LifeLab Clinical Database Management System – Return On Investment

August 26, 2012

A Clinical Database Management System (CDMS) such as the LifeLab Database Manger is a class of software, which handles receiving, processing, storing and reporting on information generated by clinical laboratory processes. Like a Laboratory Information System (LIS), these software suites typically interface with instruments and other remote information systems, and are highly configurable in order to serve a variety of laboratory workflow models. Unlike a LIS, a CDMS system adds a robust interface to clinical aspects of a medical practice not strictly viewed as laboratory functions, for example radiological image handling, EMR and billing integration as well as the ability to monitor and quickly generate comprehensive reports required for regulatory compliance. Deciding on a CDMS vendor is a major undertaking for all labs. Lab managers who invest the time and effort in finding the perfect IT implementation should fully understand what types of return on investment they can expect from their organizations cash outlay. Assessing return on investment, after all, should be the most attractive and least challenging aspect of an IT installation.

As it stands, the advent of electronic medical records (EMR) has helped an increasingly significant number of clinicians realize the value of information systems in their practices. In fact, in certain circumstances, an already installed EMR system has made it easy to justify the addition of a CDMS in order to populate the EMR with lab results. In other cases, the operational efficiency gained through the reduction of time consuming phone calls, patient data entry from remote location, and ease of access to patient data has incited a natural interest in what can be achieved by digitizing the laboratory environment.
Risk Management

In the tissue-banking world, where data entry is overwhelmingly manual in nature, facilities run the risk of significant reporting errors. The inclusion of a CDMS solely for these purposes would greatly reduce the organizations’ exposure to medical error. Most laboratories do not think about risk mitigation as important criteria in assessing ROI (return on investment); but once clinicians understand the bottom-line affect of clinical errors, legibility errors, and missing lab results, the benefit of a CDMS is very clear.
More Efficient Billing

Another overlooked aspect of a CDMS installation is the immediate value gained through a reduction of missed billing. For many organizations, management of receivables is a daunting task due to the significance amount of revenue tied up in the accounts receivable. Because revenues are delayed due to billing errors and improper coding, cash flow is negatively impacted. With a CDMS, errors can be identified at the entry point, and subsequent delays can be mitigated or even removed.
A Reduction In Overhead

One of the most touted benefits of management information systems is the immediate realization of reduction in FTE (full-time equivalents) and/or the transferability of skilled labor to other value-add work. Within an electronic environment, data is able to flow between systems and eliminate substantial and oftentimes duplicate/manual entry of data. Based on the scale and scope of a facility, this could mean an immediate FTE cost reduction of multiple salaries.

Clinical Database Management systems such as LifeLab Database Manager helps reduce errors, increase productivity, and provides a turn-key solution that benefits patients, facility directors, and staff. These systems provide a highly configurable environment that aims to streamline daily tasks, mitigate against human error, and support a system of checks and balances that keeps facilities in compliance with the myriad of rules and regulations directed at tissue banks.
About the Author:

Jason M. Gilbert, CPA – Jason Gilbert is Founder and COO/CFO of LifeLab Solutions Inc. Formerly, he was an investor at General Atlantic (a $16B Private Equity firm focused on global growth investments), where he focused on financial strategy for GA’s portfolio companies and new investments. He first joined GA’s Greenwich office in 2006 evaluating investment opportunities in various technology enabled verticals, including semiconductors, alternative energy, and financial services. Prior to joining General Atlantic, Jason was an Investment Banker at Berkery, Noyes & Co., where he serviced large and mid-sized information providers in the U.S. and international markets with strategic mergers & acquisitions, corporate and asset divestitures, strategic research, and valuations. Jason is a Certified Public Accountant with a B.A. in Political Science from the University of Michigan and an M.S. in Accounting from the George Washington University School of Business. Jason contributes financial expertise, both for internal initiatives as well as consulting engagements.
About the Company:

