the “business case” for digital pathology
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The “Business Case” for Digital Pathology. A work in progress . . . Luke Perkocha, UCSF. What will I talk about today?. WSI mainly, though static and dynamic telemed; gross imaging; teleconferencing; other IT applications, AP-LIS systems, maybe as important, as enabling technologies - PowerPoint PPT PresentationTRANSCRIPT
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The “Business Case” for Digital Pathology
A work in progress . . .
Luke Perkocha, UCSF
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What will I talk about today?• WSI mainly, though static and dynamic
telemed; gross imaging; teleconferencing; other IT applications, AP-LIS systems, maybe as important, as enabling technologies
• Clinical, educational apps. – not research• A couple of basic business principles• The “drivers” for digital radiology/PACS• Some “niche” business cases now• ? Catalysts for more rapid adoption
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Who am I?(My perspective)
• Interested novice• Career in Private Practice• Dot-com Vet• Recent career change – Academics• “Thought experiments” – no data!• Disclosure – Aperio MAB
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Where am I?• Academic medical center• Competitive market environment• Only limited digital pathology now
• Gross photos, not stored in LIS• Robotic scope for FS at home, Tx service, very
limited daytime use for consultation on FS• Manual quantification of ER/PR Her2• WSI Images used in teaching, still have scopes• No document management• No images in reports or LIS• No WSI imager in-house
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Business principles:
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Business principles:
Things that don’t work
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“We’re losing money on every case – we can make it up on volume”
• Example: UCSF Teledermatology• Store and forward model• Underserved (under-insured) population• Phone calls, secretarial time, paperwork,
coordination, billing problems• Recognized and being addressed• Digital Pathology Dream: “The world is our
market!” – make sure it doesn’t take longer and cost more than mailed-in slides.
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“I think this is the coolest thing – everyone will want it just as much
as I do!”• Corollary: Everyone will be willing to pay
(extra) for it.• Developing the market for something new
and different is within the financial capacity of the organization.
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Business principles:
Things that work
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Potential Profit Mechanisms1. Increase revenue:
– More $ for same thing: New CPT, extra pay for digital “enhancement” of what we do now (Thin Prep)
– More $ for new thing on same spec: New CPT, extra pay for digital analysis (extrapolation / quantification / CAD), what we can’t do now, but on same specimen (HPV)
– Virtualization expands geographic market: $ from new customers, increased volume from a new business channel
2. Lower costs:– Lab benefit - Increased productivity (↓cost/unit lab svc);
create capacity – Institutional benefit – in a dispersed multi-specialty
department, ↓TAT (even if ↑lab cost) may save $ on overall care delivery (Mayo model)
– Reduce non-productive costs (errors, losses, redos)
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Looking at radiology – Early drivers
• Lost films – legal; staff time; re-do; patient care; lost revenue
• X-sectional images – radiologists quickly overwhelmed – PACS enabled “stack mode”
• Radiologist shortage
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Source: Dreyer, et. Al. PACS, 2nd ed. 2006
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Source: Dreyer, et. Al. PACS, 2nd ed. 2006
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Source: Dreyer, et. Al. PACS, 2nd ed. 2006
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Sunshine and Meghea. AJR 187: November 2006
Q:
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1. Growth of imaging abated – No, up 23% 2. Non-radiologists doing more – No, rads up 15%3. More offshore outsourcing – Yes, but Americans4. Radiologists retiring later – No5. More residents turned out – No6. Fewer residents take fellowships – No7. Radiologists working more hours – No
“CONCLUSION. Increased productivity is the predominant explanation of how the radiologist shortage eased. The contribution of other factors was, in comparison, small or even in the opposite direction.”
A:
Hypotheses Investigated
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How is it that productivity increased enough between 2000 –
2003 to not only handle the increased workload, but ease the
shortage of radiologists?
• Hi tech – digital imaging and PACS, other technology (telephony, EMR results delivery, etc.)
• Lo tech – improvements in workflow, use of physician extenders – enabled by technology
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Radiology – Unexpected drivers
• Productivity gain from digital + PACS workflow improvement ~ overall 30%
• Growth capacity with same staff technical and pro fee revenue: a real ROI for radiologists, hospitals AND industry– Medicare: “contemporaneous reading
requirement”– Nighthawks – lifestyle issue
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Tracked Costs EliminatedDigital Radiology• Labor: developing,
storing, retrieving, 24/7 staffing
• Capital: Developers, Film alternators, misc.
