Feature Story

Core chores— making the core lab work

March 2002
Karen Southwick

For many core labs, the early pains are paying off—in greater efficiencies, streamlined protocols, better service, and, of course, cost savings.

Despite the pluses, the trend toward centralized lab operations is not clear-cut. Political and “turf” snags, incompatible information systems, resistance to change, point-of-care and home-care testing options—all work against the adoption of core labs.

"The interest in core labs varies in different parts of the country,” says Craig Lehmann, PhD, a consultant who specializes in workflow analysis of core labs. He is also dean and professor of technology and management at the School of Health Technology and Management at the State University of New York at Stony Brook. The decision to go to a core lab rests on the size of the hospital system, compatibility of the information technology, population density, and number of other labs in the area.

Core labs are particularly popular in dense metropolitan areas like New York City. And it’s much easier, Dr. Lehmann notes, to set up a core lab in a single-hospital system than in an integrated delivery network. “When you get to the IDN, it’s a whole different game,” he says, especially if the network has competing political factions and lacks a strong central leader. Differing LIS and HIS vendors is another barrier.

For a hospital system considering a core lab, Dr. Lehmann assesses the economics, labor pool, transportation, technology, and attitudes of all the hospitals involved. “The biggest mountain you have to climb is the politics,” he says, deciding where the core lab is going to reside, how the profits and work will be split, and how much in-hospital testing each facility will have to give up.

Generally, core labs handle hematology, chemistry, and, in most cases, microbiology, plus reference lab testing. They usually serve a network of hospitals and physician offices and nursing homes. Many hospitals in the network continue to perform routine chemistry, hematology, and some microbiology, as well as stat and POC testing in the emergency room, OR, and CCU. The core labs sometimes retain the not-for-profit status of the hospital system, but in other cases are set up as a for-profit venture.

Early adopter

The University of Virginia Health System in Charlottesville was one of the first large hospital labs to consolidate, about a decade ago. John Savory, PhD, the system’s director of core labs and professor of pathology, biochemistry, and molecular genetics, was involved from the start and now is considered one of the pioneers in core labs.

"We’ve always had an interest here in automation and robotics,” he says. To more effectively use those tools in the lab, “we came up with a concept to build these pods of chemistry, hematology, and coagulation analyzers together in one setting, causing us to realize that we had to consolidate these services administratively.” Although they never set up the pods of automated instruments, they did develop the core lab concept.

At first, the health system, which includes a large teaching hospital and several outpatient centers, put all the units in one large, open room, “but we still had an invisible line dividing the labs. We consolidated the ordering but little else,” Dr. Savory says. Staff wasn’t cut, and the different units operated fairly autonomously.

"We eventually concluded that without a total reorganization we weren’t really going to gain anything,” he adds. In 1994, he was named director of core labs and took over supervision of chemistry, hematology, coagulation, routine toxicology, and part of microbiology. “We would like to consolidate all of our services, but we just don’t have space in the large room that is now the core lab,” he says.

No one was formally laid off, but the lab offered early retirement to anybody who wanted it. About 25 people out of 80—almost one-third of the staff—took that option. Today the core lab uses 53 staff members to handle 3.4 million tests per year (excluding microbiology).

Medical technologists and others are rewarded for learning new skills through cross-training. To handle the complexities of scheduling people in ways that preserve their skills, “we developed scheduling software based on a genetic algorithm software package,” Dr. Savory says. That software is now being commercialized by Medical Automation Systems in Charlottesville. “It makes sure that people rotate through the various stations, maintaining skills and optimizing personnel resources.”

The centralized, heavily automated lab offers 24/7 service. “We’ve had some resistance,” says Dr. Savory. Cross-training and higher volumes mean the technologists, technicians, and other personnel are working harder. But Dr. Savory believes the core lab setup helps attract people “who don’t want to run the same test their whole life.”

Not everyone, however, can become fully cross-trained. “You have to find out who can and who can’t do it,” Dr. Savory says. You also need specialists in each area who can handle the complex tests and act as references for those who are less skilled. “Rather than forcing everybody to be cross-trained, you need a good mix of specialists and generalists,” he says.

