Healthcare Disruptors & Transition Strategies for Success: A Webinar Recap

On June 28, 2023, LigoLab hosted Healthcare Disruptors & Transition Strategies for Success, an engaging webinar that brought the laboratory community together. 

The spotlight was on Stan Schofield, a luminary in the realm of healthcare and laboratory management, who brought his wealth of experience and deep industry knowledge to the fore. The webinar served as a beacon, illuminating the labyrinth of the current laboratory industry landscape.

From the shifting sands of workforce dynamics to the unpredictable winds of insurance and government payors and the stormy seas of declining reimbursement and rising costs, Schofield's insights provided a compass for laboratories seeking to not just survive, but thrive in this volatile environment.

The webinar was a journey that provided attendees with a clearer understanding of the challenges they face and the strategies they can employ to overcome them. It was an opportunity to learn from a seasoned expert, to gain insights that can be applied to their own organizations, and to be part of a conversation that is shaping the future of the clinical laboratory industry.

Overview: Navigating the VUCA Landscape of the Clinical Laboratory Industry

Schofield kicked off the webinar with a candid assessment of the current state of the independent clinical laboratory industry. Drawing from his extensive experience, he painted a picture of a complicated and challenging environment.

Schofield stated: 

"We are in a VUCA world. It's volatile, it's uncertain, it's complex, and it's ambiguous. That's the world we live in." 

This powerful statement set the tone for the discussion, highlighting the difficulties that independent laboratories face in today's rapidly changing healthcare landscape.

He then delved into the disruptive themes that are causing this volatility and uncertainty. One of the key disruptors he highlighted was the issue of workforce availability and stability. 

"The workforce is a major issue. We have a shortage of qualified personnel, and this is causing significant disruption in our industry."

Automation was another key theme. Schofield emphasized the importance of automation in ensuring the continuity of services, especially in the face of workforce challenges. 

"Automation is not just a luxury; it's a necessity," he asserted. "We need to keep our services open and operating, and automation is key to achieving this."

Schofield also discussed the challenges posed by insurance payors and government payors. He highlighted the financial pressures, consolidations, and reductions in this area, which are also causing significant disruptions.

The ongoing pressures of declining reimbursement coupled with increased labor and material costs were also a key focus of Schofield's discussion. He pointed out the squeeze that laboratories are feeling as they grapple with these financial challenges:

"We are caught in a pincer movement. On one side, we have declining reimbursement, and on the other, we have rising costs. This is leading to lost margins and is a major disruptor in our industry."

Schofield's overview of the current state of the laboratory industry was both enlightening and sobering. His insights provided a clear understanding of the challenges that independent laboratories face and set the stage for the rest of the webinar, where he would go into strategies for navigating these challenges.

Unpacking the Key Disruptions in Today's Laboratory Landscape

Schofield, during the course of the webinar, identified several key disruptive themes that are currently shaping the industry. His insights, drawn from decades of experience, provided a comprehensive understanding of the challenges and opportunities that these disruptions present.

• Workforce: Schofield highlighted the workforce as a significant factor affecting the industry. He discussed the issues of availability, stability, reliability, competition, and wage pressures.
• Automation: The push towards automation, according to Schofield, is driven by the need to keep services open and operating, especially in the face of workforce challenges. 
• Insurance payors and government payors: Schofield also touched upon the challenges posed by insurance payors and government payors. He highlighted the financial pressures, consolidations, and reductions in this area, which are causing significant disruptions in the industry.
• Lost margins: The ongoing pressures of declining reimbursement coupled with increased labor and material costs were also a key focus of Schofield's discussion. He pointed out the squeeze that laboratories are feeling as they grapple with these financial challenges. 
• Mergers and acquisitions: Schofield noted that more mergers and acquisitions are occurring due to lost margins and contract labor costs. This trend, he suggested, is reshaping the industry.
• Assisted intelligence and informatics: The rise of AI and informatics is a significant trend to watch, according to Schofield. He suggested that these technologies could play a crucial role in addressing some of today’s challenges.
• Crisis management: The recent pandemic and workforce issues have highlighted the importance of effective crisis management. Schofield emphasized the need for independent laboratories to be prepared for crises and to have robust plans in place to manage them.
• Consumer and urgent care delivery: Schofield also discussed the proliferation of consumer and urgent care services, suggesting that this trend is changing how medical labs and other providers deliver healthcare.
• Supply chain constraints: Finally, Schofield touched on the issue of supply chain constraints. These constraints, he suggested, are causing significant disruptions in the industry and need to be effectively managed.