LifeLab Solutions, Inc. is a comprehensive resource for the human tissue banking industry. We provide database solutions and consulting services for both start-ups and established facilities. With over 20 years of experience in the Clinical Laboratory and Tissue Banking fields, LifeLab Solutions software and diverse management team was developed in response to the increasing volume and complexity inherent to human gamete storage. Paramount to all types of tissue banking, tracking each specimen from receipt through processing, storage and distribution together with the monitoring requirements necessary to insure the quality of the distributed tissue was front and center in the development of our software solution the LifeLab Database Manager. LifeLab Solutions targets the core areas of inefficiencies across the storage process, ranging from increased overhead attributable to routine specimen tracking and billing, to staff turnover, training and regulatory compliance. Specifically, facilities implementing LifeLab Database Manager have noted at a 20% or greater, reduction in staff costs and a significant boost to both operational efficiency and profitability.

Reproductive Tissue Banking: An Emerging Revenue Source for Urologic Practices

May 12, 2012

In light of managed care and increasing costs attributable to overhead and malpractice, Urologists (as well as a most other specialty practices) are increasingly searching outside their core business for auxiliary revenue streams. The advent of tissue banking has introduced an exciting and underserved niche market that can provide significant top line growth (as well as profitability) to a practice. The tissue banking market, while broad in definition, is best understood through its segments, ranging from reproductive to musculoskeletal to blood and skin. Urologic practices are opportunely positioned as to preside over the client depositor sperm market – perhaps the most fragmented and underserved component of the reproductive tissue banking space.
An Underserved Niche Market Ripe for Growth

The number of client depositor sperm banks in the United States is highly subject due to the ambiguous requirements of the FDA as well as the large number of unaccredited banks (which are consequently not tracked by the AATB). When examined in comparison with the number of reproductively aged males undergoing chemo or radiation in the United States, the underserved addressable base of patients is clearly evident. Taken in conjunction with higher projected cancer rates as well as an increasing awareness of banking ones’ sperm, the already underserved addressable market is prime for significant growth.
High Barriers to Entry

Serving patients with reproductive tissue banking services requires accreditation by regulatory authorities and a high level of expertise as the market demands the utmost rigor around professional qualifications. This contributes significantly to barring “just anyone” from operating one a reproductive tissue banking facility.
Sustainable Demand Characteristics

The success of client depositor reproductive tissue banking facilities is determined in large part to the installed base of patients a Urologic practice is able to leverage in addition to new patients seeking these particular services. Research indicates that that the majority of reproductive age male patients who are being treated for cancer are potential sperm banking clients. For new patients, demand will be created and sustained by the availability and heightened awareness of sperm banking services. Inherently high renewal rates will nourish the growth of client depositors and provide considerable recurring revenue streams.
A Solid Business Model

Best denoted by upfront processing fees and annual storage costs; client depositor sperm banks can be best likened to microscopic real estate. The business viability, demand characteristics (without the cyclicality and elasticity to market conditions), and passive income streams are very similar to what you would typically find in large-scale commercial real estate businesses. The costs of revenue pale in comparison to revenue generation, and roughly 70-90% of operating profit flows to the bottom line (depending on how you allocate and spread overhead and selling costs). Implementation of this business model to an existing practice will surely yield considerable benefits to practice revenue and profitability.
A Good Investment by All Metrics

No matter what metric you use to analyze the viability or business impact of a client depositor sperm bank installation, you are sure to find intriguing results. With a relatively small upfront investment, payback periods typically fall within the first year. Typical cash flow metrics such as Net Present Value analysis (NPV) and Internal Rate of Return (IRR), both which aim to provide an unbiased view of whether or not to make an investment, overwhelmingly indicate that a client depositor sperm bank is sure to be a successful and profitable endeavor.

About the Author:

Jason Gilbert is a Certified Public Accountant, and Chief Operating Officer /Chief Financial Officer of LifeLab Solutions, Inc., a comprehensive resource for the human tissue banking industry. LifeLab Solutions provides database solutions and consulting services for both start-ups and established facilities.