In transition

In a process spanning several years, Massachusetts General Hospital is developing a core lab that will serve the main teaching hospital, as well as primary care and outpatient centers. “We are not trying to build a commercial operation but to provide something that best serves patient needs,” says Kent Lewandrowski, MD, associate director of clinical labs and director of the core lab. Even though the lab has contracts for insurance and managed-care services, “we’re not doing any sales and marketing.”

Like Dr. Savory, Dr. Lewandrowski emphasizes that core labs take several years to reach their optimum level. “First you make the decision, then you put in place the organizational structure and a plan to carry it out, then implementation, finally maintenance, improvement, and quality assurance.”

For Mass General, the first phase began in 1996, when labs scattered throughout the hospital were consolidated under a single administrative management within pathology. The second phase was selecting the Sunquest LIS as a single provider for all the labs. Consolidating workstations and cross-training, both of which continue today, was the third phase. The fourth, and final, phase is financing construction of a centralized laboratory to handle chemistry and hematology.

"Our vision was never to suddenly turn on the lights and have a massive core lab,” he says. Rather, Mass General took a modular approach, starting at the “back end,” with information systems and organizational structure. With that in place, the core lab can begin to offer consolidated services on the front end, to the clinicians who are its customers.

Since Mass General began the project five years ago, “the motivation has changed,” Dr. Lewandrowski notes. “In the mid to late 1990s it was cost savings. Today it’s labor savings—we’re short of people so we need to make better use of our med techs.” Consequently, as Mass General moves into actual implementation, “we don’t have to have a magnificent ROI [return on investment] to justify this. Our goal is to provide lab services in a labor shortage environment.”

The clinical labs have about 240 people, many of whom will be cross-trained to the extent that is “reasonable and judicious,” he adds. When the techs were presented with the core lab options, most said they prefer tasks of a higher complexity. “A lot of them see the core lab as an opportunity to make their jobs more livable and for them to provide more services.”

Dr. Lewandrowski says it took a lot of arguing and prioritizing to decide which tests would be moved to the core lab, because directors of other labs would have to give up some of their authority. Although chemistry and hematology will be consolidated, “we decided to leave microbiology autonomous.” The efficiencies to be gained from integrating microbiology, he says, were not sufficient to overcome the possible jeopardy to the integrity of specimens.

He doesn’t anticipate layoffs as Mass General implements the core lab, which is expected this year. “What it will really do is give us more capacity of personnel which we can consume,” he says. “We’re hoping to be able to let some of our vacancies stay vacant.”

He anticipates that unit costs will decline as Mass General is able to handle more volume with the same number of people. The clinical labs perform about 7 million tests annually, a figure that has been growing 10 percent a year. “If our volumes go up 30 percent in the next five years, we wouldn’t be able to swallow it without increased productivity,” he says. “Productivity improvement is key.”

Outpatient driver

Three years ago, Montefiore Medical Center in New York had a “very disjointed” lab operation, with chemistry and hematology located within different buildings and under different chairpeople, recalls Herb Rose, MD, director of chemistry. Smaller labs were scattered in other areas.

As the hospital began to establish large outpatient storefronts in its service area, “the need for a centralized facility became obvious,” Dr. Rose says. The first step was to unify all the lab departments under one chairman, within pathology. Then, a number of smaller labs were consolidated within pathology, including special endocrinology and immunodiagnostics. The old hematology lab within Montefiore was gutted so chemistry, hematology, and central accessioning could be combined in one space. “It was basically a clinical pathology combination,” says Dr. Rose. Microbiology and blood bank were already on the same floor, and they’re being fully integrated now.

Dr. Rose says the lab was carefully designed, with pre- and postanalytical automation, to achieve efficiencies. “We didn’t just throw everything into one room and call it a core lab.” Going from serial to parallel processing was one efficiency, for example. The primary tube goes to the main instrument while, at the same time, an aliquot goes to another machine and is processed in parallel.

Since 1999, chemistry-hematology have operated as a “lab without walls,” he says, and what used to be 12 workstations has dropped to four. Montefiore switched to Roche workstations that can handle more tests on the same instrument. On the chemistry side, thanks to cross-training and automation, 43 FTEs can handle double the volume of three years ago, Dr. Rose says. Last year, that amounted to 6.2 million tests, an 8.5 percent increase over the previous year.

