Innovating the Lab on Three Levels

Innovating the Lab on Three Levels

Article highlights:

  • Value-based care models put new requirements on clinical labs that go beyond being efficient
  • Labs can innovate at three levels, from incremental to radical change
  • Labs should start small, think big, and stay nimble

Historically, clinical labs have measured success by optimizing performance—focusing on efficiency, turnaround time, workflow, and volume. But in these days of value-based reimbursement, peak efficiency is no longer enough. Any given test could be the key to keep a patient healthier and delivering the best possible care, or an unnecessary expense that the health system will have to absorb as part of a fixed-price contract.

Clinicians may therefore have to change habits surrounding how they order and use lab tests. All the while, a host of new gene-based tests are amplifying the lab's potential to participate not only in diagnosis and treatment, but also in prevention.

Labs must find their place in the big picture, rather than simply delivering requested lab results accurately and in record time. But how can they learn to innovate, challenge their internal status quo, and find new ways to create value?

Types of Innovation


There are three basic types of innovation, says Terry Carroll of the SPRING Network, an organization for promoting organizational change, who was a long-time healthcare CIO. Type 1 optimizes existing models; Type 2 prepares the organization for major changes in those models; and Type 3 creates and executes those radical transformations.

“Innovation is going to flex based on what the needs are," Carroll says. For example, if the lab is trying to get its costs down to remain competitive with outside suppliers, Type 3 innovation may get pushed aside in favor of Type 1's incremental improvements in current operations. If the organization is shifting to value-based care on a large scale, every department will have to re-evaluate its activities and look at Type 2 changes to address shifting workloads and new services. Type 3 level transformations, such as showing patients how their genetic information and lab results can help them manage their health, or combining lab results with population health analytics to identify health risk patterns in the community, may fundamentally transform how the lab thinks of its own role and how it fits into the organization.

Terry Carroll

Chief Digital Officer

Spring Network

Start Small


Solving a specific Type 1 problem can have ripple effects. The pathology lab at Yale University Medical School identified a communication and documentation gap with its high volume intraoperative diagnosis service.

“Communicated over the phone, you can't document these transactions," says Peter Gershkovich, pathology lab director. Because there was no commercial system available to track specimens and transmit images in real time to the operating room, online chatting could both convey the necessary information and make it a permanent part of the record for the procedure. The lab then created its own system using rapid and inexpensive software development tools. “It drives our workflow, improves quality, and saves time," Gershkovich says.

Think Big


Even with incremental changes—and especially with major innovation initiatives—lab leaders should take into account how their changes will fit within larger organizational goals. “Innovation has to occur at the front line, absolutely," says Brian Jackson, associate professor of pathology, University of Utah and chief medical informatics officer, ARUP Laboratories. “That's where the action is. But when those innovations don't roll up to a corporate strategy, they're not scalable and they never go beyond their own department."

Stay Nimble


Jackson recommends testing innovations in a separate environment, away from the core business. “It has to be lightweight, it has to be inexpensive, and it has to iterate really fast," he says. “You can't iterate fast if you're doing a heavy-weight, expensive kind of thing." Carroll recommends an “innovation fund" controlled by the organization's CEO, to keep innovation experiments from placing a burden on the existing operation. “If you put $2 million or $10 million over in this innovation space, it's not taking away from the margin or the salaries of the people who are actually delivering the care."

Contributing Lab Leaders

Peter Gershkovich, MD

Research Scientist, Director Pathology Informatics

Yale University Medical School

Terry Carroll

Chief Digital Officer

Spring Network

Brian Jackson, MD, MS

Academic Clinical Pathologist, Medical Informaticist, and Laboratory Business Leader

University of Utah; ARUP Laboratories

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