By Renee DiIulio

In this year-end report, CLP speaks with 11 industry professionals, including lab suppliers and scientists, about the state of the clinical lab—where it is, where it’s going, and how it will get there.

There were few surprises in the clinical lab industry in 2004, and there don’t seem to be many ahead, if one considers that the experts CLP spoke with all expect to see the same things in the future: increased automation, more genetic testing, and a greater role on the patient care team. These same professionals also expect to see rising costs, fewer resources, and a continued labor shortage challenging the industry. Although they may not have true crystal balls, these experts gave some insightful answers when asked what they thought of the industry’s future.

CLP: What was the most surprising trend in the clinical lab industry in 2004?

Chris Christopher (Dade Behring Inc): There were two noticeable areas of growing interest that attracted more attention than in previous years. One, senior management established “Doing more with less” as the norm. As a result, laboratorians were motivated to partner with vendors in their quest to accomplish faster turnaround times and greater productivity. Quality improvement initiatives, such as Lean principles, Six Sigma, and EFQM (Europe), also took a forefront position to reduce waste and minimize errors—all in the effort to achieve the lowest total cost solution. Two, informatics solutions resulted in the largest new investment area in many years for both the hospital and clinical laboratory. The drivers for these new investments appeared to have originated from two different sources—the government’s push toward EMR (electronic medical records) and competition from national reference laboratories that offered new Internet order/resulting systems for their customers. Historically, regional hospital laboratories have had difficulty in getting approval for new patient registration and lab order entry systems. However, 2004-2005 fiscal budgets are now including the capital needed for investments in many parts of the country.

Joeline Davidson

Joeline Davidson (West Georgia Health System): The thing that most shocked me was that foreign countries were soliciting business from us, and we’ve transported samples across the water for the first time. The labs in England claimed that low labor costs allowed them to perform tests for less expense.

James Fantus (SED Medical Laboratories): We’re finding that third-party payors are once again restricting providers.

Nanci George (SED Medical Laboratories): In Florida, Medicaid is seeking RFPs, to award one vendor who will likely subcontract out to handle the volume.

Keith Chaitoff (Abbott Laboratories): One of the most surprising things visible to us, and which is also a good thing, is the amount of interest in integrated systems. In March 2003 we launched a series of products featuring a chemistry component, an immunoassay component, and one that integrated the two. The integrated product outpaced our expectations.

Chris Bosler (Roche Diagnostics Corp): The rapid adoption of clinical chemistry immunoassay solutions in the lower portions of the midmarket was unexpected, exceeding what we’ve seen in the past.

Mark Powelson (Gen-Probe Inc): The need for molecular diagnostics has been somewhat surprising. With the increased automation of esoteric tests, more labs are beginning to perform genetic testing to take advantage of this growth opportunity.

CLP: What is the biggest challenge facing the industry in the coming year?

Davidson: The biggest challenges will continue to be issues of productivity and the provision of the highest quality of testing for the lowest cost while at the same time dealing with the personnel shortage.

Susan Fisher Gross (UCSF, San Francisco General Hospital): Staffing shortages do continue to be a challenge, particularly here in California. We need people with the knowledge and experience to run the more sophisticated tests.

Herb Steward (bioMérieux Inc): We think a number of qualified people graduate with the background necessary for the clinical lab, but they do not gravitate toward the industry because of the economics.

Chaitoff: While everyone agrees there is a shortage of medical technologists, not everyone says there is a shortage of labor—lab aides and technicians are filling some empty positions. So the challenge is for manufacturers to make equipment that is as simple to run as possible.

George Goedesky (bioMérieux Inc): Additional challenges exist in the increasing workload, not just from our aging demographics but the many new tests on the market.

George: How do you implement these tests and keep costs down? And how do you get coverers to pay and pay enough for these new alternatives? It will be a challenge to buy it and manage it.

Powelson: Labs are a big, expensive area to manage, and rising health care costs continue to put pressure on the market. The biggest challenge is cost control and containment.

