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Laboratory Information Systems Are Not Commodities!
May 10, 2024
Let’s start with a cautionary tale that ends with a costly and ill-informed decision.
Laboratory X has encountered barriers to efficiency and growth with its pathology lab software, causing lab management to call for a Laboratory Information System Selection Committee to be formed as step one of a plan to engage with LIS software vendors and investigate all available LIS system options.
Learn More: How to Set Up a Committee to Select a Laboratory Information System
After receiving this directive from management, a committee is formed with its members representing all the various departments (pathologists, medical directors, IT directors, quality control, finance, etc.) that comprise the lab.
The Committee next conducts market research and based on its findings and own internal needs, creates a shortlist of laboratory information systems (LIS meaning in medical terminology) and LIS system vendors to evaluate.
The Committee arranges LIS software demonstrations with the laboratory information system companies it considers contenders, and this is followed by reference checks and site visits, both of which help to paint a clear picture of how it is to use the pathology software in a live environment.
The Committee wraps up the evaluation process by presenting what it believes to be the best LIS for the laboratory to senior management while providing reasons why the chosen LIS system was a better fit than the other contenders.
Senior management listens to the recommendation but becomes fixated on the higher cost of the chosen system compared to the other contenders. Believing that all LIS systems are essentially the same management (or the board) decides to pursue the least expensive medical LIS option.
Fast forward a few months and after a rocky LIS system implementation, the “inexpensive” and under-performing pathology lab software can’t eliminate the barriers to efficiency and growth that caused the lab to seek a new software solution in the first place.
Management is forced to admit its costly mistake of thinking that laboratory information systems are commodities, or generally uniform in quality and interchangeable. Management returns to the Committee’s findings and starts what will be another implementation process by reaching out to the LIS company that was originally recommended.
Editor’s Note: Besides underperformance, two other equally bad scenarios may play out for the lab. First, the LIS software may perform as promised but the subpar support and service provided by the LIS company becomes an issue. Second, the company may be acquired by a private equity firm focused on raising revenue by increasing customer pricing.
Think All LIS Systems Are the Same? You Couldn’t Be Further from the Truth
“If a medical lab thinks laboratory information systems are commodities and all the same, it’s in for a shock,” said Suren Avunjian (LigoLab CEO since jointly founding the company in 2006), who unfortunately still comes across his share of Laboratory Xs that are misinformed and not taking a big picture view of the lab industry and where it’s headed.
“Choose a mission-critical LIS software based on cost alone, and you’ll soon regret that decision,” he continued while emphasizing how modern LIS systems like the LigoLab platform directly impact operational efficiency and staffing challenges by maximizing laboratory workflow management via automation and transparency.
Learn More: Navigating the Future of Pathology: The LigoLab Advantage
“Over the years several eventual customers have signed on with LigoLab after initially deciding to go with another cheaper LIS system,” he said. “For them, cost was the top consideration at the time. They chose cost over laboratory information system functions and partnership.”
By choosing a cheaper LIS system backed by a laboratory software company with fewer services to offer, Avunjian said the lab’s perceived savings were greatly outweighed by opportunity cost.
“Unfortunately, it took that misstep for them to see the true value of an advanced laboratory information system platform backed by a LIS company invested in their success.”
Learn More: What You Need to Know Before Contracting with a Laboratory Information System (LIS) Company
It’s the same story for Dennis Winsten, President of Dennis Winsten & Associates., an independent healthcare information systems consulting firm headquartered in Tucson, Arizona.
"When reviewing the top-level functionality offered by virtually all LIS software vendors, one could conclude that they are all pretty much the same,” he said. “It’s true that contemporary LIS vendors, nominally, offer the same sets of functions. To make an informed evaluation, buyers must dig deeper into how those functions operate and what are the ongoing costs of ownership to truly understand the impact on LIS system users and the benefits to lab operations. Details do matter."
Asking the Right Questions is a Key to LIS System Selection
While doing its due diligence to identify LIS software solutions that would fit the lab organization, Avunjian said making the most of interactions with the various laboratory information system vendors and asking the right questions is key.
“Asking the right types of questions is a must because it’s hard to identify potential differences through trade magazine listings and marketing hype. There’s a lot of misinformation out there and the lab needs to know where the differentiation between LIS systems starts,” he noted.
Avunjian next provided examples of questions that will help the lab identify the LIS system’s unique selling points and differentiating factors.
“Does the LIS company have a service level agreement? How long of an uptime does the LIS system provider guarantee? How fast is their response time when an issue arises? Do they guarantee response times and resolution times?”
“Engage with the laboratory information system companies and don’t hesitate to ask them detailed questions that will get to the heart of the system’s functionality, compatibility with existing hardware and software, user-friendliness, and scalability,” he said. “Other key areas of inquiry should include the LIS system vendor’s support and training that’s offered, and the total cost of ownership for each system.”
Learn More: Questions All Pathology Labs Should Ask When Evaluating LIS Software and Support
Avunjian also recommended that labs prepare and send LIS system vendors a Request for Proposal that calls on them to provide detailed information about how their systems can meet the lab’s unique requirements.
For those you may not be familiar with RFPs, here’s a good template example to follow:
Avoid a Costly Mistake and Embrace Modern LIS System Technology
Avunjian and Winsten agreed that with a subtle change of mindset lab leaders across the country can avoid the costly mistake of selecting a laboratory information system based on cost alone.
“Even though modern laboratory information systems may be perceived as costing more than their legacy rivals, it’s not an apples-to-apples comparison,” said Avunjian. “Modern LIS systems are much more cost-effective in the long run because they streamline laboratory workflow management and automate several tasks, creating leaner, more competitive, and more efficient lab operations.”
“Modern LIS systems backed by excellent customer service create differentiation that labs can capitalize on and use to rise above the competition.”
Perfecting the Science Behind Modern LIS Systems for Two Decades
At LigoLab, we’ve invested in partnerships with our LIS system and laboratory billing customers and taken FULL RESPONSIBILITY for all their lab informatics since 2006.
LigoLab’s all-in-one informatics platform includes integrated modules for LIS system functionality and laboratory revenue cycle management (lab RCM). Both fuel business growth and digitally transform laboratories into information-driven and future-ready operations.
You can learn more about the most flexible and comprehensive laboratory information system platform available (and its tiered pricing structure for maximum value) by clicking on the link below to schedule a brief consultation/software demonstration with our team of LIs system experts.