Retraining people was the biggest barrier to overcome, says Dr. Rose. “The workflow had changed entirely,” he says. “We had to quickly learn how to use the people we had and re-assign them to new tasks.” Since Montefiore’s lab staff is unionized, “we had to do everything within the confines of the contract.” Dr. Rose and other administrators worked jointly with the union. “We had excellent cooperation. Virtually everyone went along with the re-assignment,” he says, which included shifting former area supervisors into other positions because there is now only one technical supervisor for the core lab.

Integrating functions meant staff could be cross-trained, giving them more skills. The first level cross-trained everyone within the same discipline, such as chemistry or hematology. The second level, still ongoing, is cross-training techs across the three disciplines of chemistry, hematology, and microbiology.

Today, Montefiore serves three other hospitals in the Bronx and has a large outpatient business, about 60 percent of the total, Dr. Rose says. The outlying hospitals have only rapid-response labs. “They do the stats and everything else gets sent here.”

Negotiating turnaround times is one of the ways to make a core lab work, he adds. The lab directors of each area suggest turnaround times, which are submitted to a hospital committee of physicians that approves the final rules. For example, on thyroid function tests the turnaround time is 24 hours. “Some of the physicians complain, but we feel like it’s reasonable,” he says.

The four hospitals that use the core lab share a common LIS that is now being upgraded. On the HIS side, “we’re now implementing physician order entry where doctors can order the tests online.” The requests are downloaded to the lab system and the results are uploaded to the HIS, which links the lab, as well as pharmacy and radiology, to what is becoming an electronic medical record.

Competitive factors

The Laboratory Alliance of Central New York was set up as a for-profit venture, even though it’s owned by three not-for-profit hospitals. Its mission is twofold: to handle the hospitals’ laboratory needs and to offer reference lab services in competition with commercial labs.

The Alliance, which operates in greater Syracuse, started business in 1998 and occupied its core lab in 1999. Hematology, chemistry, urinalysis, bacteriology, virology, and microbiology (except for stat gram stains) are all done at the core facility, which also manages rapid-response labs at the three hospitals. Any test that must be turned around in less than two hours stays at the hospitals.

The hospitals, which weren’t affiliated when they joined in the Laboratory Alliance, “saw there was a lot of competition from very aggressive commercial labs,” says Michael O’Leary, MD, medical director of the Alliance. To keep the hospital lab business viable, “we do aggressive marketing for physician offices, nursing homes, and smaller hospitals,” he says. Any profit means the owner hospitals get their testing at lower prices.

Today, the Laboratory Alliance has a staff of 360, split evenly between the core lab and the stat labs. In 2001 the operation handled 2.12 million tests, with average annual growth of 25 percent, and generated gross revenue of nearly $30 million. For the first time, the Alliance achieved a profit last year around $1 million, according to Dr. O’Leary. “We had some very difficult first years due to the difficulties of calculating just how much we should charge the hospitals,” he says.

Infectious disease physicians and nurses resisted the decision to integrate microbiology into the core lab. “Professional organizations would send out alerts to clinicians telling them a core lab was a diminution of service in terms of losing control,” Dr. O’Leary recalls.

He tried to entice the ID physicians to visit the core lab before it opened, “but no one came,” he says. Eventually, the ID nurses began to visit the lab when Dr. O’Leary’s team instituted “lunch and learn” sessions to which it invited an expert speaker. The ID physicians were asked to come to the lab to make the presentations. Once they were there, “we gave them a tour and a chance to talk to the techs,” he says. “We see that as a major coup.”

That kind of dialogue has helped the ID clinicians realize that a central lab offers advantages, such as full-service bacteriology from 6 AM to midnight, seven days a week. “We’d go 24/7 if we could find enough med techs,” Dr. O’Leary says. For the smallest hospital in the Alliance, Community General, turnaround times on virology have dramatically improved because the hospital previously had to send out all its viral cultures.

