Although payment reform and expense management dominate discussions among healthcare providers, clinical integration will soon emerge as the long-term strategic imperative for community hospitals and health systems.

By Robert R. Reed and Arjen Westerink

Healthcare is slowly moving from its current state of loosely coordinated care among providers to a tighter, more aligned, and stronger system of care-similar to national health systems in countries such as Switzerland and the Netherlands. Whether through accountable care organizations (ACOs) or other shared responsibility arrangements, community hospitals must work to forge new alignments with physicians, specialists, skilled nursing facilities, home health services, payers, and patients.

Hospital laboratories can and should play a key role in clinical integration as hospitals work toward improving systems of care. The following are three strategies for developing the laboratory into a leader in clinical integration.

Ensure fair laboratory participation in gain sharing. The Centers for Medicare & Medicaid Services is proposing two models of risk/reward for ACO pilots to begin in January 2012. Lab test results compose 60 percent of the objective data in patients' health records and have a large and measurable impact on downstream outcomes. Based on this contribution, the lab should receive a commensurate share of any gain sharing arrangement. As payment shifts from fee-for-service to value-based payment, a new calculus is needed that moves beyond the "cost" of the test performed under the agreement to the overall "cost" of the treatment.

Support and enable meaningful use. Everyone is aware of the government-funded Health Information Technology for Economic and Clinical Health (HITECH) incentives for providers and physicians to adopt electronic health records (EHRs) and demonstrate meaningful use, or face reimbursement penalties beginning in 2015. Laboratory test ordering and results are a core component of meaningful use. A hospital and its laboratory must have a clear strategy on how they will support and enable their physician community in making this transition.

Invest in connectivity. In support of demonstrating meaningful use, community laboratories will need to invest in flexible and cost effective IT solutions that connect the lab to all of its ordering physicians. Traditional "point-to-point" interfaces between the lab and physician office are increasingly expensive and time-consuming and do not ensure the delivery of "clean orders." As demand for interfaces increases, EHR vendors and labs are experiencing increasing delays in getting interfaces done at any price. The community laboratory needs to partner with a select group of EHR partners to define standard connections and tight integration (e.g., structured data, healthcare information exchange protocols) to support and enable the overall clinical integration model.

Proactive hospital leaders and their laboratories will see the opportunity and need to provide EHR support and connectivity solutions to their physician community that not only facilitate adoption and achievement of meaningful use, but ensures a cost-effective platform of technologies to support better clinical integration and, ultimately, patient care. Forward-thinking organizations will provide targeted advice on selecting an EHR, or even sponsor an EHR solution that will closely integrate provider specialty, hospital, and laboratory services and further solidify their strategic relationship with the physician community.

A Narrow Window for Action

Individual and affiliated physician practices are at a crossroad for making a decision on how to comply with the requirements for demonstration of meaningful use of EHR solutions and how to participate in ACOs. They are seeking leadership advice and support for everything from outsourced lab services to selecting and implementing an EHR. Their decisions today will impact and shape their relationships with hospital and laboratory services for years to come. Providers have a narrow window for impacting and securing these strategic relationships by offering useful resources, experience and services. By thinking strategically about lab services and related EHR technology and connectivity, provider organizations can position themselves for leadership and financial success in the next phase of health care in the United States.

Robert R. (Reed) Saunders is business development manager, Mayo Medical Laboratories, Rochester, Minn. (

Arjen Westerink is director, business development, VitalHealth Software, Milwaukee ( 


Publication Date: Monday, February 13, 2012