Jul 2, 2007 | Laboratory Management and Operations, Laboratory News
Here’s an important example of how setting a clinical goal, then monitoring progress toward that goal can lead to significant improvements in clinical outcomes. The nonprofit National Association of Children’s Hospitals and Related Institutions (NACHRI) is leading an ambitious 3-year project that aims to eradicate bloodstream infections, the most severe infections threat in pediatric ICUs.
In April, NACHRI reported that, in the first six months of the three-year project, 29 hospitals participating in the project had collectively slashed infection rates by nearly 70%. How? By simply adhering to a rigid set of measures known to prevent infection in children. These measures included more rigorous care of catheters, higher sterile precautions, and constant assessment of the need for keeping catheters in place.
A review of published literature in the Journal of Pediatric Critical Care concluded that as many as 16% of children in pediatric units suffer from infections and these infections increase the risk of death by up to 20%. Studies also show that treating infection can add nearly $40,000 in additional hospital costs to a child’s stay.
Laboratorians will not be surprised to learn that the steps for preventing infections were fairly routine, but were difficult to get hospital staff to accept. Doctors and nurses alike were set in their ways and were resistant to protocols that lengthened the amount of time they had to spend on procedures. Among the NACHRI improvements to care targeting pediatric catheter treatment were: 1) to bundle of the insertion of catheters; 2) to make frequent dressing changes and provide extra skin cleansing with powerful antiseptics; and, 3) to constantly monitor whether a catheter needed to stay in place. Insertion protocol required that the child’s entire body be covered by drapes to provide a sterile environment and that gowns, gloves, and masks needed to be worn by catheter inserters.
Hospital Staff at the Children’s Medical Center of Dayton, Ohio were “exasperated” by the strict new guidelines, but after participating in the CHCA pilot, the hospital quickly dropped infection rates to zero and went 580 days without a bloodstream infection! Children’s Healthcare of Atlanta raised strengthened commitment to the program by posting “days since last bloodstream infection” prominently in staff areas. During the first 6 months of 2006, their rate of infections dropped to 1.2 per 1,000 catheter days, from 6.2 infections in the year before the initiative was started.
This case study shows that using quality management methods to accurately measure outcomes can indeed improve performance, particularly when all employees are committed to measuring and improving quality. Furthermore, phenomenal improvements over the status quo can be gained by gathering accurate data in real-time and managing to it. Adherence to protocols can indeed maximize patient safety.
Laboratory Directors and pathologists should take inspiration from this case study. Labs already face many of the challenges in motivating employees to change behavior to achieve improvements in outcomes. Quality management methods, including Lean and Six Sigma are powerful and effective ways to help staff accept improvement goals and adhere to quality standards. As the results of the first six months of the NACHRI program demonstrate, it is possible to quickly overcome longstanding clinical habits and achieve zero rates of bloodstream infections in Pediatric ICUs. Not only is that a major success for the participating children’s hospitals, but it is also a success for the families of children who avoid serious infections that are often caused by carelessness or inattention by their care team.
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Pediatric ICUs make headway against infection
Jun 28, 2007 | Laboratory Management and Operations, Management & Operations
Over the past month, your Dark Daily editors have been busy talking to lab directors and pathologists who are at the cutting edge of the most powerful trend unfolding in clinical laboratory management. These are the lab industry’s first movers and early adopters who actively use Lean, Six Sigma, and other quality management methods to turbocharge the performance of their laboratory organizations.
Anecdotally, these conversations reveal several useful insights about the trend to adopt quality management methods. First, any laboratory which has deployed Lean and Six Sigma with proficiency tells us they are achieving paradigm-shifting benefits. Improvements range from a 50% reduction in average test turnaround times for inpatient testing (following a 14-week implementation project) to productivity gains in pre-analytical and analytical processes of between 40% and 60%.
Second, and not surprisingly, outcomes like these tend to energize the lab, causing excitement and genuine enthusiasm to take hold, sometimes across the entire laboratory staff. Third, when a laboratory is the first clinical service within a hospital or health system to implement a Lean or Six Sigma project, it is common for hospital administration to ask the laboratory to contribute their experience to quality management projects in other areas of the hospital, particularly emergency departments, surgery, pharmacy, and radiology. Lab managers and staff find that they gain new respect and admiration for blazing a quality management path within the hospital.
