Medical Device Link.

Originally Published IVD Technology September 2001

Technology and the clinical laboratory

IVD manufacturers are leading the way toward the application of advanced technologies in clinical laboratory testing—but are customers following?

Spurred by the need to reduce healthcare costs and provide greater flexibility in healthcare testing, IVD manufacturers are continuing to develop new generations of diagnostic tests and associated instrumentation. The past decade has seen the rise of such varied technologies as high-throughput total laboratory automation systems, point-of-care (POC) testing systems, and increasing numbers of home-use testing products. Each of these product types responds in some way to needs that have been manifested in the marketplace.

Meanwhile, clinical laboratories have had their own pressures to deal with and have adjusted their business planning accordingly. Pressure to reduce costs has brought about significant consolidation and reductions in FTE. Demand for quicker turnaround has led to the decentralization of some lab testing, and the need for remote access to test results has led to greater database integration. And all of these trends have had direct implications for the training required of laboratorians and others involved in testing.

IVD Technology recently convened a roundtable to discuss the advance of IVD technologies and whether current business planning at clinical laboratories is prepared for the next leaps forward in those technologies. This article offers the complete text of the roundtable, whose participants are introduced at the bottom of this page.

Getting Ready for the Future

IVD Technology: Are clinical laboratories prepared to handle large numbers of POC instruments scattered throughout hospitals? What additional pressures will this put on laboratorians?

Craig Jackson: In clinical labs today, the pressure to produce more at lower cost is very significant. But in the future, we may also have to watch out for various forms of pressure to produce more accurately with lower corrective-action costs. This kind of pressure is likely to develop because the education level of the people who do the routine work is gradually being reduced, and consequently so is the ability of those people to see when things are not working well. Reducing costs, achieving high throughput, and accomplishing faster turnaround may all be intrinsically good—except when the pressure to do so results in lab errors.

Michael Whelan: I'd second that. One of the biggest issues in clinical laboratories is the quality of test results. This has become an issue in the United States, especially because of reductions in staffing levels and the fact that fewer laboratorians are having to do more work and handle much higher volumes.

Jackson: Staffing levels are certainly a part of the problem, because understaffing results in wearing people out. But the fact remains that, in many cases, technicians' minds aren't adequately prepared to observe or detect the many things that can go wrong during testing. And the longer those things are wrong—especially in a high-throughput setting—the higher the cost of the corrective action. The overall quality issue is a tough one to deal with.

Carolyn Jones: Laboratorians are overworked, and this raises questions about the endurance of people coming into the laboratory now. Fewer and fewer people are going into the profession because it's not as attractive as it used to be. And that's true even among highly qualified people who would be able to work in a high-complexity lab. For young people, laboratory medicine is just not a very attractive field.

One reason for this may be the fact that lab instrumentation has slowly but surely changed over the past 20 years, and the focus of the laboratory has changed from the laboratorian to the instrumentation. Consequently, there is a great deal of interest in technological solutions to testing issues, and a lot of emphasis on having manufacturers develop instruments that can do highly technical work.

The question is whether the laboratory community is preparing for the additional changes that will be taking place in the future. In the past, laboratorians were trained to understand the scientific bases and theories of testing—the biology, the chemistry, what hemoglobin is made up of, and so on—but they weren't prepared to be observant about or knowledgeable in the emerging technologies used to conduct that testing. So what should the laboratorians of the future be concentrating on? Should they be focusing on science and theory, as in the past, or should they be trained to be more like engineers, with a stronger understanding of test-related technologies?

IVDT: So it is not a matter of how many people you have, but rather what kind of training those people have once they get there?

Jackson: There is a real problem in a couple of different ways. One is that the profession lacks attractiveness to bright young people who see it as an intellectual challenge offering a good financial reward for their careers and families.

But the other thing is that we train yet we don't educate. Laboratorian education should be at a level such that when something doesn't seem to be working right, the laboratorian has at least enough background to formulate a good question for the manufacturer—because it's been passed on to the manufacturer to deal with all of these problems. That education isn't taking place, so when you try to communicate with an individual who has a problem, it's very hard to get real information transfer so that the problem can be solved.

So how do we prepare people—and not just those who handle samples and pass them through the instrument, but also those who are looking at the data and identifying what's actually being measured—so that when something doesn't quite fit or inconsistencies arise, they have some clue about where to look for solutions to the problem.

Absorbing Change

IVDT: Is this primarily an issue of education and background, or training, or both?

