College of American Pathologists
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cap today

Broader net’ cast for new IT conference

January 2004
Karen Southwick

When Jay Schamberg, MD, general manager of ACL Laboratories in Milwaukee, did an informal survey of several other lab systems to find out what they were spending on information technology, the answers were all over the board.

Of the six systems he surveyed, including his own, the dollars spent on IT ranged from 2.6 percent to 11 percent of the operating budget. (ACL had the largest annual operating budget of the six at $185.9 million; the smallest was $29.1 million.)

Based on capital expenditures, the spending range was 24 percent to 76 percent. (The capital budgets ranged from $363,000 to $5.9 million.) ACL was at the low end of the operating budget expenditure and at the high end of the capital budget expenditure at 68 percent. The total amount spent on IT varied from $236,000 to $4 million.

That survey will fuel Dr. Schamberg’s presentation at the Lab InfoTech Summit March 10-12 in Las Vegas. Sponsored in part by CAP TODAY and operated by the Pathology Education Consortium, the summit is designed to strengthen expertise in laboratory information systems, portals, e-laboratory, clinical lab consulting, and LIS/in vitro diagnostics integration.

Bruce Friedman, MD, director of pathology data systems at the University of Michigan Health Systems, operated a predecessor conference for 21 years called AIMCL (Automated Information Management in the Clinical Lab) in Ann Arbor. He then ran another meeting in Miami for three years with the American Association for Clinical Chemistry called Lab Portal Jamboree.

Now he’s ready to move on. Hence, the Lab InfoTech Summit. "I thought it might be interesting to try a new venue," says Dr. Friedman, who is also professor of pathology at the University of Michigan Medical School, Ann Arbor. "You could say this is a ’new old meeting,’" enhancing and recycling some of the content of the AIMCL and Lab Portal meetings. Other sponsors include the AACC, the Clinical Laboratory Management Association, and the Association for Pathology Informatics (he is immediate past president of the API).

"I wanted to cast a broader net," says Dr. Friedman, explaining that the AIMCL meeting focused on lab information systems and the Lab Portal meeting on portals. The summit will take "a more business-oriented, problem-solving approach" to multiple aspects of IT as it relates to the laboratory. "This reflects the growth of the LIS into a critical, strategic component of the lab," he says. He hopes to attract more lab business managers as registrants for the Lab InfoTech Summit.

The idea for the focus of this new meeting was born about a year ago when he participated in a panel discussion on outreach. The question under debate: What is the most critical factor in terms of the success of lab outreach? "Every one of the panelists said IT," Dr. Friedman recalls. What was once a tool among many other tools has now become "the most important value-adding component of a lab," he says.

The presentations and vendor exhibits will reflect a problem-solving approach-using IT to improve lab operations. "So far the response from the exhibitors has been astounding," he says. Twenty had committed by mid-December of last year, exceeding the number of those who had ever registered for AIMCL about three months before the conference.

Dr. Friedman chose Las Vegas as the location because it’s a "glitzy venue" that will draw attendees from both East and West. He’s aiming the summit at pathologists, medical technologists, laboratory scientists, clinical professionals who focus on the LIS, and executives and business managers from commercial and hospital labs. In particular, Dr. Friedman would like to attract "pathologists with a business orientation who understand the criticality of communication with physician offices."

Attendees will be able not only to hear three days of presentations, but also to "comparison shop" among the vendors, many of whom are small and widely dispersed, Dr. Friedman notes. "Many of them don’t call regularly on hospitals, so this is your chance to see nearly all of the lab information technology available under one roof."

In preparation for the summit, which has a flat registration fee of $495 (or $295 for March 11 only), he has mailed 30,000 "save the date" postcards and the same number of brochures. (The fee for pathology residents and API members is $400.) He created the Pathology Education Consortium, a nonprofit organization, expressly to handle the summit.

Dr. Schamberg’s presentation will be typical of the summit’s business-oriented approach. Its title: "Return on Investment for Lab IT Solutions." He collected data from six laboratory systems, all of which serve hospitals, that show "a great deal of difference in what they spend."

That led him to questions such as, How much should be spent on IT and how do you measure return? Dr. Schamberg says there is no definitive answer: "I’ll talk about traditional ways to measure ROI and the problems with that."

One challenge is risk management-how much a lab can justify spending to make systems more stable and reliable. "Clearly our biggest risk is the IT system," he adds. "If it goes down for a week, we’ll lose all our outreach." But traditional return on investment analyses do not factor in those kinds of risks.

Calculating the cost per test and then pinpointing the amount of that spent on IT is also problematic, he says. "It’s all a question of what you are counting in the cost." What about phlebotomy or transportation by carts?

Health care systems invest in IT for two primary reasons, he says: to boost revenue by adding services, such as outreach, or to lower the internal cost. "We can no longer function without our computers," he notes.

In regard to his survey, Dr. Schamberg says the largest health care systems, such as ACL, "should be achieving economies of scale" on their IT expenditures, so you’d expect a large system to be spending a smaller percentage of its operating budget on IT.

ACL had an unusually large expenditure in the past year, he says, because it revamped its IT to accommodate a commercial lab system for outreach, which will be linked with the internal hospital system.

How IT supports direct-access testing-an offshoot of outreach-will be discussed at the summit by Lawrence Killingsworth, PhD, chief science and technical officer for Sacred Heart Medical Center and Pathology Associates Medical Laboratories (PAML), Spokane, Wash. PAML is a reference laboratory that serves the Northwest.

PAML launched a direct-access testing venture in September 2002, rolling it out in Spokane under the name Results Direct. PAML and Results Direct are for-profit ventures but are wholly owned by Sacred Heart Medical Center, a not-for-profit institution.