Fourth, a goodly number of these first mover and early adopter laboratories tell Dark Daily that the quality management initiatives have often generated dramatic improvements in clinical service and customer service performance—so dramatic, in fact, that it has helped their laboratory outreach programs pick up new clients at a faster rate. That outcome multiplies the financial benefits from these quality management projects.
To provide more information about these projects, DARK Daily and The Dark Report are inviting the lab industry’s “best of class” leaders in quality management to gather in Atlanta on September 19-20, 2007. It will be the first-ever gathering devoted exclusively to Lean, Six Sigma, ISO, and similar quality management systems and their use in clinical laboratories, hospitals, and pathology groups.
The first annual Lab Quality Confab on Quality Management in Diagnostic Medicine will be conducted at the Westin Peachtree Hotel in Downtown Atlanta. The presentation topics and confirmed speakers are about to be released. Lab Quality Confab will feature more than 40 sessions. It will include an exhibition to showcase the companies and consulting firms which currently provide products and services to aid laboratories on their quality management programs.
You can get updated information about Lab Quality Confab’s speakers, exhibitors, registration, and the full range of activities by visiting the Lab Quality Confab Site (if you cannot click on that link, simply paste this URL into your browser: http://www.labqualityconfab.com). We hope you make plans to join us in Atlanta on September 19-20 and be first in the lab industry to hear from the experts about how Lean, Six Sigma, and similar quality management systems are boosting the clinical performance and operational efficiency of the nation’s most progressive labs!
LabQuality Confab on Quality Management in Diagnostic Medicine
September 19-20, 2007
Westin Peachtree Hotel
Atlanta, Georgia
For full details about Lab Quality Confab:
http://www.labqualityconfab.com
Jun 27, 2007 | Laboratory News, News From Dark Daily
Yesterday, Roche Holdings (SWX: ROG.VX; RO.S) of Basel, Switzerland announced that it would initiate a tender offer to acquire 100% ownership of Ventana Medical Systems (NASDAQ: VMSI) of Tucson, Arizona.
Roche is offering $75 for each share of Ventana Medical. This is a 44% premium over Ventana’s closing price of $51.95 on July 22, 2007. It also represents a total cash purchase price of $3 billion for Ventana Medical Systems. For 2006, Ventana Medical Systems had revenue of $238.2 million. Roche’s offer is thus based on a large multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
Roche’s offer is unwelcome at Ventana Medical Systems. Executives at Ventana have been tight-lipped since news of the Roche tender offer became public. Earlier this morning, Ventana Medical issued a press release recommending that its shareholders take no action in response to the Roche offer. In the press release, it further stated that its board of directors would consult with financial and legal advisors on the situation. Within 10 days, it will make a recommendation to shareholders.
In a conference call yesterday, Roche disclosed that it has approached Ventana Medical Systems numerous times since the first of the year to initiate discussions about acquiring Ventana Medical. These approaches were rebuffed by Ventana’s board and executive team. That is why Roche decided to launch a hostile tender offer to acquire all the shares of Ventana.
Lab directors and pathologists should not be surprised if another company enters the bidding for Ventana Medical Systems. It has a robust product line in histopathology, a worldwide presence, and there is great respect for the quality of its products and its corporate culture. Because molecular diagnostics is growing at twice the rate of the traditional in vitro diagnostics market, a company like Ventana Medical Systems becomes a highly-desirable acquisition candidate.
Stay tuned to Dark Daily. Not only will there be ongoing developments in this hostile takeover action, but it is likely that this story will take some surprising twists before it is resolved.
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Roche Makes Offer to Acquire Ventana for $75.00 Per Share in Cash
Roche Offers $3 Billion to Get Ventana Talking
Ventana Advises Shareholders to Defer Taking Any Action in Response to Roche Offer
Roche attempts hostile takeover of Ventana Medical Systems
Jun 22, 2007 | Laboratory News
In Seattle, Washington, the two blood brothers are dealing with an upstart competitor—one that they cannot acquire nor make go away. Since it became operational in 1997, PACLAB Network Laboratories has directly challenged the national laboratories on what can be considered their “home turf,” since both national labs operate regional testing laboratories in Seattle. Not only has it made steady gains in market share, but PACLAB is poised to become the market leader in Seattle.
Since the year 2000, a growing number of community hospitals have launched laboratory outreach programs. The most successful of these lab outreach programs—with effective sales reps and a commitment to top service—are posting impressive gains in specimen volume and net revenue. These “best of class” lab outreach programs are fully competitive and, in the communities they serve, they are steadily eroding the market share of the national lab companies. PACLAB Network Laboratories should be included in this “best of class” list.