Whelan: A recent government report notes that the number of educational programs for laboratory technicians has been reduced to less than half of what it once was. There are more openings in medical technology now than at any other time in the past two decades. And the average age of a person in a lab is now more than 47 years. With averages being what they are, that means that 30–40% of the people now working in labs are looking more toward retirement than toward a career.

When you overlay those trends on top of the issues we've been talking about, you can begin to see the seriousness of the problem. Workloads are going to change, technology is going to come in, and there's going to be increased pressure, as the technologies allow, to move more testing out of the lab. For the kind of workforce we just described, that's a lot of change to absorb.

Jackson: There is going to be tremendous change. And the process could prove to be very frustrating, especially if laboratorians start treating all instruments like black boxes—like mysterious units into which they cannot see and which therefore don't work in a transparent way. That attitude won't help them or the industry solve any problems.

Whelan: No, not at all. But you're right, the provider side of the healthcare industry is heading into some difficult times, and I don't know whether that will encourage or discourage the use of more technology. On the one hand, laboratorians need to adopt technology to fill the staffing void. But on the other hand, it's questionable whether they have the capability to understand and accept it.

Jones: As a trade association, AdvaMed encounters a wide range of industry issues, many of which are discouraging the adoption of technologies. I listened to numerous discussions with the Clinical Laboratory Improvement Advisory Committee (CLIAC; Washington, DC) and the Centers for Disease Control and Prevention (CDC; Atlanta) about issues such as waived-complexity and POC testing.

The laboratory community has raised the issue that comparing IVDs to devices such as heart valves, pacemakers, and implantable devices—as CLIAC and the CDC frequently do—wrongly elevates the risks of using IVDs to the level of those other devices. That view takes IVDs out of perspective and imposes on everything associated with IVDs a heightened scrutiny beyond other medical devices that are considered high risk. Thus, when considering things like waived-complexity and POC tests, CLIAC and the CDC frequently raise concerns that do not seem to be valid.

What those entities seem to be trying to do is to protect the laboratory community from further technology developments that could take tests away from the traditional clinical laboratorian. And they don't seem to see the new technologies as a way of helping the laboratory of the future, when there will be fewer medtechs needed to do this work.

The Lab of the Future?

IVDT: What does the clinical laboratory look like in the future? Are we talking about a very-high-tech area with relatively few but highly skilled technologists? Or are we talking about a very dispersed environment where POC instrumentation is here, there, and everywhere, but connected wirelessly, with wires, or over the Internet?

Jones: I think both. POC devices have to be connected somehow, and the highly technical laboratory will have to employ technologists, pathologists, and so on. But the training of those technologists by necessity is going to include some focus on engineering concerns so that instruments become less of a black box to laboratorians.

IVDT: Craig, you're in the midst of developing a POC instrument. Does that match your vision of the future?

Jackson: There will certainly be more POC devices, whether they are situated in the home, brought to the home in a van, or brought to an inpatient on a nurses' trolley. And the individual who's bringing the instrument to the homebound person will probably be relatively skilled.

In any case, the instrumentation will be very much connected, and there will be a demand to test for a tremendous amount of information that will be available for someone else to evaluate. It's likely that, 10 years from now, it will be possible to provide results to patients on the spot, or at least after a fairly quick turnaround.

Genetic testing, however, is likely to remain a category that will be quite different. That testing will be conducted in very-high-tech labs that will be able to evaluate genetic material using amplification technologies as well as POC devices. But POC and home-monitoring methodologies are likely to become dominant, and the transition phase is going to create a hell of a mess for a while.

IVDT: How does that vision of the future match up with the business planning of a large IVD company such as Beckman Coulter?

Whelan: There are two perspectives. The strategic perspective is a 5-year rolling plan, which out of necessity evolves out of the company's current position. It's the next version, the next product, the next step. Today, that perspective is very much focused on systems that are self-navigating, self-controlling, and able to offer efficiencies in the lab environment by automating the transport of blood samples to a single location for analysis.

To get a larger perspective, one has to step back and look over a longer time frame of more like 10 years. In that view, the IVD industry's biggest customers in the future are probably going to be pharmaceutical companies. We believe that to be the case because we expect to see tremendous growth in the field of theranostics, which involves trying to match a suitable diagnostic with a brand-new form of therapy. Each time a diagnostic assay becomes more closely related to patient results and physician treatment—rather than just part of a mosaic of information—it becomes an even more valuable piece of information in its own right. And once that takes place, the need to create remote access to test results becomes self-evident. It makes a far stronger case for product development than simply saying that a certain test can be made in a remote format and therefore should be made that way.

