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

Some good news and then some bad news.

The good news is that your medical 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 to select and implement a new laboratory information system (LIS) that will modernize operations and position your lab for sustainable, long-term growth.

The bad news is that this is not going to be a straightforward or fast process because laboratory information systems are not created equal. It will require a deep dive into which laboratory information system functions are needed to meet your lab's growth goals, what the best LIS systems offer their customers, and, most importantly, what this new LIS medical solution will cost.

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

Laboratory Information Systems: Features and Functionality

Laboratory information systems typically fall into two categories, each reflecting the level of features and functionality that can be expected.

Modern Medical LIS Software Platforms

Modern LIS software solutions are the nerve center of a medical lab, expertly managing patient and specimen data, automating and supporting workflows, and seamlessly interfacing with analytical instruments and third-party laboratory software systems, such as EHR systems and image management systems (IMS) for digital pathology.

Modern laboratory information system 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, with no 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 clinical and pathology lab software platforms, such as LigoLab's all-in-one medical LIS and lab billing platform, take functionality further by embedding sophisticated laboratory billing capabilities that support in-house laboratory revenue cycle management and power 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 Laboratory Information Systems

Legacy laboratory information systems can best be described as rigid, outdated, and inflexible. A legacy LIS system may have met your laboratory's needs in the past, but today its monolithic architecture and the manual workarounds built around it can quickly become obstacles to growth as your laboratory and the healthcare landscape continue to evolve. 

These legacy clinical and pathology LIS systems can support basic lab workflow and data management, including order entry, sample tracking, specimen processing, results reporting, and specimen storage, but have serious limitations in automation, flexibility, interoperability, and scalability.

For long-term success, laboratories should look beyond 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 Laboratory Information System Software: Comprehensive and Flexible

Thanks to advanced laboratory information systems, clinical labs and pathology groups no longer need to be frustrated by the limits of legacy LIS software. 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 information systems and data management solutions capable of:

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

In short, the best 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?

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

Understanding the various laboratory information system pricing models is just as crucial as understanding their capabilities. Here is an exploration of the pricing structures offered by the best LIS software vendors, and the impact each has on 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 model, requiring laboratories to pay a substantial upfront cost for the right to use their LIS software. Such fees can vary widely and often reach into the six-figure range.

However, this traditional pricing structure comes with significant challenges. The initial license fee is often just the tip of the iceberg; labs must also prepare for the ongoing costs of updates, customizations, and additional features. In this pricing scenario, the LIS software vendor's motivation may not align with the laboratory's long-term success, and each subsequent modification or support request incurs additional charges.

LigoLab's Innovative Approach to LIS System Pricing

In contrast, LigoLab entirely eliminates the traditional upfront license fee. The LIS company understands that its customers' success is integral to its own success and has developed a non-traditional pricing structure for its LIS model that aligns directly with the interests of the laboratories it serves.

LigoLab's approach is transparent and scalable, ensuring that labs can budget effectively and invest in growth and innovation without the fear of hidden costs.

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

Understanding User-Based Pricing in Laboratory Information Systems

One of the most common pricing models in the medical LIS market is user-based licensing, where costs increase based on the number of named or concurrent users accessing the platform. While this approach may appear straightforward, it often creates a disconnect between the LIS vendor's business model and the laboratory's operational needs. 

Because revenue is driven by user counts rather than the value or efficiency delivered, labs can end up paying more as they grow, without necessarily benefiting from improved laboratory workflow management or greater automation. This approach encourages laboratory information system companies to focus on selling more user licenses rather than enhancing software capability.

Shifting the Focus: 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 a true partnership, empowering labs to focus on automation, scalability, and operational excellence regardless of size.

Decoding Module-Based Pricing in Laboratory Information Systems

Module-based pricing is another common strategy, in which lab vendors offer a foundational lab information system platform and enable laboratories to customize it with additional features through optional modules, each priced separately.

Customization at a Cost

The main advantage of module-based pricing is flexibility. Labs begin with a core LIS software package and can add capabilities as needed. However, this à la carte approach often comes with hidden costs, as additional modules required for expansion can quickly push budgets beyond the original forecast.

