While most people don’t choose a healthcare career to drive profits, many soon realize that it’s impossible to support high-quality care without having a clear understanding of the financial realities of the business. This is especially true for clinical laboratories, where cost control is critical, and operating margins are slim. This is unfortunate, especially considering the vital role that labs play in patient care and that laboratory test results account for roughly 70 percent of today’s medical decisions.
Despite its obvious importance, it is estimated that lab testing accounts for only a small fraction of healthcare spending (between 1.4 and 2.3 percent of total healthcare expenditure and less than 5 percent of total hospital cost). This begs the question of why?
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The truth is that most labs remain an afterthought when discussed within the C-suite because they traditionally haven’t been patient-facing and are very rarely viewed as potential profit centers for healthcare organizations.
This is a flawed way of thinking that needs to change.
Don’t miss the direct-to-consumer revolution
Thanks to continued advances in technology and laboratory information systems (LIS) that fully support a lab’s operational and financial operations, and a growing trend of consumerism in healthcare, clinical labs now have the opportunity to increase revenue and expand into other areas of the care continuum. One such area is direct-to-consumer lab testing.
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As more patients adopt a self-service healthcare mentality, the popularity of direct-to-consumer lab testing is expected to grow exponentially, and labs that don’t have a plan for catering to this new market will likely miss out on an enormous opportunity.
It is estimated that the global market for direct-to-consumer lab services will double in the next two years, growing to $2.4 billion annually by 2025. For clinical labs to enter this growing market and not miss out on its expected growth, they will need to partner with forward-thinking software partners. Ones that offer scalable platforms that are already supporting patient registration, test kit ordering, specimen collection workflow, report delivery, telemedicine, physician approval, and ePrescribing.
Enhancing opportunity with effective patient outreach
The ability for clinical labs to offer direct lab testing to consumers also opens the door for expansion into other areas like care coordination and advisory services. Here are examples of both:
Example #1: A healthcare coordinator is appointed to facilitate conversations between care teams, including primary care physicians and other healthcare providers, and to expedite client service referrals.
Example #2: An advisory service like a lab test results consultation is added to the lab’s service menu, thereby enlisting a licensed medical professional to provide trusted and credible lab result interpretations either in-person or online.
These two examples represent the tip of the iceberg. Other potential future add-ons include direct integrations with pharma and other medical specialists. Clinical labs will also have the option of expanding their client base into workplaces that offer on-site healthcare as part of their employee benefits package. As more businesses work to democratize care, pop-up clinics and digital clinics will also become more commonplace.
These enhanced services will satisfy the consumer, who will benefit by having easier access to his or her health information and more control over care decisions. They will also improve treatment timelines by weeks or even months in some cases. By doing so, they will also take some pressure off of the shoulders of physicians, many of whom are already stretched thin, looking for better work-life balance, and dealing with burnout. Lastly, these new services will bring more revenue into the lab which is welcome news for an industry that continues to grapple with existential threats like complex regulatory requirements, a steady decline in per-test profit margin, a shortage of qualified laboratory personnel, and increased costs for both labor and laboratory supplies.
The new laboratory workflow: Clinical lab 3.0
This new workflow of expanded lab services in the not-too-distant future will combine elements of a modern laboratory information system (LIS) with telemedicine and patient care concierge services. This will result in a digitally enabled care hub that allows labs to go beyond traditional laboratory work and truly connect with the patient, something that hasn’t been really possible until now.
Here is another example of how the new workflow might look and feel from the patient’s perspective:
Through a lab’s patient portal, the patient digitally shops for and schedules a lab test, fills out any necessary forms, and provides payment and/or insurance information. Once the patient’s specimen is collected and processed, a lab report with the test result is automatically sent to the portal. The patient is then notified by email or text that the lab report is ready to be viewed from within the portal. If the patient has questions after viewing the lab report, he or she simply requests and schedules a telemedicine consult via the portal with either a primary care physician, a lab specialist, or a third-party lab results consultant. Referrals for a specialist can also be made and scheduled at this time.
With this new workflow, the portal benefits both the patient and the laboratory provider from start to finish. For the patient, it’s a convenient and unified experience that allows for both quicker test results and a full understanding of the lab report, all while avoiding an unnecessary trip to the doctor’s office. For the lab provider, this workflow greatly reduces the cost of care while also opening up a new source of revenue to fortify the business.
DTC testing: A welcome opportunity for clinical labs To protect against turbulent times
The technology is in place and early adopters are already using this new form of laboratory outreach to their benefit. Soon, further advancements are expected as patient monitoring with wearable devices like smartwatches will create an even tighter bond between the patient and the provider making risk stratification, or the assigning of risk status to the patient, possible. Once assigned, this information can then be used as a guide for direct care that improves health outcomes.
With benefits like improved communication between the patient and the provider, better coordination of care, and more visibility and integrations with third-party services, now is the time for clinical labs to act. Failing to do so would be a big mistake. By adopting this new technology and committing to investment outside of traditional lab work, lab managers will have a whole new world of opportunity at their fingertips to counterbalance major challenges related to rising costs and falling margins.
Photo: VioletaStoimenova, Getty Images
