Observations of Large Laboratory Outreach Programs – Part 1

Early this year, Chi Solutions, Inc. was asked to present at the G2 Intelligence Lab Revolution conference on how hospital-based laboratory outreach programs were confronting the new demands of healthcare. Chi took a comprehensive approach to address the issue by enlisting a number of vendors and consultants to provide programs that they knew were “large and successful.” There were 26 programs suggested and interviewed by Chi’s senior consultants. Of these, 20 were determined to meet the criteria of large and successful. The 20 were from locations scattered throughout the U.S. with seven of nine American Hospital Association regions being represented. Information was gleaned from one-hour interviews with the key leader of each program.

Based on this research, here is what the findings say about the typical large laboratory outreach business:

  • The business is $65 million in net revenue with growth last year of 11.4%, representing net added business of $4.5 million.
  • 75% of net revenues come from non-affiliated physicians and facilities; 25% came from affiliated or what is sometimes referred to as inreach sources (owned and/or closely affiliated sources).
  • 23% of the medical staff physicians are employed by the health system.
  • The business employs a general strategy of seeking business from both the affiliated and non-affiliated markets.
  • The program has 30 patient service centers.
  • The number of in-office phlebotomists is 19.
  • It has five hybrid representatives – responsible for both new account sales and servicing or maintaining existing accounts.
  • It pays incentive compensation for sales representatives.
  • It has a sales manager.
  • It does not have a promotional effort toward bringing in direct-to-patient testing business.

The take-home message is that large, successful outreach businesses require a robust and sophisticated infrastructure of patient service centers, in-office phlebotomists, and sales to penetrate the market at large.

This special study covered many other areas, such as operational structure, costs, information systems and connectivity, expanded service offerings, competitive advantages, and much more. These topics will be addressed in future Chi blogs and articles.

James M. Root, MBA
Advisor and Senior Consultant
Chi Solutions Inc.

    2 thoughts on “Observations of Large Laboratory Outreach Programs – Part 1”

    1. Jim, excellent current profile of large hospital-based outreach laboratories throughout the USA. I look forward to future blogs on the survey findings. The outreach/inreach percentages will be interesting to watch. Best regards, Sue.

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