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Did you know that lab services represent 2% of a health system’s medical supply spend? Yet, lab tests influence 70% of medical decisions.1 Lab services are becoming increasingly vital for maximizing quality of patient care within non-acute care sites. Establishing point-of-care testing within the non-acute care sites can lead to 11% fewer hospitalizations and 36% fewer inpatient hospital stays.2 Labs are run for pre-surgical testing at ambulatory surgery centers, rapid strep tests can be given at long-term care centers, and nurses may conduct flu tests at a patient’s home, just to name a few sites. Having the right lab supply chain is a critical component that contributes to quality patient outcomes.
Often, the supply chain team may not understand how they can impact the lab’s performance via their supply decisions. However, they can, and do, drive product standardization and formulary compliance throughout lab testing sites, which in turn increases standards in workflow compliance, enabling the lab to contribute to supporting better patient outcomes.
Integrating your health system’s medical-surgical supply chain with the lab operations drives better business performance across all non-acute sites and can relieve on-site administrators from supply chain-related headaches. Aligning and standardizing the lab products and processes between the non-acute care sites can reduce excess costs and generate potential savings.
A health system’s supply chain should focus on creating an integrated strategy across the non-acute continuum. “Supply chain operations can be integral to performance across acute and non-acute sites,” said Lynn Glass, Vice President of Strategic Accounts at McKesson. Supply chain should play an important role in helping to optimize operations, reduce expenses and enforce standardization for all the lab testing sites across a health system.
Patrick Bowman, Director of Health Systems Lab for McKesson, emphasizes the importance of the supply chain team working together with the lab staff to focus on supporting better patient outcomes, operational efficiency and financial performance. “I think some of the best practices we’ve seen with chain and lab is really an integration of supply chain with the biomedical board or clinical representative in the lab strategy decision,” Bowman said.
Not all products are created equal. Not all lab tests replicate the same results and ranges. Standardizing testing equipment leads to a better clinical infrastructure that in turn creates better patient outcomes. For the supply chain, it means generating greater operational efficiencies. Standardization leads to leveraging your spend with manufacturers, increasing your GPO compliance, reducing excess costs and creating a more organized workflow for your supply chain team.
The lab supply chain directly impacts clinical performance, improving patient satisfaction and clinical outcomes. Glass explains that having immediate results at the point of care can often be the difference between a positive patient outcome or a negative one. “Especially with older patients or chronically ill patients, it can be difficult enough to get a patient to the doctor’s office at times,” she explains. Therefore, having the lab results right away, and not having to ask the patient to come back, or go to an offsite location for testing, can support the patient experience and their odds of having a positive clinical outcome. Point-of-care testing and a well-supplied lab can help support patient compliance and patient satisfaction, thus improving quality of care. This is the ultimate goal and is beneficial to the patient as well as to the health system, according to Glass.
She adds that while point of care testing doesn’t get the high reimbursement rates of years past, point-of-care testing can still be an overall benefit from a financial perspective.
Having the lab results right away, and not having to ask the patient to come back, or go to an offsite location for testing, can support the patient experience and their odds of having a positive clinical outcome. Point-of-care testing and a well-supplied lab can help support patient compliance and patient satisfaction, thus improving quality of care.
“I think today’s clinicians really want to balance the quality of care with the financial impact. Sometimes point-of-care testing is a little costlier, but it’s important to look at the overall benefit… not just the upfront cost, but the quality of care that you’re giving,” Glass states.
According to the CDC, one in three antibiotic prescriptions are unnecessary.3 One example of this is a mother who brings her child in for the strep test. “In the past, they ran a rapid test and wrote a script, and told them not to fill it until a confirmatory result came back, or they would tell them to go ahead and take the antibiotic.”
If your facilities are equipped with molecular testing equipment, more accurate and timely results can be available for better diagnosing and treating common illnesses leading to better antibiotic stewardship. Point-of-care testing enables systems to balance the quality of the encounter with the cost and consequences, without causing the parent to give an antibiotic to her child unnecessarily or withholding the much-needed medication.
The financial performance is positively impacted by improved clinical outcomes. With value-based care, higher patient satisfaction scores and better-quality indicators lead to higher reimbursement scores, Glass explains. The lab can be a strong revenue producer with the right processes and procedures implemented throughout the lab’s supply chain operations.
“Set up properly, lab can help enhance revenue,” Glass explains. “I think people are afraid that lab is going to be a cost center for them, and sometimes it is, but it’s often because they haven’t really set up a successful strategy from the beginning.”
Glass adds that health systems need to devise a strategy based on their system’s specific demand, including patient population, payer mix, testing needs, and physician specialties. “When you consider all those factors with the value-based care initiative, whereby so many quality indicators include a lab test, and you’re strategic about…creating an appropriate test menu for the volume of testing you have with your patient population… that will help drive compliance. And compliance, in turn is really going to drive forth scores and value-based care measures, so you can get the best reimbursement, you can be financially sound, and your lab can be a revenue center rather than a cost center,” Glass emphasizes.
Utilizing a distributor that specializes in the non-acute full continuum of products and services can help health systems develop and implement a lab strategy and standardize their supply chain operations across all settings and work with the Director of lab to drive initiatives. McKesson Medical-Surgical’s cutting-edge data and analytics tools help health systems identify trends, issues, and areas for improvement to save time and cut costs. Health systems can use the supply chain data for benchmarking and trouble-shooting to improve efficiencies and streamline processes across the enterprise.
Ultimately, creating an integrated lab supply chain affects stronger business performance across the non-acute care sites can help contribute to better financial outcomes, and lead to clinical satisfaction for both care givers and patients.
In the next chapter of the Roadmap for Non-Acute Success, we will examine how the pharmaceutical supply chain is yet another area in which consolidation of suppliers and standardization leads to synergies across all settings.
Learn how the pharmaceutical supply chain is yet another area in which consolidation of suppliers and standardization leads to synergies across all settings.
1: The Impact of Diagnostics on Healthcare Infographic, HIDA.
2: American Journal Clinical Pathology 2014, Nov; 142:640-646, Implementation of Point-of-Care Testing in an Ambulatory Practice of an Academic Medical Center.