In this episode of Clinical Lab Chat, Chris Wolski, CLP’s director of Business Intelligence, David West, CEO of Proscia, and Lou Welebob, vice president and general manager of pathology at Agilent, take a deep dive into the big challenges facing clinical labs today, including workforce shortages, scaling lab operations, and reimbursement, along with some of their solutions, including increased automation, agnostic platforms, and more coherent reimbursement coordination with regulatory agencies.


Chris Wolski (00:09):
Welcome to Clinical Lab Chat, part of the MEDQOR Podcast Network. I’m Chris Wolski, director of Business Intelligence for CLP, and today I’ll be speaking with David West. and Lou Welebob, about the biggest challenges facing clinical diagnostic labs today. David is CEO of Proscia a software company advancing the way we understand diseases like cancer with a digital pathology and AI solutions. So very cutting edge. and Lou is vice president and general manager of pathology at Agilent, which provides solutions to improve the efficiency of clinical labs. So I welcome David and Lou to Clinical Lab chat. I’m really looking forward to speaking to you both about your takes on some of the biggest challenges in the diagnostic on landscape today. So let’s get to it. Thanks for having me. Let’s get to it. So, all right. certainly COVID has dominated every aspect of our society. Lou and I were actually talking a little bit about that before we started recording this podcast, and particularly the way we access healthcare now for David, we’ll start with you. what do you think has been the biggest change to come out of the pandemic in relation to diagnostic testing? And Lou will follow up with you after David.
David West (01:22):
Yeah. You know, I think there’s two or three big things. First and foremost, for the world, it really put a spotlight on healthcare and diagnostics in particular for everyone. , right? we all went from, we all went from not really thinking about what it takes, what goes into diagnostics, to in some cases bringing diagnostics right into our homes. It was kind of national news 24 7 for two years. The other thing that it did is it, it really forced the world to think about how we can use technology, but not just to access healthcare but to change every aspect of our lives. I mean, most of us are doing work via Zoom now today. It helps make the world a little bit smaller, and in many ways, we’ve seen that impact healthcare for us in pathology. What I’ve seen is labs today, pathologists, lab leaders, et cetera have leaned into the adoption of digital pathology as a product of covid because it lets them access patients anywhere. It lets them access a, a global workforce of pathologists and it makes a world of pathology a little bit smaller as well. So I think, you know, to see those two things converge is kind of the, you know, perfect storm for for digital pathology, for the use of you know, of, of this technology in a field that is so central to medicine and, and really took center stage for our lives for
Chris Wolski (03:10):
Years. Yeah, yeah, for sure. And I, I think, I think you really hit the nail on the head. I’ve talked about this a little bit as well, that, you know, so much of what we’ve taken diagnostic testing for, granted, we go to the, the, your doctor’s office, you get blood drawn and then some magical, you know, you get a report that magically happens somehow. So I think you’re right. I think that spotlight is probably the biggest thing, Lou, for what has been a couple of the biggest changes that have come out of for diagnostic testing, particularly ’cause of the pandemic. Now, we, we were talking about traveling a little bit, but let’s talk about, let’s stick to diagnostic labs for this conversation.
Lou Welebob (03:46):
Sounds good, Chris. Yeah. So for, for me, what, what Covid 19 did was really thrust to the center were diagnostics really became the first line of defense. Okay? So right before we had vaccines, before we had, you know, under a full understanding of this, this disease, it became basically, let’s get tested. Right? Right. So that was one of that really put it at the forefront of testing in one of the first pandemic settings ever. Okay. So this was really, really that thrust that into the center of it. I think the second thing is we showed is how, how we can ramp testing when we need to. Okay. So, so again, you know, the ability to, for laboratories worldwide to ramp, okay. because remember, it was all about not just having to test, but can we ramp, can we get a test, right? Yeah. I think this is a, I think COVID 19 shown us and taught us how we can actually, you know, one, use this as a first line of defense, right? and two, how we can basically scale it. And then the third one is really how do we, how can we evolve it to make it more readily available to
Chris Wolski (04:45):
Everybody, right?
