Sale of respected laboratory information system company may be an early sign that investors believe clinical laboratories and pathology groups are ready to upgrade their LISs and add needed capabilities
In the past 10 years there has been little disruption to the
laboratory
information systems (LIS) market that clinical
laboratories and anatomic
pathology groups use. Yet, over that same 10-year period, almost every
hospital and physician group practice adopted an electronic
health system (EHR), primarily because of federal financial incentives that
encouraged such adoption.
For medical
laboratories and pathology groups, this widespread—nearly
universal—adoption of EHRs by the nation’s hospitals and physicians was
disruptive. Labs were required to expend resources building digital interfaces
to the EHRs of their parent hospitals and client physicians to support
electronic test ordering and test reporting.
However, because that wave of EHR adoption is now over,
clinical labs and pathology groups have an opportunity to assess the current
state of the health
information technology (HIT) that they use daily, primarily in the form of
the classic laboratory information system that handles nearly all the primary
functions needed to support testing and other operational needs.
This opportunity to help medical laboratories enhance and/or
upgrade the capabilities of their laboratory information systems may be one
motivation behind the recent sale of a well-known LIS company.
Private Equity Firm Buys Orchard Software
On Oct. 7, 2019, Orchard Software Corporation of Carmel,
Ind., announced its acquisition by Franciscan Partners, a private equity firm
based in San Francisco.
Orchard Software, founded in 1993, has grown steadily over
the past 20 years, primarily by serving physician office laboratories,
community hospital labs, and independent clinical laboratory companies. With each
stage of growth, Orchard added functionality to its LIS and related software
offerings and moved up-market to serve larger hospitals and larger labs.
The purchase price and the terms of the sale were not
announced. Orchard’s Founder, President and CEO, Rob Bush, will retire. The new
CEO is Billie Whitehurst, who came to Orchard from Netsmart Technologies, where she was Senior
Vice President. The remainder of Orchard’s management team will be kept in
place.
“Francisco Partners will provide capital and expertise to enable Orchard to grow at a faster pace and continue to develop its newer web-based products in an industry that has lagged behind in adoption of cloud-based software,” says Rob Bush (above), Orchard Software’s Founder and exiting CEO, in a press release. (Photo copyright: Twitter.)
Is the LIS Market Heating Up?
What makes the purchase of Orchard by a multi-billion-dollar
private equity company noteworthy is the fact that it is the first significant
transaction in the LIS sector probably since the mid-2000s, which saw several
significant mergers and acquisitions.
Other acquisitions or investments involving LIS companies
need to happen before it would be appropriate to say that investor interest in
the LIS sector is heating up. However, it is accurate to say that many
professional investors will be watching to see whether Franciscan Partners
succeeds with its investment in Orchard Software. If Orchard’s revenue and
operating profits increase substantially in the next few years, that may
encourage other investors to look for LIS companies and products that they can
buy.
If this were to happen, that would be a positive development
for both clinical laboratories and anatomic pathology groups, because these
investors would have a motive to add new functions and capabilities to their
LIS products. It would also wake up a sector of lab information technology that
has been relatively quiet for several years.
Researchers believe new findings about genetic changes in C. difficile are a sign that it is becoming more difficult to eradicate
Hospital infection control teams, microbiologists, and clinical laboratory professionals soon may be battling a strain of Clostridium difficile (C. difficile) that is even more resistant to disinfectants and other forms of infection control.
A WSI news release states the researchers “identified genetic changes in the newly-emerging species that allow it to thrive on the Western sugar-rich diet, evade common hospital disinfectants, and spread easily.”
Microbiologists and infectious disease doctors know full well that this means the battle to control HAIs is far from won.
“C. difficile is currently forming a new species with one group specialized to spread in hospital environments. This emerging species has existed for thousands of years, but this is the first time anyone has studied C. difficile genomics in this way to identify it. This particular [bacterium] was primed to take advantage of modern healthcare practices and human diets,” said Nitin Kumar, PhD (above), in the news release. (Photo copyright: Wellcome Sanger Institute.)
