David Novis, MD FCAP, Peter Perrotta, MD FCAP, Barbara Blond MBA, Thomas Long, MS

In any service industry, gaps between what services customers expect from providers and what those providers actually deliver to their customers may undermine perceptions of service adequacy and quality. In the field of pathology, there is no robust market research that addresses potential discordance between customers’ expectations and actual delivery of pathology services. 

Through the College of American Pathologists, we conducted a short, “back of the envelope” survey of the perceptions of oncologists and laboratory directors regarding the delivery of molecular diagnostic services. We chose to inquire about molecular pathology testing because it is a burgeoning field of pathology in which service demands might not yet be crystalized. We chose to survey oncologists because they are regular patrons of these services who would necessarily rely on pathologists to steward them through ordering and interpreting the results of these complex tests.  And we chose to survey laboratory directors because they are responsible for ensuring that the scope and quality of pathology services meet the needs and expectations of physicians who use pathology services. 

To launch this study, we asked 12 volunteer laboratory directors who were Fellows of the College of American Pathologists to complete a questionnaire and to send an identical questionnaire to one oncologist customer who they believed to be knowledgable about the clinical use of molecular pathology testing practices. The questionnaire asked participants to grade on a 5-point scale their perceptions of the importance of 8 common molecular pathology services, and on a three-point scale, the frequency with which pathologists provided those services. The survey questions are listed below.

Molecular Pathology Services Questionnaire

1. Pathologists select suitable tissue for testing related to targeted cancer therapies.

2. Pathologists select which laboratory samples are sent to the reference laboratory for testing related to targeted cancer therapies.

3. Pathologists identify surgical pathology cases that may benefit from testing related to cancer therapies where such testing has NOT been ordered.

4. Pathologists assist oncologists with testing related to targeted cancer therapies issues.

5. Pathologists review orders for testing related to targeted cancer therapies to ensure test appropriateness.

6. Pathologists incorporate result of testing related to targeted cancer therapies into final and/or amended surgical pathology reports.

7. Pathologists are involved in ensuring institutional criteria and protocols for utilizing testing related to targeted cancer therapies are followed.

8. Pathologists attend multidisciplinary conferences where testing related to target cancer therapies are discussed for patient management.

What these 8 services are is less important than whether or not laboratory directors and oncololgists agreed on the value and delivery of these services.  This was not an assessment of the nature of  molecular pathology services, but rather an assessment of customer service in which we molecular pathology services was an arbitrarily chosen example.  

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 Dr. David Novis has sound advice for hospital administrators not quite up to speed on the inner workings of their lab.

For more than a decade, the CEO of Community General Hospital (CMG), a 120-bed, non-profit facility serving a population of 50,000, had contracted with a three-physician pathology group to provide pathology services and oversee the operation of its full-service clinical laboratory.

From the CEO’s perspective, the arrangement worked well. Lab tests all seemed to get done, doctors didn’t complain much, and the laboratory maintained its accreditation by the prestigious College of American Pathologists (CAP). But things changed abruptly.

An unannounced CAP inspection turned up enough deficiencies to place the lab’s accreditation status on probation. This was a disaster. The confidence of patients and physicians in the quality of the hospital’s services was undermined, and plans to issue a bond financing the new ambulatory wing had to be put on hold. How could things deteriorate so quickly?

Perhaps previous CAP inspectors had been lax. Perhaps previous successes in achieving CAP accreditation had lulled laboratory personnel into a false sense of security. Maybe key personnel were no longer assigned to oversee critical laboratory functions. Regardless of who dropped the ball, the ultimate responsibility for making sure all critical functions required for CAP accreditation were in place belonged to the laboratory’s medical director. The hospital administrator assumed that the pathologist had been running the lab—but what did that actually mean?

 Broad Scope

Most hospital laboratory medical directors are medical doctors, and most of those  doctors are pathologists. The scope of their work is broad, including (but not limited to) examining tissue samples and blood smears under the microscope, performing certain types of biopsies, obtaining bone marrow samples, and interpreting laboratory data.

Pathologists are commonly reimbursed for these services by billing patients or their proxies directly. Their work is scrutinized daily by the physicians who must use this information to care for their patients.

Hospital administrators, however, are primarily concerned with pathologists’ administrative responsibilities. Pathologists are commonly reimbursed for these services by hospitals that contract with them for administrative services. As at CMG, as long as things seem to be going well, administrators are unlikely to concern themselves with the details of performance or even question the value they are receiving.

Responsibilities

Here are five key responsibilities of the laboratory medical director.