Over the past 15 years, the amount of money put into the development of POC devices must outweigh the amount of revenue they have earned by something like 1000 to 1. Theranostics will change this equation by linking diagnostics to developments in the pharmaceutical arena and basing demand for new diagnostic products on patient response to new pharmaceuticals. This field will also stimulate the creation of technologies that can be incorporated into some of the new areas of genetic analysis.

IVDT: So the notion is that you disperse testing among physician office labs, and then you market the relevant therapeutic agent that goes along with it?

Whelan: Actually it's the other way around. The value of the therapeutic agent or pharmaceutical is really derived from the fact that its effects can be measured, and that results about a patient's response can be given to the physician.

IVDT: Would successful use of this approach require constant monitoring of the individual patient as well as constant adjustment of the medication?

Whelan: If the theory of theranostics is followed all the way through, it says that, with everything known, the pharmaceutical can be adjusted to the individual more correctly and specifically. And once that is done, then the individual's response will need to be monitored.

Blue Sky, and Beyond

IVDT: Assuming the model that you're talking about comes to pass, where is the clinical laboratorian in that picture?

Whelan: The IVD industry is built upon and intertwined with regulation. Even the seemingly simple task of changing a well-known assay from a serum-based result to a whole-blood-based result is a very long and difficult process.

But the new pharmaceuticals won't have to overcome such obstacles because they're being established according to a whole new set of criteria and processes. Clinical labs will probably still be required because theranostics will undoubtedly use a lot of traditional medical information. But the value of these new pharmaceutical products will be that a patient can be treated at home or through the physician's office and released for an extended period of time, without having to undergo lengthy hospitalization.

IVDT: Is the model of the clinical laboratory evolving in the right direction and at an adequate pace to accommodate this kind of technologically based change in medical practice?

Whelan: The amount of change probably won't be very great during the next 10 years. But laboratorians and IVD manufacturers have to be watching what the pharmaceutical companies are planning to do. Their new products could change everything.

With today's testing, there are very few assays that provide a direct measure in response to the physician's activities. Blood-gas testing has decentralized very rapidly because the information it gives is immediate and relative to treatment. But it's less clear that most of the available products offering panels of tests have such medical or commercial value.

Jackson: In about 10 years or so, given the ability to store and access data, many people will be keeping track of their own health. Certain kinds of information will be used to track changes in health status, and the replacement for reflex testing will be an instruction to see a physician who will evaluate all those pieces of data. Or maybe the instrumentation itself will provide such a preliminary evaluation, and even refer the patient to the appropriate subspecialist. So POC panel tests could have some future value in the hands of patients, if their results are tracked and used to determine when a change in health status has occurred.

Whelan: In all these issues, the money trail has to be followed. No matter how good science is or how good a product might be for the patient, products aren't adopted unless someone is willing to pay for them. As the population gets older, that kind of intelligent health management could enable insurance companies and other third-party payers to operate better and more cost-effectively.

Back to Reality

IVDT: Carolyn, does this kind of blue-sky discussion match any reality that is heard about in CLIAC meetings or meetings with FDA?

Jones: Not in the least. Most laboratories and government agencies are only positioned to manage the status quo. And the most they've probably thought about is expanding a number of tests that they know and love to the POC environment. Beyond that, they haven't given much thought to a vision for the future.

For example, because of the shortage of medtechs, some of the laboratories in New York don't want their techs to be running individual tests. Instead, they want them to focus on high-risk tests and other things that would benefit from a technologist's expertise. They would like to use more POC devices that would be monitored by the laboratory—but that's as far as they've gotten.

When I asked whether they had considered using home computer linkages to transmit test results to physicians, they said that they're not even thinking in that realm. They're just trying to figure out how many POC devices they can put into their facilities in order to alleviate the monotonous jobs that their technicians have to do.

IVDT: Are there disincentives to the development or adoption of technology such that either IVD manufacturers or clinical laboratories are at risk of having a business model that will make them fail? At the moment, manufacturers and labs seem to be going in different directions.

Jackson: You may be correct. And if customized therapeutic interventions that require monitoring are achieved, then the laboratorian is going to be left off the team to some extent. Something like that is fairly likely to happen.

Whelan: I would agree with that. Technology that doesn't challenge the core science and practices of medical reporting, and doesn't raise new issues for FDA, is likely to be adopted fairly rapidly.

IVDT: Do you think laboratorians see these changes coming and are concerned about them, or are they oblivious to the issues?

Whelan: At the recent annual meeting of the American Association for Clinical Chemistry, there were a couple of sessions on lab automation, but not much else. Many of the sessions were devoted to the science of areas that we're already involved in.

