laboratory is sending out, Dr. Kiechle notes, “you will discover clinicians are usually sending out a lot of viral cultures plus requests for PCR for some of the viruses. They’re covering themselves both ways.”
“But you could really eliminate the viral culture entirely and get them to send out only the specific PCR assays for the organism they’re concerned about. It would be a much, much better way of approaching it, because as a method PCR is by far superior to culturing viruses.”
There is no such thing as a false-positive molecular test, he points out. “If you select the probes correctly and you have a positive result, the DNA or RNA is there. The question that’s hard to answer is whether it’s a viable organism or not.” For example, a patient on antibiotics may still have the bacteria’s DNA hanging around, but in a denuded form.
For anyone contemplating a molecular laboratory, Dr. Kiechle has a warning: “When you are deciding whether to ‘make or buy’ and you don’t have an outreach program, your potential for revenue may be much less than if you continue to just deal with registered inpatients and outpatients.”
But Dr. Kiechle stresses that laboratories creating a molecular service can start small and scale up. “You can sort of test the waters and see how it will go. I would predict most individuals underestimate the volume of tests they will get, especially for microbes and virology tests, because the volume is going to be much higher due to the improved turnaround.”
When TDx was invented by Abbott Diagnostics, making therapeutic drug monitoring possible in real time, that’s what happened, he says. “If you send the theophylline level out and get it back two days later, you’ve already changed the dose, so the number is totally meaningless. And similar circumstances occur in molecular.”
He considers a 2,000-square-foot space enough to get a molecular service off the ground. “You can start with ASRs, as Memorial is doing, but usually they are much more difficult,” Dr. Kiechle warns. “I would never do homebrew tests. I’d start with FDA-approved kits, a couple of assays, and have a plan for expansion.”
Included in that should be a pipeline for training medical technologists who may have no experience. “We’ve been using online courses and they’ve worked out extremely well for us,” he says.
In addition, “You want to be sure to build your business at a rate you can sustain. You don’t want to make promises you can’t meet. And you really need to get buy-in from the hospital administration, both medical and nonmedical, before you begin, because there will be some bumps. There might be times when the program is in the red, and they need to understand that’s because the volume isn’t there yet.” But, he assures, it will be.
When Thomas J. Monroe, PhD, set up a molecular diagnostics service in 1995 at Spectrum Health System, Grand Rapids, Mich., the parameters were fairly basic. “We had an established cytogenetics laboratory here, and we recognized several diseases that were better met using a molecular approach such as fragile X syndrome,” Dr. Monroe says.
“The immunology department was already running the original Roche Amplicor chlamydia test, for which it had a single thermocycler in the laboratory. So we set up using some of the immunology department’s space and an adjacent room for electrophoresis.”
It was done with an initial investment that, by today’s standards, was modest. “We didn’t have any real-time instruments back in 1995. We started in the immunology department—actually we inherited an old kitchen area—with a lot of manual electrophoresis gels, simple PCRs, and transcription fragment analysis through Southern blot. Then over the years, through grants and other funding opportunities, we built up the laboratory from there.”
Today, the molecular service—a merger of the research and clinical programs—consumes about 3,000 square feet, which includes different rooms separated for contamination control. “With many of the new closed, real-time instruments, you can get away with two separate areas now, but we firmly believe we need three.” In another year molecular diagnostics will be moved to a 3,500-square-foot space.
Fragile X was probably one of the harder tests to start with. “Fragile X results from a GC-rich triple repeat expansion, and cytogenetic methods could only characterize the mutation in fully affected individuals. Once the gene and genetic changes were understood, they realized they could detect carriers, accurately size permutations, and that cytogenetics was no longer the gold standard.” However, Spectrum’s fragile X test is still done as a homebrew because no FDA-approved methods are currently available.
Spectrum had a particular interest in pediatric mental retardation, and thus the molecular service next looked into Prader-Willi/Angelman syndromes and Huntington’s disease. “Many of the mainstream molecular tests were started then, including factor V Leiden, prothrombin mutation, MTHFR, and hemochromatosis. Those were all added in the mid to late ’90s.”
For the first couple of years the molecular service’s volume grew very slowly. New associations with mutations would emerge, he says, but it was typically one to two years before they hit some of the mainstream medical journals. “There is a fairly long time lapse from the identification and association of a mutation before it’s really accepted and ready to go into a laboratory,” Dr. Monroe notes.
“Right now a good example is JAK2. Identification of a single point mutation in the JAK2 gene can render a reliable diagnosis of patients with non-BCR-ABL associated myeloproliferative disorders, or MPD, such as polycythemia vera. Many labs are testing for it. Yet the data is still emerging on whether quantification of the mutation is important.”
“Even though you start testing for these things, in many cases the clinical significance is constantly evolving, as your knowledge base evolves about the mutation’s impact on the disease and if other mutations or polymorphisms are also involved.”
In infectious disease testing, the laboratory has focused on high-demand tests like HPV, which it performs 3,000 to 4,000 times a year, as it waits for more tests to be FDA approved. But the laboratory has a longer history of inherited disorders and oncology support testing.
