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Taking the guesswork out of measuring ROI for lab systems

June 2021—ROI is the holy grail of pathology laboratories purchasing laboratory information systems and analyzers. The abbreviation stands for “return on investment,” but it should also mean “rarely obtained information,” jokes health care consultant Dennis Winsten.

What most laboratories don’t understand, says Winsten, president of the Tucson, Ariz.-based health care systems consultancy Dennis Winsten & Associates and CAP TODAY “Newsbytes” editor, is that gathering rarely obtained information can lead to a higher return on investment. In other words, it takes “ROI” to get ROI, quips Winsten, who discussed this topic in a presentation at the 2021 Pathology Informatics Summit last month and in an interview with CAP TODAY.

“Many laboratories implement major systems and don’t follow up on whether they have actually realized the benefits anticipated,” says Winsten. “They expect that the changes that were predicted to happen have actually occurred.”

For large capital acquisitions, such as purchasing information systems, large analyzers, or automation systems, laboratories often conduct a pro forma ROI based on projections of costs and benefits. The pro forma ROI typically is created by a laboratory team that needs a new system, with the assistance of a vendor that wants to sell the system, and it is structured in a manner that justifies the large purchase to senior management, Winsten explains.

Winsten

Yet hospital and laboratory management rarely go back after a system is installed to evaluate whether the initial assumptions about ROI have been met, he says. And even if they do, he adds, it is “virtually impossible” to determine the direct benefits of the system or analyzer, outside of whether a baseline standard has been met, without having begun a multi-step, systematic evaluation process prior to installation.

To recognize the benefits that can be directly attributed to the large-ticket item, the laboratory needs to perform a comprehensive operational benefits realization assessment, or COBRA, Winsten explains. This involves establishing and recording a baseline metric of significant parameters and key performance indicators, before installation begins, that will serve as the basis for a post-implementation audit that remeasures the parameters and KPIs. “Comparison of the metrics from the pre-installation baseline and post-implementation audit will indicate whether or not the expected benefits of the new system or analyzer have been achieved,” he says.

A COBRA should be included as a budget item for any large capital expenditure, Winsten continues. To offset the expense, he encourages laboratories to insist, during contract negotiations, that the vendor underwrite the costs to perform the benefits realization assessment. “The assessment can be done internally or independently but, preferably, not by the vendor,” he says. “Further, the vendor should agree to include the pre-installation baseline document as an attachment to the contract, to accept the results of the post-implementation audit, and attempt, at no additional cost [to the laboratory], to remedy any shortfalls or deficiencies identified.”

The combined pre- and post-installation COBRA analysis costs for large information system and analyzer installations vary, Winsten adds, based on the type of system or equipment being installed and the number of laboratory benchmarks being measured.

Nonetheless, a benefits realization assessment is critical for all major purchases, Winsten says. “I’m sort of frustrated that I don’t see more of it because it’s a relatively low-cost way to ensure that you are getting better quality, achieving what you were looking to do, and getting what you paid for.”    —Renee Caruthers

Orchard purchases Corwen

Orchard Software has acquired Corwen LLC to enhance the molecular capabilities offered via its comprehensive laboratory information systems portfolio.

Among Corwen’s offerings is the PRSQRL molecular solution, a smart platform that automates sample tracking, orchestrates workflows and instrument operations, and automatically converts complex data from genetic analyses into reportable results.

“Corwen’s molecular solution will work alongside Orchard’s broader LIS and point-of-care testing solutions,” according to a press release from Orchard. “This will also allow Orchard to further enhance its support of COVID-19 testing to include sample pooling and liquid handler integration.”

The companies have collaborated through the years and have mutual customers conducting high-volume molecular testing.

Orchard Software, 800-856-1948

Medbaye releases application for interpreting test results

Medbaye has announced the availability of its Clirra application for simplifying the process of interpreting diagnostic test results.

The application combines content from a proprietary database of peer-reviewed research with patient information entered by the clinician to create a single value indicating the probability of a patient having a specific disease. Clirra received approval under the FDA guidance document “Policy for Device Software Functions and Mobile Medical Applications.”