But it's a two-stage issue. If something that's inefficient is automated, what is created is inefficient automation. So first of all there's a lot of process understanding that has to take place in hospitals. And if the current science can be made to work efficiently, that will probably last through the next 5 years. Under those circumstances, more radical changes could then begin to be addressed.

But it would be too much to try to redistribute testing, reorganize the efficiency of existing processes, and layer on brand new science. I'm not so sure the testing community could accept and absorb that much change in a short period.

Jackson: One of the problems for many new tests that have been developed is that no therapeutic response exists. Regardless of the results of testing, there is no response possible. The hyperbole that is being circulated with respect to the commercial potential of identified single-nucleotide polymorphisms (SNPs), for example, is not going to go very far. Certainly, that field of research is going to create a tremendous amount of noise, and the science and genetics are going to be exciting. But until something can be done about SNP-related conditions and diseases, the field of SNP research is going to remain, in the pejorative sense, purely academic.

Whelan: You're right. Our life sciences business, which sells into that research and pharmaceutical environment, is growing 25–30% a year. But that's all driven by the scientists. Bringing that same information into the diagnostic environment is a very long process.

I know of a start-up company with an assay for a condition that currently doesn't have a diagnostic test. It's a very attractive product that might be worth acquiring. But of course that picture changes when one projects the development costs and considers the pioneering effort needed to get the test accepted. It can take as much as three years—and a lot of money and effort—just to get people to accept and use a diagnostic assay instead of the indirect processes that they were previously using. So it's not easy to bring in new technology.

IVDT: That description would seem to apply generally to the field of molecular diagnostics, where there is a lot of money going into fundamental research in academic labs, but commercialization activities have taken a back seat. Progress toward the commercialization of molecular diagnostic tests seems to be incredibly slow.

Whelan: Roche Diagnostics is the only company that seems to have the right products and patents. But even with everything Roche has, it's a very slow process.

IVDT: Are there other disincentives in the system that are making the development of technology along these lines progress so slowly?

Jones: Government entities certainly have an effect, through the product approval and reimbursement coverage processes. For a long time, companies developing new technologies had to be concerned mostly with premarket review by FDA, which was the big stumbling block. But as healthcare dollars have shrunk, companies have become less concerned with FDA and more concerned with getting a favorable coverage decision. If a company can't get reimbursement, it probably will not produce the product.

Cutting Costs

IVDT: Congress is considering legislation that is intended to improve the process for Medicare reimbursement coverage of IVDs. Will that bill have a positive effect if it is enacted?

Jones: I think it will have a positive effect. But when an agency has its mind set in a certain way, no matter what issues appear on the legislative front, it's changing the mind-set of the organization that benefits the industry. For the Centers for Medicare and Medicaid Services (CMS), that's a very difficult process.

AdvaMed has been working with FDA since 1976, and we've only recently gotten to the point where some folks at the agency have changed their mind-set. In the reimbursement arena, it's going to be a much longer process, because the ways that CMS deals with new technologies are much more ingrained.

IVDT: Laboratorians experience reimbursement pressure in the form of pressure to reduce per-test costs or overall testing costs. How do reimbursement pressures affect the development of new technologies and new products?

Whelan: As an industry, we've done a terrible job of lobbying our position, because a complete and rapid diagnostic result is inexpensive compared with the total costs of treating a patient or moving a patient in and out of the hospital. Lab testing is a very effective tool for managing total healthcare costs.

Fortunately, there are more businesspeople moving into hospitals, and they're beginning to look at total cost. This is good for labs, because it removes them from being considered only as a cost center and puts them back in place as a contributor to the management of cost. As that mind-set changes—and we as an industry need to encourage it to change—there can then be a more positive response, politically or otherwise.

IVDT: What is it going to take to get CMS to consider IVDs in the context of overall healthcare costs?

Jones: For tests that have been on the market and have passed the test of time, the agency has already come to an understanding that they have some benefit. But for newer technologies that may be faster and more specific, CMS is going to want proof that they perform better than their predecessor tests in some way. That may prove to be a bit of an obstacle to getting new-technology products out on the market and approved for all the appropriate applications.

Jackson: But the costs of morbidity are very high. And Mike is absolutely correct that in the past there has been no focus on total costs. At the same time, it should be easy to demonstrate the value of tests that can identify a particular disease in time for the physician to deal with it effectively.

Cost per test is a bean-counter subterfuge that has been used mostly because it's so easy to figure out. It isn't necessary to know what the test was or whether it was any good, just whether the test cost 10 cents rather than 25 cents.

