What You Need to Know Before Contracting with a Laboratory Information System (LIS) Company

So, some good news and bad news.

First, the good. Your clinical lab’s leadership has given you the green light to open conversations with new lab vendors. You are now guiding a research and evaluation process aimed at selecting and implementing a new laboratory information system (LIS) that will modernize operations and position your lab for sustainable long-term growth.

Now the bad. You’ve quickly discovered that this isn’t going to be a straightforward and fast process because all LIS systems aren’t created equally. On the contrary, it will require a deep dive into which laboratory information system functions are needed to satisfy your lab’s growth goals, what the best LIS systems offer their customers, and most importantly, what this new medical LIS is going to cost. 

Discover More: The Best Laboratory Information System Companies and the Advantages They Offer to Their Laboratory Clients

Laboratory Information Systems: Features and Functionality

You may already be aware of this, but laboratory information systems typically fall into two categories, with each category reflecting the level of features and functionality that can be expected. 

Modern LIS Software Platforms - Modern medical LIS solutions are the nerve center of any clinical laboratory or pathology group, expertly managing patient and specimen data, automating, simplifying, and supporting clinical lab workflows, all while seamlessly interfacing with analytical instruments and third-party laboratory software systems like electronic health records (EHR) systems and whole slide imaging scanners (used for digital pathology). 

Modern LIS software platforms deliver far more than basic functionality. They combine advanced rules and automation with a powerful administrative backend, offering labs complete control over workflows, preferences, and report customization, all without hidden costs whenever changes are needed. 

Today’s leading laboratory information systems also excel in interoperability, offering integrated solutions for sample tracking, outreach, customer service management, and inventory management. 

Advanced pathology lab software platforms, such as LigoLab’s all-in-one LIS & RCM solution, take functionality to the next level by embedding sophisticated laboratory billing capabilities that support in-house lab revenue cycle management while also powering direct-to-consumer lab testing through tools like the TestDirectly web portal.

Discover More: The Power of Integration - Unleashing the Potential of LigoLab's LIS System & Lab RCM Platform

‍ Legacy LIS Systems - Legacy laboratory information systems can best be described as rigid, outdated, and inflexible. To put it another way, a legacy LIS system might’ve fit your lab's needs yesterday, but today, because of its monolithic architecture and all the manual workarounds your lab had to build around it, your outdated LIS software system could easily become a limiting factor as your lab evolves and as the healthcare landscape changes. 

These legacy LIS systems can support basic lab workflow and data management functionality (such as order entry, sample tracking, specimen processing, results reporting, and specimen storage) but come with limitations on automation, flexibility, interoperability, and scalability.

For long-term success, laboratories should look beyond the big-name LIS software vendors and their legacy LIS systems, and carefully evaluate what other providers offer in terms of functionality, flexibility, and innovation.

Discover More: Comparing LigoLab Informatics Platform with Legacy Laboratory Information System Software

The Best LIS Systems: Comprehensive and Flexible

Thanks to the availability of advanced laboratory information systems, clinical labs and pathology groups no longer need to be frustrated with the limitations of legacy LIS systems. So instead of dealing with reliability and performance issues stemming from a lack of modules and features, they can now partner with innovative laboratory information system companies that offer all-in-one and flexible informatics solutions that are capable of: 

• Combining all departments and operations within a single laboratory information system that eliminates data silos and the need for additional laboratory software systems. 
• Automating complex processes to improve test turnaround times and reduce both the need for manual labor and the potential for human error. 
• The generation of fully customizable lab reports and multiple delivery options that cater to customer preferences.
• Monitoring quality control for troubleshooting and expedited problem resolution.
• Accessing actionable real-time business analytics (widgets & dashboards, statistical reporting, dynamic reports) to support every department. 

In short, the most effective LIS software streamlines workflows, automates manual tasks to reduce labor costs, and drives greater revenue and profitability.

Discover More: Has My Laboratory Outgrown Its LIS System?

Exploring Laboratory Information Systems: A Comprehensive Guide to Costs and Value

An argument can be made that understanding the various laboratory information system pricing models is just as crucial as understanding their capabilities. 

To help you make an informed decision, let’s explore the landscape of LIS software vendors and examine the diverse pricing structures that they offer. We’ll also highlight the impact these structures can have on your lab business in terms of both initial investments and long-range financial planning.

License Fees: A Traditional LIS System Approach with Hidden Costs

Traditionally, many legacy laboratory information system vendors have relied on a one-time license fee pricing structure. This approach requires laboratories to pay a substantial upfront cost for the right to use their LIS model. Such fees can vary widely and are often influenced by the lab's size and the LIS system's complexity. Typically, laboratories are faced with an initial capital expenditure that reaches into the six-figure range.

