College of American Pathologists
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Smart Set: Laboratory Leaders Tip Their Hand

April 2001
Vida Foubister

If innovative models of clinical laboratory and pathology group management are what interests you, the sixth annual Executive War College, to be held May 8 and 9, will have them in spades.

"It’s a good place to get a pulse on what’s happening with the country’s early adopter laboratories," says Robert L. Michel, editor-in-chief of The Dark Report, which sponsors the War College. The Dark Report is a business intelligence and management service for the laboratory industry.

The two-day forum in Cincinnati will feature general sessions each morning that give a broad perspective on what different laboratories face in their local markets. Breakout sessions each afternoon will focus on the management tools these laboratories have used to meet their goals.

Those who remain for one of three optional programs on May 10 can delve into select topics in greater detail. This year’s choices are laboratory billing and collections department management, Web-based laboratory informatics products, and a laboratory CEO summit.

Michel says he searches out hot leaders, not hot topics, in developing the conference agenda. "From the activities of innovative laboratory leaders, several themes have emerged," he says, including the following:

  • The arrival of the Internet as a platform for allowing laboratory data and information to flow back and forth within the laboratory and with hospitals, physicians, patients, and payers.
  • The changing role of the patient. "There is very clear evidence in the health care marketplace that consumers now want a more active voice in both their health care and how their laboratory testing is done and used," Michel says.
  • The growing use of laboratory test data to influence clinical outcomes. Though such data account for only about five cents of the health care dollar, laboratories are proving this information has value. "It can improve quality of care and reduce the cost of care through early detection, diagnosis, prognosis, and patient monitoring," says Michel.

Some of the presentations that will be offered at the two-day forum are featured below.

  • Richard Moriarty, MD, medical director of clinical laboratories at Sentara Norfolk (Va.) General Hospital, will discuss the negotiation of his pathology group’s first Part A hospital contract and how well the contract is working for the pathologists.
  • "In the last three years, the pathology group and the hospital administration sat down and went through negotiations where they identified the value that pathologists provided the hospital and they decided on a formula to reimburse the pathologists for that value," Michel says.

  • How community hospital-based pathologists can benefit from the genomics revolution is the focus of a talk by Kent Bottles, MD, president of Genomics Repository, Cambridge, Mass.
  • Dr. Bottles’ company, wholly owned by Genomics Collaborative Inc., is one of several that is working to develop local tissue banks and link them to academic laboratories and pharmaceutical companies willing to pay for tissue samples. Pathology groups can profit from these efforts because they have access to tissue samples and information about the patients they came from, such as their disease states, says Michel.

  • Michael Laposata, MD, director of clinical laboratories at Massachusetts General Hospital, Boston, was such a popular presenter at last year’s War College that Michel invited him back to give two talks.
  • In the first, a general session, the focus is on how pathologists can create added value for clinicians in their reporting of laboratory results. "In several areas of laboratory medicine, a narrative paragraph is attached to the report. It provides a differential diagnosis based on the laboratory results and often clinical information as well," explains Michel. "The reports are patient-specific and provide fuller details, like those in radiology and anatomic pathology." Dr. Laposata and his colleagues have been able to bill more than $1 million a year for these clinical pathology professional opinions.

    Dr. Laposata’s second talk is a breakout session on how his laboratory was able to develop its professional opinions and successfully bill payers for this service. "This is another area of lab business where helping the clinician use lab data more effectively should translate into higher revenues for the lab, which allows it to sustain high-quality services," Michel says.

  • L. Patrick James, MD, director of pathology and clinical laboratories for Health Midwest, Kansas City, Mo., is another War College veteran. He spoke in prior years about consolidating Health Midwest’s 13 hospital laboratories into a core lab at the largest facility and into rapid-response labs at the other facilities.
  • This year, Dr. James says he’s going to answer the question: What does a laboratory in a health care system do next to add value?

    For Health Midwest, there have been several answers-none of which relate to specifically targeting outreach growth as a means of lowering unit costs. "Our tack has been to look at what we can do internally to leverage the lab’s value and to make the system better," Dr. James says. "Also, how can we use process redesign to continually make our operations more efficient?"

    One strategy was to use several years worth of data from the common microbiology laboratory to convince the system’s pharmacy and therapeutic committees to adopt a single antibiotic formulary. Since 1999, when that single formulary was approved by all the medical staffs, the system has seen pharmacy cost savings "in the six-figure range." But for Dr. James, that’s not enough. "The next chapter would be to look at other areas where the lab might assist with therapeutic drug monitoring, to look at that information and assist the pharmacists to help our clinicians use that information better," he says.

    A similar strategy was used to curtail the hospital’s blood use. Working with the local blood center, the lab collected from all the hospitals in the region information on the use of blood for open-heart surgery, orthopedic surgery, and oncology. Health Midwest clinicians could then compare their use of blood for these high-volume procedures with that of their colleagues. As a result, blood use dropped eight percent last year at Health Midwest, compared to an average increase of seven percent in the region.

One of the three third-day options at the upcoming War College is a repeat of a session that was popular last year: Web-based lab test ordering and results reporting. Unlike in 2000, however, all of this year’s invited vendors have operational laboratory sites. "It’s a very different crop," Michel says. "There’s a bunch of nimble new entrants who have created their software package from scratch specifically for this function, as opposed to the existing large players who may have legacy technology that complicates their ability to present a clean solution."

A new third-day program will focus on designing the workflow of a laboratory billing and collections department. Specific topics will include what you can expect in terms of staff productivity, and what is considered acceptable financial performance.

The third option, the lab CEO summit, is for chief executive officers and senior administrators who want to explore more advanced issues. They’ll look at, for example, whether pharmacogenomics, genomics, and proteomics are fast-tracking to clinical diagnostics and why Wall Street is paying more for investments in laboratory medicine and diagnostics.

Michel predicts the 2001 War College may draw as many as 500 participants. About 425 people attended last year. For more information about the forum or to register, call 800-560-6363 or go to The fee is $715 after April 15. The cost for one of the optional third day programs is $275 after April 15.

Vida Foubister is a freelance writer in Chicago.