Bill Seay of Lifepoint Interviewed by HIStalk; IT Support for Lab Outreach

Mr. HIStalk recently posted an excellent, comprehensive interview of Bill Seay, CEO and founder of Lifepoint Informatics (see: HIStalk Interviews William Seay, CEO, Lifepoint Informatics). Read the whole thing if you have the time. I can only post scattered excerpts from it -- they are listed below:

• Obviously we have other [lab outreach] connectivity vendors that we compete with that have very similar business models to ours, but the fact of that matter is Quest really drives the demand nationally for products like ours, because what our customers are looking for is a way to compete and level the playing field, particularly with Quest these days....
  
• [Hospital outreach programs] move a little slower [than Quest] because of their non-profit status and mission. They have a longer sales cycle. I think they don’t have the profit-driven mindset and the aggressive commercial nature that the commercial labs have.....
• I see EMR companies and other people in the health IT field underestimating the complexity of lab order entry, asking order entry questions, the ABN printing, and the medical necessity checking. At Lifepoint, we have solutions that can plug in and connectors that can easily adapt to multiple EMRs, either from a single sign-on or through web services.
• Hospitals want to get into the reference lab business, but it’s driven...by scale. The more business you have, the more you can automate, so that the national labs supposedly have their tests down to a cost of pennies or less per test. Can hospitals compete with that volume and the polished corporate performance?
• One of the reasons that the outreach lab market has been so successful [in hospitals is that] they have untapped capacity. Normally they’re testing during the day. With the average business, they’re turning around specimens in the evening. In that respect, they’re filling up their capacity and utilizing their instruments at a higher rate....
• I think the [lab outreach] portal will continue to be necessary going forward because it gives the labs a way to control their brand and their functionality, which they lose out on if the results are streamed into an EMR....
• I think there are some people in health IT that have a misunderstanding of how dominant Quest and LabCorp are. In fact, together they represent less than 9% of the laboratory test market by test volume. They only comprise 26% of the independent laboratory market volume.
• What we’re passionate about here at Lifepoint is enabling hospital-based outreach labs and smaller commercial regional labs to level the playing field and compete against the larger national labs with IT and connectivity solutions.

Most of the quotes that I have selected from Bill refer to the ability of hospital outreach programs to compete with the major national references labs like Quest for business. Such hospital programs have certain disadvantages in the market such as a longer sales cycle for new physician office customers and sometimes a less aggressive attitude toward sales opportunities. On the positive side, hospital labs tend to have untapped reserve capacity on the afternoon and night shifts when most of the outreach lab work is performed. As Bill emphasizes, the hospital labs loose brand recognition if their test results are "streamed into the EMR." The key take-home point for me from this interview is encapsulated in the last bullet: lab portal software such as that offered by Lifepoint levels the playing field and enables hospital lab outreach programs to compete with aggressive competitors like Quest.

Comments

[Bill G]

Bruce - I have one thought on Bill's comments and your take-home point. First, as a disclosure, I work at a 10+year client of Lifepoint. The lifepoint system only levels the playing field from a technology perspective, and not very much. Hospital IT is broad based, while LabCorp and Quest devote most of their IT budget to lab testing. Hospitals will never be able to level the playing field against a niche business. The key hospital advantage in performing lab outreach, in my opinion, is the relationship the hospital has with the providers, which if it is a good relationship, allows them leverage in getting outreach business.