Genomic Study Finds New Species of Bacteria Thrive in
Western Hospitals
In the published paper, Nitin Kumar, PhD, Senior Bioinformatician at the Wellcome Sanger Institute and Joint First Author of the study, described a need to better understand the formation of the new bacterial species. To do so, the researchers first collected and cultured 906 strains of C. difficile from humans, animals, and the environment. Next, they sequenced each DNA strain. Then, they compared and analyzed all genomes.
The researchers found that “about 70% of the strain collected specifically from hospital patients shared many notable characteristics,” the New York Post (NYPost) reported.
Hospital medical laboratory leaders will be intrigued by the
researchers’ conclusion that C. difficile is dividing into two separate
species. The new type—dubbed C. difficile clade A—seems to be targeting
sugar-laden foods common in Western diets and easily spreads in hospital
environments, the study notes.
“It’s not uncommon for bacteria to evolve, but this time we actually see what factors are responsible for the evolution,” Kumar told Live Science.
New C. Difficile Loves Sugar, Spreads
Researchers found changes in the DNA and ability of the C.
difficile clade A to metabolize
simple sugars. Common hospital fare, such as “the pudding cups and instant
mashed potatoes that define hospital dining are prime targets for these strains”,
the NYPost explained.
Indeed, C. difficile clade A does have a sweet tooth. It was associated with infection in mice that were put on a sugary “Western” diet, according to the Daily Mail, which reported the researchers found that “tougher” spores enabled the bacteria to fight disinfectants and were, therefore, likely to spread in healthcare environments and among patients.
“The new C. difficile produces spores that are more
resistant and have increased sporulation
and host colonization capacity when glucose or fructose is available for
metabolism. Thus, we report the formation of an emerging C. difficile
species, selected for metabolizing simple dietary sugars and producing high
levels or resistant spores, that is adapted for healthcare-mediated
transmission,” the researchers wrote in Nature Genetics.
Bacteria Pose Risk to Patients
The findings about the new strains of C. difficile bacteria
now taking hold in provider settings are important because hospitalized
patients are among those likely to develop life-threatening diarrhea due to
infection. In particular, people being treated with antibiotics are vulnerable
to hospital-acquired infections, because the drugs eliminate normal gut
bacteria that control the spread of C. difficile bacteria, the
researchers explained.
According to the Centers for Disease Control and Prevention (CDC), C. difficile causes about a half-million infections in patients annually and 15,000 of those infections lead to deaths in the US each year.
New Hospital Foods and Disinfectants Needed
The WSI/LSHTM study suggests hospital representatives should
serve low-sugar diets to patients and purchase stronger disinfectants.
“We show that strains of C. difficile bacteria have continued to evolve in response to modern diets and healthcare systems and reveal that focusing on diet and looking for new disinfectants could help in the fight against this bacteria,” said Trevor Lawley, PhD, Senior Author and Group Leader of the Lawley Lab at the Wellcome Sanger Institute, in the news release.
Microbiologists, infectious disease physicians, and their
associates in nutrition and environmental services can help by understanding
and watching development of the new C. difficile species and offering
possible therapies and approaches toward prevention.
Meanwhile, clinical laboratories and microbiology labs will
want to keep up with research into these new forms of C. difficile, so
that they can identify the strains of this bacteria that are more resistant to
disinfectants and other infection control methods.
Low prices to encourage consumers to order its WGS service is one way Veritas co-founder and genetics pioneer George Church hopes to sequence 150,000 genomes by 2021
By announcing an annotated whole-genome sequencing (WGS) service to consumers for just $599, Veritas Genetics is establishing a new price benchmark for medical laboratories and gene testing companies. Prior to this announcement in July, Veritas priced its standard myGenome service at $999.
“There is no more comprehensive genetic test than your whole genome,” Rodrigo Martinez, Veritas’ Chief Marketing and Design Officer, told CNBC. “So, this is a clear signal that the whole genome is basically going to replace all other genetic tests. And this [price drop] gets it closer and closer and closer.”