1.  Ensure that laboratory services meet the needs of, and are used properly by, the medical community. To accomplish this, laboratory directors must oversee laboratory quality improvement programs and provide the interface between the laboratory and those accrediting organizations that serve as watchdogs of laboratory quality. Directors often supervise mock inspections of their laboratories using checklists and criteria of the organizations and agencies from which they are seeking accreditation. As hospital-based physicians, laboratory directors must also provide leadership in hospital-wide quality improvement programs.
2. Ensure the reliability of laboratory data. Physicians place their unbridled trust in laboratory test results. Laboratory medical directors must guarantee doctors that all data emanating from the laboratory is accurate beyond question. Anything less undermines the confidence of physicians and patients in the integrity of laboratory and, by association, the hospital.
3. Consult with and communicate laboratory data to healthcare providers. Pathologists may advise clinicians on which tests best diagnose suspected diseases, which test results are distorted by drugs their patients may be taking, and how test results may be interpreted in their patients’ unique environments. Sometimes this involves hands-on activities such as viewing either peripheral blood smears under the microscope or bacterial culture patterns on agar plates. In all cases, laboratory medical directors must make sure that test results are reported quickly enough to allow doctors to initiate therapy in a timely manner.
4. Interact with the medical and patient communities. As medical directors of major hospital departments, pathologists are consultants to the entire community of healthcare providers. As such, they must contribute eagerly to their hospitals’ continuing medical education programs by conducting lectures, grand rounds, and specialty conferences. Hospital administrators view their medical directors as upper-level executives and may require them to provide leadership on key governance committees.
5. Oversee all aspects of laboratory management. Keeping an eye on the shop is the nuts and bolts of what laboratory medical directors do. They prepare operational and capital budgets and strategic plans. They attend and/or chair laboratory and hospital management team meetings. They conduct research and development, select and monitor subspecialty reference laboratories, and interact with equipment vendors. Director’s comments appear on reports of applicant interviews, employee job performance, and equipment evaluations.

 Documentation

Laboratory medical directors gather, review, process, and interpret various sources of data. Their involvement in these activities is recorded in their signatures and commentaries that appear in documents that contain this data. Some of this data is objective; some is subjective. The list of documents containing this information includes:

* Metrics of laboratory services such as rates of laboratory test turnaround times, lost specimens, laboratory testing errors, unsuccessful phlebotomies, and computer downtime. Directors can choose to develop these metrics internally within their institutions or purchase benchmarking and analysis packages containing these metrics.

* Operational checklists, testing protocols, results of daily quality control, ranges and tolerance limits of test results, reports of laboratory errors, and customer complaints.

* Diaries and logs of consultations with physicians, hospital staff personnel, and patients.

* Memoranda and reports issued to the hospital medical and nursing staffs.

* Patient, physician, and hospital staff satisfaction surveys, especially point-of-service questionnaires such as those used in electronic and automobile repair facilities. These surveys are crafted to document the value with which customers view laboratory services.

* Minutes of meetings held by laboratory management, medical staff departments, and hospital committees.

Checklist for administrators

Talk to doctors. Some hospital administrators determine whether or not laboratory services are meeting the needs of healthcare providers by waiting for angry physicians to complain. More savvy administrators periodically approach key physicians individually for their opinions before problems surface.

Read the minutes. Problems with laboratory services may surface first in the minutes of key hospital committees such as medical executive and quality.

Review the logs. Laboratory consultation, operational, error identification, mock inspection, and complaint logs will give administrators a handle on how their laboratory directors deal with problems and whether or not the corrective actions they pursue are appropriate and productive.

Keep an eye on the charts. Regularly review the results of laboratory quality indicators and satisfaction surveys.

 Be consistent. The documentation required to assess the effectiveness with which laboratory medical directors function in their broad roles as hospital executives should mirror those used to assess the effectiveness of executives elsewhere in the healthcare system.

Maximize success

Not all pathologist directors possess the same managerial abilities. Whether or not a candidate possesses all the necessary skills required to run laboratories is better assessed not by their pathologist trainers and colleagues, but by the hospital administrators ultimately responsible for the hospital and everything in it. Here are six ways hospital administrators can maximize the success of their pathologist laboratory medical directors.

Control the process from the outset—hiring. Administrative and management training has never been the strong suit of pathology training programs, and there are no guarantees that newly trained pathologists have the skills to oversee the direction of laboratories. Hospital administrators who have much to risk in these appointments are likely to be better able to evaluate pathologist applicants than are other pathology service providers.

