Clinical laboratory consulting firms provide crucial financial and strategic guidance to clinical laboratories. This may include a wide variety of services, from unified lab strategy to space planning. A comprehensive clinical laboratory strategic advisory team offers more than operational improvement, it enables hospital and healthcare executives to envision the future of their laboratory in alignment with the entire organization and develop robust strategic plans to achieve that vision.
For example, consider a health system interested in entering the molecular and genetic testing space, which represents a significant revenue opportunity. The factors for success require careful consideration, and without the right guidance, expanding into this field can result in higher costs than revenue. A clinical laboratory strategic advisory consultant can provide valuable insights, including understanding the laboratory industry, markets, competition, as well as revenue and cost projections to identify viable strategic options unique to that health system and understand the financial impact of each option. This understanding enables healthcare leaders to evaluate the tradeoffs inherent in every strategic decision, resulting in the best possible outcome for their organization and their patients.
The laboratory sector in the US is valued at a substantial $8 billion. With such a large market potential, healthcare executives should leverage clinical laboratory strategic advisory consultants to understand the operational, strategic, and financial impact of major organizational decisions. By partnering with experienced advisors, healthcare leaders can capitalize on opportunities and overcome industry challenges. In the ever-growing and competitive laboratory sector, having a trusted partner becomes increasingly vital for developing strategic plans, performing due diligence to validate strategic decisions, and achieving success.
Strategic Consulting is a consulting service that specifically identifies and quantifies various strategic options available to a hospital, health system, or independent laboratory. A team of consultants enable executives in evaluating long-term decisions that impact the bottom line. The most valuable thing strategic consultants do is provide due diligence for lab strategies. They can help leaders match expertise with opportunity to enhance the quality, efficiency, and profitability of the lab.
A good clinical laboratory advisory service will be comprised of many experts in business, finance, data, compliance, quality, technology, safety, supply chain, and efficiency aspects of lab operations. This allows the team to provide a detailed review that considers multiple perspectives. By drawing on this expertise, lab consultants provide valuable feedback and insight that helps labs move closer to achieving their strategic goals. Then, after strategic decisions have been made, operational consultants work hand in hand
The fees charged by a clinical laboratory consultancy will vary from project to project. Because every client has unique needs, the scope and nature of a consulting engagement will require varying degrees of customization. A good clinical laboratory consultancy will tailor its services to meet the unique needs of its clients. Just as a professional sports team devises different game plans when facing various opponents, consultants should take a customized and flexible approach to address the specific challenges presented by each client. Every Consulting engagement with Accumen starts with a customized Statement of Work. We meet with prospective clients and determine what strategic business question they are looking to answer. We then develop a list of Key Activities that would need to be completed in order to identify strategic options and develop forward-looking financial statements to assess and compare the viable strategic options. These Key Activities define the scope of the project as well as the level of effort required to answer the strategic question.
Clinical laboratory consultants offer labs their knowledge and experience. Some labs may already have the expertise needed to fully optimize their approach to quality, service, productivity, cost, and compliance. However, many labs may struggle with some, or even all, of these areas. That is where clinical laboratory consultants come in. Our laboratorians have broad experience with many organizations, so they can take lessons learned and apply them to new client challenges. They also employ the latest management techniques and key performance metrics to deliver unbiased quantitative and qualitative recommendations.
Hire a strategic consultant when your organization is faced with a major strategic decision. This is especially true whenever a large strategic investment is being considered. If a health system is preparing to spend tens or even hundreds of millions of dollars in the hopes of increasing future profits, it’s a good idea to subject that decision to the most rigorous due diligence possible. A healthcare advisory service can evaluate the investment and point out any potential flaws in its business case. That way, healthcare executives can be sure that they are making the best use of their organization’s resources and time.
The most common Strategic Decisions Accumen has been asked to advise on include: Consolidation of laboratory services, building an offsite Central laboratory for a hospital system, addition or removal of laboratory services (Molecular, Genetics, Toxicology), Strategic Space Planning when building or updating facilities, evaluation of merger and acquisition opportunities, buying or selling Outreach programs, and evaluation of Joint Venture opportunities.
Authentic feedback. Especially when the consultant is being asked to address issues of strategic importance, they should be expected to take the lab’s perspective and identify the actions that will truly move the organization closer to reaching its strategic goals. In some cases, that will mean that the consultant points out systemic issues that require changes. Of course, in order to identify and ameliorate these issues, the consultant needs to have expertise in both lab operations and strategy. They also need to be able to work as a team with each other, and with leaders and staff, to evaluate the business from many different angles.
From a purely financial perspective, clinical lab ROI is a matter of revenues and costs. However, it’s worth noting the crucial role that trust plays in matters of provider and patient satisfaction, as well as community reputation. When evaluating strategic option, it is important to understand the cost of doing nothing. If operations continue as they currently are, there is a financial impact to that decision. At Accumen, we evaluate the Net Present Value of each identified strategic option alongside the “Status Quo” model in order to understand the differential between all possible strategic options. This enables healthcare executives to appropriately balance the financial impact of their decisions with the needs of their patients.
Cost cutting is both a science and an art. Most of the over two thousand diagnostic tests offered by clinical laboratories are very low yield, and they have low throughput. However, that doesn’t mean that labs can’t capitalize on economies of scale. If a technician is putting fifty test tubes onto a tray, very little is required for them to double that to one hundred. So one way to cut costs is to look for ways to increase the efficiency of everyday lab operations. The supply chain is another place to look to for cost-cutting opportunities. An experienced supply chain expert will be able to draw on a wide variety of suppliers and negotiate effectively to bring costs down.
