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Understanding the Laboratory Value Pyramid as published as a 4-part series in “The Dark Report” (Sept. 22, 2014; Nov. 24, 2014; Feb. 17, 2015; March 30, 2015)

Jim Ellis; BS, MS, MBA, MBB, (Retired Novartis & J&J) Managing Partner MME Consulting, LLC Aiken, SC jellisaiken@gmail.com

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Meet the ‘Laboratory Value Pyramid’

• What path can clinical labs follow to respond to healthcare’s transformation?

• Introducing the concept of the “Laboratory Value Pyramid.”

• Provides lab leaders with a four-step road map from current state to ideal future state.

• Incorporates all concepts of modern business and quality management systems.

The Four Levels of the Lab Value Pyramid

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Level 1: Achieve Normalcy & Predictability

The Dark Report, Sept. 22, 2014

“The goal of this four-level pyramid is to give the strategic leaders of lab organizations a vision and an ideal that can be attained by their lab team.” “Collaborators in this effort include a veteran lab industry executive and a team within a major in vitro diagnostics company.” “……the lab regularly engages subject matter experts (SME’s) in lab process control and has these experts work with lab staff to identify and establish a core group of performance metrics unique to that lab’s successful operation.”

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Level 2: Establish & Meet Standards of Value

The Dark Report, Nov. 24, 2014

“……the key to level two is to put people, process and products together so as to achieve a best practice organization.” “You will know your lab is competent at level two when the owners, directors, and C-suite executives outside the lab want to know about the core competencies established by your lab , along with how your team nurtured the staff culture of continuous improvement and delivering more value to customers.” “……these CTQ’s are separate and measure the true heartbeat of the lab’s daily operation………. CTQ’s are to Value as Westgard Rules are to QC”

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Recent Results applying concepts from Level 1 & 2 into real lab case studies (lab employees + external SME’s + major supplier)

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“……the key to level three is to shift from service provider of lab results to a vital contributor in generating clinical value………moving from volume to value.” “You will know your lab is competent at level 3 when your lab is proactive and is driving improvements in its informatics capabilities instead of being held hostage by IT, LIS, HIS, and middleware.” “………lab has gained recognition as a core competency of its parent hospital or health system and is providing subject matter expertise in operations to other depts.”

Level 3: Deliver Value that Exceeds Expectations

The Dark Report, Feb. 17, 2015

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“……the most significant differentiator of a level four lab is its sophisticated use of information technology, particularly to analyze lab test results and clinical big data.” “You will know your lab is competent at level four when you have the metrics that resemble and compare to the best labs in the US and world.” “…….mastered the skills to raise the value and quality of lab testing services while reducing the cost of those services.”

Level 4: Use Benchmarks to Achieve Best-in-Class

The Dark Report, March 30, 2015

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Example of KPM’s: 1st pass yield, defect rate, sigma level, paid labor $’s per billable, etc.

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March 4, 2015

Pathologists and clinical laboratory managers could find opportunity to add value as providers learn to use big data to improve patient outcomes and lower costs

Early adopter accountable care organizations (ACOs) are establishing data warehouses. This is a first step in collecting and analyzing healthcare big data. The move toward integrated care makes big data critical to an ACO’s success. Pathologists and clinical laboratory managers will want to follow the healthcare big data trend because laboratory test results will be a major component of that data.

The Goal of Healthcare Big Data The goal for healthcare big data is twofold: 1) develop the ability to aggregate a vast amount of data from wide-ranging sources, and 2) use that data in real time to improve care and lower costs, a recent story published in Modern Healthcare (MH) reported. New performance-based reimbursement models mean that big data analytics will be essential for ACOs to succeed going forward.

ACO’s are Learning to use Big Data – Dark Daily

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The Value of “Big Data” – a pathway to Wisdom

Level 1: DATA

Level 2: INFORMATION

Level 4: WISDOM

Level 3: KNOWLEDGE

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The systematic progressive steps from Level 1 through Level 4 of the Lab Pyramid of Value allows a Lab to get to the Big House by contributing Big Data*.

Level 1: Achieve Normalcy & Predictability

Level 2: Establish & Meet Standards of Value

Level 4: Use

Benchmarks to Achieve

Best-in-Class

Level 3: Deliver Value that

Exceeds Expectations

Numerous US Labs today are struggling with what to do & how to get where the market is demanding them to go.

US Labs pathway to getting to the “Big House” is to develop & execute a strategy to contribute “Big Data”

Big House of US 6 Sigma Quality Healthcare Delivery at

Substantially Lower Cost

BIG

D A T A

“Big House”

*Examples of what “Big Data is and examples of those early adopter labs demonstrating success at all levels of the pyramid and contributing “Big Data” can be found in back issues of the Dark Daily, The Dark Report, Clin Lab News, and Executive War College and Lab Quality Confab agenda content.

TBD

AFF\C A R E

ACO

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Understanding the Laboratory Value Pyramid as published as a 4-part series in “The Dark Report” (Sept. 22, 2014; Nov. 24, 2014; Feb. 17, 2015; March 30, 2015)

Jim Ellis; BS, MS, MBA, MBB, (Retired Novartis & J&J) Managing Partner MME Consulting, LLC Aiken, SC jellisaiken@gmail.com

Level four: Use Benchmarks to Achieve Best-in-Class

Your lab’s practices and competencies are recognized as best-in-class by your peer groups and third party reviewers.

You are consulting with other hospitals and systems to help them replicate what you have done within your institution.

Your lab is recognized as among “the best in the business” because of how your lab team uses all the attributes from the first three levels.

Examples of world-class labs can be found within prestigious institutions like Mayo, Stanford, Vanderbilt, MGH, Cleveland Clinic.

Extra credit! Your lab has created the database structure that allows it to mine the value of lab test data.