“Some of the earliest tests supporting oncology were the immunoglobulin and T-cell receptor gene rearrangements. We started doing them in the mid ’90s as well, first by Southern blot, then by PCR.”
The laboratory workhorse and “probably our most expensive piece of equipment,” Dr. Monroe says, is the DNA sequencer. It’s a machine with a roughly $150,000 price tag. “But we don’t do any sequence-based testing on it. Over the years we have developed many homebrew tests, and we have used the sequencer to validate and troubleshoot these tests.”
The molecular service has several additional tests in the works. “We’ve been working on a couple of projects with some of our partner laboratories, one in flow cytometry looking at ZAP 70 expression as a prognostic indicator in CLL, and we’re determining whether it’s best done by flow cytometry or by molecular methods,” Dr. Monroe says.
A new joint venture between Spectrum Health and the Van Andel Institute has created the Center for Molecular Medicine in Grand Rapids, which will focus on microarrays and other highly multiplexed diagnostics. But his own laboratory is also developing multiplexed testing—starting with a pharmacogenetics test for warfarin dosing.
As the technology of molecular diagnostics has improved, so has the laboratory’s turnaround time. “For inherited disease testing, the doctors have to understand many of the tests take several days to complete. It’s not a stat test in most cases. But using real-time PCR instrumentation for infectious agents like HSV and CMV, in most cases if we get them in the morning we can report them out in the afternoon. Some recent equipment is the random-access type that will produce on-demand testing, but batching is still the norm, and for certain assays there may be only one or two runs a week.”
Running a molecular diagnostics service raises more complex inspection issues, Dr. Monroe says. “It’s definitely a little harder with a homebrew test, for example. It takes a lot more documentation than just saying ‘Here’s a kit and here are all the lot numbers,’ and it requires equipment like a DNA sequencer to support test development.”
“Even though we’re running a lot of real-time instruments now, we’ll take those same products and put them on an electrophoresis gel or sequencer as part of our validation process.”
The argument that the hospital loses less money by bringing molecular testing in house is hard to document, he says. The major advantage from his standpoint is the clinicians’ access to laboratory experts.
“They can pick up a phone almost 24 hours a day and get to us. They know who we are, they don’t hesitate to make special requests, and if there are problems they can talk to me or the lab technologists. If they’re waiting to discharge a patient, we can tell them within an hour when the result will be available, and if a result does not jibe with a previous result, we can look into that right on the spot.”
Dr. Hyder’s experience at Southwest Washington Medical Center, a community hospital with 460 beds, confirms that it isn’t only large institutions that are good candidates for molecular laboratories. He started pushing the entire laboratory toward cutting-edge technology when he arrived there in 1992.
“I thought then that molecular diagnostics was going to start blurring the difference between clinical and anatomic pathology, so we started looking at what kinds of platforms were available to community hospital laboratories that wouldn’t require a huge investment in facility, in equipment, and in training.”
With his background in hematopathology, Dr. Hyder was interested in helping to refine diagnoses of lymphomas and leukemias. So he started looking at low-volume molecular tests that were sendouts for the hospital, often with long turnaround times, but crucial to accurate diagnosis, such as staining for kappa and lambda messenger RNA and Epstein-Barr virus by in situ hybridization.
“We didn’t initially start looking at any amplification techniques like PCR,” he says. “We had one very high-volume amplification test online which was gonococcus/chlamydia, and then as the community and the hospital and molecular diagnostics were growing, we added more and more to that.”
About seven years ago, he added a hemostasis and thrombosis consultation service to offer panels of tests that could help explain patients’ thrombotic or hemorrhagic risk. Two mutations that contribute to that risk are factor V Leiden and prothrombin gene mutation. It was about that time that vendors started offering closed systems that were easy to operate for performing these assays, he says. “They didn’t require a super-specialist PhD in the laboratory, they were FDA-approved, and could be easily set up in a community lab.”
The relatively small size of Southwest Washington’s laboratory made ASR or homebrew tests more difficult to validate, though the lab now performs a number of ASR assays. “The FDA-approved tests are much easier to validate than ASR assays,” Dr. Hyder says. The lab acquired a Roche Diagnostics LightCycler in late 2000.
However, since physical space in the laboratory is limited, he says, “we’ve tried not to proliferate platforms like crazy. We’d like to be able to run multiple tests on one platform, but unfortunately, vendors are rushing out with one instrument/one test, and those are hard to justify if it’s not a high-volume test.” A real-time PCR instrument is very small, he adds, “whereas our gonococcus/chlamydia instrumentation takes 15 to 20 square feet of laboratory space.”
One of the most common diagnoses at Southwest Washington is a thrombotic disorder such as stroke, myocardial infarction, or recurrent abortion. “So we had a fairly significant volume of tests we could do to justify a real-time PCR instrument to perform factor V Leiden and prothrombin gene mutation assays,” Dr. Hyder says. “From there, the laboratory started using the same instrument for infectious disease testing like pertussis and herpes simplex virus. Those went online and were very easy to validate.”