Lou Welebob (04:46):
And this was a huge push toward, you know, point of care test, you know, toward a point of care testing and so forth, right. Which allowed the test to become taking the test closer to the patient, right. As opposed to going closer.
Chris Wolski (04:57):
Right. Well, great. Well, you’ve, you’ve, you’ve rolled right into our next ques my next question for you and Lou, I’ll, I’ll keep you on the hot seat for that then for this. So I’ve talked a lot about access and, and personnel shortages throughout in, in the magazine on this podcast. Let’s put them together. How is the workforce shortage of both technologists and pathologists affecting access to testing, particularly now that there’s so much better understanding of how important testing is? And, and in light of some of the things you just talked about, Lou, so put those two, those two things together, access and the tech shortage, and, and how are they related and how, you know, how, how are we, how are we coping with that because of, because of these, some of these changes?
Lou Welebob (05:37):
So, so the first one is like around tech shortage, right? So I think this is probably, this is not the first industry to see a shortage of technicians.
Chris Wolski (05:44):
Of course not. Yeah, for sure.
Lou Welebob (05:45):
However, what you see is when you start seeing the shortage of technicians, that’s where automation comes in. Okay? Right. So, so automated platforms like we have here at Agilent, automated platforms, pathology testing, and other companies do as well, that automation really rises, rises to the top mm-hmm. . And even if, even if, even if you start to see more send outs of laboratories to say more centralized testing, the automation still is in play at those large laboratories where this, where this is happening. But, you know, just getting the test, just getting the test performed is just one part of the equation. The next part of the equation, you know, is how do we interpret it? Right? Right. That’s where, that’s where basically, you know, we look at that at what’s happening in the pathology world today. And, you know, we’re now with the pandemic, which has pushed telepathology further.
now we now we start to see the, where digital pathology really is coming into play, because you can run the test on the automated platform, but you still have to interpret it. And so there’s a level of interpretation that is further enabled, okay. Through digitization. And then of course, you know, digitization rings, you know, more algorithm or algorithm assist type for the, for the ultimate interpretation. So this is what we see really has happened, you know, and that really was, you know, it was there before the pandemic, but we’ve seen it driven further since the pandemic.
Chris Wolski (07:03):
Right? Right, right.
Lou Welebob (07:04):
That’s how, that’s how laboratories seem to be dealing with, you know, scaling Okay. Through, but also scaling through interpretation by the use of these two technologies of automation and then digitization.
Chris Wolski (07:16):
All right. David, for you, what about from your perspective, what about the relationship with access and, and technician shortage and some of the things that Lou’s talking about with automation? I know we’ve talked a little bit about some of those things in the past.
David West (07:29):
You know, when I talk to lab leaders today, they are keenly aware of the, in some cases, talent war that they’re in, in order to run their business, they need to access great talent, right? And patients are everywhere. Yeah. Patients are not just in, you know, I’m sitting here in, in, in, in, you know, Philadelphia in a major hub, and but that’s not where patients are exclusively. They’re everywhere, right? And in many ways, pathology has been a brick and mortar discipline for its entire history, but that’s starting to change. And so lab leaders are looking at this and saying, how can I lean in the, into this technology to create new advantages that allow me to attract talent anywhere and maybe be able to go after a, a broader you know, customer base if you are a right private laboratory,
Chris Wolski (08:34):
David West (08:35):
Which is a whole other side of the equation. but as it relates to the workforce shortage, I think what what you’re seeing here is that, you know, these labs now have a new tool in solving that talent challenge that doesn’t make it go away entirely, but in a world where, you know, the number of pathologists relative to the cancer burden or, you know, is decreasing and where, you know, pathology is an increasingly complex and sub-specialized field that you want to be able to tap into a global talent pool, or at least a national talent pool depending on what kind of organization you are. Mm-hmm.
