How-to Sustain Growth in Today’s Lab Market

I recently had the pleasure of being interviewed by Richard Faherty, managing director of The Dark Intelligence Group. I was on a panel with fellow industry veteran David Nichols. The main topic of discussion was why it is vital for laboratory leaders to understand and maximize the value of the lab, even if you’re not in a buying or selling mode? I hope you’ll find that David and I offer some useful insights to increase revenue and operating margin, and effectively maximize your laboratory’s value.

I believe that efficiency and effectiveness of a lab’s revenue cycle management (RCM) processes is one of the fastest routes to financial improvement and successful navigation of the regulatory challenges in today’s market. The graphic below shows what is needed to achieve this from an RCM system.

Having served in executive positions at several laboratories including Pathology, Inc., Spectrum Laboratory Network, Quest Diagnostics, and LabCorp, I know how critical revenue cycle management is to an organization’s success.

Our approach to the discussion was to first briefly review the current market factors that are creating challenges for many laboratories. Then we had a deeper discussion on the strategies you can implement right away to help improve your market position. This included things such as:

• The most important key performance indicators (KPIs) to track and measure against
• Why optimizing your RCM processes (and by extension reimbursements) is one of most successful ways to improve financial performance
• Why it is crucial for your CFO to be fully engaged when it comes to monitoring RCM metrics and trends

Once we covered key strategies, we discuss the specific steps your lab needs to take to optimize its reimbursements. This includes understanding why compliance is so important to laboratory valuation, as well as describing the components of an effective compliance program.

Both David and I have a lot of experience with merger and acquisition (M&A) activity in the laboratory space, so we also talked about the current trends in valuation and M&A in an effort of help your lab prepare for the future. This part of our discussion also covered the specific challenges that need to be addressed in any merger or consolidation plan.

Listen to our webinar with The Dark Daily and see our related slides, here.