Pathologists and clinical laboratory managers will want to watch to see if Veritas’ low-priced, $599 whole-genome sequencing becomes a pricing standard for the genetic testing industry. Meanwhile, the new price includes not only the sequencing, but also an expert analysis of test results that includes information on more than 200 conditions, Veritas says.
“The focus in our industry is shifting from the cost of sequencing genomes to interpretation capabilities and that’s where our secret sauce is,” said Veritas CEO Mirza Cifric in a news release. “We’ve built and deployed a world class platform to deliver clinically-actionable insights at scale.” The company also says it “achieved this milestone primarily by deploying internally-developed machine learning and AI [artificial intelligence] tools as well as external tools—including Google’s DeepVariant—and by improving its in-house lab operations.”
The myGenome service offers 30x WGS, which Veritas touts in company documentation as the “gold standard” for sequencing, compared to the less-precise 0.4x WGS.
The myGenome service is available only in the United States.
Will Whole-Genome Sequencing Replace Other Genetic Tests?
Veritas was co-founded by George Church, PhD, a pioneer of personal genomics through his involvement with the Harvard Personal Genome Project at Harvard Medical School. In a press release announcing the launch of myGenome in 2016, Veritas described its system as “the world’s first whole genome for less than $1,000, including interpretation and genetic counseling.”
Church predicts that WGS will someday replace other genetic tests, such as the genotyping used by personal genomics and biotechnology company 23andMe.
“Companies like 23andMe that are based on genotyping technology basically opened the market over the last decade,” Martinez explained in an interview with WTF Health. “They’ve done an incredible job of getting awareness in the general population.”
However, he goes on to say, “In genotyping technology, you
are looking at very specific points of the genome, less than half of one
percent, a very small amount.”
Martinez says Veritas is sequencing all 6.4 billion letters
of the genome. And, with the new price point, “we’re closer to realizing that
seismic shift,” he said in the news release.
“This is the inflection point,” Martinez told CNBC.
“This is the point where the curve turns upward. You reach a critical mass when
you are able to provide a product that gives value at a specific price point.
This is the beginning of that. That’s why it’s seismic.”
Rodrigo Martinez (above), Veritas’ Chief Marketing and Design Officer, told CNBC, “The only way we’re going to be able to truly extract the value of the genome for a healthier society is going to be analyzing millions of genomes that have been sequenced. And the only way we can get there is by reducing the price so that more consumers can sequence their genome.” Photo copyright: Twitter.)
Payment Models Not Yet Established by Government, Private
Payers
However, tying WGS into personalized medicine that leads to actionable diagnoses may not be easy. Robin Bennett, PhD (hon.), a board certified senior genetic counselor and Professor of Medicine and Medical Genetics at UW School of Medicine, told CNBC, “[Healthcare] may be moving in that direction, but the payment for testing and for services, it hasn’t moved in the preventive direction. So, unless the healthcare system changes, these tests may not be as useful because … the healthcare system hasn’t caught up to say, ‘Yes, we support payment for this.’”
“Insurers are looking for things where, if you get the
information, there’s something you can do with it and that both the provider
and the patient are willing and able to use that information to do things that
improve their health,” Phillips told CNBC. “Insurers are very interested
in using genetic testing for prevention, but we need to . . . demonstrate that
the information will be used and that it’s a good trade-off between the
benefits and the costs.”
Sequencing for Free If You Share Your Data
Church may have an answer for that as well—get biopharmaceutical companies to foot the bill. Though Veritas’ new price for their myGenome service is significantly lower than before, it’s not free. That’s what Nebula Genomics, a start-up genetics company in Massachusetts co-founded by Church, offers people willing to share the data derived from their sequencing. To help biomedical researchers gather data for their studies, Nebula provides free or partially-paid-for whole-genome sequencing to qualified candidates.
“Nebula will enable individuals to get sequenced at much
lower cost through sequencing subsidies paid by the biopharma industry,” Church
told BioSpace.
“We need to bring the costs of personal genome sequencing close to zero to
achieve mass adoption.”
So, will lower-priced whole-genome sequencing catch on?