Chris Wolski (09:14):
. Okay. Alright. Well that also brings up another issue reimbursement. And I know David, that’s, that’s, that’s your area in, in large part. And now that’s also certainly likely the bane of most of our listeners particular laboratory managers and directors. can you give an overview of the reimbursement landscape in 2023? Now, certainly, for example, the Covid tests, they’re not, you know, reimbursement. I just had to do one for a trip not too long ago. I had to pay for it was not inexpensive. So how do you recom, so how, so that landscape is changing a little bit than what it was just a few months ago or, or a year ago. So how do you recommend that, that these, our lab directors and lab manager listeners optimize, in some cases a shrinking or at least constrained resource in terms of, in terms of re reimbursement? ’cause certainly if I, if people have to pay for certain tests out pocket, they’re not gonna get them. So how do they cope with, with that and this renewed reimbursement landscape?
David West (10:21):
You know, I think Lou probably has the best 360 c gk.
Chris Wolski (10:24):
Okay. Well, Lou, why don’t you just, well,
David West (10:28):
What I will say is, as it relates to, as it relates to, to, you know, CIA’s world of digital pathology, I think one of the really notable things to come out of the last, whatever it was year and a half or, or two years, was a material change in the reimbursement framework for digital pathology. So now there’s tracking codes, right? And that lets laboratories, well, lets payers start to get a sense for what digital pathology, adoption and impact looks like. And it lets laboratories, you know, in, in a sense, get credit for what they’re doing in digital pathology. So labs are just starting to adopt that. And, you know, that’s, it’s still a new phenomenon and it sets the foundation for, you know, new technologies to be able to be built on top of these, this image-based paradigm that could potentially be candidates for reimbursement mm-hmm. ,
Chris Wolski (11:28):
Et cetera,
David West (11:28):
Right? So that’s what we’re seeing in, in this space.
Chris Wolski (11:31):
Okay, well, Lou, what, so why, why don’t you give us that big through that big picture then? Yeah,
Lou Welebob (11:36):
So, so lab economics is the, you know, lab economics is really, you know, the challenge today, right? Right. So it’s, it’s really a challenge. The re it’s a reimbursement challenge, but it’s also overall lab economics challenge, right? So laboratories are being asked to do, you know, asked to do more with less, right? And in the meantime, there’s still patients on the other end of the testing that’s counting on the result, right? And so, you know, as you start, as you start to work through this, you know, some of the biggest challenges to the laboratory is really getting, getting paid for the tests that they run, right? Right. So it’s still a struggle and, you know, some of the more recent legislation that’s come out such as PAMA and now the SALSA Act, and then, you know, we’re all, we’re all looking as, you know, as vendors to the ballot act, right?
Oh, yeah. So, you know, these, the legislation is getting, the legislation is actually getting a bit heavier, but also the, every time there’s new legislation, it seems like, you know, there’s some reimbursement that leaves the equation. And so it makes it more difficult for the patient, but also also for the laboratory. You know, when we start to think about it, as David mentioned, you know, there’s, there’s new codes available now for this new technology with digital pathology scanning so forth, right? So, so the reimbursement is coming up there. I think the key thing that we’re looking at, you know, in, you know, in, you know, in Agilent is, is how do we, how do we look at this, right? From a holistic perspective, from an entire test perspective, right? So mm-hmm. , a test gets ordered, right? a test gets ordered and the test gets run, okay?
But then as you start thinking through the reimbursement of that, how is the value of the test enhanced through digital pathology? And so when you start thinking through that as far as like enhancement of that value, now you start to, it starts to become somewhat easier to make the cases, including with the, with outcomes to make the cases to the, to the agencies for reimbursement to make sure that, you know, they’re seeing what’s happening at the laboratory level. And so this is an opportunity to not decrease reimbursement, but to, to look at how reimbursement could be increased based on basically the, the new technology and the advantages that it’s bringing, you know, to the patient and to patient care, right? And I think that’s where, that’s where this all sits right now. And I think this is something that, you know, we, we, we, you know, as, you know, providers of tests, but also working closely with, closely with reimbursement and reimbursement providers, that we actually are working together, you know, in sync to make sure that we are making sure that this new technology is getting, you know, it’s, it’s fair share of reimbursement, right?