James Fantus

Fantus: With rapidly changing technology, including molecular biology and genetic testing, labs will also have to consider how to deal with their investments in traditional lab equipment. How rapidly will new testing come? Proprietary tests are also an issue. Many labs are developing their own tests, which cost more than reimbursement, but because of patents, they are the only ones available.

John Hertia (Bio-Rad Laboratories Inc): As suppliers, our biggest challenge remains establishing the delicate balance between product cost reduction and improved quality systems, while still maintaining enough for research and development. For publicly held companies, these must then be balanced with satisfaction of shareholder expectations.

CLP: What will be the biggest cost saver for labs in 2005?

Hertia: Automation of manual processes can be the biggest cost saver for labs. Implementation may increase costs initially but will result in savings in the long term, particularly with the labor shortage.

Gross: The automation of more equipment will help with the staffing shortage and therefore save money.

Chaitoff: The integration of clinical chemistry and immunoassay testing can reduce workstations and the related reagent, maintenance, and labor costs.

Fantus: The automation of all lab processes, including record automation, will save money. The ability to manage data is key.

Bosler: Better labeling and coding can help to streamline the preanalytic process. Different financial models can bring additional savings.

Christopher: The biggest cost savers will not come from technology, but from the implementation of productivity and quality improvement tools, such as Lean and Six Sigma. These tools are designed to reduce waste and errors—the two essential reduction areas that are needed to drive lower cost.

Davidson: I’m a proponent of automation along with the use of Six Sigma, which achieves the most streamlined methods, eliminating duplication of efforts and extraneous steps.

Goedesky: There are two perspectives. One is interlab cost savings that can result from increased productivity through increased automation across the entire process, from sample collection to result release. The second is how the lab can contribute to greater savings in patient care.

CLP: How can labs run more efficiently?

Powelson: In the short term, automation is the key to efficient operation and can help with the labor shortage.

Gross: There is no question that automation can release more employees to run the sophisticated tests.

Fantus: New technology and analyzers do require less reagent and less hands-on management.

Steward: Automation can increase efficiency, but it’s really cutting around the edges. The lab needs to be viewed in a new way, looking at the value it brings to patient care and then approaching efficiency from this angle.

Christopher: The best practice high-volume clinical laboratories have aggressively sought out operational solutions from their vendors, their peers, and even other industries. They view their laboratory operations as a complex production model with emphasis on simplifying where possible. Management in the best-practice labs establishes quality improvement initiatives that become the norm, not just a program of the month. They constantly seek to minimize sample handling, splitting, and travel within the lab via efficient layouts and instrument consolidation, while automating selective high-volume manual tasks.

Chaitoff: Integration can help accomplish this, providing a system with one entry point, but only if throughput and carryover are not compromised.

Bosler: There are still workstations that can be reduced due, in part, to the menu.

Nanci George

George: Efficiency is also tied into the information technology systems used. How user friendly are they? How much data can you manage? It’s no longer just about the result. With new technology, users can trend and graph and extend a report to enhance the physician experience, making it easier and faster to access results and what they mean. IT is also key to the management of invoicing and contracts. Streamlining these processes will increase efficiency.

CLP: What trends do you foresee in the next 5 years?

Christopher: There are three trends that appear to be taking hold nationally. One, finding practical and affordable solutions designed to increase productivity and reduce errors in the midst of a smaller work force. Two, transitioning from a paper requisitioning outreach system to electronic order entry for all lab tests that include medical necessity checks and electronic entry into the LIS. And three, reviving school programs for careers in medical technology.

Powelson: Labor will continue to be an issue for labs over the next 5 years. A less skilled labor force will be supported by more automation.

Gross: I expect to see automation of the more sophisticated technologies.

Bosler: There will continue to be pressure to reduce costs as well as increased acknowledgement of laboratory information as part of patient care. Consumerism is likely to find its way into the lab with greater patient choice in disease-state management.

Steward: Patients will be asked to pay a lot more of total health care and expenditure than they do now. When they pay more, they will want to see the breakdown and will then want to make choices to obtain the best possible care for their money.

Goedesky: Patients will demand greater transparency in health care outcomes by the hospital or physicians. Demonstrating the value of the lab result is therefore critical in the near term. The discovery and utilization of new markers, which can determine predisposition to disease states, will also add new value and care options.

