le01.jpg (13069 bytes)The Sharp HealthCare network includes seven San Diego hospitals that make up about one-third of the local market share in diagnostic testing — approximately 3 million clinical chemistry tests per year.

Our goal was to improve the efficiency and consistency of testing at all laboratories, beginning with clinical chemistry. Our options included centralizing testing or standardizing equipment and procedures at all lab locations.

At the time, multiple equipment vendors supplied each of the seven hospitals. We examined centralized models that included high-output, high-capacity analyzers. However, our research indicated that a decentralized model with standard equipment was more patient- and client-focused and more cost effective. After evaluating several vendors, we chose a clinical chemistry platform with enough models to support different testing volumes. In 1996, we installed 10 chemistry systems in seven hospitals.

After careful evaluation, we decided to implement the Vitros Chemistry Systems from Ortho-Clinical Diagnostics (OCD). The Vitros dry-slide system includes both mid-volume and high-volume analyzers. A mid-volume unit is the primary analyzer in our three smaller hospitals. Each of our four large labs operate with a high-volume testing system, augmented by a mid-volume device that acts as a backup or stat analyzer.

le02.jpg (15335 bytes)Francis Thomas, laboratory assistant at Sharp Healthcare, loads samples into the Vitros 950 Chemistry System from Ortho-Clinical Diagnostics for an analysis session.

An innovative shared risk contract with the vendor lets us pay for our equipment use through a fee-for-test arrangement. It includes: equipment, service, disposables, consumables and any other associated costs. Our contract is based on a projection of billable tests per year in all seven hospitals.

Total test volume is based on a combination of projected and past productivity. Because the cost of equipment is factored into the cost of each test, the laboratory services system was not required to make an investment in capital. The vendor shares the risk by installing the testing systems and earning the revenue specified by the contract. The eight-year contract contains a no-penalty out clause after year three.

From the start, it was clear that this type of contract would not work if we did not act as partners. We developed a reasonable use clause that is based on a calculated efficiency rating. By dividing the number of patient reportables by the number of tests performed, we established a reasonable use rating that was realistic to OCD and Sharp. This efficiency rating also was compared against efficiency ratios based on national averages. With those ratings in place, we determine our operational success with quarterly business reviews.

Labor was another important issue. We found the new equipment easy to operate and maintain. Currently, it takes only one week to teach medical technologists and lab assistants how to operate the equipment and perform routine maintenance.

The new equipment was installed with minimal problems. Most service issues have been solved over a telephone help line. Infrequent maintenance is due mainly to the dry slide technology. In the past, when using wet chemistry systems, we experienced many more mechanical problems such as air bubbles and hydraulics. Clotting was a particular problem. Our previous wet system could be inoperative for up to 30 minutes while locating a fibrin clot.

The chemistry systems achieve a 30 percent increase in productivity and a 20 percent reduction in costs for our laboratories. A stat analysis is completed in less than 45 minutes and for exceptionally critical procedures, the lab performs tests in as little as 15 minutes. Routine tests are delivered within two hours.

le03.jpg (13657 bytes) Thomas manipulates the touch screen display on the Vitros 950.

A large part of the rapid results come from the efficiencies introduced by our chemistry system. A single analyzer is producing up to 700 tests per hour. Increased productivity is a matter of accuracy as well as speed. The virtual elimination of repeats, combined with greater capacity, accounts for our 30 percent increase in efficiency.

Equipment reliability is also a critical element. Through independent sources, we evaluated the maintenance records of all the chemistry systems we considered. These studies indicated that the systems we selected were the most reliable, and our experience has confirmed this.

We also have found that dry-slide technology is more accurate than wet-chemistry systems. The process is both sensitive and specific, and there is less risk of error since results are more automated. If there is a testing process failure, the dry-slide systems will not produce a result. In our experience, many liquid systems produce a flawed result, despite corruption in the testing process.

Employing the same testing platform in all hospitals also has allowed us to standardize our inventory. Patient test results are now consistent throughout the hospital system.

The lab’s increased productivity and efficiency has reduced overall expenses by 20 percent, as promised and delivered to us in the vendor contract.

Blood Bank Results
We included the blood bank as part of our laboratory standardization effort because it presented an opportunity to replace a manual system with a more automated one. Traditionally blood bank testing has been the last area of the laboratory to automate. We used manual tube technology until we installed ID-Micro Typing Systems (ID-MTS). The MTS gel card is one of the first major changes in blood bank methodology since the Coombs method was adopted in 1941. We pipette our reactants into small gel cards that are incubated and then centrifuged.

The reading process has been reduced from four phases to one. Technologists’ time has decreased by two-thirds while sensitivity and specificity increased. When we performed the antibody screen parallel test, we tested 180 samples: 135 samples lacking antibodies and 50 samples containing antibodies. We achieved 96.5 percent sensitivity using the gel system versus 93.6 for the tube method. And the specificity was greater as well: 98.6 percent for the gel versus 97.7 percent for the manual tube.

We looked at detection of antibodies in the first three-months after implementing the gel technology and compared it to the same three-month period a year before. We found an 82 percent increase in the detection of antibodies. When we sub-classified those results between clinically significant antibodies and clinically insignificant antibodies, we increased the detection of clinically significant antibodies by 113 percent when compared to the manual tube method.

Our shared risk relationship with our vendor has been instrumental in the successful standardization of lab equipment and procedures. It gave us the confidence to try new technology because we did not have to invest in capital equipment.

The cost-per-billable test concept, as we have developed it, encompasses expenses for all tests performed in a single fee. This appears to be rare in the industry. Most contracts are based on a defined cost per test, plus additional costs. We see a tremendous potential for this type of shared risk contract in other areas such as hematology and coagulation.

le04.jpg (11478 bytes)Conclusion
At Sharp, we expect to enjoy a 20 to 30 percent annual savings in laboratory expenses over the next six years. Improvements in efficiency and productivity will allow existing staff and equipment to handle increased workloads. Not only has this contract been an economic success, but we also are improving service to requesting physicians and patients by providing faster results, fewer repeats and excellent accuracy.

Michael J. Armstrong, MT, MBA, is director of laboratory services for Sharp HealthCare.