 Make sure the laboratory directors understand their roles. Contracts are not enough. Certainly contracts with pathologists are needed to spell out their duties as  described above. But for laboratory medical directors and hospital administrators to interpret the language in precisely the same dialect, they must sit down and discuss job expectations in detail. Once everyone is on the same page, administrators must grant pathologists the authority they need to carry out their  tasks. Keep in mind that you may want your pathologist directors to perform other functions not spelled out by regulatory and accreditation agencies.

Secure your investment. Assess skill levels. Determine what additional training laboratory medical directors need to bring them up to the same levels of competency required of your other health executives. Hospitals administrators may decide that it is more efficient to allow their medical director to delegate certain functions to other laboratory personnel, but keep in mind that delegation is not the same thing as abrogation. As stated in the standards of the CAP, “The director remains responsible for the overall operation and administration of the laboratory to assure that quality patient services are provided.”

 Instill the vision. Agree on outcome measurements of success and failure. Standards of excellence must be uniform throughout the hospital. Pathologist medical directors must understand that that they are being evaluated by the same criteria and processes used to judge top administrators elsewhere in the hospital. The laboratory medical director and the hospital administrator must agree on the rewards and penalties for exceeding, meeting, and failing to achieve the desired performance.

 Ensure success. Put the pathologist on your management team. If pathologists are to function as managers, they must be treated as such. They must attend selected meetings of the management team, have the opportunity to participate in educational conferences available to other hospital managers, and be assimilated into other activities and projects that develop their accountability as medical executives.

Maximize credibility. Make quality the top priority. The pathologist must champion the culture of quality as established by the hospital trustees. The laboratory medical director must ensure that the letter and spirit of CAP quality is maintained in the laboratory. These mandates will likely require the pathologist to oversee the development of quality assurance programs in the laboratory and to integrate these programs into the quality assurance programs of the medical and hospital staffs.

Don’t get caught in a pinch. Develop contingencies. In the end, some pathologists may not have the horsepower to be managers or may require more resources than you want to commit to turn them into managers. Yet it may be unwise to terminate the pathologist’s employment, especially if the pathologist commands considerable professional respect among the medical community. Consider amending the medical director’s contract and hiring other individuals such as a non-pathologist PhD or MD or a pathologist from a neighboring practice to run the laboratory.

Dr. David Novis has practiced laboratory medicine and pathology for 25 years and is a recognized expert in clinical quality, medical outcome assessment, patient safety, medical service delivery and best practices methodologies. He is a senior consultant for Chi Solutions, Inc. He can be reached at www.davidnovis.com

Is It Time for a Change in CAP Governance?
Posted by David Novis MD FCAP
June 5, 2014

The members of the CAP House of Delegates (HOD) had no difficulty abrogating their charge as the CAP’s “legislative body” once they realized it to be an illusion that did more to weaken than it did to strengthen their ability to influence College policy. I suggest that the membership of the College now reevaluate the charge and structure of College governance.
To date, the College has taken great care of us. But that may be despite rather than because of our governance system.

Times used to be good. Fees for services were generous, urologists sent all their biopsy samples to us, and Medicare paid their outpatient lab bills. Times are no longer what they once were. I believe that the shifting plates of health care may expose and fracture the faulty seams of a system conceived in better days.

At the center of our governance is the Board of Governors (BOG). The BOG is charged with setting College policy and ensuring that its implementation meets the needs of our 18,000 members. What makes governing the College so complicated is that the CAP is really two organizations: a professional society and a $170 million business. The business is our air supply. The revenues it generates fund the services upon which the professional membership needs to survive, not the least service of which is political advocacy.

The Board comprises twelve Governors, three officers and four ex-officio members. They are all pathologists. Having served on the Board for four years, I can tell you that our Governors are sincere, hard-working and committed to the constituents who elected them. But they are all pathologists. The perspectives they bring to the boardroom reflect their own, unique, personal experiences accumulated in their training and practice of Pathology. Sitting at the table are no independent directors chosen solely for their expertise in running a $170 million business. It is not reasonable to expect the board’s pathologists to possess those skills. In a sense, we have a board of directors consisting entirely of plant managers.

This means that we have no impartial insight to guide our decisions. When our upper level staff presents their plans to enter foreign markets, there is in the room no CEO of a multinational corporation to challenge them. There is no investment banker to question how our money managers invest our sizable portfolio. There is no nationally recognized marketing guru to offer alternative approaches as to how we might market our proficiency testing products.

That is not to say that our executive staff lacks ability. In my estimation, they are probably the best in the industry. But with the exception of the CEO and CFO, their counsel comes unhindered by the requirements of fiduciary responsibility. It’s one thing to provide expert opinion. It’s quite another to provide it with the conditions of fiduciary responsibility.