So that it can come to the market in a way that can be more adoptable by laboratories,
Chris Wolski (14:07):
Right? Well, that’s always kind of a two-edged sword too, because you have maybe a very effective test you’ve shown it’s proven to be effective. Maybe we’ve got regulatory approval in, in some, some regards, and then now you have to get that reimbursement part of it. One’s, one’s always seems to be trailing behind the other. And that seems to be really the biggest headache no matter what, what area of healthcare you’re in, that they’re trying to get that reimbursement in a way that makes the best sense for everyone involved, both for the organization. So you’re making some money. And also for that, as you mentioned, lieu the patient, because really ultimately it’s about the patient. ’cause the patient needs, needs those tests, particularly if there’s good turnaround time or they’re very effective and can help lead to resolution, their issues or their condition. So
Lou Welebob (14:54):
I think on the other side of it, like there’s also a movement, we see this movement to bring agencies, you know, like the right US, F D A and C M Ss kind of together, right? So that,
Chris Wolski (15:06):
Lou Welebob (15:06):
That, that you can actually have the reimbursement when this new test is released so that you’re not now having to go and say, oh, now I have to go get the reimbursement after I’ve got my, after I’ve done regulatory approval. But I think that we see this in the United States where they really are working, the legislation is working to bring these things together. And I think the, the more that occurs, the better it will be for, for the lab, better if it’ll be for the patient.
Chris Wolski (15:29):
Yeah. Oh, that’s great. That’s terrific. Well, I know that Prosky and, and Agilent have just announced a distribution agreement, so congratulations. so what’s on the horizon for both for you both as partners? So Lou, we’ll keep you on the hot seat. So what’s, what’s on the, what’s on the horizon with this, with this partnership, and then David we can talk about from your perspective.
Lou Welebob (15:50):
Yeah. First of all, we are very excited to have partnered with prosha. This has been, you know, a great, a great fit between two great companies. And we, we see Prosha as really in many ways, you know, leading the way into the market, in the area, in the area of digital pathology. Okay. So I really, I really feel like the, the agnostic approach that approach has taken and that we’ve taken at Agilent really is part of that, where we can meet the, we can meet the laboratory where they are in their digital pathology journey, you know, and by being agnostic, by allowing the the purchase protection that they have from what they’ve already bought while still basically, you know, adding to that so that they can gain a more full digital experience. We also see this as really important to our end-to-end solution, right? So our end-to-end solution from, from the standpoint of reagents to the testing through to the, through to our automation technologies, right? By coupling this now with a strong digital pathology offering, we really can offer a, a, a much more extensive portion of the end, end solution to do all the great things that we just spoke about in the earlier part of this podcast for automation as well as, you know, how we actually work with the lab on laboratory economics.
Chris Wolski (17:01):
All right. And David Pro, what about Prosha? What’s your, what’s your perspective on this partnership?
David West (17:08):
Yeah. At, I may be kinda stealing Lou’s words, but we are incredibly si excited as well. This is a really great coming together of, you know, a company, which in our position as Prosha, we’re a software company, right? and this lets us focus on building world class software, but what ENT brings is global distribution and that end-to-end solution that’s still backed by that open platform approach. And I think for the customers that’s so important because labs want digital pathology to be something that’s easy to adopt mm-hmm. that can be flexible for them to adopt as, as Lou pointed out. And, you know, part of, part of that ease of adoption is these customers have great relationships with Agile and Agilent is a, is a worldwide leader in diagnostics and pathology. and so that makes Agile such a great partner for us because, you know, it helps us get our software to customers where, where they are. And for that to be part of a, a broader end-to-end solution.