The Alliance recruited the top microbiology techs to the core lab, which meant that less experienced people were left doing the gram stains at the hospitals. “That did become an issue,” says Dr. O’Leary. At first, the stat lab person would make a preliminary call on the gram stain, then transport the specimen to the core lab for confirmation. Now, however, “we’re putting digital cameras into each of the rapid-response labs.” The techs take a picture of the gram stains and can do consultation without having to ship a specimen to the core lab.

The emergency departments, too, had reservations about the core setup. Dr. O’Leary gave them a list of 20 standard tests, including hematology, chemistry, and urinalysis, and promised that 80 percent of the time they’d be turned around in 45 minutes and 100 percent of the time they’d be turned around in 60 minutes. “We haven’t quite achieved that, but we’re close,” he says.

Point-of-care testing has become something of an issue as well. Glucoses, hemoccults, and blood gases are done in the emergency rooms or the critical care units. With more esoteric tests, “we’re always asking, ’Do you really need it that urgently?’” Dr. O’Leary says. The Alliance oversees POC testing and the training of nurses who do it.

Information technology is another barrier. Each of the three hospitals has different systems. The core lab uses the Sunquest LIS with CoPath for anatomic pathology. Results are transmitted to the security firewalls of each hospital and handed off to three separate systems. “That continues to be a headache,” Dr. O’Leary says.

Midwest amalgamation

One of the largest not-for-profit lab systems is operated by the Health Alliance of Greater Cincinnati. Five hospitals share the lab, and a sixth is being consolidated now. The administrative umbrella for the lab is Alliance Laboratory Services, formed in 1996. ALS performs 7.4 million billable tests a year and has a $60 million operating budget and 800 FTEs split between the core and the hospitals.

“Each hospital contributed its lab resources to a single administrative structure,” says Wendell O’Neal, PhD, ALS vice president. The hospitals all have immediate-response labs. “Any test that has to be done within four hours is done on site. Everything else would be consolidated into the core.”

In the consolidation, three major issues had to be wrestled with: infrastructure, such as choosing a common LIS; standardizing the instrumentation; and cultural amalgamation. The third was the toughest, Dr. O’Neal says. “All of these were previously independent hospitals that had competed with each other. We put together people from all those labs and told them to be friends.”

Within the hospitals served by the lab, results are available online. The other half of the lab’s business comes from doctors’ offices and nursing homes, which get their results via courier, mail, fax, remote printers, or computer interfaces. “We use the outreach business to offset the costs of serving the hospitals,” says Dr. O’Neal.

Smaller conflicts, too, popped up, including resistance to consolidating microbiology. “We recognized that the infectious disease doctors felt like they were losing something,” says Dr. O’Neal. The core lab had to demonstrate that the breadth of its offerings and its proficiency with unusual organisms would exceed that of a local lab.

Vince DeRisio, DO, ALS’ vice president and medical director, calls microbiology “very morphologically intensive. The more you see, the better diagnostician you will be.” Putting all the microbiology expertise into one room also brings the benefits of more interaction.

Mary K. Ansara, MT(ASCP)SM, manager of microbiology and molecular pathology for the core lab, says the clinicians like getting 24/7 service. As soon as a positive result is available, it’s delivered to the hospitals. When the testing was done on-site, “they usually had to wait until the next morning to get the results,” she says. For the core microbiology lab’s fourth quarter 2001 QA report, lab personnel sampled 2,000 specimens from the five hospitals to measure their turnaround times. The TAT exceeded 48 hours for only one percent of those specimens.

The core lab has standardized its reporting of microbiology results, which took some negotiating with clinicians. “We wanted to give them only the clinically relevant information,” Ansara notes. Until they became accustomed to it, “in some areas the physicians felt like we were reporting less than what they used to get.”

Dr. DeRisio acknowledges that having a consolidated lab “usurps part of the normal way of practicing for these hospitals, but you gain quality of results, veracity, and the ability to bring in new tests.” In fact, as point-of-care testing escalated, having the core lab was a plus. POC testing, says Dr. O’Neal, “was growing out of control, in random motion.” About two years ago ALS recruited a senior staff person to oversee it. Hospital-based specialists report to ALS, which has the “overall responsibility for technical oversight, quality issues, and training,” Dr. O’Neal says.