Blueprint for Success: Schofield’s Five Rules for Successful Laboratories

Schofield next shared his "Five Rules for Successful Laboratories." These rules, drawn from his extensive experience in the industry, provide a roadmap for laboratories seeking to navigate the current disruptions and achieve success.

Add Clients

Schofield underscored the significance of expanding the client base as a cornerstone for successful laboratories. This strategy is not limited to traditional methods of outreach to providers but also embraces innovative approaches that reflect the evolving landscape at present.

"Adding clients is a critical part of our growth strategy. We need to be proactive and innovative in reaching out to potential clients and demonstrating the value we can provide."

Schofield highlighted three key strategies for adding clients:

• Clinical integrations with health systems: This involves forming strategic partnerships with health systems to provide integrated laboratory services. These partnerships can lead to increased volumes, improved patient care, and enhanced operational efficiencies.
• Direct contracting with employers: As more employers seek to control healthcare costs and improve employee health, there is a growing opportunity for laboratories to contract directly with employers to provide testing services.
• Direct-to-consumer testing: With the rise of consumerism in healthcare, there is an increasing demand for direct-to-consumer testing. Laboratories can tap into this trend by offering convenient, accessible, and affordable testing services directly to consumers.

It's clear that Schofield's approach to adding clients is not just about increasing numbers, but about building meaningful relationships based on value and trust. It's about understanding the unique needs of different types of clients - from health systems to employers to individual consumers - and tailoring services to meet those needs. 

It's a strategy that requires not only business acumen but also a deep understanding of the changing dynamics of the healthcare industry.

Keep Clients

Schofield stressed the importance of not just acquiring clients, but also retaining them. According to Schofield, client retention is a multifaceted process that goes beyond delivering excellent service. It requires a proactive and comprehensive approach to building and maintaining strong relationships with clients.

"Client retention is just as important as client acquisition. We need to build strong relationships with our clients and continually demonstrate our value to them."

Schofield outlined four key strategies for keeping clients:

• Account rep visits/luncheons: Regular face-to-face interactions with clients help to build strong relationships, understand their needs, and address any issues or concerns they may have. These interactions also provide opportunities to demonstrate the laboratory's commitment to its clients.
• Annual business reviews: These reviews provide an opportunity to assess the laboratory's performance, identify areas for improvement, and discuss future plans and strategies. They also provide a platform for clients to share their feedback and suggestions.
• IT connectivity: In today's digital age, seamless IT connectivity is crucial for efficient and effective service delivery. It can enhance the client's experience, improve operational efficiency, and facilitate better communication and collaboration.
• Keeping the office staff happy: The satisfaction of personnel is often overlooked, but it plays a crucial role in client retention. Happy and motivated staff are more likely to provide excellent service, which in turn leads to higher client satisfaction and retention.

Client retention is not a passive process. 

It requires ongoing effort, commitment, and strategic planning. It's about understanding the client's needs, exceeding their expectations, and continually demonstrating the laboratory's value. It's about building strong and lasting relationships based on mutual trust and respect.

Create Revenue Opportunities

Schofield underscored the significance of creating new revenue opportunities as a vital strategy for successful laboratories. He emphasized the need for laboratories to be both creative and proactive in identifying and capitalizing on these opportunities.

Schofield suggested several ways to generate new revenue streams:

• Offering new services: This could involve introducing new tests, providing specialized services, or offering value-added services such as consulting or data analysis.
• Expanding into new markets: This could involve targeting new customer segments, entering new geographical areas, or venturing into related healthcare services.
• Monetizing existing capabilities: This could involve finding innovative ways to generate revenue from the laboratory's existing resources, capabilities, and expertise. For example, a laboratory could offer training services, license its technology, or sell its data.

Creating new revenue opportunities is not just about increasing sales or profits. 

