The power of data was a key topic at the eighth annual laboratory outreach conference, presented by Washington G-2 Reports (Newark, N.J.) and Chi Solutions (Ann Arbor, Mich.) on June 8-10 at the Hyatt Regency Mission Bay in San Diego, Calif. Focused around the theme of "Making Outreach Work: Maximizing Value, Profitability, and Service," the event brought together clinical laboratory leaders and hospital executives from around the country to discuss the issues, challenges, and significant opportunities in the outreach testing market.

Many of the speakers emphasized the appealing nature of outreach testing programs: they often require little new capital, can take advantage of excess capacity (whether with labor, time, or equipment), and can link physicians to the hospital and all its service through electronic medical records (EMRs) as well as provide the ability to cross-sell through an external sales force. But to succeed, an outreach program must secure the commitment of lab leadership, present a strong business case to key stakeholders, and be ready to take advantage of the key drivers of outreach growth.

In a keynote presentation entitled "Know Your Numbers," Michael Metzler, the former COO of St. Elizabeth’s Medical Center (Boston) and CEO of St. Anne’s Hospital (Fall River, Mass.), provided a valuable window in the mind of a CEO considering a move into outreach testing. Metzler prefaced his discussion of how to make the business case for outreach with a warning. “The lab must have a reputation for excellence before outreach can be sold to the CEO,” he said. "Weaknesses must be fixed before making the case for outreach."

As for how to make that case, Metzler laid out the key components of a business plan. In addition to the typical elements of projected revenues, costs, capital needs, and cash flow over five years, he advised including an operational plan. "You really need to show hat you’ve got the specifics down really well by including tasks, timelines, and assignments." Metzler also recommended balancing conservative revenue estimates with "realistically aggressive" estimates for items such as courier service, IT, training, and sales and marketing staff. "You're not going to have a good outreach program if you don’t have a sales staff," he added.

Another vital component to an outreach business case is a market analysis that outlines specific strategies for acquiring volume. "As a CEO, I would expect to hear the story, not just the numbers," said Metzler.

The outreach "story" can be enhanced through such selling points as the potential for bundling of outreach lab testing with other ancillary services such as imaging and the attractiveness of the hospital EMR. Finally, the outlook for outreach is bright thanks to several drivers, including EMRs, patients' online access to medical records, universal coverage, changing demographics, and yes, capitation.

"It's capitation but with a check on balance and quality," said Metzler. "There's a feeling that it will control health care costs, and create a much greater demand for diagnostic testing to reduce hospitalizations. Capitation also gives you an opportunity to work with physicians on utilization."