Hertia: I see more labs taking advantage of the increase in biomarkers and developing home-brew tests.

Davidson: Proteomics and molecular testing will come into their own.

Powelson: Molecular diagnostics are expected to grow 20% over the next 2 years. Regulation will also increase, and I think we’ll see an increase in the severity of disease states, particularly those of a bacterial or viral nature, which morph rapidly.

Fantus: In addition to molecular diagnostics, we also expect to see more point-of-care (POC) testing, which will change what labs sell in the future, though it will not eliminate them. There will continue to be consolidation in the industry, creating fewer labs with increased efficiency and volume. There will be more electronic data transfer and less paper.

CLP: Do you think education of laboratory professionals should change, that is, should a master’s degree or licensing be required?

Davidson: This should definitely have happened a while ago so that new personnel have the necessary expertise and don’t need to be trained on the job. Models for a clinical doctorate in labs are currently under investigation.

Gross: The two are important and already implemented in some states, but the system needs to change to offer both a master’s and license in the same program. In addition, reciprocity would be helpful. California requires licensing but does not accept licenses awarded in other states. Some technologists and scientists have found that they are ineligible to even take the test because they did not complete the right coursework. This lack of reciprocity has very likely contributed to the larger labor shortage in California.

Fantus: I do think licensing should be required to ensure the most qualified people are working in the lab. Whether or not to require a master’s degree depends on a position’s responsibilities. For instance, a lab technologist running an Olympus may not need a master’s, but a laboratory scientist developing protocols would need at least that.

Christopher: New requirements, though, will only place additional hardships on an industry that is already plagued with regulations. However, continuing education is a must for all professionals and especially for laboratorians, where study of other industries will generate ideas that can solve their unique problems.

Hertia: We have no opinion about this. As a manufacturer, we don’t drive policy but support it.

Chaitoff: No comment, but I will say, even if lab professionals have more education, manufacturers still will not want to add complexity or costs to testing.

CLP: How is the lab of today different from the lab that we’ll see in the next few years?

Steward: Labs will strive to deliver the right information to the right person at the right time, and additional resources will be applied to technology and personnel to maximize the influence on a positive clinical outcome.

Davidson: We’ll become a greater part of the clinical management team and work more closely with other departments, such as pharmacy. Already we’ve seen new positions with a responsibility to help the physician interpret results.

Bosler: The value of test results will be better understood by the medical community and will be seen as adding value not driving cost. Innovation will be less around systems and more around data management, with systems becoming more accessible for doctors.

Hertia: The new data management systems will pull and compile data for physicians, who may be overwhelmed by the growing amount of information generated. We’ll see the use of multiplexing increase. This technology uses clinical algorithms to suggest a disease state based on the many different test results. We will continue to see other new technologies, as well as the emergence of new biomarkers, in genomic and proteomic research, with companion diagnostic tests for new therapeutics.

Gross: I expect to see more molecular testing and more infectious disease testing than in the past. This will require new technologies whose level of sophistication will demand the skills of clinical lab scientists with master’s and PhD degrees.

Christopher: With the evolution in new tests each day, the laboratory of the future will certainly be challenged with keeping processes simple. I expect advances in technology, such as more affordable task-targeted automation and new instrumentation with more channels and faster throughput, to significantly help.

Chaitoff: Systems will continue to have larger menus and onboard capacity. Labs will move from six to four to two analyzers, resulting in workstation consolidation.

Powelson: Technology will improve—we understand how to put the components in a box. The next step is to make them smaller and faster, moving toward handheld devices.

Fantus: The increase in POC and genetic testing will push more scientifically oriented labs. But if you look at history, the top 20 lab tests today are the same ones from 20 years ago. The number one POC test is for glucose levels, but it’s also still the top test in the lab. So many of the things we measure will not change, though where we perform the testing may. I do expect some of the more esoteric tests to become routine.

Christopher: The key, though, will be in management’s ability to seek out solutions and provide a safe working environment that motivates the staff while meeting customer demands 24/7.

George: My question is who will pay for it?

Renee DiIulio is a contributing writer for Clinical Lab Products.