This is a companion article to the feature, “Getting Ahead of PAMA.”
In planning to meet the challenges of implementing the Protecting Access to Medicare Act of 2014 (PAMA), laboratory management should keep an open mind about what business arrangements may offer the greatest advantages for their institution. As suggested below, labs have recently been exploring many different business arrangements that can help to address current and future challenges.
Joint Venture. In joint venture arrangements, a hospital or health system and a specialist laboratory agree to co-own one or more types of lab operations, including outreach labs. Joint ventures are best suited when combining large and similarly-sized businesses with redundant cost infrastructure to drive cost efficiencies and leverage shared investments.
Lab Stewardship. Stewardship arrangements can be used when a hospital or health system needs assistance in leveraging data analytics to improve its ordering, retrieval, and interpretation of laboratory tests. Such arrangements can offer advantages when a hospital or health system lacks big data analytics capabilities or requires specialized interpretive skills.
Outsourcing/Optimization. Arrangements directed at optimizing or outsourcing a lab’s operations commonly involve a reference laboratory whose role is to collaborate with a hospital or health system to optimize lab operations, reduce costs, and improve quality. Such arrangements are especially suited for hospitals or health systems that are seeking standardization and network optimization.
Reference Testing. Referring tests to an outside laboratory—a reference laboratory—typically occurs when a hospital or health system needs to perform a subset of testing services that requires specialized equipment or expertise not available in its own facility.
Sale/Divestiture. The sale or divestiture of a lab’s operations can be a good choice when a hospital or health system is seeking to improve quality and innovation while also dealing with reimbursement or other cost pressures and capital constraints. Such a move typically involves the sale of the institution’s outreach business.