I think it is time for us to rethink our governance system. We need to either populate our governing board with independent directors or create a second board comprising industry leaders to oversee our commercial interests.

A Shortage of Pathologists. The right solution?
Posted by David Novis MD FCAP
May 29, 2014

I don’t know if the CAP’s predictions about an impending shortage of pathologists are accurate or not, however I do agree that having contingency plans for worst-case scenarios makes sense. Unfortunately, as best I can tell, our leaders charged with formulating these plans have alighted upon one solution and one solution only: train more pathologists.

I can see where convincing fiscal gatekeepers to fund population Earth with more pathologists serves the interests of the training programs and specialty pathology societies whose emissaries comprised the Pathology Workforce Summit. Whether or not that argument holds any weight with your average working pathologist might be another story.

In any other industry, contingency plans would include a whole lot more than one solution, and adding more labor would likely be the very last one on the list. Rather than throw more people at the problem, production engineers would brainstorm system changes that get more work done with less people. And incur fewer errors to boot. For instance, they might consider how pathologists can make better use of their physician extenders, develop laborsaving technology, and eliminate wasted steps in producing diagnoses.

No, I don’t have the answers. That’s the point.  The CAP needs workgroups to brainstorm solutions to a potential shortage of pathology coverage (which is not necessarily the same as a shortage of pathologists) other than a manpower workaround.  If efforts to open more training programs fail, which I believe is more likely than not, and we become spread too thin to provide pathology services that our customers need, I fear that not only will we be inviting other professionals to step in and do what we are unable to do, we will have lost an opportunity to learn the skills of efficiency that our healthcare consumers—and healthcare reimbursement–demand.

Workforce Strategy: Aiming for the Wrong Target?
Posted by David Novis MD FCAP
May 20, 2014

In their zeal to protect our livelihoods by staving what they believe will be an alarming shortage of pathologists, our well-intentioned leaders may have set their sights on the wrong target.
A recent CAP study concluded that over the next two decades, the pathology workforce would find itself 14,000 FTEs short, a gap that would require swelling residency training programs about 8% to plug. [Robboy et al, Arch Pathol Lab Med. 2013 Dec;137(12):1723-32.]

The study based their calculations on all sorts of assumptions about emerging technologies, practice behaviors, utilization, and the use of ancillary personnel. There is no way of knowing the accuracy, let alone the shelf life of these assumptions and hence the validity of the predictions. However, if they are anywhere near accurate, the consequences of doing nothing will be unpleasant for all of us.

To avert what they see as a potential disaster, this past December representatives from the CAP and 24 other professional pathology and medicine organizations held a Pathology Workforce Summit. They identified threats to pathology workforce supply and demand and considered whether training programs will be able to meet the needs of employers and pathologists newly in practice. The CAP Policy Roundtable has established a Workgroup on Workforce and Graduate Medical Education to deal with the issues identified at the Summit.

Among other challenges, the coalition plans to compute how many residents we will need, in what specialties they need to be trained, and how training programs will fill this capacity. But they are launching into this without first defining an end point. How do we know when we have enough doctors? When it takes graduating residents 18 rather than four months to find placement, if indeed they find places at all? When the labor surplus has potential pathology residents considering other specialties? When the glut of pathologists precipitates a 40% drop in fixed-rate reimbursement?

We need to know precisely what target we are aiming for, and it’s probably a good idea to do that before we launch a missile that we may not be able to recall.

Now is the Time to Re-arm Ourselves: Requisites to Strategic Planning
Posted by David Novis MD FCAP
December 19, 2013

The smoke surrounding the impact on pathology of CMS’s long-awaited Final Physician Fee Schedule finally cleared on the eve of Thanksgiving Day, revealing battles both won and lost. As unwinnable as some of those battles were, it may still be difficult for some of us to accept losing them. That’s understandable.

Our Advocacy division has racked up an impressive list of victories—securing CLIA provisions legislating our employment as laboratory medical directors, propelling legislation that will likely close the Stark loophole, derailing a competitive bidding initiative for clinical lab tests, among others. Indeed, the College has established itself as the only credible organization capable of representing, and achieving political victories for, pathologists.

Yet, I fear that Advocacy’s extraordinary success over the years may have some of us relying too heavily on political warfare to preserve our livelihoods. The terrain of the past may have tilted the outcomes in our favor. Now, the landscape is changing. Consolidations threaten to deplete our ranks. New technologies will likely undermine our current tactics. Disappearing fee–for-service reimbursement will change the game altogether. We cannot assume that advocacy alone will preserve the steady flow of 305’s and laboratory medical directorships.

