Major Business Challenges of Medical Laboratories

The Major Business Challenges of Medical Laboratories

A wide array of innovations, particularly around technology have greatly improved the productivity of clinical laboratories in recent years, but at the same time, the services provided by these laboratories are also increasingly becoming commoditized. To be prepared for the future, clinical laboratories therefore need to enhance efficiency/effectiveness and reduce costs. This can be done by seeking new alliances,integrating with other organizations or outsourcing. But they must also deal with several other challenges described below.

The need for collaboration and consolidation
The prevailing medical laboratory business model, particularly in the US, suffers from too much fragmentation, redundancy (especially in terms of equipment), and excess capacity. Such a model has competitive disadvantages and is no longer adequate in the new reality of the need for much greater cost containment and increased competition. Laboratories should therefore seek to cooperate, consolidate, and/or form strategic alliances to enhance efficiency and reduce costs. The challenge, of course, is to find the right partner in each situation.

Hiring People Talent
Good talent with a strong motivated work ethic is hard to find in many industries but is increasingly so in medical laboratories. This includesdata entry,optical technicians and tinting staff in particular. Where the laboratory equipment is highly automated and complicated to learn, the recruitment challenge is even higher.

Focusing more on Innovation
In a medical laboratory, the analysis of patient specimens is becoming increasingly commoditized. To be prepared for the future, pathologists and laboratory technicians need to redirect their thinking and engage in greater levels of innovation. Laboratory professionals therefore need to differentiate themselves not only by their technical skills but also by being involved in the creation, distribution, and application of knowledge related to laboratory aspects of patient care.

Building better business relationships with doctors as customers
The complexity of laboratory tests has increased significantly in recent years and primary care physicians and clinicians of all kinds need more assistance in the use of new laboratory technology and on test interpretation. This need will increase as even more complex testing becomes available (genomic and proteomic testing, for instance). Laboratory professionals should therefore develop their professional relationships with clinicians who order laboratory tests and serve as trusted advisors. This means that relationship skills of staff will need to be high.

Laboratory cost effectiveness
Medical laboratories will increasingly be under pressure to be as cost effective as possible in performing tests. Advances in technology should help with this challenge but it needs to be implemented effectively and with a mind to speed and tangible value-added. For example, real-time electronic ordering by physicians has the potential to ease the move toward rule-driven generation of orders rather than ad hoc ordering, thereby making tests cheaper and quicker to turn around.

The mission of any medical laboratory is to improve patient care by improving the speed and quality of testing. To be best positioned for the future, laboratory leaders should therefore focus on greater efficiency by addressing each of the above challenges, either themselves or by seeking out new value-adding partnerships. RX4 has experienced all of these laboratory challenges in many different healthcare environments and can provide considerable insight and options where the knowledge is limited or does not exist internally.

Dr Jon Warner

Dr. Jon Warner
CEO-RX4 Group-Taking Care of the Business of Healthcare

Jon is the CEO of RX4 Group based in Los Angeles, California. He can be reached at

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