Connecticut Laboratory Seeks to be the Provider Insurance Companies and Employers Want

by HCE Exchange on June 23, 2014

Jim-Fantus-thumbJames Fantus, President and Chief Executive Officer

When HCE last spoke with James Fantus, president and chief executive officer of the independent, full-service Clinical Laboratory Partners in Connecticut, in 2011, we discussed the history of the organization and how it had bounced back from near-financial ruin. We also talked with Fantus about the difficulty of regulation on the organization.

In the ensuing years, the shifting landscape of healthcare has only become trickier to navigate, Fantus told us.

“Insurance companies and employers are starting to profile providers against each other,” he said. “In other words, if an employer is trying to save money on their healthcare costs, he looks for who has the lowest lab fees and the lowest X-ray costs and pushes his employees to go there, and if they go anywhere else, they have a co-pay they have to pay. They steer people to where they have to go.”

He’s seeing this occur with greater frequency, along with an increase in high-deductible plans that prompt patients to challenge physicians on the care they’re receiving. As a result, he is focused on becoming the high-quality, low-cost provider insurance companies and employers want, while ensuring that anti-steering language is placed in health-system contracts.

Regardless of these trends, he said, his goals remain the same: continued growth of market share, especially since volume is going to taper off; greater competitiveness at the insurance-company level; and improved distribution networks so third-party payers will be partners rather than adversaries working against them.

Coordinating care through data management

Fantus said CLP has just finished work on a data warehouse of all patient lab information. Currently, CLP holds 12.5 million patient records and 65 million test results.

“There’s a big push to coordinate care,” he said. “And coordinating care means that somebody is managing your healthcare from one end to the other. This requires a navigator like a PCP who makes sure you get the care you need when you need it.”

He added that the healthcare industry has lagged behind all other industries when it comes to disseminating information, something that is also complicated by HIPAA regulations, which make it complicated to share info.

“But nonetheless, if you coordinate somebody’s care, not only are you going to ensure they get appropriate care and that they get their follow-up, but you’re also not going to need a second laboratory test because you didn’t see the first doctor’s test,” Fantus explained. “If the care is coordinated, you only need the test once, not two or three times, which occurs frequently now.”

To achieve this, a robust data program is needed, he continued. “We’ve developed a data warehouse of all of the lab test information on every patient that we see whether they’re an inpatient in one of four hospitals or seen at a doctor’s office anywhere in the state.”

CLP draws data into the warehouse, sorts, and organizes it by patient so that any physician with the right authorization can have access to the database and see a patient’s complete lab history.

“When it comes to one of the key trends in healthcare, lab tests are involved in 70 to 75 percent of medical decisions,” he said.

Fantus feels this goes a long way toward coordinating care. It also helps with third-party payers, since it’s a value-added service. Even if it costs a little more than a national lab, CLP provides a comprehensive database that helps physicians manage test utilization and reduces overall healthcare costs.

Reducing operational costs through integration

With the data-warehouse project completed, Fantus has turned his attention to integrating with each of the labs in CLP’s five-hospital system in order to bring down operational costs. Currently, CLP only manages two of these labs.

“Whenever you say consolidation, people think job loss,” Fantus said. “That’s not necessarily so, but it will result in us being more efficient. We don’t have any idea just yet what it all means. We just know that doing the same thing in multiple places has got to cost more than doing it in a single place.”

He would also like to expand CLP’s services into neighboring states, but this is no easy task since insurance companies aren’t yet across state lines and every state has its own insurance groups. The key here, Fantus said, is building up CLP’s testing capabilities so it would be able to serve as a lab resource to hospitals that currently have to send tests to national labs because they can’t do them in-house.

He would like to conduct about 80 percent of any test a hospital would have to refer out. He said CLP is probably in the 50 to 60 percent range right now. Once they get 80 percent, they’re free to go into other states, because then they bill hospitals not insurance companies.

Fantus is also looking to open up additional patient-access points. His goal is 25 new locations, an achievement that would give CLP coverage across the entire state of Connecticut.

Fighting to survive in a difficult climate

Under Fantus’ watch, over 500 new jobs were created by CLP that didn’t previously exist.

“When I got here, we were the biggest money loser of all of the organizations owned by our parent company [Hartford HealthCare] and today we are the most profitable owned by our parent company. If we’re not the biggest lab in our state, then we’re pretty close to it and that includes the national labs that have a footprint here.”

CLP also went from serving 500,000 patients to 1.6 million non-hospital patients per year. But even with this success, Fantus is just as hesitant as his colleagues about healthcare’s future.

“I’ve always been able to see the future and been able to plan to get there and now the future is kind of murky. I’m just going to have to use a little bit more intuition and take a little more risk in getting there. I’ve been a survivor my whole career, and I’m bound and determined that we’re going to survive the new changes and challenges that the rapidly changing healthcare environment is bringing upon us.”

-by Pete Fernbaugh

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