Around the world, laboratory services are under pressure to deliver better value while meeting financial sustainability targets of strapped healthcare systems. This is particularly acute in the public sector, where uniformity of price and quality is expected, even though operations often run in silos, with each hospital and laboratory making purchases separately. Budget is allocated based on workload and patient volume, which leaves labs paying for unnecessarily large bills for rare tests.

This was the challenge we faced in Penang, Malaysia in 2013. Our state laboratory service, which is spread across six hospitals, was running its services using six different platforms and different test methodologies, resulting in different costs per test depending on demand. With variability in workload and cost, efficient use and fair allocation of the state budget was challenging. On occasion, this would even lead to non-critical testing having to be suspended. To tackle this, we embarked on a two-phase standardisation and integration plan.

Phase 1: Standardisation

This first phase involved standardising our service across the state. This meant putting up one call for tender to supply all equipment and instruments for laboratory testing. Through combining our needs into one four-year tender, we could achieve cost savings through scale, while at the same time ensuring standardisation of all tests across our service. With a centralised purchasing team, we also freed up manpower at other laboratories to concentrate on other work.

Centralising our purchasing power meant that we were able to guarantee a uniform per-test cost across the state. This gave patients peace of mind, but also ensured that our budget would be used more efficiently. Money could be safely and evenly distributed based on workload as this variability had been eliminated.

With a standard set of instruments in place, we were then able to focus on improving laboratory quality over the duration of the tender. Our central reference laboratory could monitor each lab’s performance and evaluate the equipment. We were able to demonstrate that test results are standardised between all six laboratories. And despite a stable budget of around RM 13 million, we are able to sustain our operations without overspending and even expand our test services.

Phase 2: Consolidation and integration

In 2017, we embarked on phase II of this project, which is currently underway. The goal was to add value while reducing costs. We identified two possible ways to achieve this—either through greater automation in our main lab or by developing an effective laboratory information system (LIS) that could support our services across the state.

With limited resources, we had to prioritise. As our main lab already performs at a high standard without total automation, we opted to invest in a LIS as this would allow us to reduce the equipment needed, introduce auto-validation across the state and make e-results from the central lab available in real time to clinicians and pathologists at any of the five other labs.

We collaborated with a local LIS company to create a system that was built around our specific needs. Through its implementation, we were able to cut our logistic routes from 112km to 0km. More than 90% of the results are now auto-validated. Over 91% of staff have responded positively to these changes.

This system also allowed us to improve our lab turnaround time. More than 98% of general biochemistry results are now released within three hours. We’re also able to turn around 94.9% of immunoassays complete with interpretive comments within the same time.

In addition, we were able to cut our equipment from 19 pieces to 10 to deliver greater budgetary efficiency. Consolidating platforms allowed us to perform multiple tests and centralise the performance of some tests in our main lab.

Through state-wide standardisation, consolidation and integration, we are now providing a financially-sustainable laboratory service to our population that offers better value and higher standards of care to our patients.

This article is based on the presentation: Embrace lab standardisation and integration to the next level at the Roche Efficiency Days (RED) 2018 REDefining perspective in Guangzhou, China.