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Preparing for Market Disruption – Operational Lessons From COVID-19

Conor Ward
VP of Sales, XIFIN

Joe Nollar
AVP LIS Product Development, XIFIN

In March 2021, we had the privilege of being interviewed by Linda Wilson, Senior Editor of Medical Laboratory Observer (MLO). The discussion focused on what has been learned by laboratories during the COVID-19 pandemic so far and how these learnings can help labs be better prepared for future market disruption. The first part of the discussion focused on the initial lab challenges at the early stages of the pandemic. See the full discussion in the video below.

In March 2020, at the outset of stay-at-home orders in the U.S., one of the first things most labs experienced was a dramatic drop-off in routine testing and the revenue that goes along with it. Patients were reticent to get this routine testing to avoid exposure to the virus. By the end of March 2020, routine lab testing volume had fallen approximately 55% and as much as 80% for some pathology laboratories. In addition, laboratories were dealing with the logistics of having non-essential personnel work from home. A cloud-based technology infrastructure made the rapid move to remote work feasible.

As the need for COVID testing ramped up, laboratories faced supply challenges with equipment, instrumentation and reagents. Laboratory software systems such as laboratory information systems (LIS) needed to be modified for specimen collection, accessioning, and workflow, as well as to meet new state electronic reporting requirements. Labs also faced billing and reimbursement challenges as payors adapted their systems to handle novel COVID testing policies and requirements.

COVID testing did offset some of the loss of routine testing revenue, but COVID testing is reimbursed at a lower dollar value than the average diagnostic test, so labs were still left with revenue shortfall. By July 2020, routine testing rebounded in many segments, so with the addition of COVID testing, volumes exceeded the pre-pandemic baseline. For example, in the molecular segment, volume reached 200 percent of baseline by July 2020 and peaked at 700% in January 2021. As routine testing has now recovered to pre-COVID levels, COVID testing is now a supplemental revenue source for many labs. To get a more detailed understanding of the volume variability over time, by segment, see the XIFIN Lab Volume Index. The interactive charts that comprise the LVI are updated weekly.

Laboratories took varying approaches to implementing COVID testing to respond to the needs in their communities. Some labs were up and running with COVID testing within two weeks. For example, XIFIN clients with the required instrumentation already in place were able to establish the specific configurations required to process the PCR assay relatively quickly. On the other hand, labs that had to purchase, install, test, and validate new instrumentation, and make changes to facilities and/or staffing, needed more time to prepare. Some labs started from scratch and were running patient samples within three months. By and large, the industry shared information and cooperated well to overcome these challenges. For example, XIFIN facilitated resource matching for many clients, enabling labs with excess equipment to lend them to labs with shortages.

Nonetheless, there were challenges, such as fulfilling state electronic reporting requirements on patient results. This necessitated quickly building new reports and interfaces to get the results reported as specified by each state. Flexibility is what enabled labs to respond and adapt quickly to rapid change; an absolute must to handle volume surges whether caused by a pandemic or a natural disaster. This nimbleness also provides opportunities to stand up new tests quickly. Labs that invested in this readiness up front are the ones that are now performing well in terms of handling volume fluctuations and maximizing the reimbursement for their valuable work.

With vaccination continuing swiftly across the nation, we expect COVID testing volume to decline. However, it will not go away. We expect to see a shift to point-of-care testing as well as continued demand for PCR tests due to new genetic variants. In December 2020, we also saw an increase in a combination COVID/Influenza panel, which we expect to continue.

We believe that to be best prepared for future market disruptions it is critical for laboratories to have an integrated LIS, revenue cycle management (RCM), and healthcare informatics solution that provides end-to-end, real-time connectivity across the diagnostic lifecycle from patient to payment. Solutions designed to work together that are built on a common, data-compliant technology foundation enable real-time, multi-directional connectivity to other LIS, electronic health records (EHR), and integrated data sources. This provides laboratories with a significant advantage. It is also a best practice to host these applications at a highly secure data center with multiple layers of security, the highest levels of continuity planning, redundancy, and natural disaster preparedness.

The industry learned a tremendous number of lessons in the past 12 months, and we expect most labs to be much better prepared for any future market disruption whether caused by yet a new viral strain, or some other health care emergency.

To learn more about the value of integrating laboratory systems, read “Making the Case for an Integrated Operational, Clinical, and Financial Technology Strategy.”

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Published by XIFIN
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