Chris Wolski (18:23):
Great. Well, I, I wanna talk a little bit about the agnostic part of that. I think that’s really interesting because I’ve covered different parts of healthcare. I’ve covered other industries where things start out either software or tech, you know, whatever technology starts out as this very proprietary sort of approach. And then it ends up becoming more of an open platform and, and agnostic. And it really benefits it, it really benefits everybody no matter what industry. It’s so interesting when I, whenever I’ve, I’ve done this and I’ve seen like this proprietary, this proprietary journey to open an open platform or, or agnostic platform. Lou, can you talk a little bit more about the benefits of just more in, in terms of that concept of that open open platform or that agnostic platform, the benefits for the labs, for people, for Agilent, people like you and certainly for the, for the patients.
Lou Welebob (19:18):
Sure. So, so in the laboratories today, pathology laboratories today, there’s no such thing as a one vendor all solution. Okay? Right? So that doesn’t exist, right? So, right. So today you see in the pathology laboratories where they choose solutions from various vendors, okay. And we have to interoperate with each other’s platforms today, right? Right. And so it’s no different than when we’re extending this now to digital pathology where we need to basically make sure that we’re, that we’re interoperating mm-hmm. . And also, you know, again, so that one, it’s, it’s not just about, and it’s about already solutions that have been chosen in the laboratories. How do we work with those solutions as opposed to making the laboratory go out and buy an entire, you know, complete brand new end end solution. Alright, so then investment protection is really important. And then also, you know, they’ve made that investment and so that investment isn’t just in, in the hardware or in the software, but it’s also in the training of the laboratory and their laboratory workflow, right? So the changes actually to the laboratory workflow. And so we always look at this from a, having a flexible set of solutions and flexibility now also means, you know, making sure that we maintain that agnostic approach as we enter into digital pathology as well.
Chris Wolski (20:28):
David West (20:28):
Great. You know, one that I’ve noticed is every lab is different, and even within a laboratory, they might need a, a handful of very high throughput, high volume scanners, high capacity scanners they might need at one of their satellite locations, smaller footprint, lower two, put scanner, right? There’s a lot of, lot of kinda permutations of what this can look like. And that’s something we’ve always tried to bake into our, our approach as a software company is to be able to support that very landscape. And that’s great for, for customers. And we’ve seen it’s great for laboratories and we’ve seen how they’ve been able to adopt this technology. And every year there’s more, you know, opportunities, options for them to consider when, when going digital. We talk a lot about investment protection, that future proofing aspect is so important. Yeah. And it’s especially important in, you know, a, a time when the sort of analysis and AI applications that can live on top of this new modality is growing very, very quickly.
We see this explode in the research world, and now some of these technologies are starting to get approved for diagnostic use. We’re gonna see more of that over the next few years, and we want customers to be able to tap into all of those technologies today and tomorrow whenever they come out. Great. So that’s part of the open solution. Yeah. As a software for us, we have to look at both sides of that, right? Laboratory wants scanners, how can we support different scanners? Laboratory wants different AI applications, how can we support AI applications, right? 70% collab that we work with, use our a p i to integrate third party or homegrown AI applications right on top of that platform, right? That level of flexibility is really important.
Chris Wolski (22:26):
Yeah. I mean, it’s so critical. I mean, this off the shelf kind of approach just, just doesn’t, it doesn’t work as, as, as you said, David, everybody, every lab is different, every organization I’ve ever worked for and you know, in, in my, in my world, there’s some similarities with a lot of differences as well. So yeah, you, you bring up a great point there. So one thing I always like to do with, when I talk about big picture things like that, I always like to have the guests pull out their crystal ball or tea leaves or whatever it is that they use to, to foresee the future. And I want to talk a little bit about the future. So the Covid emergency declaration is gonna be ending soon. So again, it kind of goes back to what we, we started with. so what’s the next big challenge diagnostic labs are going to face in the next three to five years? And, and I think we’ve touched on maybe a couple of them. David, why don’t you, why don’t you go first and, and talk about that.
