Transitioning the Lab from a Clinical Partner to a Business Partner

Transitioning the Lab From a Clinical Partner to a Business Partner

The traditional services provided by a lab—collecting samples, performing tests, delivering results—already make it an important clinical partner, but perhaps not a unique or indispensable one in an era where the C-suite may be looking to trim overhead by outsourcing. However, in-house labs can dramatically amplify their value if they also make themselves good business partners and tie their activities to their organization's strategic goals. No outside lab is in a better position to understand and own those goals. For labs that want to integrate better with their organizations, here are some "how-tos" from the nation's top lab leaders.

Be on the team

The patients belong to the lab just as much as they do to the physicians or the nursing staff. "We have to stop just lobbing values back at physicians and leaving it up to them to decide what to do with them," says James Nichols, Medical Director, Clinical Chemistry and Point-of-Care Testing at Vanderbilt University School of Medicine. "We need to become part of the patient care team, really going beyond the lab and saying, 'Why did the physician need this test in the first place? What does this result mean? And bringing together all of the tests that have been ordered as well as the history on this patient in an interpretation.'"

Article highlights:

  • Make your lab part of the care team Identify ways to use lab values for better predictive analytic
  • Tie the lab's performance goals to larger clinical and business objectives

Contributing Lab Leaders

Duane J. Fitch

Duane J. Fitch CPA, MBA, FACHE

Partner, Healthcare Management Consulting
Plante Moran, PLLC.

James Nichols

James Nichols, Ph.D., DABCC, FACB

Medical Director, Clinical Chemistry
Associate Medical Director, Clinical Operations
Vanderbilt University School of Medicine

Diana L. Kremitske

Diana L. Kremitske, MHA, MS, MT(ASCP)

VP Laboratory Operations
Geisinger Medical Laboratories


Nichols urges labs to provide context and interpretive reports for every test ordered, at a minimum, and also to help physicians decide up front which tests are appropriate. Vanderbilt uses a "lab formulary"—similar to a pharmacy formulary—that specifies which tests are appropriate and cost-effective in a given context. New tests need to be evaluated both financially and clinically by a committee of physician and lab leaders "So many times, I think the lab is over-utilized because physicians don't know what tests to order," Nichols says.

Be proactive

Lab values can point the way to better disease management and even prevention, if they are deployed as part of an overall program of predictive analytics. For example, certain lab results for a diabetic patient might trigger activities that improve their quality of life and also keep them from a destabilizing crisis that lands them in the hospital, says Duane Fitch, partner at accounting firm Plante Moran.

Labs can help their organizations leverage lab data by identifying where it can be plugged into appropriate rule sets and algorithms. This type of care coordination can help set a health system apart in the patient's mind as well, says Diane Kremitske, Vice President of Laboratory Operations for Geisinger Health System. If patients consider all of their care—both tests and treatments—as part of a larger plan for their health, they are less likely to defect to Wal-Mart or Walgreen's for individual services

Be part of larger performance goals

Lab performance measures should not exist in isolation from the rest of the organization, Kremitske says. Labs should participate in the shared goals of the care team—patient satisfaction, specific clinical outcome measures, and even financial targets, identify their role in achieving them, and be evaluated on them at the end of the fiscal year. "If you can prove both the clinical and monetary value of the service you're providing, that can be very powerful," Kremitske says.

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