We still need every member in there together to fight our Advocacy battles. That will never change. However, we must each arm ourselves for the new millennium. We must invest in new strategies and services. Anticipating these trends, the College is providing us the necessary ordnance. To get started, look no farther than the CAP website. Promising Practice Pathways will provide you the vision. The Learning Portal will provide you the education in that health care will soon be requiring of pathologists: genomics, molecular, informatics.

From there it’s up to each of you to deploy your medical expertise in new ways in this uncertain environment.

Suggestions for Sharpening Your Competitive Razor
Posted by David Novis MD FCAP
October 11 and 12, 2013

The afternoon session of tomorrow’s fall 2013 meeting of the CAP House of Delegates will be devoted to a discussion of a large white elephant sitting in the corner: competition among pathologists.

When I went into practice in 1980 nobody in my group considered that pathologists residing elsewhere would nibble away at our pie. That all changed a few years later thanks to managed care. To grow our practice–let alone stay alive –we knew that customer service had to replace notions of entitlement. Today, consolidation of health care institutions, employment of our clinician customers, dwindling reimbursement and the inevitable demise of fee-for-service conspire to advance that understanding to a level of necessity.

At tomorrow’s HOD session, several of our peers will describe how their pathology practices keep the wolf from the door. Today and tomorrow, I will share what worked for our practice.

• Customizing reporting templates. When we began using template reports in 1982, our customers stopped calling to ask about information we had forgotten to include in those reports. They especially liked being able to locate the information they were looking for in the same place in every report. The templates worked so well, we soon had our clinicians participate in crafting them. Our competitors could not or would not do that. Our customers felt as if they now owned a piece of the real estate in those reports and they were not about to give that up to our competitors.

• Customizing services. It began with one OBGYN group fretting over losing follow-up patients with dysplastic smears. So once monthly, we sent them print-outs of patients with positive Pap smears on whom we had no follow-up biopsies. The numbers of biopsies soared. Our competitors balked at doing this. We offered it to everyone and we picked up two new OBGYN practices.

• Featuring digital photos on surgical and autopsy reports. Not a big deal now, but it was in 1983, when we began embedding photomicrographs in surgical reports. Yes, placing arrows on lymphocytes traversing colonic epithelium and drawing measurement brackets on tumors was time consuming. But it also resulted in in phone calls expressing gratitude. In fact, doing something as simple as placing pictures on autopsy reports helped us win customers and capture the cash-rich, otherwise shunned autopsy business for the entire five-hospital Seacoast region of New Hampshire.

More to come tomorrow on how we sharpened our competitive edge by double reading of all surgical specimens, reported our batting averages, and sent postcards from the edge (these strategies and more). In the meantime, what’s working to set your practice apart from your competitors?

• Postcards from the edge. We never wanted to learn that customers were unhappy with us by noticing that we were no longer receiving their specimens. In fact, we didn’t even want discontent to incubate to the level of a vocal complaint. So, in the days before Internet reporting, we would affix stamped, addressed postcards to selected surgical pathology reports asking three simple questions regarding customers’ satisfaction with the report. The cards bore code numbers allowing us to identify the source of, and resolve problems quickly. Customers told us that they were pleased that we were listening to them.

• Reporting our batting averages. Every month we sent the results of all our QA monitors, including our amended report statistics, to the hospital medical executive and quality committees and to the departments of medicine, surgery and pediatrics. Our competitors would not consider doing this.

• Virtual practice. I saved best for last. We finally realized we could not train ourselves to the level of expertise that our specialist customers required. Even if we could, we did not have the volume to maintain that expertise. Attracting specialty-trained pathologists to our small community was likewise problematic. And sending cases out for consultation not only incurred a certain degree of financial friction, it advertised the limitations of our practice. Besides, our customers did not want to rely on the ability of generalists to determine which cases needed to be seen by experts–they wanted all their cases examined by experts.

What did we do? In one sensitive area we added a specialist practicing 1500 miles to our west. We licensed him in New Hampshire, credentialed him at our hospital, wired his phone number into our office, and put his name on our report heads. He officially became a member of our practice. We sent to him, all designated specialty specimens processed according to his specifications, issued his diagnoses on our reports, and worked out a reimbursement arrangement acceptable to him, his partners, and us. The added value of our group perceived by our specialist clinicians dug an anti-competitive moat around our practice.

Will these strategies work for everyone? Are they practical in other practices? I’m not sure, but I hope you will let me know. They worked for us. I hope this will fuel your power to develop your own innovative solutions. And by all means, if you have arrived in Orlando for CAP’13, I urge you to drop into the afternoon HOD session and hear what your colleagues are doing to survive.

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