However, this traditional pricing structure comes with its set of challenges. The initial license fee is usually just the tip of the iceberg. Laboratories must be prepared for the ongoing costs associated with updates, customizations, and additional features. 

In this pricing scenario, the LIS software vendor's motivation may not necessarily align with the long-term success of your laboratory. Once the initial fee is collected, any subsequent requests for modifications or support will incur additional charges. This "nickel-and-diming" approach for every change and request can strain the relationship between laboratories and lab vendors, making it difficult for labs to adapt their LIS lab solution to evolving needs without absorbing unexpected costs.

LigoLab's Innovative Approach to LIS System Pricing

In contrast, LigoLab takes a different approach, forgoing the traditional upfront license fee for its advanced pathology lab management solution. Instead, the LIS company understands that the success of its customers is integral to its own success. That's why it has developed a non-traditional pricing structure that aligns with the interests of the laboratories it serves.

LigoLab’s innovative approach to LIS systems and pricing is designed to support the long-term growth and adaptability of your laboratory. Unlike legacy LIS systems that burden labs with prohibitive initial costs and unpredictable future expenses, LigoLab's model is transparent and scalable. This ensures that labs can budget effectively and invest in growth and innovation without the fear of hidden costs.

In the upcoming sections, we’ll dive deeper into how LigoLab's pricing structure differs from other LIS software vendors and supports laboratories in achieving their operational goals while maintaining financial flexibility. 

Continue reading to see how choosing the right LIS company and the best LIS software can transform your lab's efficiency and productivity to ultimately drive business success despite the competitive landscape and the ever-present challenges.

Discover More: LigoLab Informatics Platform - Uniquely Designed to Deliver Maximum Value

Understanding User-Based Pricing in Laboratory Information Systems

In the LIS systems market, one of the most common pricing models is user-based, where costs are tied to the number of individuals or concurrent users accessing the diagnostic lab software. While this structure may seem simplified, it often creates a misalignment between the goals of the LIS company and the laboratory’s needs. Because revenue is driven by user counts rather than the actual value or efficiency delivered, labs can end up paying more as they grow, without necessarily benefiting from improved laboratory workflow management or greater automation.

The core issue with this approach is that it encourages laboratory information system companies to focus on increasing user numbers rather than enhancing the software's capability to drive maximum value through extensive automation and elevated service quality. Laboratories may find themselves paying for additional access points without seeing a corresponding improvement in their operational efficiency or the effectiveness of their clinical lab workflow processes.

Shifting the Focus on Laboratory Information Systems: Efficiency Over Quantity

Unlike traditional user-based pricing, forward-thinking laboratory information system companies structure their models around the laboratory’s success. For example, LigoLab’s pricing is designed to drive efficiency and productivity, rather than simply charging for user growth. By eliminating user limits, the platform fosters true partnership, empowering labs to focus on automation, scalability, and operational excellence.

With this approach, laboratories of all sizes can fully leverage the power of LigoLab’s informatics platform, scaling seamlessly as needs evolve while continuously improving laboratory workflow management and performance.

Decoding Module-Based Pricing in Laboratory Information Systems

Module-based pricing represents another common strategy among LIS software vendors, designed to align with laboratory growth and adapt pricing accordingly. With this pricing structure, lab vendors offer a foundational pathology information system platform as the core offering. 

Subsequently, laboratories can customize their pathology LIS systems with additional features through optional modules, each priced separately. This approach allows labs to tailor their LIS systems to specific needs but also introduces several considerations in terms of cost, integration, and user experience.

Customization at a Cost

The main advantage of module-based medical LIS pricing is its flexibility. Labs begin with a core software package and can add capabilities as needed, such as advanced reporting or specialized testing modules. 

However, this à la carte approach often comes with hidden costs. As laboratories expand and new needs emerge, additional modules may be required, creating unplanned expenses that can quickly push budgets beyond the original forecast.

Challenges with Integration and User Experience

One of the significant drawbacks of the module-based approach is the potential for reduced interoperability between the base lab information system and the add-on modules. When modules are developed and sold as separate entities, it can result in a disjointed user experience, with each module functioning more as a standalone product rather than a seamless extension of the core laboratory information system. 

This fragmentation can introduce operational inefficiencies, as LIS lab staff may need to navigate between different interfaces or deal with varying degrees of functionality and performance across the modules.

Moreover, integrating new modules into the existing LIS software can present technical challenges, particularly if the modules are not designed with compatibility in mind. Labs might face issues such as data silos, where information is not easily shared across the system, hindering comprehensive analysis and reporting. 

