When Medicare announced last November a $670M cut in reimbursements to clinical labs for medical tests performed in 2018, it represented just the latest in a long series of financial challenges for today’s clinical labs. Struggling to keep pace with the expanding volume of testing required to make effective diagnoses, modern labs find themselves confronting a perfect storm of rising costs, decreasing reimbursements, and substantial commoditization of the services they provide.
The typical approach to managing costs, which often requires a cut in services or reduction in customer-centered activities, often comes up short for labs seeking the answer for managing escalating costs. For with more and more tests being performed on similar equipment, with similar materials, delivering a strong customer service component along with the obligatory rapid and accurate test results is often the lab’s best chance at differentiation and competitive advantage.
So how are the best labs managing through this sea of uncertainty, where the only constant seems to be the pressure to increasingly drive efficiency?
A good starting point is to focus on three key areas: people, process and tools.
As lab performance begins and ends with the professionals performing tests, this is a logical place to start any evaluation. The simple question to ask is: Do you have the right number of the right people performing the right tasks? In addition to a straightforward human resource evaluation, using this broad criteria can lead to evaluating the services you offer, the turnover you achieve, and training that might be needed to bring your performance to a higher level of efficiency.
Beyond the individual, to optimize the performance of the lab team, you need solid, proven processes, based on best practices, throughout your lab operation. In today’s environment, this often means having automated systems in place to handle everything from client pre-analytical supply needs through advanced specimen tracking and management processes to longer-term contract and supplier management. Your ability to make better business decisions related to supply distribution and replenishment, optimized transportation options and automated specimen tracking from pick-up through test result can not only increase efficiency leading to lower costs but can also drive higher customer satisfaction.
The good news for the efficiency-centered clinical lab is that the level of supporting technology and tools to help optimize processes and reduce costs has never been higher. Proven supply, logistics and tracking technology is available to help replace outmoded paper-based tracking and reporting processes with automated, accurate and easy to manage systems throughout the specimen management supply chain.
For example, labs can leverage technology to manage the entire branded specimen collection kit supply process, ensuring customers always have the needed collection kits on hand. The advanced visibility into client inventory these tools provide can help avoid costly overstock situations or outages that can result in increased courier costs. When these technology tools are tied to an advanced supply distribution network, labs can reach a new level of performance accuracy and efficiency in the lab management of specimen supplies.
Specimen transportation costs make up one of the most significant costs labs face in the management of clinical testing. Having the right information on hand to properly manage courier and carrier relationships is critical to optimizing lab efficiency. The right courier management system can offer critical specimen transport functions such as courier scheduling, route management, supply tracking, specimen reconciliation and reporting. This allows you to improve courier utilization that can reduce labor expense and even generate revenue. And having the ability to track supply orders and specimen pickups in real time on a mobile platform provides and additional level of efficiency.
When it comes to handling specimen logistics, the best technology tools deliver real-time multi-carrier tracking and reporting, enabling you to better monitor and respond to immediate issues as well as measure performance. Leveraging the latest RFID technology, these solutions can provide a new level of specimen tracking, generating exception alerts for days in transit and, through advanced temperature tracking, generate out-of-compliance notifications. This gives lab managers better visibility into specimen integrity and avoids expensive testing against compromised specimens.
While having the right individual solutions to manage logistics and customer activities is integral to optimizing efficiency and cutting costs, the most efficient labs have found that an integrated platform that offers end-to-end specimen management is the ultimate answer to optimization. Having one home for all the logistical, analytic, and performance data you keep up with can deliver dramatic results. One end-to-end approach gives managers and employees better visibility, aids decision-making with real-time reporting and analysis and frees up time to dedicate to other tasks. Overall, integrated solutions drive better reporting, better reporting enables better analytics, and better analytics results in better, more efficient decisions.
Cost control is something clinical labs will be living with for the foreseeable future. And despite the predicted rise in test volume that should open the door for expanded operations, labs that can’t find ways to take advantage of the technology and automation that best-in-class operations are already implementing are facing a challenging future.