PAML stands on the verge of releasing a multi-million dollar technology breakthrough called Outreach Advantage to the clinical laboratory industry, its success will help deliver care to the poor and vulnerable
Written by Emmet Cole and produced by Nick Ledue
Pathology Associates Medical Laboratories (PAML) is set to release a set of proprietary technologies aimed at the clinical laboratory industry, with the dual aims of fueling efficiency and progress in the healthcare sector, and financing the system for those that need it most. PAML’s not-for-profit parent company, Providence Health & Services is helping to fund the new division with the goal of developing alternative revenue streams to help support their community based ministries.
“Our health system serves the poor and vulnerable,” OA CIO Mark Johnston says. “We’re trying to preserve the strength of organizations within the communities we serve. We can’t rely on the old reimbursement stream being there, because we don’t turn people away that don’t have insurance. We take care of them.”
Big thinking in a big industry
The clinical laboratory industry is worth $50 billion each year, split almost evenly between commercial and hospital-based labs. In the commercial sector, two massive companies - Quest Diagnostics and Laboratory Corporation of America - form a practical duopoly, leaving a smaller market share for fragmented regional labs. In this context, PAML’s unique success - $200 million in enterprise revenues each year, up from $35 million just ten years ago - is remarkable and can be attributed to its ability to form partnerships with community hospitals that tend to underutilize their own laboratories.
“It’s difficult to get different hospital systems to collaborate within a given market when they’re often competing for patient volumes,” Johnston says. “They typically don’t have deep expertise and domain understanding around outreach lab operations, so their investments might not be optimized.”
As average per-bed build costs hover around $2.5 million, hospitals often have too many high-dollar programs competing for capital to make a push for outreach lab work. PAML makes that outreach more cost-effective by providing a series of easily-implemented technologies and services that make better use of the labs. “We’ve unleashed the assets,” Johnston says. “Healthcare is undergoing a digital revolution. The in-patient setting has had a lot of computers and information systems, but the out-patient setting and the physician office setting is undergoing significant transformation.”
PAML is preparing for the commercial release of a three-armed package called “Outreach Advantage” to the laboratory industry. “We believe that not only will we commercialize our technology, but through it we will also develop more joint venture opportunities to continue to expand the core business as well,” says Johnston, who, on the strength of significant experience in the laboratory industry, will become OA’s CEO.
Here’s what’s on the horizon: OA Mobile
OA Mobile features a full logistics suite including route optimization and a variety of technologies, like desktop applications on the dispatcher’s computer, server applications that talk to hand-held devices and properly identify the couriers position using a cellular network, and software that captures specimen details and ensures standardized workflow processes.
“There are all kinds of dynamic things that happen during the day that you have to overlay over this fixed route structure,” Johnston says. “Most labs don’t even know where their couriers are because they have no visibility on a GPS grid.”
When a doctor needs emergency lab work done, the system enables the closest courier to deviate from route plans and make the pickup. The service pays attention to every detail, from ensuring that frozen specimens are accounted for to implementing as many right turns into the optimized route as possible.
When PAML installed this technology in Spokane, it saved more than $110,000 in the first year alone. The suite also ensures accuracy in an industry where mistakes could prove costly. “That whole logistics thing - labs fall down a lot there,” Johnston says. “There are a lot of errors made in terms of losing specimens. When a breast biopsy is done and you lose that specimen, you can’t get it back.”
OA Connect
Built on a Sun Microsystems Java CAPS Integration toolset, OA Connect aims to establish connectivity between laboratory information systems and electronic medical record systems used by physicians. Often, different lab systems use different vocabularies and different message structures, and information gets lost in translation.
OA Connect aims to cut through the confusion and pave the highway for critical information transportation. “OA connect is really a turnkey system that takes advantage of different interfaces through a network model,” Johnston says. “We take a message and deliver it to the recipient in the manner they need to perform their work. They produce the result, and we broadcast it back out through the network.”
Already, PAML runs thousands of these transactions every day, with 12 different laboratory information systems already connected to the central systems which communicate with 17 different EMR vendors.
OA CRM
Physician communities would prefer to refer lab work back to local hospitals instead of larger national laboratories, but local hospitals tend to lack the necessary technology to accommodate physicians’ needs. “They expect certain things in terms of service, so we try to be that missing link to neutralize the service playing field,” Johnston says. In response, PAML has developed a number of proprietary, laboratory-unique customizations complementary to Microsoft Dynamics CRM.
“Everything that happens related to service activity is captured and tracked in CRM,” Johnston says. “It’s amalgamated in a client-centric way, so when our field reps go in front of a client they have a complete up-to-date history.”
With OA CRM, hospitals can easily integrate the program onto platforms they might already use and make up for their technological disadvantage. “Anybody can go buy Microsoft CRM, but we have millions invested in technical development of the different proprietary workflows and laboratory processes,” says Johnston, noting that Microsoft has begun referring potential clients to PAML. “For hospitals that are on the sidelines because they don’t have technology, we can bring it in and take away the investment and implementation risk, and provide them with the tools they need to be competitive in getting physicians to refer lab work into their hospitals.”
Implementation challenges
The biggest challenge facing OA’s commercialization, Johnston says, is getting clients to buy into the opportunity. Nearly 85 percent of the nation’s medium-to-large sized hospitals feature some type of outreach laboratory program, and some realize a small amount of success. But most lack OA’s capability to connect to the physician’s EMR system. They also lack the capital to invest in logistics. “They don’t have good ways of doing market development,” Johnston says. “They don’t track client experience very well, and so their service isn’t always optimal.”
This is where OA stands out, and potential clients are taking notice. PAML operates around the Pacific Northwest, and is part of the Compass Group - an association of some of the country’s largest integrated delivery networks that operate laboratory outreach programs. And with ten years of product incubation completed, OA appears ready to go. “Everything that’s in OA is in production today,” Johnston says. “This is not vaporware.”
Johnston says OA will hire 30 people this year, and he expects it to grow to $25 million in sales within five years. Incremental financial returns that can be invested back into our health system helps to preserve our 150 year old mission of serving the poor and vulnerable. “We’re doing more than building widgets here,” Johnston says.
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