These integration challenges can lead to increased IT workload, additional training requirements for staff, and ultimately, a slowdown in laboratory operations.

Moving Beyond Module-Based Limitations

In contrast to the module-based model, some LIS software vendors are adopting more integrated and user-friendly approaches. These alternatives focus on offering a comprehensive, all-in-one LIS lab solution that evolves with the lab's growth without compromising on interoperability or user experience. 

By providing a fully integrated informatics platform, these laboratory information system vendors ensure that their customers have access to a cohesive system where all components work harmoniously, facilitating smoother workflows, more efficient operations, and better overall value.

As laboratories consider their lab information system options, understanding the implications of module-based pricing is crucial. While the flexibility to customize the LIS system based on specific needs is attractive, it's essential to weigh this against the potential for increased costs, integration challenges, and a fragmented user experience. 

By exploring alternatives that prioritize integrated medical laboratory solutions and predictable LIS lab pricing, these operations can position themselves for success in an increasingly complex and dynamic healthcare landscape.

Subscription-Based Pricing - Some LIS software vendors utilize a subscription-based pricing model. With this arrangement, labs gain a certain degree of cost certainty by paying a recurring monthly or annual fee to use the laboratory information system software; however, this arrangement may also lead to additional charges for support, maintenance, and LIS software upgrades, so beware. 

Tiered Pricing - Laboratory information system companies may also choose to offer their medical LIS solution as a laboratory workflow management platform that’s based on tiered pricing. This type of pricing model is often viewed as the most attractive because it allows for the alignment of the laboratory information system with the lab’s current operations, rather than forcing the lab to settle for a one-size-fits-all pathology lab management solution. 

This one-size-fits-all mentality has long dominated the industry, but that’s changing as progressive LIS software vendors such as LigoLab are now able to tailor their pricing structure to meet the unique needs of all medical labs, regardless of their size, discipline, or complexity. 

Discover More: Why Medical Labs Should Consider Deeper Alignment with Their LIS System Partner

Other Potential Laboratory Information System Costs to Consider

Now that we’ve covered how laboratory information systems are priced in the market, it’s also important to dig a little deeper to understand what other potential fees your clinical laboratory or pathology group may be confronted with. 

Implementation and Data Migration Fees - Be prepared for costs associated with both the LIS system implementation and the migration of data from the old lab information system to the new one. These costs are standard throughout the industry, but also vary widely depending on the LIS company you’re dealing with. 

For instance, the training and implementation for LigoLab customers is heavily subsidized, and no upfront license fee is required. In short, LigoLab is willing to share the risk of going live with its customers because it believes in the power of its pathology lab software and the immediate impact it will have on lab modernization and productivity. 

This varies sharply with legacy LIS vendors, who seem most interested in securing a large capital commitment from your lab upfront with license and implementation fees, and less interested in the long-term growth goals of your lab. 

Next, let's focus on hidden costs that can add up significantly over time. 

Support Fees - LIS support fees often fall into this category. As a lab grows, its need for support naturally increases, and those costs can add up quickly. That’s why lab directors and managers should carefully review support terms and potential long-term implications upfront to ensure full clarity before signing with any LIS vendor.

Please note that some legacy LIS software providers outsource their support to third-party lab vendors that are not located in the U.S., and this can lead to challenges that stem from time zone differences, HIPAA compliance issues if any PHI (protected health information) is accessed or shared, language barriers, and, most importantly, a lack of technical LIS software expertise. 

To guard against this, be sure to ask if the LIS system you’re evaluating is supported by engineers who reside in the U.S. and if the engineers are intimately familiar with the pathology software. 

Maintenance and Upgrade Fees - Similar to support fees, charging a customer for ongoing maintenance or for moving to new versions of the diagnostic lab software are examples of ways a LIS company can nickel and dime a customer. As they say, read the fine print and ask pointed questions during the sales process to make sure there are no surprises later on. 

Customization Fees - If your laboratory requires customization to support a specific clinical lab workflow, be prepared for added development and implementation costs. Because no two labs are the same, customization and cost definitely should be discussed before moving forward with a new LIS company. 

Moreover, these add-on fees don’t always come into play. The best laboratory information system companies have moved away from hidden costs and made the cost of their LIS system much more transparent.

LigoLab stands out in this category with its tiered pricing model, offering unlimited seats, modules, upgrades, and support, plus comprehensive training and unmatched system flexibility. This empowers trained users to fully customize the medical LIS to fit their lab’s unique workflows and operational needs.