Whelan: As we were going through some manufacturing process improvements a few years ago, we discovered that hospitals had a need for many of the same skills. So we ended up sharing some of these skills with hospitals. And it came to the point where we had people going to hospitals and giving courses on process improvement, including process analysis. For example, how to analyze the lab's current processes, design process improvements, and implement them. Those skills are basic to the understanding of IVD companies, but they are not so common among hospital managers.

Jackson: And again, part of that failing in hospital laboratories is due to the fact that people have been trained how to push buttons, operate instruments, and get data sent to the right people in a timely fashion—and yet, much more important issues haven't been dealt with.

Whelan: That's true, and it relates directly to questions about moving or redistributing testing to POC devices. The rationale for deciding to undertake those moves has to be very sound, both financially and practically; they shouldn't be undertaken just because new technology makes it possible to do so.

Unless a hospital structure understands the process as we've discussed it, it can't intelligently address the redistribution of testing. Without such an understanding, the institution can easily end up with a laboratory structure that is overworked and simply wants to pass some of its workload on to nurses. And then, of course, the nurses start to rebel and say they won't do it. So even a manufacturer that has made a perfectly good device then can't figure out why it can't sell any—and it's because the hospitals are in the middle of a turf war or a labor war.

With regard to the evolution of technology in the labs, the bottom line is that new technology can't be introduced unless it can be done profitably—and that can't happen under today's predominant organizational structures. So the focus should be on making the current organizational structure more efficient, with very few scientific innovations—basically developmental innovations—and bringing change to the lab environment. But, of course, what I just described is a slow process.

The Path Forward?

IVDT: Given all the issues that we've raised, what do you think are the key problems in this scenario, and what do you think the likely or ideal solutions should be?

Jones: There is a myriad of problems, so it's essential that industry and the laboratory community communicate their visions for the future of the laboratory and not become entrenched in the differences between them. Instead, we should work together so that the laboratorian of the future will be able to cope with possible advances in technology, and so that organizational impediments to marketing new technologies will be minimized. That would be the best solution for manufacturers, because then they won't come to the point of having developed a great technology with great science, only to find that there's no market because their potential customers are all entrenched in protecting turf. That would also be best for laboratories, as well as for the American public.

Whelan: At the very least, labs need to identify the true value that they contribute to the total care and management of patients. If labs can establish that fact, then they can begin to understand what they really have to offer the healthcare system. And in turn, manufacturers would be in a better position to develop and deliver technologies that make economic sense for labs to adopt.

Jackson: Labs ought to look at what technologies are available today—and what technologies might be available 5 or 10 years from now—and then develop a view of how those technologies might benefit patients or improve the efficiency of healthcare delivery.

It's certain that change will occur, so laboratorians need to be eager to embrace it or be prepared to be left out. Having embraced the inevitability of change, laboratorians should then work toward being part of the combination of technologies and advanced practices that are most likely to win out in the marketplace. They can do that, in part, by doing the things that Mike and Carolyn have already suggested.

In short, laboratorians need to look at what the future could be and work toward bringing about the best possible outcome.

Roundtable panelists For the roundtable presented here, IVD Technology sought out the views of three experts with considerable experience in the development of IVD technologies and their application in clinical laboratories. Biographical details about the panelists are provided below.
	Craig M. Jackson, PhD, is cofounder of Hemosaga Diagnostics Corp. (San Diego), a start-up company that is developing instrumentation and methods for point-of-care testing. Jackson previously served as president and director of research and development for Reagents Applications Inc. (San Diego), and as scientific director for the Southeastern Michigan Region Blood Services of the American Red Cross (Detroit). He serves on numerous national and worldwide committees involved with hemostasis and the standardization of coagulation tests, and is a fellow of the American Association for the Advancement of Science and of the Association of Clinical Biochemistry. He is a member of the IVD Technology editorial advisory board.
	Carolyn D. Jones, JD, is associate vice president for technology and regulatory affairs at AdvaMed (Washington, DC), where she coordinates the activities of the association's IVD Task Force. Prior to joining AdvaMed (then the Health Industry Manufacturers Association), she was a consumer safety officer in FDA's Center for Biologics Evaluation and Research (Rockville, MD). Jones is currently a board member and industry representative for the National Committee for Clinical Laboratory Standards (Wayne, PA). She is a member of the IVD Technology editorial advisory board.
	Michael J. Whelan is vice president and director for worldwide diagnostic strategic marketing at Beckman Coulter Inc. (Fullerton, CA). Whelan first joined the company in 1979 and has held a number of positions since then, including director of European marketing, director of investor relations, director of international marketing and sales planning for the diagnostics systems group, and director of strategic marketing for diagnostics commercial operations.

Copyright ©2001 IVD Technology