Across today’s healthcare landscape, clinical laboratories and pathology groups are operating under increasing pressure. Reimbursements continue to tighten, staffing shortages remain widespread, compliance demands are growing more complex, and testing volumes continue to rise. At the same time, laboratories are expected to deliver faster turnaround times, greater interoperability, enhanced cybersecurity, and support for emerging technologies such as digital pathology and molecular diagnostics.

Despite these demands, many laboratories continue to rely on outdated laboratory information systems (LIS) that were built for a different era of healthcare.

While these legacy systems may appear to be “working,” laboratory leaders are increasingly discovering that the hidden operational and financial costs associated with aging LIS infrastructure quietly erode efficiency, scalability, and profitability every day.

According to LigoLab CEO Suren Avunjian, this is one of the most important conversations happening within laboratory medicine today.

“The greatest risk for many laboratories isn’t necessarily system failure,” said Avunjian. “It’s the gradual accumulation of inefficiencies that leadership teams stop noticing because they’ve become part of everyday operations. Manual workarounds, disconnected systems, duplicate data entry, billing delays, and fragmented workflows all create hidden costs that compound over time.”

The Illusion That “Good Enough” Is Sustainable

Many laboratories continue delaying modernization because their legacy systems still support day-to-day operations at a functional level. Tests continue moving through the lab, reports are delivered, and billing activities are completed, but often through inefficient, heavily manual workflows that limit productivity and scalability. 

However, the true cost of outdated LIS infrastructure often exists beneath the surface.

Legacy LIS environments often depend on outdated architectures, aging hardware, unsupported software components, and heavily customized interfaces that require ongoing maintenance and troubleshooting. As a result, laboratories gradually allocate larger portions of their IT budgets toward sustaining obsolete systems instead of investing in modernization, automation, cybersecurity, and operational innovation. 

“The question laboratory leaders need to ask isn’t whether their LIS still works,” Avunjian explained. “The real question is whether the system is actively helping the organization move forward or quietly holding it back.”

These hidden costs often appear in the form of:

  • Manual data entry
  • Duplicate workflows
  • Coding errors
  • Delayed billing
  • Revenue leakage
  • Staff overtime
  • Integration maintenance
  • Downtime risk
  • Compliance challenges
  • Employee frustration and burnout

Although each issue may seem minor in isolation, their combined impact can place significant pressure on laboratory operations, ultimately hindering efficiency, profitability, scalability, and long-term organizational growth. 

Workflow Fragmentation Creates Operational Drag

One of the most common issues within legacy LIS environments is workflow fragmentation.

Historically, many laboratories addressed technology limitations by layering multiple third-party systems on top of the core LIS platform. Over time, this creates a patchwork environment consisting of separate billing systems, middleware platforms, outreach solutions, digital pathology viewers, reporting applications, and analytics tools.

While each system may solve an immediate need, the long-term result is often operational complexity and disconnected workflows.

“Every additional interface introduces another point of failure,” said Avunjian. “When laboratories are forced to manage multiple disconnected systems, the organization spends more time reconciling information than optimizing operations.”

This fragmentation leads to duplicate data entry, inconsistent records, synchronization issues, and delayed communication between departments.

It also increases the burden on laboratory IT teams, which must continually maintain and troubleshoot integrations between disparate systems.

Modern laboratory informatics platforms are increasingly designed around unified architectures that consolidate clinical workflows, laboratory billing, reporting, analytics, and interoperability into a single ecosystem.

This approach simplifies operations and also improves data consistency and organizational visibility.

The Hidden Financial Impact of Delayed Billing and Revenue Leakage

One of the most significant hidden costs associated with outdated LIS systems is revenue leakage.

Legacy environments often struggle to support efficient laboratory billing workflows because financial processes are separate from operational procedures. Data silos, disconnected systems, and delayed information transfer result in coding inconsistencies, missing demographic data, claim rejections, and reimbursement delays.

According to Avunjian, laboratories increasingly recognize that revenue cycle management can no longer function as an isolated back-end process.

“The most successful laboratories today are moving billing automation to the front end of the workflow,” he said. “Financial accuracy begins at accessioning, not after the test is completed.”

Modern unified LIS and laboratory billing platforms increasingly incorporate capabilities such as:

  • Automated CPT and ICD coding
  • Eligibility verification
  • Insurance discovery
  • Address validation
  • Denial prevention workflows
  • Real-time financial visibility
  • Automated claim scrubbing

These capabilities help laboratories reduce administrative burden while accelerating reimbursement cycles and improving clean claim rates.

“Automation is about far more than increasing operational efficiency,” said Suren Avunjian. “It also plays a critical role in safeguarding revenue integrity across every stage of the testing and billing lifecycle.” 

Staffing Shortages Are Exposing Workflow Inefficiencies

Workforce shortages continue to affect nearly every area of laboratory medicine, particularly among pathologists, medical technologists, and laboratory technicians.