Hardware Fees - Be aware that other, less obvious fees must also be factored in when purchasing a new laboratory information system software. This includes costs associated with the upgrading or purchasing of new hardware infrastructure to support the new LIS software. This list often includes hardware like servers, workstations, barcode scanners, and cassette and label printers. All these items should also be accounted for to get a true picture of the fees required. 

Summarizing Laboratory Information System Pricing Models and LIS System Selection

Understanding the complexities of selecting the right LIS company and the best LIS can be a daunting task for any laboratory. The diverse pricing models and strategies employed by different laboratory information system companies add to this challenge, making it difficult to compare options and determine the best value for your lab. 

At LigoLab, aligning incentives with customer needs is paramount to fostering a mutually beneficial partnership.

One critical aspect to consider is the incentive structure inherent in various pricing models. Lab vendors that charge substantial upfront fees may not be motivated to ensure your satisfaction over the long term. After the initial payment, requests for additional services or customizations are often met with hesitation, resulting in added charges or, in some cases, requests being delayed, ignored, or left unfulfilled.

Moreover, such LIS software vendors may lack the incentive to guarantee a risk-free and timely implementation, as the bulk of their compensation is secured upfront, leaving little motivation to address potential issues promptly.

User-based fees and module-based pricing models can similarly misalign vendor incentives with the laboratory's best interests. These approaches encourage laboratory information system companies to focus on selling more user licenses or modules rather than optimizing the lab's operations through automation and efficiency. The result can be a LIS system that fails to unlock the laboratory's full potential, prioritizing vendor profit over client success.

Many LIS software vendors may initially present lower cost estimates to appear more attractive. However, the true cost of ownership - including hidden fees for additional services, modules, and users - can significantly exceed these initial quotes over the relationship's lifespan. This lack of transparency makes it challenging to accurately assess and compare the long-term financial impact of choosing one laboratory information system software over another.

Considering these factors, it's crucial to recognize that the greatest expense a laboratory may face is not just the direct costs associated with its laboratory information system, but rather the opportunity cost (more on that in just a bit). When a laboratory's potential is artificially constrained by its LIS system, the delta in opportunity cost can be staggering - sometimes 10 to 50 times greater than the initial investment in the LIS itself.

At LigoLab, the approach to pricing and partnership is different. The goal of the LIS company is to provide complete transparency about costs from the outset, ensuring that laboratories can make informed decisions without fear of unexpected expenses down the line. 

LigoLab views its relationship with customers as a partnership, striving to deliver maximum value to your organization, staff, clients, and patients. This commitment means focusing on driving automation, enhancing efficiency, and supporting your lab's growth and success.

To be fair, LigoLab doesn’t aim to be the cheapest option on the market, but to be the best informatics partner for growing laboratories that want to reach their potential. By choosing LigoLab, you're investing in a pathology management software solution that prioritizes your laboratory's long-term success, ensuring a partnership that grows and evolves to meet your changing needs.

White Paper: Vendor to Partner - How Aligning with Your LIS Provider Can Transform Your Lab

Laboratory Information Systems and Opportunity Cost

Clearly, there are numerous potential fees to consider and fully understand before committing to an LIS software vendor and their system. After reviewing options and weighing costs, it’s natural for lab leaders to pause and ask: Is upgrading our LIS truly necessary right now?

Asking that question is not a mistake, but going back to an underperforming lab information system surely is. That’s because there’s also a significant opportunity cost that medical labs must pay for choosing to stick with their legacy LIS systems instead of realizing the benefits they would’ve experienced if they had chosen a different LIS system that better aligned with operational needs and growth potential. 

By sticking with the old and failing to embrace a new and scalable LIS system, these labs will, unfortunately, be unable to take advantage of new opportunities such as digital pathology solutions, automation, artificial intelligence, interoperability with third-party systems and instruments, and data analytics. 

Industry Insights: Digital Pathology Redefined - Uniting AI, Viewers, and a Robust LIS System for a Seamless Workflow

Further, by hitching themselves to a LIS system that lacks adaptability to evolving industry standards, these labs will have severely limited their ability to innovate and expand services, a cost represented by unrealized revenue and market share that could’ve otherwise been captured with a much more scalable and flexible LIS system. 

Labs relying on outdated LIS systems inevitably face the frustrations of inefficiency, limited integration, excessive manual work, and wasted resources that compound existing challenges. These inefficiencies carry a steep opportunity cost, as staff time and energy are diverted from higher-value, revenue-generating activities.

Another critical consideration is usability. A non-user-friendly LIS can erode both staff morale and client satisfaction, leading to employee turnover and the loss of clients who seek better service elsewhere.

In today’s highly competitive environment, where supply costs are rising and qualified personnel are increasingly scarce, the ability to adapt and innovate is essential for survival. Holding onto a legacy LIS system that restricts growth and stifles efficiency ultimately results in missed opportunities far greater than the system’s price tag.

