Michigans Reference Laboratory

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Michigans Reference Laboratory Lessons
Learned      Eugene J. Napolitan University of
Michigan Health System        APC PDAS Meeting
Mont Tremblant, Quebec, Canada 27-30 July 2005
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University of Michigan Health System Hospitals
Health Centers FY 2005
of Hospital Beds
783 of Health Centers/Taubman Clinic
Visits 1,625,000 of FTEs - Pathology
Laboratories 458 of billable
tests 3,980,000 Gross charges
CP/AP technical 286,573,000
Hospital laboratories budget
51,181,000
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Forecast of MLabs Net Revenue for FY 05
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• Brief History Anatomic/Clinical Pathology
• TEFRA/DRG
• Part A Negotiations/Incentive Program Department

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• Spare/Excess Capacity/New Hospital
• MDS Laboratories Toronto
• MLabs Program 1985

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(No Transcript)
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good analysis is a necessary precursor to
every major decision. Only professors can say,
alternatives would indicate. When we rework
and perfect data, we succumb to what
psychologists have dubbed decidophobia .
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Peter F. Druckers statements from The Essentials
of Drucker

• Do not mix managerial units with entrepreneurial
  ones
• Diversification does not mix with
  entrepreneurship
• Business entrepreneurialism does not occur by
  acquisition

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• Program Description/Role in Academic Mission
• Market Assessment Macro
• Esoteric Testing Boutique Laboratories
• Major Program Expansion - 1994

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Lessons Learned Challenges

• Culture/faculty technical staff acceptance
• Barriers to knowledge management success

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Barriers to Knowledge Management SuccessResults
from international survey
Earnst Young KM International Survey, 1996(431
senior executive responses)
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Lessons Learned Challenges

• Culture/faculty technical staff acceptance
• Barriers to knowledge management success
• URBIT
• Interface Costs
• Billing and receivable problems

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• Courier service
• Incentive Program sales staff
• Lack of a laboratory portal
• Rapid growth causing lack of capacity in several
  laboratories

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Lessons Learned Accomplishments

• Hook to retain clients switching costs
• Customer (client) services
• Early identification of operational problems
• Improved turnaround time esoteric laboratory
  testing

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• Cost savings/Make vs. buy
• UMHS strategic direction Health Centers
• JVHL managed care contracts
• Incentive Program faculty
• MCare University of Michigan HMO products

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Competition

• Michigan Co-tenancy
• Commercial laboratories

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• New Hospital/Pathology (MLabs) Agreement
• FY 05/FY 07
• Were we successful?

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The majority of our strategic successes were
ideas that we borrowed from the marketplace,
usually from a regional or local competitor. In
each case, what we did was spot a promising new
idea, improve upon it, and then out execute our
competitors

Andrew Pearson

Former
President, PepsiCo
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• References
• M. Desmond Burke, M.D., Laboratory Medicine in
  the 21st Century. American Journal of Clinical
  Pathology 2000 114 841-846.
• Ronald A. Blum, Ph.D., Linda Dearing, M.S., M.D.,
  Ian Cameron, B.S., Choosing a reference
  Laboratory? Medical Laboratory Observer (MLO)
  August 2004 32-33.
• Anne Paxton, Survival Tips for Informatics and
  Retail Revolutions. College of American
  Pathologists, July 2003.
• Jerry Useem, Jim Collins on Tough Calls.
  Fortune, June 27,2005 89-94.
• Jerry Useem and Michael Useem, Great Escapes.
  Fortune, June 27, 2005 97-102.
• The Dark Report, R. Lewis Dark, Publisher
• Laboratory Industry Report, Washing G-2 Reports