The quadruple ROI of aligning lab and C-suite

In my role as a Chief Medical Information Officer, one of my goals is to look at lab testing data and determine how to generate additional value beyond the test itself. That means thinking creatively about using the lab to lower the overall cost of care, using predictive tests to help defray high treatment costs, delivering data in new ways to help the health systems and agencies we serve, and helping to  retain good employees by focusing on their well-being.  

Many in healthcare aspire to achieve the quadruple aim concept introduced in 2014 by Dr Thomas Bodenheimer. The concept updates the original IHI Triple Aim goals—improvingthe patient experience of care, improving the health of populations, and reducing the per capita cost of healthcare–to include improving provider satisfaction by offering access to tools and resources that can help address workload burden and prevent burnout. I would argue that aligning your health system’s C-suite with its lab around value-based care creates a quadruple ROI that can bring your organization closer to its own quadruple aim.

Here are the four levels of benefit as I see them:

1. System 
2. Population 
3. Individual 
4. Engagement 

Let’s go into a little detail on each.

Starting at the system level, you—or you and your reference lab partner—should define guidelines to reduce care variation so the right tests are being administered to the right patients at the right time. The best place to start this journey is to focus on high-cost, high-volume tests, since these will generate faster ROI. At the end of the day, you need to generate operating margin to pay for your colleagues to do the work, and to invest in and grow services. As the saying goes, no margin, no mission.

But an initiative to improve value need not be a cold, abstract exercise. As a leader you can make a more human case to the lab department. The conversation you lead might run like this: 

• We have to undertake a plan at the system level that’s really hard but will improve quality as well as patient care and outcomes, all things that you care about
• Here's why it’s important to you
• Here’s how we’ll celebrate your success and the work that you’re doing
• Here’s how I’d like you to lead this effort
• Here’s how I’ll support you when you have challenging conversations with physicians and other clinicians

Now ROI becomes much more meaningful. In the best cases, it becomes a mindset of continuous quality improvement. 

At the population level, ROI is based on better deployment of tests to gain insights into patients who share similar morbidities. Leveraging the chronic kidney disease (CKD) RRT prediction model, for example, it is possible to predict with a high degree of confidence who is likely to need renal replacement therapy in the next 12 months. This level of insight can help your population health team better align resources for the most benefit.

If you don’t prioritize and intervene on behalf of higher-risk individuals and they end up in an emergency room for RRT, you can expect increased costs of $60,000 or more.¹ The ROI is therefore pretty steep if you can tell someone that they have a 90% chance of needing RRT in the next 12 months. All of a sudden you’re having a different conversation, rather than this person showing up into the ED with hyperkalemia, confused and needing to be admitted to the ICU. There is a high negative ROI on that healthcare journey, financially and as a healthcare provider. 

Frontline staff provide care at the individual patient level and, with the right clinical decision support, can ensure that the right care is delivered at the right time. The lab has lots of insights that can help guide quality improvements and reduction in care variation. Done in parallel with population work, you increase the odds of improving outcomes by coming at the patient’s condition from both clinical viewpoints. 

Even before the pandemic, burnout rates in healthcare were cause for concern.² COVID-19 exacerbated this problem significantly. In one study from 2021, more than half of 26,000 healthcare providers surveyed reported symptoms of depression, anxiety, post-traumatic stress disorder, and suicidal ideation.³ In labs, an exodus of frontline workers has placed particular pressure on operations.

In this new, more complex staffing landscape, it’s incumbent on us as leaders to acknowledge that our response to employees fell short and that we need to work collaboratively with the frontline staff for improvements. Empowering frontline staff to innovate and solve problems to improve their workplace helps not only to improve quality and outcomes, but also to retain employees because they are proud of what they have built. As leaders we need to continue to look to improve workplace flexibility, provide better behavioral health benefits, celebrate the work done by the team, and ensure there is adequate compensation.

As the lab teams helps improve their own processes, this helps ensure that each person has their roles well defined and is encouraged to act for success on behalf of each patient. Seeing their observation-based ideas put into practice also encourages more creativity on the part of lab staff, and generates a much more positive mindset that drives higher retention.

On paper, laboratory operations may make up only a small percentage of your health system or hospital budget, but as an executive with an ROI frame of mind, you will find yourself thinking of ways to get more value from that spend. You may start to ask, “How can lab and diagnostics broadly help us provide higher quality at a lower cost?” That’s a very different question than “What’s their budget number?”

If we think and operate with a sunk-cost perspective, lab can't really do anything for us and we can’t ask the right questions. On the other hand, if we go in asking, “What can our lab do for us?” the possibilities will open up. As we know, asking the right questions almost always provides better answers.