In contrast, investing in an advanced laboratory information system software that aligns with the laboratory's needs and potential for growth can unlock value far beyond the initial investment, driving substantial returns in terms of increased revenue, market share, and operational excellence.

To learn more about the cost of inaction and how to both measure opportunity cost and prevent it, click the link below. 

Discover More: Cost of Inaction: The Dire Consequences of Neglecting Modernization in Laboratory Operations and Informatics

Here also are questions designed to help you assess your lab’s current LIS system and its capabilities. 

Assessment of the Current LIS System:

• How does the current LIS system meet your lab's evolving needs, and where does it fall short in terms of scalability and flexibility?
• Have you encountered challenges in adding new testing or customer requests with your existing LIS system, and if so how has this impacted your lab's efficiency and growth potential?

Exploring the LIS System’s Impact on Operational Efficiency:

• Have you experienced operational inefficiencies or limitations due to the modular nature of your current LIS system? How might a fully integrated LIS software platform transform your lab's productivity?
• In what ways could automating more of your lab's workflows reduce manual errors and improve turnaround times for your clients?

Evaluating Customer Support and System Evolution:

• How responsive and effective has your current LIS company provider been in addressing system issues or adapting to your lab's changing needs?
• How would partnering with a provider like LigoLab, known for its commitment to continuous innovation and customer support, impact your lab's ability to stay competitive and meet regulatory requirements?

Considering the Strategic Value of Data Insights:

• Are you currently able to leverage your LIS system for comprehensive data analytics and insights that inform strategic decisions?
• How might LigoLab's advanced reporting and analytics capabilities enable your lab to uncover new opportunities for service expansion or operational improvements?

Focusing on User Experience and Satisfaction:

• How do your staff and clients rate their experience with your current LIS system, and what improvements are they seeking?
• Could the enhanced usability and customizability of the LigoLab platform lead to higher satisfaction and productivity among your team?

Understanding the Financial Model:

• How much of your budget is allocated toward hidden costs, such as additional modules or user licenses, with your current LIS system provider?
• Could reallocating these funds toward a more transparent and predictable pricing model, like LigoLab's tiered pricing, improve your lab's financial planning and cost management?

Assessing the Long-term Partnership Potential:

• Looking toward the future, how well-positioned is your lab to adapt to industry changes with your current LIS system?
• How might a strategic partnership with LigoLab support your lab's long-term goals for innovation, growth, and service excellence?

More Details on LigoLab’s Tiered Pricing Model

As noted earlier, LigoLab offers a tiered pricing model designed to align closely with customer interests. With this approach, LigoLab’s success is tied directly to the real value and performance the platform delivers. As your lab grows, costs scale with usage, not with arbitrary account limits, creating a true partnership built on efficiency and scalability.

Each tier is structured to match increasing levels of functionality and complexity, ensuring that both the laboratory and LigoLab move forward in lockstep as operational needs evolve.

“With LigoLab, our partners have the features and capabilities to match their current needs, plus a clear roadmap for future growth and development,” said LigoLab CEO Suren Avunjian. “Our LIS system and lab billing informatics platform give them the flexibility to scale up to a higher tier as needed without ever having to change LIS systems.” 

“We've witnessed numerous labs benefit from this LIS model,” added Avunjian. “Labs that choose to partner with us experience not only a reduction in costs but also significant improvements in lab workflow efficiency. Our commitment to enhancing our pathology lab software for better automation and efficiency is evident in every feature we develop, and is directly influenced by the tiered pricing model.”

Below are links for each of LigoLab’s LIS software pricing tiers. Click on each link to see what’s included within each tier.

Essential Tier - An intuitive LIS system for small and medium-sized labs. 

Professional Tier - A comprehensive laboratory information system platform. 

Advanced Tier - This LIS system solution features robust informatics tools for medium to large-sized labs. 

Enterprise Tier - A powerful laboratory information system platform with advanced flexibility and control, and multi-facility support. 

“Our pricing is more than just a billing strategy - it's a commitment to your lab's long-term success. This approach ensures costs are predictable and proportional to your activity, aiding in better budgeting and forecasting. It’s a LIS model that grows with you, encouraging a scalable and sustainable expansion of your operations,” concluded Avunjian.

Ready to learn more? 

We invite you to explore how LigoLab’s innovative pricing model can revolutionize your lab's LIS system operations. Contact a LigoLab product specialist for a consultation or a software demo, and experience firsthand how an advanced LIS software can align its goals with yours for a more efficient, scalable, and cost-effective future.