To meet the challenges of today’s healthcare system, lab executives and administrators are rethinking their business strategies. As the era of fee-for-service from government and private payers is replaced by value-based reimbursement, how will clinical laboratories and pathology groups be paid? As integrated care organizations, such as ACOs and medical homes, enter the healthcare market, which lab testing services will deliver the most value to these new users? And will payers issue coverage guidelines and set adequate prices for the flood of new molecular assays and gene tests coming to market? These complexities have already driven a handful of medical laboratories and pathology practices to bankruptcy, sale, or closure. Innovative lab business and service models, such as those at TPC, are emerging to address these concerns.
At TPC, our Anatomic Pathology (AP) Reference Lab Services address testing that includes Flow, Fish, IHC, Genetic, Histo, Cyto, and Consult, as well as many others. Our unique collaborative model allows us to deliver compelling financial and non-financial results to our Members that they could not achieve on their own.
The AP lab initiative began in late 2014, led by TPC’s Lab Clinical Value Analysis Team (CVAT). The team consisted of lab directors from each Member facility, in coordination with Member pathologists and the TPC Supply Chain Council.
When the process began, the membership’s contracts were spread across ten different suppliers. Together, TPC Members recognized an opportunity to standardize their AP reference testing needs. As this area of testing is extremely clinical and vitally important, TPC Members felt it necessary to dual source this category. Nevertheless, the opportunity to standardize to just two suppliers would achieve huge savings for all TPC Members, while still providing them the flexibility of choice in their primary and secondary sources. TPC assembled pathologists from each Member to review and evaluate the suppliers that would participate in the Request for Proposal (RFP) – taking into consideration each supplier’s test menu and service capabilities.
At the end of the review process, two suppliers were selected, and the results were impressive. The category spend for nine TPC Member organizations was over $3 million. By leveraging their combined purchasing power, these Members realized an immediate savings of $529,000, with the potential for more savings in the future. In addition to the financial benefit, the program also afforded a turnaround guarantee with penalty, third party billing, firm pricing for the term of the agreement, web portal tool and services, and educational training.
Through our unique collaborative model, TPC is able to achieve results that our Members could not achieve on their own. We maintain strong partnerships to manage expenditures and focus on building innovative solutions to improve healthcare purchasing, ultimately driving down the cost of healthcare for patients. TPC provides the framework for independent, community-based hospitals to achieve system value through standardization, utilization, and pricing strategies that optimize operational, financial, and clinical performance.
Stronger Together. Superior Results.
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