Perhaps. It’s certainly popular with everyday people who want to learn their
ancestry or predisposition to certain diseases. How it will ultimately affect
clinical laboratories and pathologists remains to be seen, but one thing is
certain—WGS is here to stay.
Presenters at the 13th Annual Lab Quality Confab 2019 discussed the negative impact of disparities between medical laboratory processes and SOPs
ATLANTA, Oct. 18, 2019—Several weeks ago, the Centers for Medicare and Medicaid Services (CMS) quietly released QSO-19-20-CLIA: Revisions to State Operations Manual (SOM), Chapter 6—Special Procedures for Laboratories. The release, which went to all State Survey Agency Directors, includes a “comprehensive revision to establish quality laboratory policies and procedures to ensure accurate and reliable test results to protect patients and improve the quality of healthcare,” CMS’ website states.
The revisions went into effect September 26, 2019.
For clinical laboratory administrators, managers, and
quality team members, reviewing the Special Procedures for Laboratories is
worth the effort as part of your 2020 lab quality program and continuous
improvement efforts. CMS made it easy to see what has changed by highlighting
the revisions in red.
One revision worth noting is 6006.4–Certificate of
Compliance, which has been revised to say, “A Certificate of Compliance is
issued to a laboratory after an inspection finds the laboratory to be in
compliance with all
applicable requirements.”
CMS Stepping Up Scrutiny, Particularly in Preanalytical Phase
Laboratories that deviate practices and processes from their
standard operating policies and procedures (SOPs) are going to get dinged,
Flynn explained during her session. Some examples recommended for review
included:
Validating specimen types, initially and as part
of a change in a major component;
Showing that temperature is properly controlled
during specimen transport; and
Mitigating risks as part of the shift to more
nurse-drawn specimens.
Additionally, Flynn noted that addressing deficiency citations, deficiency practice related survey data tags (D-Tags), and Form CMS-2567 (Statement of Deficiencies and Plan of Correction) are all daunting and complex. Many D-Tags have multiple regulatory requirements, according to CMS.
During her breakout session at The Dark Report’s 13th Annual Lab Quality Confab in Atlanta, Linda Flynn (above), Principal of LS Flynn and Associates, explained that the rigors of a CMS inspection far exceed those of other inspectors. “This is digging,” she stressed, adding that a CMS inspection comes with a big team of career inspectors. “It’s almost punitive … they know what they are looking for.” (Photo copyright: The Dark Report.)
Are Medical Laboratories at Risk for Factors They Cannot
Control?
Several attendees pointed out that in certain scenarios,
specimen jeopardy and patient risk are out of the medical laboratory’s control.
Nevertheless, Flynn says the laboratory is still responsible.
In addition to how a failure can adversely affect a patient,
the cost of failures can run into the millions of dollars which are attributed
to legal fees, consulting, staff overtime, and sanctions for the laboratory,
she said.
To reduce risk, Flynn recommends that medical laboratory
management address the complete lab continuum by getting out of the lab and
interfacing with people outside the lab who may adversely affect specimens.
Lessons Learned Through Health System’s Policy
Standardization Project
Intermountain generates approximately 10 million laboratory
tests per month, according to Zern. However, years ago, the health system’s
laboratories were not standardized at all. They were individually managed, they
had been writing unique SOPs, they were purchasing their own equipment, and
their vendor contracts were facility specific.
To standardize the labs, 11 discipline-specific practice
councils (work groups) were developed, each including representatives from
rural and core laboratory sites.
“What we found is that there is a lot of personal attachment
to SOPs,” Zern said. “As a team, we came up with better wording than we did as
individuals.” The end product was a single SOP, developed with the oversight of
medical directors and workable for everyone.
Clinical laboratory administrators, managers, and quality team members learned much at this year’s LQC. If you were unable to attend Lab Quality Confab this year, the digital audio recording series of 41 presentations is available for purchase. Go to https://www.labqualityconfab.com for more information.
The UE study sheds light on the types of bacteria in
wastewater that goes down hospital pipes to sewage treatment plants. The study
also revealed that not all infectious agents are killed after passing through
waste treatment plants. Some bacteria with antimicrobial (or antibiotic)
resistance survive to enter local food sources.
