The medical laboratory makes the bulk of its revenue by performing physician ordered tests. A typical laboratory's revenue stream is predictable since the lab knows its current customer base and the rough number, or average volume, of test orders usually placed for a given time period.
Reimbursements for tests from various insurance companies based on Current Procedural Terminology (CPT) codes means the lab has little volatility in expected cash flow, as long as all of the paperwork is properly submitted. To increase revenues, each lab will need to devise a strategy and review the associated return on investment.
Some strategies include reviewing current billing practices to maximize reimbursements, reducing operating costs through process improvements and the additional use of technology, taking lab testing direct to the public, mergers and acquisitions and good marketing plans. The top potentially lucrative strategies are highlighted here.
1 Review Billing Processes to Maximize Reimbursements Up to 40% of lab claims submitted for reimbursement contain inaccurate or missing information that can lead to delayed or denied payments. It is difficult, time consuming and cuts into profits to chase down insurance agencies for payments once updated information is re-submitted. Accurate patient and insurance information and correct use of current CPT codes are the simplest way to ensure prompt reimbursement. The best way to ensure that accurate information is submitted the first time is to have an integrated LIS that automatically passes patient demographics and current CPT codes for ordered tests and any subsequent stains.
2 Reduce Operating Costs More often than not, when a lab wants to increase revenue the first thing it does is attempt to reduce operating costs while adding physician clients or medical center locations to the customer list-essentially doing more of the same revenue-generating functions with fewer resources. Doing more with current resources usually means restructuring/automating processes to make the most out of available resources. The implementation of key and efficient software solutions to extend LIS functionality can help achieve these goals without having to incur major capital expenses or go through a large budgeting process. By leveraging the lab's current IT investment, there are cost-effective solutions for adding web-based order entry and report results options through affordable/sustainable outreach solutions.
3 Implement EMR and Web-based Technologies EMR integration with the current LIS to practice management systems (PMS) and the HIS does not have to be an expensive undertaking and can allow the lab to attract more clients as well as take advantage of government funding/reimbursement initiatives.
EMR interfaces and web-based/electronic order entry between the lab and physician customers reduces time and errors associated with test order entry as well as ensures that all patient data and test codes are electronically transferred to the lab and ordering physician. The patient simply shows up at the lab, data is verified, samples collected and tests run. Once results are reviewed and approved, the lab report is sent back to the client by the preferred delivery method (e.g., e-mail, auto printed at the physician's office, data automatically transmitted to the PMS or EMR in the physician office) or to a secure website for access by the ordering physician, 24/7 from any web browser.
4 Offer Boutique or Specific Tests Directly to the Public Labs are now specializing and increasing their revenue by offering highly specialized and detailed tests and custom panels directly to the patient population. These tests can include pre-employment drug screening, paternity DNA workups, predictive modeling for specific diseases and more. By taking the tests directly to the public, the potential customer base is not only increased, but the level of customization and detail of the end product has become a commodity.
5 Consider Mergers and Acquisitions Labs with capital looking to increase their market share have turned to acquisitions as a vehicle to grow their business and potential revenue stream. Mergers and acquisitions increase reach as well as the bottom line. If done successfully, a lab can increase their test menus, volume, capabilities and geographic footprint virtually overnight by combining the test menu and leveraging systems and solutions for all their labs and offering the combined portfolio to all customers. This is possible through a fully integrated LIS with outreach capabilities, test routing, etc.
6 Develop Marketing Strategies Often overlooked but one of the most powerful tools in a lab's arsenal (if done correctly), marketing is an excellent strategy to increase the revenue stream. Tech-savvy labs are putting themselves on the Internet through well-designed websites. Labs can enhance their site by building pages specifically for patients, healthcare providers and insurance agencies that tie back to the LIS so each group can log on using secure methods to review results, order tests, submit claims and check claim status. Allowing doctors access to their patients' medical information 24/7 gives them the ability to review patient cases as time permits. In an age where many people are connected at all times, labs that have instant access through secure Internet connections and web portals will be the labs clients do business with.
In addition to a website, e-newsletters, marketing campaigns with specific messages to target audiences and introduce new tests, automation, etc. is an inexpensive way to get the word out to current/prospective clients and stay in the forefront of their minds.
Lisa-Jean Clifford is CEO of Psyche Systems Inc.