Results Direct ( "offers a full menu that covers a wide range of everyday lab tests," says Dr. Killingsworth, including blood and urinalysis readings. In the year-plus since it opened, "we have listened to our customers and made refinements," he says.

Most of those refinements have been to unbundle groups of tests so that consumers, who must pay for the procedures themselves, can order just one. For example, Results Direct started off with a diabetes panel of HbA1c and glucose. Since patients were testing their glucose at home, they wanted only HbA1c, which Results Direct now offers separately. Another bundled test was a full CBC, but consumers wanted that broken out as well, so now the company offers red and white blood cell counts, hematocrit, and hemoglobin as choices.

Results Direct has also added tests to its menu, including a total estrogen test for women and a comprehensive cardiac panel. When high-sensitivity C-reactive protein began getting coverage in the media, "we had clients asking for it, so we added it," Dr. Killingsworth says.

Typical customers are Baby Boomers of adequate means who "consider themselves healthy and want to monitor their health," he says. Results Direct does not accept insurance; all procedures are self-pay and the results are given to the consumer, who must be 18 or older. Typical tests are lipid and thyroid panels.

Although Dr. Killingsworth declines to release financial results, he says the direct-access operation is profitable and has expanded into other parts of the state. "There’s a huge amount of interest in the laboratory community," he says. However, he cautions, direct-access testing laws "vary dramatically" by state, so any system considering offering the testing should first do a regulatory check.

Results Direct has developed a software package, which it will demonstrate at the summit as an exhibitor, to support direct-access testing. "We’re offering a complete turnkey system where you have all the software you need, including a full Web site with your brand on it," says Dr. Killingsworth. It includes an internal application for customer service centers. Customers can order tests online and print a receipt, then go to a service center. They don’t need an appointment; they just walk in with the receipt.

Results are delivered by mail or directly to patients when they return to the center. "Right now we don’t have the functionality for customers to look up their results on the Internet because they’ve shown very little interest in this feature," he says.

With the Results Direct software, labs can track the tests that are ordered and add or delete tests. It also provides financial tools "that contract revenue from each customer service center," Dr. Killingsworth says.

He advises hospital labs that do outreach work to at least consider direct-access testing if it’s allowed in their states. "This is a natural extension of outreach," Dr. Killingsworth says. "It’s also a community service."

Based on conversations he’s had and presentations he has made, "we feel there are a lot of labs on the cusp of getting into this," he says. Ohio State University recently set up a program in Columbus, for example. "The tide is changing and people are taking action to change with it," he reports.

At the summit in March, Stewart Adelman, general manager of PacLab in Seattle, will look at the IT needs of regional labs that belong to a larger health system. PacLab is part of the PAML system in Spokane; it serves 10 hospitals in western Washington by coordinating their labs’ outreach operations. A $50 million, for-profit venture that specializes only in outreach, PacLab claims about a 31 percent market share in its area.

"We are a virtual lab," Adelman says. PacLab does not perform testing itself; it handles marketing, IT support, getting results to physicians, and billing and financial reporting for its member hospitals. Testing is performed locally at PacLab’s owner labs.

All the hospitals that participate in PacLab have different laboratory information systems. "Through a variety of techniques we have created interfaces to communicate," he says. "We’ve developed products to help facilitate getting results to physicians," through fax or posting into an electronic medical record.

PacLab is developing a Web services product through a partnership with Microsoft and Cap Gemini. With that product, which was in certification last month, physicians will be able to go into a hospital Web portal to obtain outpatient and inpatient laboratory results. "Now that the ’plumbing’ is built, our owners can add pharmacy and radiology results at a future time," Adelman says.

He says the Web portal should solve the integration problem. In fact, he believes that Web portals will answer many of the problems of coordinating regional labs that have diverse IT systems. First, however, "you will have to see acceptance of the technology," particularly as it relates to authentication and privacy.

With the PacLab portal, each member hospital controls what data it exposes to the system. "They continue to own their information, and what is available shows up only on a doctor’s computer screen. We don’t save it anywhere," he says.

Adelman would like to see physicians be able to view patients’ results "no matter where in our entire [PAML] system they had the testing done." That would mean moving to fully electronic order entry and retrieval. "We don’t know how soon we will move to it," he says, because it will require multiple systems to be coordinated. "We have coined the term ’LabsNow’ to refer to it and generate excitement."

Also at the summit, Rodney S. Markin, MD, PhD, vice chairman of the Department of Pathology and Microbiology at the University of Nebraska Medical Center, Omaha, will examine the interplay between laboratory information systems and laboratory automation systems. Dr. Markin views the software component of laboratory automation as the medical version of process control and device control. Inside each instrument "is a level of process control designed for that instrument," he says, such as automatic error correction.

On the information side is the LIS, which receives orders and distributes them to the different instruments and collates results. Dr. Markin will focus his talk on the intersection of the LIS and process control systems for the clinical laboratory. For instance, he will discuss the HL7 interface, based on specifications assembled by NCCLS, that makes communication between instrument, automation system, and LIS possible.

Dr. Markin will outline how to get information on orders and results to the laboratory automation system.

"In the future, the best possible thing that could happen is that the software, the lab automation system, and the LIS would become an LOS, or laboratory operating system," he suggests, similar to the operating system on a PC. "It would both drive your instruments and devices and manage your results."

Karen Southwick is a writer in San Francisco. For more information about Lab InfoTech Summit, visit or contact Pathology Education Consortium, 3170 W. Central Ave., Toledo, OH 43606; 419-534-3251.