Security in the cloud leads off in LIS exchange

Yes, people are delaying care. Is it going to be seen the same across the country? No. There are different pockets, and it depends on the type of facility you are, where you are in the country, and how your organization is dealing with that.

As molecular testing becomes mainstream, laboratories that have invested in PCR and molecular technology for COVID are looking to expand their test menu using what they already have. They’re saying, “We’re not going to be able to solve these problems with people, so how do I take my investment, which I had to put in place for COVID, and expand into cancer diagnostics, or into women’s care?” You’re going to see a lot of new molecular testing over the next 24 to 36 months, and it is going to move clinical pathology forward at a speed we haven’t seen in a long time.

I think digital pathology and molecular testing are going to boom. The laboratory is finally at the forefront of diagnostic testing and there’s an understanding within health care of how important the laboratory is. And I don’t think it will go backward. That’s a tremendous benefit to the laboratory, and in the long term it could have a positive effect on budgets.

We had a lot of new lab entrants in the past year, pop-up labs devoted to COVID testing. Are those people looking for IT solutions as they grow and expand?
Curt Johnson (Orchard): We see it on two fronts. A lot of labs are sitting on a war chest of financials because of COVID. Some are startup labs with rudimentary systems, single tests, and they’re saying, “How do I expand this business? I can’t live off COVID two, three, four years down the road. What does the future hold?” They’re asking, how do we upgrade our technology and what markets can we serve to benefit the overall population?

Others are branching into toxicology. They’re thinking, How can I help with the opiate crisis? How can I move to women’s care? How can I move to cancer using the molecular technology I have? Where’s the best benefit for the business that matches up with the needs of health care? That’s what the smarter COVID labs are doing.

If the labs have integration with their customers, they have the pipes in place now to continue to be that lab’s reference lab of choice. COVID allowed regional reference labs direct pipelines that wouldn’t have been there before to businesses like Delta airlines or Tyson Foods. So how can they benefit businesses in personalized medicine and help organizations with their overall health care costs? Forward-thinking laboratories that came into the market are looking at those opportunities.

Jonathon, are you seeing new entrants in the lab business that will have greater needs for information technology?
Jonathon Northover (CompuGroup): We’re seeing two things happen. New labs are appearing and existing labs are pivoting dramatically from doing, for example, fertility specialization testing to infectious disease testing with COVID. The reference labs we work with that have been successful have ramped up their volume of testing and staff management, almost the opposite of the labor shortage problem.

Now they’re trying to figure out what to do next. And I agree with what Curt said with regard to reusing existing PCR machines to do other types of molecular testing such as urinalysis.

The second piece we’re seeing is forward-thinking labs trying to get directly to the consumer. COVID has accelerated those labs’ existing plans to develop the technology and availability for direct to consumer tests, and there’s a huge marketing effort to offer such tests directly to the consumer.

And sometimes consumers themselves are demanding services. For example, we’re supporting consumers being able to scan a QR code, for entrance to events or for international travel, that proves the legitimacy of their COVID test results within 72 hours.

Bob, I’m assuming what you’re hearing from Curt and Jonathon sounds familiar, and your customer base would be happy to expand in a salutary way, financially and clinically. Have you experienced this over the past few months?
Bob Dowd (NovoPath): Some of the laboratories we work with have added the abilities of the PCR instrumentation they already had or invested in not only to expand their molecular offerings but to do COVID testing. So we created a repository for data for COVID testing for our clients to use, and now that our clients are expanding into molecular testing, we have the capability to add combined reporting. We’re incorporating the cloud in that, too.

Michelle, pre-COVID, two years ago every conversation would’ve been consolidation, standardization, systems adapting, one system, et cetera. COVID has cut against that grain of consolidation—and it’s good to have new entrants, new business. Three years from now, do you imagine we will have a greater number of laboratories operating in the United States? Or will we be closer to our pre-COVID number, with consolidation again having pride of place in the market’s development?
Michelle Del Guercio (Sunquest): We will see some of those start-up or pop-up labs go away. That will occur naturally. Some will get acquired because what they are growing might be attractive to other organizations to purchase or consolidate with.

Even though traditional mergers and acquisitions have reduced during COVID, we have seen quite a bit of test routing and sharing, where one lab is not set up for COVID testing but they’re receiving orders and sending them elsewhere to be performed, or consolidating to a single laboratory within a health system to perform the volume of work. We might see consolidation or M&As continue, but in a different way. We might see some sharing—I don’t want to say management services organizations necessarily, but where there will be spreading of that integration consolidation in different ways.

Nick, could you comment on this same question?
Nick Trentadue (Epic): Michelle’s right. We’re going to see different groups pivoting into COVID testing or adding it into their line of business. Some of them will be successful; many will go away.

We’re seeing enormous mergers and acquisitions and consolidation even through COVID, and I think it will continue, whether it’s divesting part of a business to one of the large labs or health systems merging. Across the pond, the National Health Service and other groups in Europe are starting to consolidate and create more of a center-of-excellence model where they can build huge laboratories that serve most of London, for example. So I think we’re going to continue to see bigger laboratories and more laboratories acquired, but I do agree there will be new players and there probably will be even acquisitions of those as well.

Toby, do you have an opinion on mergers and acquisitions, this system consolidation and how it might end up? What does it look like from your perspective?
Dr. Cornish (University of Colorado): I agree with everything that’s been said—there is a lot of pressure to consolidate laboratories. We’ve seen it in our market. There’s a lot of expansion too of existing health systems, to be more competitive in markets. It’s difficult to be a small lab these days, and they’re kind of going by the wayside. You almost have to be acquired or merge.

