PHYSICIAN OFFICE LAB

Changing POL Dynamics

POLs are undergoing integration into IDNs

IDN ownership of physician practices is a long-standing trend with over 38% of all physicians employed by hos-

pitals in 2016. In some areas of the country the number is closer to 50%, with younger physician employment by hospitals at over 65%.

Purchase of physician practices by hospitals, and more recently private equity firms, has created new pressures on the physician office lab and increased concerns about consistency of lab results from setting to setting. There were 169,000 labs in 2000, and by 2017 the number has grown to nearly 260,000. As the number of labs has increased over time and the number of POLs owned by IDNs have increased, the need for result standardization has become more obvious and important. While PAMA

By Jim Poggi

is likely to reduce the number of labs to some degree, standardization of lab results between care settings is a major concern, particularly among larger IDNs.

IDNs have taken various approaches to assure quality of care and lab result consistency. Some IDNs have reduced the types of tests

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permitted to be performed in their physician-owned practices. Others have mandated which testing systems are permitted in the POL. Nearly all have point-of-care coordinators and clinical committees whose objective is to assure availability of the right test at the right time for the right reason. Standards of practice are shaping up intended to govern testing in the core lab, point-of-care settings within the hospital and the POLs owned or affiliated with the hospital. What does this all mean to the distributor sales representative, their suppliers and their physician office customers? It means that, sooner or later, testing in these POLs will be more strictly governed by personnel OUTSIDE of the physician practice. Test menus, personnel qualifications and standards, quality control practices and cost considerations will be determined by the clinical personnel of the practices in collaboration with core lab personnel, hospital risk management and C-suite executives including finance. In short, it means you and your suppliers need to step up your game and recognize that to be a successful player in the changing market for lab testing, you can no longer focus on the needs of your

With customer consolidation comes a smaller number of total customers with greater leverage and more competition for the expanded spend these customers represent.

POL customers, their desire to create a profitable lab and the emergence of new tests to maintain and grow your lab business. The need to be a consultant has never been higher and the number of call points you and your suppliers need to effectively manage has increased substantially. To say that selling lab testing in the market with a high level of IDN oversight is a complex sale is an understatement.

How do you succeed in this changing environment? Your strategy needs to change to embrace and work effectively in a more sophisticated and dynamic environment. New thinking and broader teams are required.

Changing call points, needs and sophistication

With your POL customer now part of an IDN, more departments and viewpoint than ever before need to be considered and satisfied. The call points you and your suppliers will need to work with now not only include the clinicians and practice managers at the POL, but also the IDN core lab, point-of-care coordinators, finance and other C-suite personnel and logistics. Each customer team will have varying levels of influence and differing needs and opinions. Fundamentally, they all share the same three goals: clinical/laboratory excellence, economic improvement and improved procedural efficiency.

As the number and sophistication of your call points increases, the need for more expertise and higher skill sets on your side increases. The need for clinical and technical expertise from your supplier is higher than ever. They must have the resources to effectively engage with core lab pathologists and clinical personnel, C-suite executives as well as IT professionals of the

IDN. Scalable instrument solutions with the ability to meet the high throughput core lab needs and provide the same level of result quality for shared tests in the POL can be a very strong selling point. This is especially true in clinical chemistry, hematology, immunoassay and molecular testing platforms.

Concerns about data security and management of HIPPA data will be top-of-mind questions posed to you and your suppliers. The ability of lab and clinical stakeholders to view, review and assess patient lab results electronically in real time is a core concern. A strong LIS offering allowing secure access to lab data, QC results, patient test result trends and administrative data including personnel training records and reagent/QC lot tracking is an absolute requirement.

From a distributor account manager viewpoint, the hurdle rate increases greatly: You need to be able to effectively discuss your company’s value proposition for lab and on an overall basis. How can you help with consolidation and cost reduction? How can you demonstrate the

IDNs have taken various approaches to assure quality of care and lab result consistency. Some IDNs have reduced the types of tests permitted to be performed in their physicianowned practices. Others have mandated which testing systems are permitted in the POL.

ability to manage reagent, control and calibrators lot numbers offered by your key manufacturers? What business review tools do you have to set objectives, manage progress and report results successfully and accurately? The best distributor sales teams involve a variety of experts and management levels to provide a compelling message that resonates with this sophisticated customer. With customer consolidation comes a smaller number of total customers with greater leverage and more competition for the expanded spend these customers represent. Do not underestimate the need to involve management from high levels in your company to assure the customer has confidence in your offering and understands their importance to your business.

The market has changed. There are fewer customers. Customers are larger, represent higher levels of spend, have a greater level of sophistication and a broader number of needs to be satisfied. The well-prepared distributor account manager understands these needs and has developed the strategy with their management and key suppliers to deliver greater value than ever before. Game on.

Best practice thoughts and considerations

Technology

ʯScalable instrument platforms with broad menus and consistent precision and accuracy ʯ Reliability and ease of use and training ʯ Flexible reagent systems, multiple package sizes, large scale lot manufacturing ʯ Secure IT connectivity ʯ LIS features and flexibility with integration with

EMR allowing real time data access, review and management

Commercial business

ʯHigh level management involvement from distributor and supplier ʯ Thoughtful, effective understanding and response to customer needs ʯ Appropriate consolidation of product availability across lab and other product needs ʯ Effective tools to manage daily ordering needs and multiple settings and unit of measure needs ʯ Sophisticated lot tracking and sequester programs ʯ Frequent communication and comprehensive business reviews ʯ Coordination of expertise (clinical, technical, IT) to meet customer requirements