Unlock the value of hospital-based laboratory outreach

Take a look at most hospitals’ or health systems’ mission statements, and you will find some common themes. You likely will see references to expanding footprints, improving community health, and building provider relations. Simultaneously, hospital laboratories face intense financial pressure — which means lab leaders must draw on their organization’s existing infrastructure to achieve greater operational efficiency. In other words, they need to do more with less.

That’s where hospital-based laboratory outreach programs play a key role. These programs are laboratory services provided to nonhospital patients, such as those served by physicians’ offices, urgent-care centers, or long-term care facilities. By expanding your laboratory services beyond hospital walls, hospital outreach can better serve communities while creating new revenue streams, improving health outcomes, enhancing clinician satisfaction, and strengthening your hospital’s role as a regional healthcare leader.

This article explores how laboratory leaders can work with hospital executives and others to evolve beyond their traditional inpatient service role. It is based on my experiences working with a team at Bryan Health in Lincoln, Nebraska, to develop such a program.

Demonstrate value and quality

In many organizations, hospital-based laboratories are seen as cost centers rather than revenue generators. Thus, before requesting the resources to develop or expand an ancillary-support service department, laboratory leaders must recognize, evaluate, and demonstrate the value of doing so.

This work cannot be done in a silo. Nor can it be achieved with the flip of a switch. Your outreach project and service-line initiative need to be incorporated into your hospital’s operational strategy and integrated with its broader goals. Garnering support from executive leaders in finance, compliance, IT, and marketing will ensure your program has the infrastructure and resources it needs to grow.

To do this, demonstrate that you understand the bigger picture. In today’s complex and competitive healthcare environment, hospitals face surging costs and declining reimbursement rates, which are driving the shift towards value-based care and greater operational efficiency. Much of the success in my lab at Bryan Health can be attributed to presenting a strong business model and obtaining support from our executive team, who helped socialize the plan with key stakeholders.

Strategic ROI and business model development

Developing a business plan is an essential first step. To follow are several key areas to consider as you engage in this process.

First, return on investment (ROI) is a crucial metric. This encompasses weighing the costs of the resources you will need to implement your outreach plan — such as analyzers, automation, personnel, and software/IT — against anticipated income, so you can estimate the net revenue you expect to generate. To ensure accurate data for your business plan, dedicate time to developing a growth model, identifying potential clients, and laying out a phased client-integration plan.

Be sure to include current- and future-state considerations in your business plan. Start by evaluating the potential of your existing laboratory instrumentation. Likely, you are nowhere near running at the capacity of your analyzers. That’s good news, because demonstrating what you can achieve with what you have now will help you secure stakeholders’ buy-in.

Then include what you will need to be efficient and effective as your business grows, utilizing the revenue you expect to generate through your outreach. Demonstrate in your model that investing in specific analyzers and automation will decrease your personnel’s hands-on lab time and increase testing capacity, thereby reducing the cost per test and improving operational efficiency and revenue.

Additionally, understanding reimbursement rates and the local payor mix will help you optimize financial performance and accurately forecast your ROI. It’s important to consider how revenue-cycle management will work and who will process the increased billable units. Will your revenue-cycle department be able to process the increased volume of claims? Or will you need to collaborate with another department and budget for a revenue cycle management (RCM) system?

Multiple vendors on the market specialize in laboratory revenue-cycle management. In our organization’s case, we elected to contract with an external RCM system to ensure resource stewardship and optimize our revenue capture, a critical step to compliance and proper billing.

Additionally, be sure you have the ability to bill both clients and patients through your outreach plan. The leaders of hospital-based laboratory outreach labs should collaborate with their revenue-cycle department to establish a fee-schedule model. Will you offer a volume-based fee-schedule model, or will you have a flat fee schedule for all clients? Will providers’ offices have a different fee schedule compared to long-term care facilities? These are questions that you will need to answer while developing your business model and calculating ROI.

Service and personnel resources also should be included in your plan. Transitioning to a laboratory that performs outreach testing requires adopting a service-oriented mindset that prioritizes not only accuracy, but also convenience, communication, and reliability. Outreach clients expect fast turnaround times and responsive customer service, so your business model must include the resources needed to ensure an excellent client experience. This often means extending hours, offering multiple specimen pick-ups, and creating dedicated client-service teams. These teams include, at a minimum, logistics coordinators, couriers, client-service representatives, and sales professionals.

Specimen delivery logistics and courier services are a critical piece of the laboratory service, since many times the couriers are the only consistent representation of the laboratory in the client’s space. At Bryan Health, our hospital-based laboratory outreach program established its own courier service. We took a phased approach to ensure financial stewardship, and some of our routes remain contracted out to an external service.

