Remember back in 1997 when laboratory compliance programs were mandated by Medicare officials? That was a big thing in the laboratory industry. Every laboratory organization in the United States scrambled to assess their laboratory's operating practices, develop policies,and create a compliance manual that met regulatory requirements.

The Dark Report was first to predict this would happen, following the announcement that SmithKline Beecham Clinical Laboratories had agreed to pay a $325 million fine to settle allegations of Medicare fraud and abuse. (See TDR, March 10, 1997). I mention this because I am ready to make another prediction. It is a prediction that will have similar impact, touching every laboratory organization in the United States.

My prediction is that the growing drive to improve patient safety will require clinical laboratories (indeed, all classes of healthcare providers) to measure errors affecting patients. Further, having measured these errors, laboratories will be required to have management systems in place which allow the lab to identify the sources of those errors in their work processes, and, most importantly, reduce or eliminate them.

If this has a familiar ring to it, it is consistent with a theme we've discussed on these pages and at our Executive War College for more than seven years. Under the banner of patient safety, the healthcare system will move rapidly to embrace and implement the same types of quality management systems used outside healthcare by the world's most respected corporations.

Even as I write these words, any number of healthcare accrediting bodies are in the midst of rewriting their guidelines. The new guidelines will increasingly call for labs, physicians, and hospitals to accurately measure outcomes which affect patient care, then show how they are improving their work processes to raise quality and reduce unnecessary errors (and costs).

For most practitioners in the American healthcare system, this is a very different mindset. However, within the clinical laboratory segment, the payoff from these quality management systems is huge—both in outcomes and employee morale. Early adopters already introducing such quality systems into their labs universally report that their labs enjoy greater productivity, lower costs, and fewer errors that affect patients. They also report that the laboratory team becomes energized and enthusiastic at the opportunity to fix long-standing problems and do a better job for their local community.

Several Major Surprises Mark Events of 2002

"Ten biggest lab industry stories" for year cover wide spectrum of laboratory activities

CEO SUMMARY: It was a year when the two blood brothers got much bigger and expanded market share by buying their largest competitors. With patient safety as the goal, employers began active steps to force hospitals, physicians, and other healthcare providers to use quality management systems to reduce errors. Unpredictable in many ways, 2002 set the stage for accelerating change in our healthcare system.

Docs' In-Office Testing Showing Mixed Trends

New technologies and the need to improve patient care may stimulate growth in POLs

CEO SUMMARY: Despite the burdens of CLIA certification and reduced reimbursement for lab tests, many medical practice experts are advising doctors to expand in-office testing. However, diagnostic technologies for near-patient testing are still not robust enough to support this trend. Early attempts to expand testing in physicians' office laboratories show the technology is still not quite ready for "prime time."

Quiet Changes To Ripple Drugs-of-Abuse Market

Evidence grows that two blood brothers are gradually de-emphasizing DOA testing

CEO SUMMARY: Drugs-of-abuse (DOA) testing is an intensely-competitive market poised for significant change. Historically, national lab companies have been the major players and used rock-bottom prices to control the nation's biggest corporate DOA clients. But since this line of testing yields meager profits at best, indications are that the nation's two largest labs intend to quietly reduce their DOA testing business.

Patient Safety Update

Tech Shortage Plays Role In More Drug Dosing Errors