Challenges With Integration and User Experience

A significant drawback 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, the result is often a disjointed user experience, with data silos, varying degrees of functionality, and integration challenges that increase IT workload and slow laboratory operations.

Moving Beyond Module-Based Limitations

In contrast, some LIS software vendors are adopting more integrated approaches, offering comprehensive, all-in-one LIS lab solutions that evolve with the lab's growth without compromising interoperability or user experience. Understanding the implications of module-based pricing is crucial before committing to a vendor.

Subscription-Based Pricing

Some LIS software vendors use a subscription-based pricing model, in which labs pay a recurring monthly or annual fee. While this arrangement provides a degree of cost certainty, it may also lead to additional charges for support, maintenance, and LIS software upgrades. Read the fine print carefully before committing to this LIS model.

Tiered Pricing: The Most Aligned Model

Tiered pricing is often viewed as the most attractive model because it allows the laboratory information system to align with the lab's current operations, rather than forcing labs to settle for a one-size-fits-all diagnostic lab software solution.

Progressive LIS software vendors such as LigoLab now tailor their pricing to meet the unique needs of all medical labs, regardless of 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

Beyond base pricing, lab leaders must understand all potential fees before committing to an LIS software vendor.

Implementation and Data Migration Fees

Be prepared for costs associated with both implementation and data migration from the old LIS system to the new one. These costs vary widely by vendor. For instance, LigoLab's training and implementation are heavily subsidized, with no upfront license fee required, because LigoLab believes in sharing the go-live risk with its customers.

Support Fees

Support fees can add up quickly as a lab grows. Lab directors and managers should carefully review support terms and potential long-term implications before signing. Note that some legacy LIS software vendors outsource their support to third-party providers outside the U.S., creating challenges related to time zone differences, HIPAA compliance, language barriers, and limited technical expertise with the LIS application. Always confirm that support engineers are U.S.-based and intimately familiar with the medical LIS software.

Maintenance and Upgrade Fees

Charging customers for ongoing maintenance or for moving to new versions of LIS lab software is a common way vendors add hidden costs over time. Ask pointed questions during the sales process to ensure there are no surprises later on.

Customization Fees

If your laboratory requires customization to support unique workflows, many LIS vendors charge additional development and implementation fees. By contrast, leading laboratory information system companies have moved away from hidden customization costs. Case in point, LigoLab's tiered pricing model includes unlimited users, modules, upgrades, and support, while empowering trained staff to configure and customize the medical LIS to meet their laboratory's specific operational needs without vendor intervention. 

Hardware Fees

Less obvious but equally important are hardware costs, including servers, workstations, barcode scanners, and cassette and label printers, that must be factored in to get a true picture of the total investment required.

Laboratory Information Systems and Opportunity Cost

After reviewing all options and weighing costs, it’s natural for lab leaders to ask, “Is upgrading our LIS system truly necessary right now?” That question is not a mistake. Going back to an underperforming lab information system, however, is.

The Cost of Staying on a Legacy Lab Information System

Labs that stick with legacy LIS systems miss out on the latest digital pathology solutions, automation, artificial intelligence, interoperability with third-party systems and instruments, and data analytics, each of which represents lost revenue opportunities and a competitive disadvantage. These labs also face the compounding inefficiencies of manual work, limited integration, and excessive staff time spent on low-value processes.

The cost of staying on a legacy LIS system extends far beyond the initial purchase price. The opportunity cost, the gap between what laboratories achieve with a modern LIS and what they forgo by remaining on an outdated system, can be 10 to 50 times greater than the investment required to modernize. 

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

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Self-Assessment: Questions to Evaluate Your Current Laboratory Information System

LIS System Assessment

• 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 tests or accommodating new customer requests, and how have these impacted efficiency and growth potential?

Operational Efficiency

• Have you experienced inefficiencies due to the modular nature of your current LIS system? How might a fully integrated LIS software platform transform productivity?
• How could automating more workflows reduce manual errors and improve client turnaround times?

