CHARLOTTE, North Carolina – Speaking during this week's ThinkLab '06 sessions sponsored by CLMA (Wayne, Pennsylvania) at the Charlotte Convention Center, Julie Taylor, PhD, of the Centers for Disease Control and Prevention (CDC), said the main goal of the Institute for Quality in Laboratory Medicine (IQLM) is to "advance health by improving lab services."

Taylor, senior service fellow in the Division of Public Health Partnerships of Laboratory Services at the CDC, said that IQLM sets standards accepted by a cross-section of players in the healthcare community for laboratories to follow and with the intent to establish processes for operation and accountability that lead to a reduction in errors.

IQLM was incorporated in 2005 after stakeholders in the organization decided that it should be independent of government – or any other body.

"It is not set up to be a regulatory agency," Taylor told the audience of about 200, noting that IQLM wants to be a "partnership group," and also to do support research, rather than being an "accrediting body."

The goal is to generate quality indicators, monitor the progress of labs and develop national reports on how well labs are doing. He said IQLM's focus is to help the laboratory community do this for itself, building its own accountabilities, rather than having some other body do it for them.

Also speaking during Monday's panel was Lee Hilborne, MD, deputy director, global health, of the Rand Corp. (Santa Monica, California). Hilborne, who chairs the 2006 IQLM Indicators Workgroup, discussed the importance of indicators used to monitor care processes and outcomes, saying that good indicator performance "suggests – but doesn't necessarily mean – good practices." And he advised labs to look to good performers for best practices to decrease the potential for patient harm.

"The focus is on improving quality for high priority areas, not to demonstrate one can do well on the indicator," Hilborne said, with patient care foremost. Quality indicator characteristics should be "broad and defensible" and focus on "improving health," he said.

Hilborne said the workgroup is determining how to prioritize indicator efforts by considering such things as what is important, where the focus should be, questioning in what testing venues the indicators would be applicable – all without "biting off too much."

He also referred to an Institute of Medicine (IOM; Washington) report, released earlier this year, introducing a series of performance measurements and information on quality improvement organizations that operate under the auspices of CMS. "The insight that came from that report was really quite good," he said, noting that it "parallels" IQLM's effort.

Any IQLM efforts need to link to the American Healthcare Research and Quality (AHRQ; Washington), they need to define the scope of analysis, the information developed needs to be actionable, data efforts need to be doable in terms of practicality, feasibility and affordability, and submissions toward the report should be audited, Hilborne said.

The indicators also must be sensitive to a variety of different testing venues from hospital laboratories to physician office laboratories to public health labs. And he said that while all phases of the testing process are important, emphasis should be placed on the pre-analytic and post-analytic phases to build relationships with the nurses and physicians who generally order lab tests.

Hilborne noted that while it's easy for an orthopedic surgeon to measure the outcome of a hip replacement procedure, it's much trickier for the laboratory. "Where we play the biggest role is providing information for the subsequent provision of care," he said.

And while other bodies ranging from the College of American Pathologists (Northfield, Illinois) to CMS to the Joint Commission on Accreditation of Health Care Organizations (JCAHO; Oakbrook Terrace, Illinois) all are either working on or have developed quality standards, Hilborne said IQLM's advantage is the involvement of "non-laboratory stakeholders." These include accrediting organizations, patients and the public, payers and purchasers and representatives of the diagnostic industry, among others.

The final speaker on the panel, Julie Gayken, director of laboratory services at Regions Hospital (St. Paul, Minnesota), said that future best-practice sharing would come from such measures as the Patient Safety and Quality Improvement Act of 2005.

Gayken said it creates efforts such as HHS-certified patient safety organizations to facilitate sharing of patient safety activities.

She also noted that there are other efforts to monitor safety. For example, in Minnesota, which is her state, she said it had had the "adverse event law," which monitors such events in patient care.

In a Q&A following the presentations, virtually every hand in the room was raised when asked if they preferred a structured way to monitor laboratory processes and safety.

In another ThinkLab session, Frederick Kiechle, MD, PhD, discussed how he built a molecular diagnostics program at William Beaumont Hospital (Royal Oak, Michigan).

Noting the release by Laboratory Corporation of America (LabCorp; Burlington, North Carolina) of financial results on its operations as one of the first companies to enter genomic testing, he said, "Folks, we are looking at a cash cow."

He began the program at the hospital (which had 1,061 beds, 114,790 emergency room visits and 7,663 employees in 2004) in 1991. Kiechle, who is about to take a new job in Hollywood, Florida, is the past chairman of the department of clinical pathology and past medical director of Beaumont Reference Laboratory (BRL).

"It is an enormously profitable [operation]," Kiechle told the audience at the CLMA ThinkLab '06 conference here on Monday, where he was speaking about how to build a financially viable molecular diagnostics program. The William Beaumont program has since been selected as one of 35 centers of excellence by Roche (Indianapolis)

When he began the program, Kiechle said he was given $200,000 to buy equipment for the lab and a goal of supporting 10% to 20% of the annual growth of BRL. He also was charged with generating revenue-cycle metrics to monitor financial data for BRL and the hospital, and generating enough money for future capital equipment needs.

The hospital wanted to introduce tests based on spending.

"I told [hospital] administrators this program won't be profitable for three years," Kiechle said. In reality, the program actually lost money for more than three years.

The molecular diagnostics lab began with the technique known as Southern blotting, which takes three to four days of turnaround time. But in 1993, the hospital signed a polymerase chain reaction (PCR) license with Roche to incorporate that method.

Kiechle, who also was responsible for reducing the number of "send-out tests," or tests sent to other labs, said that from 2003 to 2004, send-out tests decreased from 40,893 to 28,101, a 31.3% decline.

Molecular tests per year went from 387 in 1992 to 43,824 in 2004, he said.

One of the measures that the hospital undertook was an effort in what Kiechle called "up-selling," or a conference for "stakeholders," primarily physicians, who ultimately are the ones who order such tests. It also was an educational effort, because surprisingly, he said, sometimes physicians don't order tests simply because they aren't aware that such tests are available.

The hospital now is in its 14th year of hosting the conference.

The lab also undertook an effort to analyze the utilization of its outreach laboratory, measured by spending. In other words, he said, the hospital wanted to find out "which doctors were ordering which tests."

"You can play a lot of games with these numbers, but without them you can't do anything," he said of the data he shared with the audience.

One of the challenges of operating molecular labs are the patents on genes, which he said increased 62% in the U.S. from 1996 to 2001, which affects licensing required for DNA testing.

At the end of 2001, Kiechle said there were 18,174 patents on human DNA sequences and 365 patents on single-nucleotide polymorphisms (SNPs).

One of his favorite quotes on this issue comes from Nature Biotechnology, Thomas SM, et al.: "Lest we forget, the patent system was established to protect and promote inventions, not investments." Patenting of DNA has turned this thought "upside down," Kiechle said.

Among the patent problems he referred to, as pointed out in a 2005 article in Science, are that patent examiners spend only about 18 hours per patent reviewed. Also, he disagreed with the fact that patent examiners are financially rewarded for quickly pushing patents through the patent office.

He described the impact of gene patents on diagnostic testing as "major."

In a survey of 132 of 211 molecular lab directors, 25% said they discontinued performing genetic tests and 53% did not develop new clinical genetic tests.

In sharing information regarding the estimated revenue/profit of the molecular program at the hospital, Kiechle said that the lab studied 26 tests. Of that number, six tests lost $200,000, and 20 tests made about $1.95 million for a margin of 58.5%.

If a company had that kind of margin, he said, "I'd buy stock in it."