David West (23:22):
You know, we have touched on, on a couple of ’em, we’ve touched on things like workforce reimbursement and I will say, you know, digitization in its own right. While a lot of labs have been really successful, it’s a challenge to do that. Yeah. They have to think about transforming it. They have to think about transforming their operations, and they have to think about change management at pathologists, lab staff level. Mm-hmm. , there’s a lot of things that have to go on. And we’re still in the first inning of that transformation journey. You know, innovative labs have leaned into this really well and been super successful. And you can see the r o I that they’re talking about, you can see the innovative edge that they’re getting. You can see how that’s impacting growth. So more labs are gonna, are are, you know, they now have a blueprint to follow.
They have, they have a roadmap. And I think, you know, big picture when I take a step back, maybe less so a challenge, but more of an opportunity that I get really excited about something like, let’s call it a billion slides created for diagnostic purposes every year. You know, give or take, whatever it might be, 10 or 20%, something like that. And if we were to digitize all of those slides, each of those slides is a gigabyte of information. Each about a billion pixels telling some story about a patient’s cancer or other disease would otherwise be sitting on a shelf, on a piece of glass, collecting dust doing nothing for us. That is a lot of data that puts labs in the driver’s seat of a massive transformation that’s happening in the world right now. labs are increasingly data-driven organizations, and I think one of the challenges that they have to navigate as they’re going digital is how do they use that data-driven paradigm to their advantage? Yeah. It opens up a lot of new possibilities for that, from efficiency to quality, to innovation, to, you know, being at the forefront of, of research in medicine. and I think that creates a more con connected healthcare ecosystem. That’s one of the things that I’m really excited about. And one of the things that I think, you know, labs ought to be excited about, and the ones that have gone digital are realizing what that opportunity
Chris Wolski (25:45):
Is. Right. Okay. Great. And Lou, for you, what’s your, what’s your crystal ball say about the challenges, the big challenges we should be looking at the next three to five years?
Lou Welebob (25:56):
Yeah, I think one of the big challenges to face today is, you know, getting more actionable information out of a sample. So this is really mm-hmm. , this is really important. Okay. Yeah. ’cause you know, you, you have one, you often have one shot at this, right? To get, to get it, to get the information you need, right. To provide the prognosis or diagnostic to the patient. So today, with so many different technologies and techniques around, you know, you, you have to choose wisely what you’re, what technique and technology you’re going to use to get the most information out of, out of patient samples. So that, that’s, that’s one thing at the, the testing and the patient level. The second thing that I hear, you know, frequently is scalability. Okay. Especially in, especially in in the United States laboratories, their ability to scale. And, and you brought it up earlier, the lack of technicians, the lack of right, lack of pathologists, right?
How to continue to scale that laboratory, right? Because again, you know, the, the scaling of the laboratory also means, you know, how is the economics working, right? Right. And so in order to basically keep up with, you know, maybe a downward trend in reimbursement, right? The laboratories have to run more specimens, more samples to keep up with that. And that’s where that scalability comes in, right? So I think this is gonna be their, this is gonna be their continuous challenge, you know, is through scalability. But this is where I also think that, you know, more digitization, you know, is certainly part of the answer to that equation.
Chris Wolski (27:18):
Well, great. thanks to you both with that, we’ll, we’ll call it a day. And thanks again for both of you to take time to speak with me today. Lou Lou’s in Copenhagen, so it’s the end of your day. So I hope you have a good evening. And David, I think you’re looking at the back end of yours. I think this, we had a great conversation. Lots of food for thought. Let’s not wait three years to find out if we’re right, so we’ll we can talk. I hope we could talk again soon. And I also want to thank our laboratory audience for listening. As always, look for more episodes of Clinical Lab Chat in the future and visit us online at clp and on all of the major social media platforms. So until the next
Speaker 1 (27:56):