Additionally, you will need to budget for the resources you plan to provide at the client’s location. Consider which equipment will be supplied (e.g., phlebotomy supplies, chair, or centrifuge) and whether to staff a phlebotomist at the client site. Our laboratory model included collection- and specimen-processing materials, while stipulating that phlebotomists would be provided based on volume.

Gone are the days of faxed lab results and paper order forms. Today, successful outreach programs must invest in electronic medical record (EMR) integration capabilities. This means either planning for internal resources or contracting with external vendors to support ordering options for clients. Laboratory clients expect an option to integrate their orders and results into their current EMR workflow. Electronic integration also benefits the laboratory, as it allows for accuracy, efficiency, and improved user experience.

From planning to execution

There are multiple pathways to developing a successful program and business model. At Bryan Health, our phased approach to developing a hospital-based laboratory outreach program has seen success since 2019. Using a combination of in-reach, outreach, and service models — including direct-access testing and patient service centers — our laboratory operations and overall testing volumes have increased over 53% since 2019.

In the past 12 months alone, our talented client integrations and operations teams have onboarded 18 new clients and realized a 247% increase in test volume for our hospital-based laboratory outreach service. This resulted in hundreds of thousands of dollars in additional monthly revenue.

As you look to create your own pathway to success, think about whether your organization has provider practices that do not currently send tests to your hospital lab. Our outreach business model started with demonstrating our lab’s value for “in-reach” opportunities, defined as laboratory testing for nonhospital patients ordered by providers and clinics within our physician network and conducted at our hospital’s laboratory instead of an external reference lab.

Bryan Health created and expanded its own provider network with multiple physician clinics and urgent-care locations, many of which utilized large national reference laboratories prior to joining the organization’s physician network. When those clinics transitioned to the network, they continued to send tests to the national reference lab.

For this reason, our laboratory’s leaders advocated for bringing testing in house to add value. They pointed out that doing so would not only significantly improve patient and provider satisfaction, but also grow revenue opportunities. One of many benefits we demonstrated through our model was an improvement in turnaround times from days to hours. This immediately and positively impacted our provider’s experience and their workflows, fostering rapid buy-in.

This model has been so successful that our physician network now requires new practices to transition laboratory services to our hospital-based laboratory. An additional perk to this agreement is that no new IT integration or interfaces are needed since we use the same EMR.

The next step in Bryan Health’s journey was to improve access to our outpatient and nonpatient laboratory services via a patient service center (PSC). For our organization, there was value in opening a laboratory PSC because it allowed us to market affordable services to the community. Prior to taking this step, our laboratory often received complaints about the cost of our laboratory services from patients who presented to the hospital’s outpatient collection locations and received hospital laboratory pricing.

By adding a PSC, we were able to use our reduced fee schedule. This option gained great popularity because of the lower pricing and ease of access, because patients did not have to navigate parking and wayfinding through our medical center campuses for a routine outpatient lab draw.

We also used direct access testing (DAT) to attract return patients to our PSC and encourage continued provider referrals. Because our PSC opened during the COVID-19 pandemic, we experienced a significant need for rapid and affordable COVID-19 testing, for both symptomatic patients and those who needed to confirm their COVID status for travel. At the time, providers’ offices and hospitals were being inundated with testing requests while having to care for a surge in ill patients.

To ease this pressure, our laboratory leaders team decided to enter the DAT market and offer nonprovider–ordered COVID-19 tests and about 30 other common laboratory tests. Our DAT service proved an immediate success, and our community members continue to overwhelmingly utilize the service. Additionally, local providers often refer the service to their patients as a money-saving option, improving both provider and patient satisfaction.

Although implementing hospital-based laboratory outreach can seem daunting, the value you’ll realize makes it well worth the effort. Such programs are vehicles for improving patient care, supporting clinicians, and sustaining the financial health of the laboratory and its organization. When managed effectively, they transform the laboratory from a cost center into a value driver.

By embracing innovation, focusing on service, and building strong community relationships, hospital labs can thrive in today’s dynamic healthcare environment. For future-focused laboratory managers and hospital leaders, investing in outreach is not just a smart move — it’s also an essential one.

Jayne Ellenwood, MHA, MLS(ASCP)^cm, is the director of clinical strategy and operations at Wound Pros Management Group, Inc. She was formerly the clinical pathology laboratory manager at Bryan Health in Lincoln, Nebraska. +Email: [email protected]

Read the full November-December issue of CLN here.