Putting your supply chain to work in the lab to deliver better results

Meet Linda — a 68-year-old grandmother and a diabetic. Linda calls 911 one day after experiencing pain in her stomach and back. In the hospital, her CT scan does not reveal anything significant, so the ER releases Linda. Later at home Linda's daughter finds her unresponsive and calls 911 once again. Back in the hospital, her blood tests reveal three strains of bacteria, so her doctor prescribes two different antibiotics as a broad-spectrum approach.

This real-world scenario not only has a huge financial impact on the hospital, but, more importantly, it also has a huge impact on the health of patients like Linda. A study by the National Academy of Medicine estimated that approximately 12 million people are misdiagnosed annually, and that diagnostic errors contribute up to 17% of adverse events in hospitals and 10% of patient deaths.1

Fortunately, in Linda's case, she received the right diagnosis in time, but both she and the hospital paid the price. Combining readmission, delayed response to sepsis and the associated costs of a longer hospital stay, that single misdiagnosis adds up to more than $52,000.

Clearly, this scenario is untenable, and hospitals are finding themselves in choppy waters when it comes to balancing care and cost to meet the needs of patients, staff and leadership.

Better care begins in the lab
Given that lab testing represents 2% of healthcare spending and influences 70% of medical decisions,2 it makes sense that hospitals are making more investments in that area of their business. After all, lab is everywhere — from the doctor's office to the urgent care center to the patient's home. It delivers diagnoses, informs treatments and helps improve lives. The importance of a well-run lab cannot be underestimated. Consider these statistics from HIDA.org:2

• 60% of patients with a sore throat receive antibiotics but only 15% of those sore throats are actually caused by Strep A
• Patients whose HbA1c level was tested during hospitalization had 7.4% fewer readmissions and 30% deduction in readmissions due to heart failure
• Patients with heart attack symptoms who received point-of-care testing in the ER had 38% fewer intensive care admissions, 12% fewer hospitalizations and an 8% reduction in length of stay

With decreasing reimbursements, increasing labor shortages and fluctuating patient satisfaction, optimizing your lab requires all hands on deck. That's why more hospitals are relying on their supply chain to do some heavy lifting to help solve challenges like:

• Staffing vacancies and reduced productivity
• Insufficient quality control and validation
• Poor lab metrics
• High turnaround time (TAT)
• Outdated equipment
• Inefficient inventory management
• Low patient satisfaction
• Decreased profitability and cost management

Here are three ways your supply chain can help you take control of your lab and improve clinical, operational and financial outcomes.

Better clinical outcomes
Fact: 56,000 adverse health effects and 34,000 deaths can be avoided through appropriate diagnostic testing. And when that happens, patient satisfaction improves by 59%.2 So how can your supply chain help bring that about? By bringing you the latest diagnostic technology for faster, more accurate results — all at a price you can afford.

One of the most powerful ways your supply chain can help you improve clinical outcomes is through antibiotic stewardship. The Centers for Disease Control estimates that up to 50% of antibiotics prescribed in acute care hospitals are unnecessary or inappropriate.3 Linda's three antibiotic prescriptions may have rid her of a bacterial infection, but they also increased her chances of antibiotic resistance. And, her longer hospital stay increased her exposure to potentially deadly hospital acquired infections (HAIs).

With more superbugs on the horizon, antibiotic stewardship has become top of mind for hospitals. As one assistant pharmacy director at a Southeastern hospital observes, "Antibiotic stewardship is huge right now. Reducing antibiotic misuse, IV to PO, hospital acquired infections — all of that is really important." But many, especially small community hospitals, struggle to put an effective antibiotic stewardship program (ASP) in place. According to the CDC, only 26% of small hospitals have met all of the CDC's core elements for ASP programs.4

This is especially concerning given that antibiotic resistance is projected to kill 10 million people annually by 2050.5 Already more than 2 million people become infected with antibiotic-resistant bacteria each year, and 23,000 people die from these infections.6

A good supply chain partner can help you reverse the trend by delivering solutions in three key areas:

• Faster, more accurate results with aggressive diagnostics
• Better efficiencies with coordinated data
• Enhanced protocols with change management support

With these elements in place, your lab can:

• Improve turnaround time from days to hours
• Save on drug costs by using targeted therapy
• Deliver on VBP core metrics including reduced length of stay, HACs and readmission rates
• Improve operational and financial efficiency
• Aggregate data for the clinical team

Better operational outcomes
Did you know that most labs spend more than 50% of their time reviewing results that are 95% acceptable?7 Couple that with the fact that open MT/MLT positions are expected to reach 40K by 20268 and you've got a poor prognosis for productivity.