It's about ensuring the laboratory's long-term sustainability and growth. It's about being adaptable, innovative, and entrepreneurial. It's about continually exploring and exploiting opportunities.

Get Paid

Schofield stressed the importance of effective lab billing and revenue cycle management for the financial health of laboratories. This aspect of laboratory operations, while often overlooked, plays a critical role in maintaining a lab's financial stability and ensuring its ability to continue providing services.

"We need to ensure that we are getting paid for the services we provide. This involves having effective billing processes in place and actively managing our revenue cycle."

Effective billing and revenue cycle management involve several key components:

• Accurate and timely billing: This includes ensuring that all services are billed correctly and promptly, reducing the likelihood of billing errors that can lead to delayed or denied payments.
• Active revenue cycle management: This involves monitoring and managing the entire process of revenue generation, from patient registration and service provision to billing and collection. It includes activities such as claim submission, payment posting, denial management, and patient collections.
• Regular audits and reviews: This involves regularly reviewing and auditing the billing and revenue cycle processes to identify and address any issues or inefficiencies.

Getting paid involves managing the entire process of revenue generation effectively and efficiently; ensuring that the laboratory's financial resources are managed wisely and used optimally; and maintaining the financial health and sustainability of the laboratory.

Reduce Expenses

The final rule for successful laboratories, as outlined by Schofield, is the reduction of expenses. In a landscape characterized by declining reimbursements and escalating costs, the ability to manage and minimize expenses is crucial for the survival and growth of any laboratory.

Reducing expenses involves a strategic and systematic approach:

• Efficiency improvements: This includes streamlining processes, eliminating waste, and improving productivity. It's about doing more with less and finding ways to deliver the same level of service at a lower cost.
• Cost-effective purchasing: This involves negotiating with suppliers for better prices, exploring bulk purchasing options, and making cost-effective decisions about equipment and supplies.
• Optimized resource utilization: This includes ensuring that all resources, including staff, equipment, and facilities, are used optimally and efficiently.
• Strategic investments: This involves making smart investments in technology and equipment that can improve efficiency and reduce long-term costs.

"We need to be vigilant in managing our expenses. This involves continually looking for ways to reduce costs without compromising the quality of our services."

Reflecting on Schofield's insights, it's clear that reducing expenses is not just about cutting costs. 

It's about making strategic decisions that improve efficiency, optimize resource utilization, and ultimately enhance the value that the laboratory provides to its clients. It's about ensuring that every dollar spent contributes to the laboratory's mission of providing high-quality, cost-effective services.

Wrapping Up: Key Takeaways & Forward-Looking Insights

Schofield's insightful webinar concluded with a dynamic Q&A session, where he addressed a variety of pressing topics. These ranged from the potential impact of AI on laboratory operations and services to the strategies that can be employed to compete effectively with large national labs. His responses were not only informative but also provided actionable advice, reflecting his deep understanding of the industry and its evolving challenges.

One of the key takeaways from the Q&A was Schofield's perspective on AI. 

He acknowledged the transformative potential of AI but also cautioned that its practical implementation in diagnostics and other critical areas is still years away. However, he encouraged laboratories to stay abreast of these developments and to start considering how AI could be integrated into their operations in the future:

"AI, in its most sophisticated interpretation, would take those creating value at the lab and say, 'Hey, by the way, look guys, we got kidney injuries here. Did you know what's going on?' and they would notify you. But that's years away."

When asked about strategies for competing with large national labs, Schofield emphasized the importance of service differentiation. He suggested that regional labs could leverage their ability to provide personalized service and build strong relationships with clients, something that large national labs often struggle to do.

The webinar, part of LigoLab's ongoing series, underscored the company's commitment to fostering knowledge sharing and discussion within the laboratory industry. 

Through its webinar series, LigoLab provides a platform for industry professionals to gain insights into the current state of the industry, understand the disruptive themes shaping it, and learn about the strategies that can help them navigate this challenging environment.

As we look forward to future webinars, LigoLab remains committed to bringing you valuable insights and discussions on the latest trends, challenges, and opportunities. 

Note: Click HERE to access the Schofield webinar on-demand, and visit the LigoLab webinars page to access all of the company’s recent webinars.