From what Toby just said, one could take that there is a move in pathology toward not only subspecialized pathology but what I’ll call deeply subspecialized pathology where we have two, three, or even four experts in the system who will deal with all the cases. Bob, are you seeing that trend with your clients?
Bob Dowd (NovoPath): Yes. Working with the clients, we’ve helped design with our distribution system down to the level of what type of cases people would like to read, can read, or be assigned. A lot is done automatically, programmatically, as cases come in; we know this type of case goes only to Dr. Cornish because that’s his specialty. We have put that in at the request of some of our larger clients with pathologists who have a wide range of cases coming in.

Jeff, let me ask you the same question because it has to do with productivity—we assume the more subspecialized the pathologists are, the more productive they are with those cases. Are you seeing that in Sunquest’s anatomic pathology offering and customer base?
Jeff Watson (Sunquest): Yes. Being able to have that center of excellence and get those cases to the right pathologist is more important than it ever has been, and it helps drive productivity.

Curt, out of all this activity, are we evolving toward a more efficient laboratory system, say, two years down the road—better organized, better triage among all the different levels and players? What’s your prediction?
Curt Johnson (Orchard): Tell me how reimbursement will look in two years, and I’ll tell you exactly what it’s going to look like. Don’t lose track of “follow the money” in all of this. When we’re talking about mergers and acquisitions with large health care organizations, you’ll see that. And when they start to think about what’s our focus, what’s our strategy, and they can divest or merge to meet that need, that makes sense.

When you think about where new things are coming from, they’re typically from large university sites or from people we don’t know about today. You’ll continue to see an expansion of small laboratories because laboratory-developed tests will allow small labs to enter the marketplace. Will they get gobbled up if they have something of true value? Absolutely. With molecular testing and digital pathology I think you’ll see an expansion of laboratory tests, and some of the mom-and-pop labs that popped up will turn into something and some won’t.

The lab is also a business unit, a profit center for an organization. So while I’m half-joking about “tell me what the reimbursement’s going to look like,” I can tell you how consolidated or unconsolidated it’s going to be. That’s a factor that has to be taken into consideration.

Judging from what we’ve heard from CMS earlier this summer, PAMA will be back, threatening reductions. The clinical lab fee schedule and the physician fee schedule are not doing us any favors, from a 60,000-foot view. Toby, I don’t think you’d disagree with that, would you?
Dr. Cornish (University of Colorado): No, I don’t. And as was brought up earlier, I think our costs will go up substantially if we get serious about recruiting and retaining our technical staff, who are vital to the lab. Medicare reimbursements continue to decline, and it does not reflect the realities of what it takes to run a laboratory, even if you do consolidate. We are bound for a crisis in reimbursements versus costs in the near future.

Let me change the subject, Dayna Carlin, to sales and marketing and what it looks like in terms of getting around and getting your job done, particularly in the midst of the latest COVID uptick.
Dayna Carlin, marketing director, NovoPath: From a marketing and sales perspective, it’s digital, which has opened up a brand-new door and brought people to see that people are people, not just pathologists or chief information officers or lab managers. It’s given us a better way to connect as humans in a different light. When you were traveling and meeting face to face, it was businesslike. Now you’re seeing kids and dogs pop in, and it’s brought a new human perspective to sales and marketing.

Nick, are you missing the old days of trade shows and personal visits?
Nick Trentadue (Epic): It’s a new ball game. The lab hasn’t worked from home or stopped working the past year and a half, so to some business is normal. At Epic we haven’t stopped either; we have made some trips, but most has been digital, remote. To Dayna’s point, I agree it’s brought out the human side in everything. We’ll continue to see a hybrid.

In some cases we get greater attendance when it’s remote because people don’t have to drive to, say, a seven-lab or seven-hospital system. We’ve seen success in terms of participation where more people are brought to the decision-making table because it’s easier to connect via Zoom than it is to meet in one location.

Jeff, same questions: How have things been, and how do things look going forward?
Jeff Watson (Sunquest): It’s a new world, working to reach people in a digital way. We leverage webinars. We have user-group meetings digitally, and we’ve taken on a vendor approach, doing sort of a digital tradeshow with a digital exhibit hall and speakers in the auditorium via a virtual platform environment that offers peer-to-peer networking, educational sessions, and product booth displays.

Our salespeople are eager to get back to interacting with customers face to face, and that is happening more regularly.

I’ve always found the wonderful hallway conversations at meetings indispensable. I don’t think I could do my job without them. Toby, do you miss the hallway conversations and exchanges?
Dr. Cornish (University of Colorado): Absolutely. I’m eager for in-person meetings to start up. I’m not saying this just to pander to the crowd on this call, but I do miss walking the vendor floor. People ask me questions about emerging technologies and I tell them I haven’t walked a vendor floor in two years. I feel like I’m out of touch with what the developments are.

People say this is the new normal—working from home, remote work, virtual meetings. I think it undervalues those spontaneous conversations. In a perfect world we would understand who all the vendors are, what their offerings are, and we’d be able to efficiently and directly reach out to the people we need to contact to ask the right questions. The world is not that perfect.

It’s what you’re talking about, Bob. It’s the hallway conversations, the things that are off agenda. At an in-person meeting you talk to the right person who’s maybe not your salesperson but a technical person who’s at the show. And you come away with an unexpected appreciation of a product or even redefining your own needs. You can’t always get that when you are limited to just directed, digital interactions.