Where smart labs go when the money’s gone

Payment rates declining. Bad debt rising. Test orders falling. Diagnostic equipment manufacturers checking in on test-volume commitments. A wrenching transition from fee-for-service care to population-based medicine. These are a few of the trends that laboratories across the country are seeing and that keep lab directors up at night, heavy lidded, checking their email, illuminated by the glow of their smartphones.

Strategies that once reliably yielded success in the laboratory business are no longer sufficient, says W. Stanley Schofield. He is president of NorDx, which operates 11 labs and 23 patient service centers and is owned by the MaineHealth system, also affiliated with four other health care organizations in the state. Schofield is cofounder and managing principal of the Compass Group, a 501(c)(6) business league whose 24 lab members represent more than 300 of the nation’s most prestigious hospitals and health systems.

Labs are being called upon to simultaneously add value, cut costs, and improve the quality of the work they do, Schofield says. Moreover, the pressure is on for laboratories to show how their performance compares with that of their peers.

“Today, labs are known for, and their value is seen to be in, delivering accurate test results in a timely fashion,” Schofield tells CAP TODAY. “In the future, the value of the laboratory is that it will help manage that the right test was done on the right patient for the right reason, and that the right cost will be available. And that they manage the data, rather than just report the data. That is one of the huge transitions that labs have to go through right now, and that we are preparing for.”

My cover story in the August issue. Read the whole shebang.