• Consumables: film, developer chemicals, film jackets
• Disposal: chemical waste, recycling
• Space: darkroom, film storage
Digital Pathology• Labor: ? courier• Capital: ? cars• Consumables: ?
recuts for lost slides• Disposal: ?• Space: ? glass slide
storage (legal to be solved)
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Glass-based Pathology: Untracked Costs
• Pathologist productivity loss from “batch mode” operation, bad workflow – will pathology PACS fix this?
• Wasted staff time looking for lost tumor board slides; pulling old bx for compare, etc.
• Delay in diagnosis, waiting for sub-specialty consultation; courier slide transport from remote lab
• Patient safety / errors (if PACS forces machine tracking of assets)
• “Opportunity costs” of lost business due to slow TAT
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Lost FilmsLost Films X-S Data ExplX-S Data Expl
Rad ShortageRad Shortage
DICOMDICOM
Comp Pwr, CostComp Pwr, CostProfit PotentialProfit Potential
Overt Cost ReductionOvert Cost Reduction
“Perfect storm” for adoption of digital radiology and PACS
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Lost SlidesLost Slides IPOX Data ExplIPOX Data Expl
Path ShortagePath Shortage
StandardStandard
Comp Pwr, CostComp Pwr, CostProfit PotentialProfit Potential
Overt Cost ReductionOvert Cost Reduction
+ / -
SOON
YES
“Perfect storm” for adoption of digital pathology and PACS?
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• “Digital pathology is no longer a dream. Doctors have begun to diagnose diseases by using computers like microscopes… Pathology is just beginning to enter the digital era… It’s a change that promises faster diagnoses for patients and potential cost savings for hospitals.”– Story on PBS’s Nightly Business Report,
July 10, 2008
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• “Doctors in the US and other countries have long practiced variations in telemedicine to provide care to …underserved locations. But in the future, telemedicine will be practiced more as a way of distributing work loads and lowering costs…Outsourcing and offshoring of medical services will increase, providing more …cost-effective healthcare.”– Wall St. Journal, Oct. 20, 2008
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• “In the future, there will be three often overlapping modes of delivering healthcare services: …performed in person by humans … performed by people at a remote location … performed by computers without direct human involvement.”– Wall St. Journal, Oct. 20,2008
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Storm clouds gathering in pathology?• Patient safety media focus a “brand”
issue for the institution• Histotechnologist shortage
“breakthrough” robotics (continuous flow)… or skip the glass …
• Path PACS perceived as a “growth market” by mega-technology companies?
• DICOM – 26 or other; bar code effort APIII• Demographics: newpath @ home• Disruptive biz models: off-shoring; e-Bay
for biopsies; “virtual” practice models
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Applications Considered at UCSF• Medical Education: Students, residents, CME,
remote learning• Remote FS – nights, expert at other hospital• Virtual Consultation – distributed practice (may
have clinical ROI)• QC – IPOX• Tumor Boards – Spinosa study, requires PACS to
realize full potential cost savings• Quantitative image analysis• Other CAD applications• Routine digitization of all cases ???• New business models, enabled by virtualization
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Education
• Med Student Histology / Pathology courses: improved quality, inexpensive, but no cost savings; other places get rid of scopes
• Resident frozen section / teaching archive: improved quality, inexpensive, but trivial cost savings from current system
• CME: cases distributed virtually, some cost savings w/o glass slides, improved revenue if attractive to registrants– Competitive advantage price of entry
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A “Big Hairy Audacious Business Case”
Dot-com era justification to ask for ridiculous sums of money to
commercialize a hair-brained idea
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Summary• No compelling business case now for full
digitization of routine cases in most labs• Niche business cases exist now
– Education, Remote FS / Consultation, IHC Quantification
– Tumor Boards, QC• These may not apply in all settings – local
cost/benefit must be assessed• Routine digital path probably will make
business sense in the future, but when?• “Catalysts” that bring this about may not
be the ones we now predict
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Thanks !!
• Ron Arenson, David Avrin, Radiology UCSF, ASNR
• Paul Chang, Rads and Path, U Chicago• APIII Faculty• Bruce Wintrobe, Ilona Frieden,
Dermatology, UCSF• Abul Abbas, Linda Ferrell, Pathology,
UCSF