Now is the time to make your lab a strategic partner

As a former health system lab director, I understand how important it is for the lab department to be both visible to and understood by health system management.

Why should health system leaders make labs their strategic partners? In my experience, when these executives understand lab’s critical role in enabling value-based care, they come to see the promise of the lab as far more than just a support department.

Here are a few reasons I believe a lab/senior management partnership is a win-win:  

Labs play a vital role in establishing quality metrics. As we continue on the journey to value-based care, the quality of that care plays a foundational role in achieving the Triple Aim. They can also routinely identify quality metrics, but they also can demonstrate to leadership how quality contributes to expense savings or even cost avoidance.

Lab standardization can play a significant role in health system finances. Like any other business, labs require mindful financial management. Standardization of lab practices can drive bottom-line impact almost immediately, which is a welcome outcome as every hospital budget undergoes intense scrutiny. Standardization is key to striking the optimal balance between supporting care and driving revenue. Standards create impact that goes beyond the lab to other medical departments.

Labs can offer insights into lean processes and optimize employee efficiency. Two strategies particularly benefited me as a lab director. One was a concerted focus on lean processes to root out wasted steps or effort, the second was optimizing staffing so that the right number of employees were on-site during peak and non-peak times of the day. I think health system executives can learn a lot from the lab regarding processes and staffing that they can apply to their larger organization.

Labs can help to enable population health programs. Of course, labs can do much more in a value-based care delivery model beyond their obvious importance in assisting inpatient care. Labs also can perform meta-analyses of their data that elevate their insights to the population level. These insights can help health system leaders to improve the quality of care and outcomes while managing costs for a defined cohort of patients.

Thanks to these and other benefits, health system leaders stand to benefit by reaching out and forming stronger partnerships. These alliances are essential to understand financial performance of the lab. Yet as The Advisory Board recently pointed out, partnerships also can surface where “health systems don’t have the tools or lab-specific financial expertise required to collect, track, and apply lab financial and operational data.” ¹ 

Understanding data is second nature to laboratorians, but fragmented IT systems make the effort to validate financial, quality, and turnaround time data an uphill climb. I highly recommend that hospital leaders invest in resources to ensure they have the right data systems, because this insight will help them understand how their laboratories are performing. Ultimately, this also will drive better financial performance.

In their role, lab managers need to be conversant in concepts like quality enhancements, utilization management, and retention. This will give them the ammunition they need to visit a leader's office and make a compelling case for understanding the lab’s importance. As it happens, the American Society for Laboratory Pathology now offers a virtual “Lab Management University” program to improve fundamentals in areas such as personnel management, operations, financial management, informatics, and compliance.

The pandemic helped to highlight the importance of the many roles lab departments play. Labs rose to the occasion when tens of millions of people wanted to be tested, were able to execute on making this testing available in the midst of often extreme supply chain challenges, and delivered a major source of financial benefit when many areas within health systems slowed to a crawl or went dark. Going forward, laboratories can also lead the way toward population health and value-based care goals that should be at the top of every health leader’s priorities.