Removing some of the administrative burdens on your staff is imperative, for not only efficiency but patient care as well. Physicians are putting in more test orders than ever before (at a growth rate of 7%9) but labs are still laboring under paper processes that take more time, reduce quality and open up more room for error.

A good supply chain partner can help you build a stronger lab program in three critical ways:

• Transformational product and technology options that provide multiple results from one test
• World-class distribution with fast deliveries, reduced ordering frequency and increased quality control
• Lab intelligence, compatible with your EMR, to increase efficiency and productivity across your lab

Let's talk about technology a little more. Rapid diagnostics, specimen archiving, inventory management, reporting and analytics, online ordering: these types of solutions can be the biggest game changers for your team and, by extension, your patients. The right solutions can bring your patient results in hours instead of days, reduce readmissions and improve satisfaction.

Not every lab faces the same administrative burdens. Says one lab manager in Texas, "Our biggest challenge is relying on our staff to maintain inventory. Often I find out about missing supplies too late." In her case, technology that allowed staff to scan barcodes into an online ordering system, track products and identify purchase trends could relieve some of those inventory-induced headaches.

Distribution has to be firing on all cylinders, as well. From sequestering programs that allow labs to spend less time recalibrating to effective cold storage that protects products to reliable order accuracy and expedited delivery, your supply chain should be working in tandem with your team to keep your lab operations running smoothly.

Better financial outcomes
With Medicare reimbursement cuts and increasing healthcare costs, it's no wonder that one in five hospitals is at high risk of closing. According to the Centers for Disease Control, Medicare Part B fee cuts totaled $400 million in 2018, and PAMA resulted in a decrease in reimbursement for approximately 75% of lab tests. The new Clinical Laboratory Fee Schedule has reduced test reimbursement by 40–50%.10 Add to that, avoidable misdiagnoses that cost hospitals $900 million per year2 and inefficient workflows that increase labor costs.

Lab leaders are being asked to help stem the tide when it comes to revenue loss. As one lab manager in Iowa explains, "My biggest challenge is cost to overcome Medicare reimbursement cuts. We are constantly challenged to get the most bang for our buck."

Your supply chain can help here, too, in the following ways:

• Best-in-class distribution of equipment and supplies at a competitive price
• Wide selection of equipment and diagnostics technology
• Outreach strategies to optimize reimbursements and revenue
• Inventory management to cut time and costs

Remember Linda and her $52,000 misdiagnosis? Her situation could have had better clinical, operational and financial outcomes with a lab program that leveraged the full power of its supply chain partner.

For more information on how our lab solutions can address your challenges, visit mms.mckesson.com/stewardship.

References:
1 https://www.nap.edu/catalog/21794/improving-diagnosis-in-health-care
2 https://www.hida.org/App_Themes/Member/docs/Resources/HIDA_Impact-of-Diagnostics-on-Healthcare-Outcomes.pdf
3 https://www.cdc.gov/antibiotic-use/stewardship-report/outpatient.htm
4 https://www.cdc.gov/antibiotic-use/healthcare/implementation/core-elements-small-critical.html
5 his.org.uk 
6 https://www.cdc.gov/drugresistance/biggest_threats.html
7 https://labtestsonline.org/understanding/features/ref-ranges/start/5/
8 https://www.bls.gov/ooh/healthcare/medical-and-clinical-laboratory-technologists-and-technicians.htm
9 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4975220/
10 https://www.impact-advisors.com/regulatory/deep-cuts-pamas-impact-on-clinical-laboratory-reimbursement/

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