“Currently, we estimate that PACLAB holds a 30% share of the Seattle market for testing referred by office-based physicians,” stated Stewart Adelman, General Manager of PACLAB. “That makes us about equal to each of the two blood brothers, since we estimate that, in the Seattle metro, Laboratory Corporation of America (NYSE: LH) has about 30% and Quest Diagnostics Incorporated (NYSE: DGX) has about 30%. The remaining 10% of the market is shared among several other lab companies.”
Adelman made his remarks at PACLAB’s annual strategic retreat, conducted last week in Spokane. Dark Daily Editor Robert Michel was there to participate. “On several of the medical campuses of PACLAB member hospitals, we currently hold market shares of 80% and 90%,” observed Adelman. “It is powerful evidence that physicians will support their community hospital’s lab outreach program when it offers service levels that match or exceed that of competing laboratories.”
As a phenomenon, the mushrooming number of hospital laboratory networks is a natural market response to the lack of local independent laboratory companies in many cities across the United States. During the past 15 years, Laboratory Corporation of America and Quest Diagnostics Incorporated have regularly acquired any local or regional laboratory that achieved size and scale. Thus, it is not surprising that many community hospital administrators recognized the void in local laboratory services and organized a laboratory outreach program to provide more lab testing choices in the local community.
That is certainly one of the reasons why PACLAB Network Laboratories was organized. When it became operational in 1997, PACLAB’s equity members included eight hospital laboratories, with PAML, Inc. of Spokane as a partner and the manager of the regional laboratory network. During the past decade, it has grown to include 11 member hospital laboratories and serve all of the Seattle metro region, from Centralia in the south to Everett in the north.
PACLAB is also noteworthy for one other impressive achievement. It is living proof that hospital laboratories can band together and collaborate to their mutual benefit over the long term. In addition to paying for all expenses associated with the outreach business, each quarter, PACLAB distributes a sizeable dividend check to the CFO of each member hospital. Laboratory administrators and pathologists in other regions should study PACLAB as a business model that could advance the clinical and economic success of their own laboratory organizations.
P.S.: Dark Daily readers with knowledge of other successful, innovative and thriving laboratory outreach programs are invited to contact us with that information: schristensen@darkdaily.com and/or rmichel@darkdaily.com
Jun 20, 2007 | Laboratory News, News From Dark Daily
It’s a deal that is likely to trigger significant changes in the relationship between the laboratory outreach programs of major health systems and the two national laboratories. It was announced yesterday that Laboratory Corporation of America (NYSE: LH) will acquire DSI Laboratories, Inc. of Fort Meyers, Florida.
The parent of DSI Laboratories is NCH Healthcare System. It owns two hospitals in the Naples area, along Florida’s west coast. DSI was founded in 1984 as a stand-alone enterprise owned by NCH. DSI Laboratories manages the consolidated laboratory services for NCH. It also is a major provider of laboratory testing services to office-based physicians and has enjoyed steady growth in specimen volume and revenue in recent years.
What makes LabCorp’s pending acquisition of DSI Laboratories significant is that the parent health system is willing to “take the money and run” by selling the outreach component of its business. NCH will “retain internal, patient laboratory testing at its Downtown Naples and North Naples campuses, with LabCorp assuming the remainder of the operation.”
If, in fact, if NCH is motivated to sell its lab outreach testing business primarily to realize the capital value of that business, then it is the third health system nationally to take this step in recent years. In 2005, the health system owners of Spectrum Laboratory Network, in Greensboro, North Carolina, sold a majority interest in this laboratory company and its outreach testing business, to Apax Partners, LP. Dark Daily estimates that the health system owners realized more than $100 million cash in that sale. (See The Dark Report, November 14, 2005.) Another similar transaction was the sale by Cincinnati, Ohio-based Health Alliance of its laboratory outreach business to LabOne, Inc. (now part of Quest Diagnostics Incorporated). The sale, which occurred in early 2004, brought the selling hospital organization $43.9 million in cash. (See The Dark Report, February 23, 2004.)
In the upcoming issue of The Dark Report, which goes to press next Monday, we will provide more detailed analysis of LabCorp’s acquisition of DSI Laboratories. This unfolding story should be of keen interest to laboratory administrators and pathologists who are currently leading laboratory outreach programs in different regions across the country.
Related articles:
Laboratory Corporation of America(R) Holdings Agrees to Acquire DSI Laboratories from NCH Healthcare System