But in molecular diagnostics, usually multiple methods are available. “You could use conventional PCR, FISH analysis, real-time PCR. Sometimes it’s an open-and-shut question—for example, if you are doing a test for a genetic abnormality, there may be only a limited number of commercially available methods and one or two may be FDA cleared.”
For cancer, the options are more diverse. “You could use PCR to detect a BCR-ABL translocation present in a CML patient or use FISH—two totally different techniques useful in different clinical settings. For an original diagnosis you might use PCR because it’s fast, but if you’re looking for residual diseases to see if there’s a recurrence, then FISH may be the way to go.”
About three years ago the program began to be more responsive to the hospital’s cancer diagnosis needs. “For the myelodysplastic syndromes, leukemias, and lymphomas in our community, you can generally make a diagnosis 90 percent of the time with a light microscope, immunohistochemistry, and flow cytometry. But we were seeing enough cases where we needed to know if the T-cells or B-cells were clonal at the genetic level or if a t(15;17) translocation was present, that we started talking about bringing the tests in house.”
“That’s a lot more complicated than closed-system real-time PCR tests, but we had significant volume, so we did it.”
The test Dr. Hyder’s laboratory brought in most recently was cystic fibrosis carrier screening. Under recommendations of the American College of Obstetricians and Gynecologists, every patient considering children should be advised of the benefits of having the screening test. “It’s not the most common genetic disease; that’s probably hemochromatosis. But because one company holds the patent on the hemochromatosis test, it hasn’t proliferated like cystic fibrosis carrier screening.”
When Osmetech came out with an FDA-cleared instrument for CF carrier screening in 2006, “it was just a natural step to bring that test in house. And it’s through a reagent rental, so we didn’t have to buy a $45,000 instrument out of our normal budget.”
Bringing tests in house makes it possible for the laboratory to take ownership of them. “In-house molecular testing has driven us to get much more educated. So if a physician or patient calls and asks ‘What does the mutation on this panel mean?’ I know how to answer now.”
“We don’t have to be experts in the area; we can still be community pathologists.” But becoming knowledgeable about molecular testing “has required us to get away from our microscopes.”
“It’s not like just putting up the latest versions of the hematology or chemistry instruments we’ve been using for decades. And when you start doing molecular diagnostics, you’ll be more scrutinized during your inspections than the other clinical laboratories are.”
Has bringing molecular testing in house proved cost-effective? Absolutely, Dr. Hyder says. For example, the 23-test panel for cystic fibrosis screening is reimbursed by Medicare at about $400, depending on the region. You can get a contract with a commercial reference laboratory that covers all 23 mutations for the $100 to $200 range, he notes. But direct costs to perform the test in house—meaning technologist time and reagents only—total about $65. And CF screening is going to increase dramatically, he predicts.
The next six to 12 months will be interesting, he thinks, because the human papillomavirus market is heating up. Currently, for every 100 Pap tests, five or six cases are diagnosed as atypical squamous cells of undetermined significance, and ACOG recommends HPV testing for those patients. But new primary screening recommendations will call for any woman over 30 who is getting a Pap test to have an HPV test done at the same time.
“That’s going to put a huge demand on laboratories to provide HPV testing.” At his hospital, the number of HPV tests could swell from 2,400 to 20,000 a year.
Molecular tests for Coumadin metabolism present yet another future trend that could overwhelm the capacity of commercial laboratories, Dr. Hyder believes. “The FDA recommends that you genetically screen for the mutations that can cause failure to metabolize Coumadin correctly—which produces a very high bleeding risk—and you have to get the testing before starting someone on Coumadin.”
“There’s no way in the world commercial labs can handle the literally millions of tests they would have to turn around stat.”
“If you think about the number of people put on Coumadin every year, it’s gigantic,” he adds. “We’re watching really carefully and will bring mutation testing on board as soon as it looks like the FDA will move from a recommendation to a requirement.” Methicillin-resistant staph, group B strep, and JAK2 tests for myeloproliferative disorders are the tests his laboratory is considering for in-house testing now.
The other lower-volume tests he is looking at in oncology would be more esoteric ones for lymphomas and leukemias. “The instruments we have now will do those tests,” he notes. “We might bring on t(15;17) and t(14;18) translocation analysis by FISH or PCR because we have good therapy for the disorders associated with these abnormalities, and therefore we have a growing number of those lymphoma or leukemia patients who need monitoring.”
In Dr. Kiechle’s view, it will become impossible for anyone to run a laboratory without having molecular techniques available for anatomic and clinical pathology. “Clinicians will be demanding it because turnaround time for sending tests out is way too long. And I just can’t believe you can continue to be a viable operation and not do it.”
Dr. Hyder, too, advocates taking the leap. “As we move more and more to molecular diagnostics, laboratories have got to keep up or they risk becoming big triaging centers that just send tests out to a reference laboratory. And that’s no fun.”
Anne Paxton is a writer in Seattle. Dr. Dan Hyder will be one of the speakers at the CAP ’07 session on molecular testing for the community pathologist, to be held Oct. 3 in Chicago. To register for the meeting, call 800-323-4040 option 1#.