Customer Support and System Evolution

• How responsive has your current LIS company been in addressing issues or adapting to changing needs?
• How would partnering with a vendor committed to continuous innovation and customer support impact your ability to stay competitive?

Strategic Value of Data Insights

• Can you currently leverage your LIS system for comprehensive data analytics that inform strategic decisions?
• How might advanced reporting and analytics unlock new opportunities for service expansion?

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?

Financial Model

• How much of your budget goes toward hidden costs such as additional modules or user licenses?
• Could reallocating these funds toward a more transparent pricing model improve financial planning?

Long-Term Partnership Potential

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

More Details on LigoLab's Tiered Pricing Model

LigoLab's tiered pricing model aligns closely with customer interests, tying LigoLab's success directly to the real value and performance the platform delivers. Costs scale with usage as the lab grows, 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.

"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 pricing reflects a commitment to our customers' long-term success. It provides predictable, proportional costs that make budgeting and forecasting easier while supporting sustainable growth. As laboratories expand, the platform scales with them, not against them." 

LigoLab's Four Pricing Tiers

• Essential Tier: An intuitive LIS system for small and medium-sized labs.
• Professional Tier: A comprehensive laboratory information system platform.
• Advanced Tier: Robust informatics tools for medium- to large-sized labs.
• Enterprise Tier: A powerful informatics platform with advanced flexibility, control, and multi-facility support.

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. 

Frequently Asked Questions About Contracting With a Laboratory Information System Company

What are the most important factors to evaluate before selecting a lab information system?

Labs should evaluate the LIS system's functional depth, including automation, interoperability, reporting flexibility, and scalability, as well as the lab vendor's pricing model transparency, total cost of ownership, including hidden fees, post-implementation support structure, implementation track record, and whether the vendor's business model aligns with the lab's long-term growth goals rather than maximizing upfront revenue from the lab.

What is the difference between a modern LIS and a legacy LIS?

Modern LIS systems offer advanced automation, open architecture, seamless EHR and instrument integration, fully customizable reporting, cloud deployment, integrated lab billing, and scalable tiered pricing, all within a unified platform. Legacy LIS systems are typically rigid, require manual workarounds for growing operational complexity, charge significant fees for configuration changes, and were built for the regulatory and technological environment of a previous era, making them increasingly limiting as labs evolve.

What hidden costs should labs watch for when evaluating LIS software vendors?

Labs should watch for per-user licensing fees that increase as headcount grows, per-module charges that make full functionality unaffordable, fees for support requests and maintenance after go-live, charges for moving to newer versions of the software, high customization development fees for routine workflow changes, and implementation and data migration costs that are not clearly disclosed during the sales process.

What is user-based pricing in LIS systems?

User-based pricing charges laboratories according to the number of users accessing the system. This causes costs to rise as the organization grows. It also creates misaligned incentives, rewarding vendors for selling additional licenses instead of helping laboratories improve automation, efficiency, and productivity. 

What is module-based pricing?

This pricing provides a core LIS system with additional functionality sold as separate modules. While this offers flexibility, it can introduce hidden costs as laboratories grow, reduce interoperability between core and add-on components, create data silos, and increase IT complexity, ultimately slowing operations. 

Why is opportunity cost such a significant consideration when evaluating LIS system upgrades?

The opportunity cost of staying on a legacy LIS system, including lost revenue from the inability to offer digital pathology, direct-to-consumer testing, or advanced analytics, can be 10 to 50 times greater than the system's direct cost. Labs that delay modernization forgo these revenue opportunities while simultaneously absorbing the compounding costs of manual inefficiency, staff frustration, compliance risk, and competitive disadvantage relative to labs that have modernized.

How does LigoLab's tiered pricing model protect labs from unexpected costs as they grow?

LigoLab's tiered pricing is based on case volume rather than users or modules, with unlimited users, modules, upgrades, support, and training included at every tier. Laboratories gain access to the full platform from day one and never incur additional licensing fees as their teams grow. As testing volume increases, they seamlessly transition to the next tier. This predictable pricing model aligns LigoLab's success with each laboratory's growth while eliminating the hidden fees common with legacy LIS vendors.