Pathology Associates Medical Laboratories Inc., of Spokane, which touts itself as the Northwests largest independent medical lab, says it has begun marketing a turnkey package of services designed to help big hospitals do in-house specimen testing.


The package called Outreach Advantage, is intended to provide hospitals all of the tools they need to launch or expand their testing business and put their underutilized laboratory facilities to more cost-effective use, PAML says.


The outreach part of the name refers to hospitals desire to reach out to market their test services to doctors in their areas who order specimen tests of various types for their patients.


The biggest trend in the nation is hospitals wanting to get into the outreach business, says Rosalee Allan, senior vice president and chief operations officer at PAML. Hospitals want to capture some of the lab-related revenues currently being siphoned off by large commercial competitors based elsewhere, and minimize their per-test costs by building up a healthy volume, Allan says.


PAML, a for-profit entity owned by a subsidiary of Spokane-based Providence Health Care, is seeking to respond to that demand, and expects the fee-based package of services its offering to hospitals to create a significant new revenue stream for the 1,300-employee company, she says.


The launch of Outreach Advantage, while seemingly counterproductive to PAMLs efforts to continue to grow the huge volume of specimen testing it does here, actually represents its latest in a series of strategic moves that involve teaming up with hospitals and pursuing laboratory-service joint ventures.


Theres two typical ways that commercial labs like PAML do business, Allan says. Our competitors would come in and compete against that hospital. The PAML philosophy is to keep the work local. We form a new LLC, and we share in that business, so were actually a financial stakeholder in the venture. So we have a vested interest to make sure that work stays local, and thats something the large competitors have a hard time competing against. They dont have the local relationships.


As an example of such partnerships, PAML is one of the founders of PacLab Network Laboratories, which provides lab services throughout western Washington. It also is a partner in several other regional lab operations, including Alpha Medical Laboratory, in Coeur dAlene; Tri-Cities Laboratory, in the Tri-Cities; and Treasure Valley Laboratory, in Boise, and is part owner of Signature Genomics Laboratories LLC, of Spokane.


PAML was expected to announce shortly, possibly this week, what Allan describes as a major new venture with one of its clients, and she says that being able to offer Outreach Advantage played a huge role in the closing of that transaction.


PAML has promoted the suite of services at a number of health-care industry conferences recently, Allan says. Weve created a lot of interest, so we just now are taking those prospects and following up, and as well, we are pushing the product out to the Providence Health & Services system, she says.


Providence Health & Services is the combined entity created in January 2006, when Spokane-based Providence Services, the parent of Providence Health Care, merged with Seattle-based affiliate Providence Health Care. That overall Catholic health-care system now includes 27 hospitals, 35 non-acute facilities, physician clinics, and other entities.


Outreach Advantage includes components covering everything from the scheduling and route management of dispatch vehicles sent to pick up specimens, to billing, market-development, and consulting services.


It has offered some of those services to customers for a number of yearsfor example, it currently handles billings for 22 clients and mails more than 1.4 million patient statements annuallybut only recently has integrated them all into a single marketable package.


PAML came upon the idea for the outreach venture somewhat calamitously after losing a large, longtime customer about five years ago due to a series of customer-service missteps that prompted it to re-evaluate its own operation.


That was kind of the turning point, says Dr. Thomas Tiffany, PAMLs president and CEO.


As a result of that internal review, PAML invested about $1.6 million to replace its paper-based customer call-tracking system with an electronic customer-relationship management (CRM) system, called Microsoft Dynamics, that Redmond, Wash.-based Microsoft Corp. was starting to market at the time.


That system gave PAMLs employees access for the first time to a single database of customer data and a record of every customer contact. The company licensed the software for use by all of its customer-facing employeesencompassing more than 900 people in departments ranging from lab testing, logistics, and dispatch, to supply, billing, information technology, client retention, and quality improvement.


I think it really has helped us in dealing with our clients, Tiffany says.


Allan says, The biggest thing is that response time has dropped significantly. In the past, she says, It could take us up to three days to get through all of the paper and things to respond. Now its same day.


From that starting point, she and Tiffany say, PAML began to incorporate more of its businesses processes into the versatile Microsoft system to automate its work flow further, which in turn led to its development of Outreach Advantage.


In January, Microsoft published two case studies detailing how the Spokane company had used the system to improve its operations dramatically and to show how quickly the substantial cost of the system could be recouped. Microsoft uses those case studies to market Microsoft Dynamics globally, Allan says.


PAML, which is celebrating its 50th anniversary this year, serves more than 100 hospitals and numerous other clients throughout the western U.S., and as the Microsoft studies made clear, the company has prided itself on the job it does testing specimens for clients. In the medical-testing business, though, labs are judged not only on their testing expertise and facilities, but also on their pre- and post-analytical systems, one of the studies notes.


Hospitals and clinics of course want accurate test resultsthats a given, the study quotes Allan as saying. But what they really judge us on are the services surrounding the testingthe speed of sample pickup, the efficiency of sample processing, and our ability to answer their questions and handle special requests along the way. Its in these service areas that we win or lose customers. Unfortunately, there are thousands of process steps in our business, each one of which is a point where errors can occur.


Customers call PAMLs dispatch department when they have samples for pickup, its supply department when they need more test supplies, its billing department when they have billing questions, and its information-technology department when they have a problem with computer equipment connected to PAML systems. That still is the case.


PAMLs employees formerly logged customer calls in paper ledgers, but that information was never entered into a database, so there wasnt a central place where those points of contacts were recorded or could be reviewed.


Similarly, PAMLs management team had no easy way to monitor customer-service issues or to identify trends or problem areas. In the case of the large customer it lost, none of the missteps were related, the case study says. There was a specimen-handling problem in one department, a supply problem in another, and a billing glitch. Each situation was resolved, but no one at PAML saw the big picture, although the customer did and took action, the study says.


Tiffany and Allan say PAML originally was hesitant about converting to an electronic customer-relationship management system because of the reported high failure rate of such systems nationally.


There were some software packages (on the market) that were lab-dedicated, but they didnt have the features we wanted, Tiffany says, which led the company to choose the Microsoft system.


Given the huge volume of work that PAML does, its operation still isnt without occasional mishaps. This summer, the company had to notify 2,000 clients at three hospitals, including Sacred Heart Medical Center, that private information about their medical tests was mailed inadvertently to the wrong addresses. The statements revealed the names of clients, the types of tests performed, and the costs for the procedures, but no other personal information. PAML blamed the incident on a computer-program glitch that it says it since has corrected.


Contact Kim Crompton at (509) 344-1263 or via e-mail at kimc@spokanejournal.com.