Industry Insights
Business Success Through Advanced Laboratory Information System Technology: Connecting All The Pieces
June 5, 2025
In serving physicians and their patients, laboratories provide the preponderance of clinical information used for diagnostic and therapeutic medical decisions. Characteristically, emphasis is placed on quality assurance, rapid turnaround, and responsive client services.
Doing quality work on time is necessary but not sufficient for success in today’s healthcare environment. Medical laboratories must also pay close heed to the financial parameters of their business. Laboratory operational and financial managers must not only be aware of the current revenue and cost profiles but also be able to project the impact of changes in the marketplace, regulations, legislation, and client utilization that will affect the business aspects of pathology lab management.
Learn More: The Benefits of a Modern Pathology Lab Management System
Growing Lab Revenue Through Outreach: Opportunities and Challenges in a Competitive Market
Establishing and maintaining a successful laboratory business whether hospital-based or in an independent laboratory environment, is a difficult undertaking. Assuring profitability and increasing revenues in a competitive, price-sensitive, and regulated market is a significant challenge to laboratory administrators. To increase revenues on a profitable basis, many laboratories have established an outreach testing business component.
With an outreach program, laboratory services are provided to other healthcare facilities, physicians' offices, nursing homes, assisted living facilities, managed care organizations, and, more recently, directly to the patient via direct-to-consumer lab testing.
Although the total volume of outreach business has increased in recent years, the realized value of outreach on a per-test basis has decreased due to the impact of CLIA and other regulatory requirements, prospective payment, and convoluted/complex reimbursement rules.
Industry Insights: The Competitive Edge in Laboratory Outreach: Enhancing Value Beyond Price
Why Most LIS Systems Fall Short on Financial Insight - and What Labs Can Do About It
Laboratory information systems (LIS systems) have achieved significant improvements in quality assurance monitoring, automated result acquisition, interoperability with automated robotics, lab workflow simplification, and result/report distribution. The modern lab information system has helped increase productivity and reduce operational costs.
However, from a business and financial perspective, today, many LIS systems contribute relatively little to guiding an enterprise through the turbulent waters of today’s highly competitive, cost and profit-sensitive environment. It has been said that “If you cannot measure something, you have very little knowledge about it.” The same can be said for many laboratory businesses today.
Today, most laboratories pull the necessary financial management data from multiple, disjointed laboratory software systems and diagnostic lab software. This process is often labor-intensive, requiring repeated data entry, transcription, or the creation of interfaces to connect various disconnected systems.
Many legacy LIS software platforms make this even more challenging. As a result, laboratory administrators are frequently forced to piece together makeshift solutions—linking PC tools, business subsystems, and the LIS lab applications through a patchwork of manual and electronic workflows—to access and analyze key business metrics.
While no LIS software can replace strong leadership and sound management, a modern, business-oriented LIS system can significantly ease the burden by providing the tools to monitor performance and drive better decisions.
The Next Evolution of LIS Software: From Operational Support to Enterprise-Driven Intelligence with Laboratory Billing Capabilities
Information collection and data management tools are now available to laboratory managers to have their fingers on the pulse of their business operations. The key for such tools is to:
- Collect accurate and comprehensive data about current operations
- Include laboratory billing, reimbursement, and revenue capture
- Provide dynamic, interactive notification of significant changes in financial characteristics
- Provide concise and “to-the-point” reports that highlight the important information that requires management attention
So what’s the pathology lab software solution?
What is needed is the evolution of the LIS system from an operational support entity to an enterprise-oriented one. An entity that features an integrated combination of laboratory information system functions and laboratory revenue cycle management (lab RCM) capabilities.
This integrated LIS model with advanced laboratory billing solutions would perform all the characteristic LIS system operational functionality and would also add utilization and reimbursement statistics, streamlined lab revenue cycle management workflow, and revenue capture.
The effective and efficient use of such an integrated LIS system with advanced billing software for labs would contribute in several ways:
- Tracking utilization by test count and by actual revenue
- Validating reimbursement codes against tests ordered
- Determining billed/received dollars by the payer
- Determining percent reimbursement by the client, by CPT code, and by the payer
- Determining the gross/net revenue obtained per requisition/reportable result/billable test
- Determining the disallowance rate
- Determining the payer mix by client
- Determining denials by the client
In short, an all-in-one LIS system that includes modern billing software for labs could provide easy access to critical information that your laboratory enterprise needs to understand its financial performance and complement the “classical” LIS system functions with business management functionality.
Why Even the Best LIS Systems Aren’t Enough—And How Integrated Medical LIS-Lab RCM Unlocks Full Lab Potential
Users of most leading laboratory information systems have achieved improvements in lab workflow productivity and quality management. Advanced LIS system capabilities for test order validation relative to diagnostic codes, ABN generation as rules indicate, reduction of misidentification or mislabeling errors, collection through storage sample tracking, access for orders, and result inquiry via the internet and other operational advancements have made these improvements possible.
Many testimonials from various laboratories using the best LIS software can attest to this fact. Still, many LIS systems operate with only operational issues and not financial and enterprise management requirements. This gap is preventing labs from achieving the maximum benefit from a business perspective and gaining the competitive edge needed to increase market share, grow revenues, and assure greater profitability.
Utilizing an integrated medical LIS-lab RCM encompassing modern pathology lab reporting software functionality plus tightly coupled or integrated lab billing and managerial applications can help your laboratory become “The best that it can be.”
Learn More: Best LIS Software - Maximize Growth With Cutting Edge Pathology Lab Management Software
Dennis Winsten is the president of Dennis Winsten & Associates, a healthcare systems consulting firm with headquarters in Tucson, Arizona ( www.dwinsten.com).