For-profit endeavor

Integrated Regional Laboratories, based in Fort Lauderdale, Fla., serves 10 HCA hospitals in southeastern Florida. A joint venture between the hospital chain HCA and Canadian lab MDS, IRL is, like its parents, for-profit. “We operate as one lab system with 11 locations,” including the 10 hospitals and the central automated core lab, which opened in 2000, says Joanne Trout, IRL’s chief operating officer. IRL also provides laboratory services for non-HCA hospitals, but doesn’t manage their labs.

The core lab handles microbiology and some chemistry, hematology, immunology, and coagulation. For the 10 HCA hospitals, it performs about 28 percent of the overall billable tests, according to Trout. In 2001 that amounted to 1.6 million tests, handled by 155 FTEs of whom 62 are technologists and technicians. Transportation, specimen integrity, and the condition of the patient determine what tests are done where. For example, critical care patients are more likely to have their tests performed on site.

Like her counterparts in the not-for-profit world, Trout had to handle the clinicians’ resistance, especially on microbiology. “We worked with the infection control nurses and infectious disease physicians at all the hospitals to come up with acceptable protocols,” she says. Enlisting the infection control nurses was “very important,” she says. “They rely heavily on microbiology to do their surveillance.”

She also found that “you need to identify the key drivers for the infectious disease physicians.” For instance, the overall turnaround times are not the only important service indicator. Rather, “they wanted to know that for new cultures they would get a preliminary report by 7 AM the next day, when they came in to do their rounds.”

IRL had an advantage getting started in that all 10 hospitals used the same IT system, Meditech, for both LIS and HIS. For its outreach work for doctors’ offices and nursing homes, IRL has created a customized system called Access IRL that allows them to pull up the patient demographics and other needed information on a PC. “Access IRL has just been deployed into our first outreach account in January,” Trout says. “It’s a tool that will allow us to be more competitive in the outreach market going forward.”

Bigger can be better

The North Shore-Long Island Jewish Health System encompasses 18 hospitals in Long Island, Staten Island, Brooklyn, and Queens. For seven of those hospitals, a core provides all lab services except stat. Over the next year they hope to add the remaining hospitals for reference work. The core lab performs 2.5 million tests a year and coordinates another 3 million tests in the seven hospitals. Reference work from the other hospitals means picking up another 1.5 million tests.

The 30,000-square-foot consolidated lab is located off-site from all of the hospitals and relies heavily on automation, says Thomas Sodeman, MD, chairman of laboratory medicine for the health system. A CLAS robotic system handles routine chemistry, hematology, and coagulation. Because of the automation, the number of tests per FTE is high. “We got over 55,000 tests per FTE per quarter on the chemistry line,” Dr. Sodeman notes. About 90 percent of chemistry and hematology is auto-released.

The seven hospitals chose to standardize on the Cerner LIS “because of Cerner’s ability to handle our robotics,” he says. The next step will be to create a common patient repository with a master patient index. That way, no matter where patients enter the system, “they will be assigned a single number.” In March, the system will go live on an Internet-based order-entry system, so that physicians can place orders and look up results online.

Like his colleagues, Dr. Sodeman says the way to overcome physician resistance to core labs is to demonstrate superior service. “We have very advanced molecular infectious disease work,” including the full spectrum of HIV, herpes, and hepatitis. While most hospitals use routine HIV screening for mothers and newborn, “we use PCR testing and turn it around within the allotted performance of others doing a screening test,” he says.

The core lab has five lines of business: hospital work, nursing homes, physician offices, reference work, and clinical trials. Under an arrangement with a Belgian company, Barc, that coordinates clinical trials, “we do all the testing for patients in the U.S.,” Dr. Sodeman says. “They do the pre- and postanalytical work in Belgium.”

He anticipates two new steps this year: adding digital storage and imaging, and using bar-code scanning of all specimens so they can be tracked electronically by the couriers.

The biggest advantages of core labs? In Dr. Sodeman’s view, they are improved quality, expanded services, standardized results, and electronic access to information. The highest hurdle? Achieving the right balance between each hospital lab’s individuality and the need for standardization by the core.

Karen Southwick is a writer in San Francisco.