The scientists concluded that the amount of AMR genes found
in hospital wastewater was linked to patients’ length-of-stays and consumption
of antimicrobial resistant bacteria while in the hospital.
In a paper the University of Edinburgh published on medRxiv, the researchers wrote: “There was a higher abundance of antimicrobial-resistance genes in the hospital wastewater samples when compared to Seafield community sewage works … Sewage treatment does not completely eradicate antimicrobial-resistance genes and thus antimicrobial-resistance genes can enter the food chain through water and the use of [processed] sewage sludge in agriculture. As hospital wastewater contains inpatient bodily waste, we hypothesized that it could be used as a representation of inpatient community carriage of antimicrobial resistance and as such may be a useful surveillance tool.”
Additionally, they wrote, “Using metagenomics to identify
the full range of AMR genes in hospital wastewater could represent a useful
surveillance tool to monitor hospital AMR gene outflow and guide environmental
policy on AMR.”
Antimicrobial stewardship programs are becoming increasingly critical to preventing the spread of AMR bacteria. “By having those programs, [there are] documented cases of decreased antibiotic resistance within organisms causing these infections,” Paul Fey, PhD, of the University of Nebraska Medical Center, told MedPage Today. “This is another indicator of how all hospitals need to implement stewardship programs to have a good handle on decreasing antibiotic use.” [Photo copyright: University of Nebraska.]
Don’t Waste the Wastewater
Antibiotic resistance occurs when bacteria change in response to medications to prevent and treat bacterial infections, according to a World Health Organization (WHO) fact sheet. The CDC estimates that more than 23,000 people die annually from two million antibiotic-resistance infections.
Wastewater, the UE scientists suggest, should not go to
waste. It could be leveraged to improve hospitals’ detection of patients with antimicrobial
resistance, as well as to boost environment antimicrobial-resistance polices.
They used metagenomics (the study of genetic material
relative to environmental samples) to compare the antimicrobial-resistance
genes in hospital wastewater against wastewater from community sewage
points.
The UE researchers:
First collected samples over a 24-hour period from various areas in a tertiary hospital;
They then obtained community sewage samples from various locations around Seafield, Scotland;
Antimicrobial-resistance genes increased with longer length of patient stays, which “likely reflects transmission amongst hospital inpatients,” researchers noted.
Fey suggests that further research into using sequencing
technology to monitor patients is warranted.
“I think that monitoring each patient and sequencing their
bowel flora is more likely where we’ll be able to see if there’s a significant
carriage of antibiotic-resistant organisms,” Fey told MedPage Today. “In
five years or so, sequencing could become so cheap that we could monitor every
patient like that.”
Fey was not involved in the University of Edinburgh
research.
Given the rate at which AMR bacteria spreads, finding antibiotic-resistance
genes in hospital wastewater may not be all that surprising. Still, the University
of Edinburgh study could lead to cost-effective ways to test the genes of
bacteria, which then could enable researchers to explore different sources of
infection and determine how bacteria move through the environment.
And, perhaps most important, the study suggests clinical
laboratories have many opportunities to help eliminate infections and slow
antibiotic resistance. Microbiologists can help move their organizations forward
too, along with infection control colleagues.
How medical laboratories can show value through process improvement methods and analytics will be among many key topics presented at the upcoming Lab Quality Confab conference
Quality management is the clinical laboratory’s best strategy for surviving and thriving in this era of shrinking lab budgets, PAMA price cuts, and value-based payment. In fact, the actions laboratories take in the next few months will set the course for their path to clinical success and financial sustainability in 2020 and beyond.
But how do medical laboratory managers and pathologists address these challenges while demonstrating their lab’s value? One way is through process improvement methods and another is through the use of analytics.