One way to increase ROI is to optimize the physical layout of the lab. Oftentimes, labs are poorly organized, and technicians have a hard time moving about the lab safely. There should always be at least four feet of walkway to let people move past one another quickly. That being said, it would be best for people to move as little as possible. Wasted motion not only reduces the productivity of the lab but also demoralizes technicians. People want to be productive at work, and nothing will sap their energy like wasted time. As a result, it’s recommended to group similar types of equipment together so that technicians won’t have to move very far in order to access the tools they need to perform tests.
From a purely financial perspective, hospital lab ROI is just a matter of revenues and costs. However, it’s worth noting the crucial role that trust plays in driving lab ROI. Patients and health systems trust hospital labs to deliver reliable and timely diagnostic services. That trust is the foundation of clinical lab operations. As a result, no attempt to improve ROI can endanger the trust that people have placed in a clinical lab. That being said, there are many tactical and strategic improvements that a lab can make to reduce costs and increase output. These range from optimizing layout to getting assistants to complete higher-value tasks during their shifts.
Hospital laboratories are an $8 billion business in the United States. That’s big business. However, not every hospital lab is profitable. In fact, due to increasing regulatory burdens and competitive pressures, many hospital labs are being closed as health systems consolidate. For some health systems, it makes sense to capitalize on economies of scale with one high-throughput lab. This means that labs that want to remain open have to be as profitable as possible.
It’s worth noting that diagnostic testing is recession proof. It doesn’t matter what’s happening in the broader economy; people still need lab tests. As a result, the way for most labs to increase profits is to control their costs and accurately explore new revenue streams.
Laboratory services are also critical to patient care. So understanding the strategic and financial implications of laboratory decisions can help organizations ensure that their patients are able to receive the best possible care with the best possible outcomes.
of all critical medical decisions, such as admittance, discharge, and medication, are based on laboratory results
Bad strategic decisions cost organizations an estimated 3% of profits
-Gartner, Inc (Dec 2018)
Jeff Downs is the Vice President of Strategic Relationships at Accumen. In this role, Jeff advises health systems on a wide variety of topics, but his passions center around company mergers, acquisitions and divestitures. Other favorite topics include strategic planning, core lab concepts, lab stewardship and process improvement. Jeff has 30 years healthcare experience covering clinical and anatomic pathology labs, population health/ disease management programs, physician practice management, reagent & instrument manufacturing and test R&D. As CFO, Jeff oversaw the turnaround and growth of a four health-system joint venture laboratory operation, which included 11 hospital labs, a core laboratory and outreach services across five states. Jeff received his masters’ degree in Biomedical Diagnostics from Arizona State University and his undergrad in Accounting from Elon University. He is proud to have maintained his CPA license for the past 30 years and as an alumni of both Deloitte and CVS/Caremark.
Jeff Myers, CPA, is the Vice President of Strategic Advisory Services for Accumen and provides expertise on Lab Operations, Consolidation, Strategy, Outreach, and Performance Improvement. Jeff has over 20 years experience in health care finance, focusing on financial analysis, decision support, strategic guidance, and operational improvement analysis. His industry experience includes physician practice management, health insurance, commercial laboratory, and academic health care systems. A Certified Public Accountant (CPA), Mr. Myers graduated with honors from the University of Tennessee with a Bachelor of Science degree in Accounting and Business Law.
Kim brings over 10 years of laboratory experience as both technician and leader in military and civilian clinics and hospitals. Prior to joining Accumen, Ms. Zunker worked as a Medical Technologist and later, Supervisor of the growing laboratory at Soin Medical Center, part of the Kettering Health Network, where she led day-to-day operations as well as multiple process improvement initiatives.Prior to Kettering Health Network, Ms. Zunker served as a Laboratory Officer in the Biomedical Sciences Corp of the United States Air Force. She managed two Air Force Laboratories, winning multiple awards and earning several military decorations. Ms. Zunker earned a Bachelor of Science in Clinical Laboratory Science from Midwestern State University and a Master in Business Administration from the University of Dayton. She is a nationally certified Medical Laboratory Scientist by the American Society of Clinical Pathologists and holds a CAPM certification (Certified Associate in Project Management) from the Project Management Institute.
Nora has more than 15 years of healthcare consulting experience with Chi Solution Inc (part of Accumen since 2016). Prior to consulting she was an Administrative Laboratory Director for a Florida health system for 12 years. Prior to that she worked as a Medical Technologist in laboratories in Florida and Massachusetts. Nora has extensive experience in strategic planning, process redesign, laboratory consolidation/integration, regulatory compliance, quality management and cost reductions initiatives. She has worked with hospitals and health systems across the US, providing consulting expertise to meet the individual requirements of each client. She also is a regular speaker at the annual Laboratory Quality Confab, speaking on topics related to Quality and Regulatory Compliance.Nora earned her Bachelor’s degree in Medical Technology from Northeastern University in Boston MA and an MBA from the University of Sarasota in Sarasota FL.
In the role of Healthcare Consultant at Accumen, Dori is able to combine her financial background with the clinical knowledge she has gained from working with laboratory clients over the last 20 years. Dori received her BBA in accounting from Eastern Michigan University in 1993.
Her accounting background provides a foundation to provide in depth financial analysis to assist Accumen partners with understanding the financial impact of decisions they are facing. Her experience in finance, data analytics, and project management have provided an opportunity to work with hundreds of hospitals and health systems across the country to profoundly impact healthcare.