In this environment, inefficient workflows become even more problematic.

Legacy LIS systems often require laboratory staff to perform redundant manual tasks, navigate multiple systems, retrieve information from disconnected sources, and manage paper-based or spreadsheet-driven processes.

These inefficiencies contribute directly to staff burnout and declining job satisfaction.

“When laboratories rely on outdated technology, they force highly skilled professionals to spend time on administrative work instead of diagnostic and clinical activities,” said Avunjian. “That’s not sustainable in today’s workforce environment.”

Modern LIS platforms increasingly support automation and rules-driven workflows to eliminate repetitive tasks and reduce unnecessary manual intervention.

Examples include:

  • Automated specimen routing
  • Barcode-driven tracking
  • Intelligent work queues
  • Automated report delivery
  • Real-time alerts and escalations
  • Dynamic workflow orchestration
  • Integrated quality control monitoring

By reducing manual workload, laboratories can increase throughput and operational consistency without proportionally increasing staffing levels.

Digital Pathology Is Accelerating the Need for Modern Infrastructure

The rapid expansion of digital pathology is also exposing the limitations of many legacy LIS environments.

Digital pathology workflows require seamless interoperability between the LIS, image management systems (IMS), scanners, AI tools, reporting workflows, and external healthcare systems. Many older LIS platforms were never designed to support these complex integrations.

As a result, laboratories often experience workflow bottlenecks, fragmented case management, and inefficient user experiences.

Modern laboratories are increasingly seeking tightly integrated informatics ecosystems that enable pathologists to move seamlessly between case data, imaging software, reporting workflows, and AI-powered tools without having to navigate separate platforms.

“Digital pathology is no longer a future conversation,” said Avunjian. “The infrastructure decisions laboratories make today will determine whether they can fully participate in the next generation of diagnostic medicine.”

Downtime, Cybersecurity, and Compliance Risks Continue to Grow

Legacy LIS systems also introduce growing operational risks related to cybersecurity, disaster recovery, and regulatory compliance.

Legacy platforms frequently lack advanced cybersecurity safeguards, scalable cloud infrastructure, and comprehensive disaster recovery capabilities. In healthcare settings where uninterrupted operations are crucial to patient care, even brief periods of downtime can result in significant operational disruptions, financial losses, and service delays. 

“Cybersecurity is no longer just an IT issue,” Avunjian said. “It’s a patient care, operational, and a business continuity issue.”

At the same time, laboratories must navigate evolving CAP, CLIA, and HIPAA requirements while validating increasingly complex workflows and integrations.

Legacy systems often struggle to keep pace with evolving regulatory and operational standards, leaving laboratories focused on reactive compliance efforts instead of strategic process optimization and continuous operational improvement. 

Modern LIS platforms increasingly emphasize:

  • Cloud scalability
  • Audit trail transparency
  • Automated quality checks
  • Secure interoperability
  • Flexible validation workflows
  • Centralized reporting and monitoring
  • Disaster recovery preparedness

These capabilities help laboratories strengthen operational resilience while reducing long-term risk exposure.

Why Many Laboratories Are Modernizing Before Vendor Deadlines

Historically, many laboratories waited until vendor end-of-life announcements forced replacement decisions.

Today, however, many organizations are proactively reevaluating their technology infrastructure well before mandatory replacement deadlines, particularly as several long-established legacy lab vendors have announced plans to sunset systems in the coming years. 

Modernization conversations increasingly center around long-term strategic flexibility rather than short-term technical replacement.

Laboratory leaders are evaluating whether their technology infrastructure can support:

  • Future testing expansion
  • Outreach growth
  • Digital pathology adoption
  • AI integration
  • Multi-site scalability
  • Remote workflows
  • Financial sustainability
  • Workforce optimization

Organizations that modernize earlier often gain a competitive advantage by improving operational agility before inefficiencies become critical barriers.

Modernization Is Becoming a Strategic Necessity

For many years, laboratories viewed the LIS primarily as a system focused on storing patient and test information.

Today, that perspective is rapidly changing.

Modern laboratory information systems are increasingly viewed as operational engines that orchestrate workflows, automate decision-making, unify clinical and financial processes, and provide real-time visibility across the organization.

“The laboratories that thrive over the next decade will be the ones that view technology strategically rather than reactively,” said Avunjian. “Modernization has moved from an IT project to a business strategy.”

As the healthcare landscape continues to evolve, laboratories relying on outdated infrastructure may find themselves increasingly limited compared to organizations that have invested in automation, interoperability, and integrated informatics platforms to drive operational efficiency and long-term growth. 

The consequences of delaying modernization often accumulate gradually over time. For many laboratories, the question is no longer whether modernization is necessary, but how much longer they can afford to operate with outdated infrastructure before the operational and financial impact becomes too significant to ignore. 

Photo credit: LigoLab