Clinical pathologists, hospital lab leaders, and independent lab executives have told Dark Daily that the trends demanding their focus include:
Ensuring needed resources and appropriate tests,
while the lab is scrutinized by insurance companies and internally by hospital
administration;
“Our impact on patient care, in many cases, is very
indirect. So, it is difficult to point to outcomes that occur. We know things
we do matter and change patient care, but objectively showing that is a real
struggle. And we are being asked to do more than we ever had before, and those
are the two big things that keep me up at night these days,” he added.
This is where process improvement methods and analytics are
helping clinical laboratories understand critical issues and find opportunities
for positive change.
“You need to have a strategy that you can adapt to a changing landscape in healthcare. You have to use analytics to guide your progress and measure your success,” Patricia Nortmann, System Director of Laboratory Services at St. Elizabeth Healthcare, Erlanger, Ky., told Dark Daily.
Clinical Laboratories Can Collaborate Instead of Compete
Prior to a joint venture with TriHealth in Cincinnati, St. Elizabeth lab leaders used data to inform their decision-making. Over about 12 years preceding the consolidation of labs they:
Implemented front-end automation outside the core area and in the microbiology lab.
“We are now considered a regional reference lab in the state
of Kentucky for two healthcare organizations—St. Elizabeth and TriHealth,”
Nortmann said.
Thanks to these changes, the lab more than doubled its
workload, growing from 2.1 million to 4.3 million outreach tests in the core
laboratory, she added.
Christopher Doern, PhD (left), Director of Microbiology and Associate Professor of Pathology at Virginia Commonwealth University Health System; Patricia Nortmann (center), System Director of Laboratory Services at St. Elizabeth Healthcare; and Joseph Cugini (right), Manager Client Solutions at Health Network Laboratories, will present practical solutions and case studies in quality improvement and analytics for clinical laboratory professionals at the 13th Annual Lab Quality Confab, October 15-16, 2019, at the Hyatt Regency in Atlanta, Ga. (Photo copyright: The Dark Report.)
Using Analytics to Test the Tests
Clinical laboratories also are using analytics and information technology (IT) to improve test utilization.
At VCH Health, Doern said an analytics solution interfaces
with their LIS, providing insights into test orders and informing decisions
about workflow. “I use this analytics system in different ways to answer
different questions, such as:
How are clinicians using our tests?
When do things come to the lab?
When should we be working on them?
“This is important for microbiology, which is a very delayed
discipline because of the incubation and growth required for the tests we do,”
he said.
Using analytics, the lab solved an issue with Clostridium
difficile (C diff) testing turnaround-time (TAT) after associating it with
specimen transportation.
Inappropriate or duplicate testing also
can be revealed through analytics. A physician may reconsider a test after discovering
another doctor recently ordered the same test. And the technology can guide
doctors in choosing tests in areas where the related diseases are obscure, such
as serology.
Avoiding Duplicate Records While
Improving Payment
Another example of process
improvement is Health Network Laboratories (HNL) in Allentown, Pa. A team there established an enterprise master patient index (EMPI) and implemented digital tools to find and eliminate
duplicate patient information and improve lab financial indicators.
“The system uses trusted sources of data to make sure data is clean and the lab has what it needs to send out a proper bill. That is necessary on the reimbursement side—from private insurance companies especially—to prevent denials,” Joseph Cugini, HNL’s Manager Client Solutions, told Dark Daily.
HNL reduced duplicate records in its database from 23% to
under one percent. “When you are talking about several million records, that is
quite a significant improvement,” he said.
Processes have improved not only on the billing side, but in
HNL’s patient service centers as well, he added. Staff there easily find
patients’ electronic test orders, and the flow of consumers through their
visits is enhanced.
Learn More at Lab Quality Confab Conference
Cugini, Doern, and Nortmann will speak on these topics and more during the 13th Annual Lab Quality Confab (LQC), October 15-16, 2019, at the Hyatt Regency in Atlanta, Ga. They will offer insights, practical knowledge, and case studies involving Lean, Six Sigma, and other process improvement methods during this important 2-day conference, a Dark Dailynews release notes.
Register for LQC, which is produced by Dark Daily’s sister publication The Dark Report, online at https://www.labqualityconfab.com/register, or by calling 512-264-7103.
