November 2011
Feature Story

Laura Hegwer

Just as flying solo can be dangerous in an airplane, it can be risky when shopping for a laboratory information system.

So, with millions of dollars and a laboratory’s productivity at stake, why do some labs select an LIS without expert guidance? The short answer is because they don’t think they need it, says Raymond Aller, MD, director of informatics in the Department of Pathology, University of Southern California School of Medicine, Los Angeles. But as these laboratory decisionmakers begin to investigate potential vendors, they may realize that their perspective is limited to the few LISs they have used. “A good consultant will have in-depth knowledge of a dozen or more systems,” says Dr. Aller, who has served as a consultant to numerous laboratories and vendors.

Cost concerns are another deterrent. Yet consultants say medical facilities save money and time when they obtain professional guidance. It might take a laboratory up to a year to select an LIS on its own, tying up critical personnel, according to several of the consultants interviewed for this article. Using a consultant, it might take only three to five months to move from documenting what the customer wants and needs from a system, to creating a request for proposal, to helping the client negotiate and then sign a contract for an LIS.

Consultants’ extensive knowledge of the LIS marketplace, gleaned from years of tracking the industry and making many professional contacts, can also help laboratories avoid costly missteps when purchasing technology. Consultants often learn before their clients do that an LIS company is going to sunset a product or go out of business, says Hal Weiner, president of Weiner Consulting Services, LLC, Florence, Ore.

So how much does a consultant cost? To obtain assistance with evaluating and selecting an LIS and negotiating with a vendor, laboratories can expect to pay a consultant up to five percent of the initial cost of the system they purchase, the consultants say. If laboratories factor in the total cost of the system over five years, that percentage drops to about 1.5 percent—but consulting fees are based on the scope of the services provided and are not tied to the price of the LIS, notes Dennis Winsten, president of the LIS consulting firm Dennis Winsten and Associates, Tucson, Ariz. Yet, the consultants concede, using the five percent figure as a guideline, the final cost for consulting services is nothing to sneeze at since laboratory information systems can cost $1 million to $2 million—nearly three or four times what they cost prior to the year 2000 and the adaptations required for Y2K.

Hiring an LIS consultant, however, doesn’t have to be an all-or-nothing arrangement. Some laboratories may not need assistance with the entire LIS selection process and can opt instead to work with a consultant during key stages of the process, saving themselves money. For example, a laboratory may need a consultant to support it through vendor negotiations but may not require that consultant’s services to choose an LIS. Or a laboratory may want to hire an LIS expert to serve as a project manager during the implementation process to make sure the roll-out meets critical deadlines. A consultant too can help deter friction and finger-pointing between a laboratory and a vendor over system modifications, missed deadlines, and other obstacles.

Consultants can also save laboratories money by exploiting their existing LIS. In some cases, supplemental laboratory applications, such as middleware, can add functionality to an existing system and extend its lifespan at a significantly lower cost. This might include adding molecular diagnostic testing, radio-frequency identification for specimen tracking, synoptic reporting for anatomic pathology, or human leukocyte antigen testing for tissue compatibility. Because such functionality may require tricky interfaces with the legacy system and electronic medical record, hiring a consultant to help select and integrate these applications can be beneficial, Winsten says.

Good consultants not only help evaluate, select, integrate, and negotiate, they teach, offering personalized education that’s difficult to find elsewhere, even at professional conferences. “A good consultant serves as a teacher, providing lessons that will benefit the laboratory long after the engagement is over,” Winsten says.

A consultant can also act as a catalyst in the political environment in which laboratories operate. Their services can be valuable when many personalities from various hospital departments come together to select an LIS. In many cases, the final LIS decision lies outside the laboratory, yet the only stakeholders who may truly understand the needs of the laboratory are the pathologists and end users, says Larry Wimberly, president of Wimberly Consulting Services, LLC, Houston. A specialized consultant may bring more might to the laboratory’s corner, helping the lab defend its interests, he adds.

Another, often unrecognized, role of an LIS consultant is that of “reality checker.” “People tend to believe the grass is greener with a new LIS,” says Wimberly. “It’s common for an LIS to have been installed for 10 to 15 years,” he continues. “During this time, the client may have experienced a turnover in personnel, version upgrades that are not well documented, and a lack of reinvestment in vendor-supplied training. So it shouldn’t be a surprise that a site doesn’t realize that many of its problems may be solved with what it already has.”

To get a handle on what their clients really need, consultants will validate their clients’ problems and document their requirements as a first step. This also helps labs to develop an accurate budget if they need to invest in a new LIS.

This type of analysis may reveal that a single product cannot meet all of a laboratory’s needs for the next five or 10 years, says Bruce Friedman, MD, professor emeritus of pathology at the University of Michigan Health System and an independent consultant based in Ann Arbor, Mich. If so, a laboratory may want to consider several best-of-breed solutions, which offer the highest level functionality but require more interfaces to the hospital’s EMR and billing and patient management systems.

Once the laboratory has documented its needs and established a budget, the next step in choosing an LIS is the request-for-proposal process. Consultants can assist laboratories in designing a detailed RFP that goes to a select list of LIS vendors. This helps facilities avoid getting sidetracked by chasing special features they don’t really need, the consultants say.

Vince Regina, president of the LIS consulting firm V. T. Regina & Associates, Charlestown, Mass., recommends narrowing the field and sending RFPs to no more than six or seven vendors. Regina recalls working with a client after the facility sent a generic RFP to nearly every LIS vendor. “When I got called in, they took me to a room that was full of boxes of RFP responses,” he says. “The client was overwhelmed, and we had to start the selection process from the beginning so we could document what was important to them.”

Don’t “over-engineer” an RFP by listing too many requirements, cautions Dr. Friedman. RFPs should be about 10 to 20 pages, he says. Dr. Friedman recommends structuring the RFP as a series of statements or questions by category so it’s easier for the client’s LIS selection committee to evaluate the proposals. For example, an RFP might include major categories covering such areas as order management and reporting, as well as some of the specialized labs, such as the blood bank. Questions about functionality should be structured so vendors respond to each one with a “yes,” “no,” or “under development.” This makes it much easier for laboratories to compare different vendors’ answers to the same questions. After his client selects a vendor, Dr. Friedman encourages the client to append the vendor’s RFP responses to the LIS contract to hold the vendor legally accountable for the functionality of the product.

While RFPs serve a specific function, both Winsten and Dr. Aller caution against placing too much emphasis on them. “Often, the most significant oversight in preparing an RFP is failing to consider, in advance, how it will be evaluated,” which could make comparisons difficult, Winsten says. These documents can be “ambiguous and misleading,” he adds.

RFPs may detail the impressive func-tionality offered by a vendor, but they can’t convey whether or not the vendor provides stellar support to its clients, Dr. Aller explains. “It’s disastrous to choose a system with exciting functionality that is backed by a vendor with mediocre support,” he says. Consultants, he adds, can help stave off this problem by assisting their clients with interviewing a select group of a vendor’s lab customers—culled from the vendor’s complete customer list by the consultant or prospective LIS buyer—to determine how satisfied those labs are with the vendor’s service.

“A multi-phased process,” says Winsten, “involving reference checking, on-site demonstrations, site visits, and corporate visits provides the information needed to make a confident and comfortable decision.”

Organizing on-site demonstrations of potential replacement systems is a routine task of most consultants. Laboratories that go it alone often make the mistake of spreading demonstrations over several days or weeks, Winsten says. On-site demos should be run concurrently—the same day or week—so users can compare how systems do what they do back to back, while everything they’ve seen is still fresh in their minds, he says. “Most [lab systems] do pretty much the same thing, but how they do it does vary, and it usually turns out to be the biggest differentiator between systems,” Winsten continues. For instance, the process whereby users record findings in the synoptic format may differ from one vendor to another.

For laboratories faced with the challenge of obtaining specialized systems functionality, consultants may offer innovative approaches to securing such features. Consultants may be able to work with LIS companies to establish their clients as alpha- or beta-testing sites for new software functions, Weiner says. However, he cautions laboratories against entering into agreements on the belief that the vendors will create custom systems just for them. He also warns against putting too much faith in a vendor’s promises of upcoming features. “Let’s say you really need a molecular diagnostic product and the vendor says that will be in the next release,” says Weiner. “That might be 10 years from now. Unless you specify it in the contract, you may never see that function.”

What makes LIS consultants most valuable to laboratories, the consultants say, is that they can save facilities thousands of dollars during vendor negotiations—namely through their in-depth knowledge of which companies discount and which do not. “Some vendors quote the list price but don’t expect anyone to pay that, while other vendors may not move off the stated price but may offer additional software modules baked into the quote,” Dr. Friedman says. While peers can provide some insight into vendor pricing habits, LIS consultants often have a better knowledge of vendor pricing strategies. And some have worked for LIS companies, giving them an insider perspective.

Once a laboratory has narrowed the field to just a few vendors, a good consultant won’t push the facility in a particular direction, the experts say. Rather, the consultant will offer unbiased opinions that help the institution’s selection committee make a decision.

To help ensure that a consultant isn’t “in bed” with a particular vendor, laboratory decisionmakers should inquire about the results of the consultant’s last 10 engagements before hiring that person, Weiner says. They should also ask if the consultant has significant stock holdings in any particular LIS company or is on a retainer with an LIS company, notes Wimberly. Once hired, the consultant should be willing to sign a conflict of interest/nondisclosure agreement, he adds.

When vetting potential LIS consultants through reference checks and face-to-face conversations, laboratories should look for someone with extensive industry experience, honesty, and integrity, the experts say. Dr. Aller suggests working with a consultant who maintains a small, niche practice that focuses on laboratory information systems. If a hospital requires the laboratory to work with a larger, general health care or information technology consulting firm, laboratory leaders should request a list of the firm’s recent laboratory engagements, find out which lab systems were selected, and get a list of references to check, he advises.

The bottom line is that if laboratories choose to work with an LIS expert, they should enlist an individual who understands the complex demands placed on all aspects of the laboratory, the consultants say. As Regina points out, “An LIS doesn’t stand on its own anymore.”