Transcript Dreyer, et. Al. PACS, 2 - Digital Pathology Association

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
• 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
Who am I?
(My perspective)
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Interested novice
Career in Private Practice
Dot-com Vet
Recent career change – Academics
“Thought experiments” – no data!
Disclosure – Aperio MAB
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
Business principles:
Business principles:
Things that don’t work
“We’re losing money on every case
– we can make it up on volume”
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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.
“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.
Business principles:
Things that work
Potential Profit Mechanisms
1. Increase revenue:
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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:
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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)
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
Source: Dreyer, et. Al. PACS, 2nd ed. 2006
Source: Dreyer, et. Al. PACS, 2nd ed. 2006
Source: Dreyer, et. Al. PACS, 2nd ed. 2006
Sunshine and Meghea. AJR 187: November 2006
Q:
Hypotheses Investigated
1.
2.
3.
4.
5.
6.
7.
Growth of imaging abated – No, up 23%
Non-radiologists doing more – No, rads up 15%
More offshore outsourcing – Yes, but Americans
Radiologists retiring later – No
More residents turned out – No
Fewer residents take fellowships – No
Radiologists working more hours – No
A:
“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.”
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
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
Tracked Costs Eliminated
Digital 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)
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
“Perfect storm” for adoption of digital radiology and PACS
Lost Films
X-S Data Expl
Rad Shortage
Overt Cost Reduction
Profit Potential
DICOM
Comp Pwr, Cost
“Perfect storm” for adoption of digital pathology and PACS?
Lost Slides
+/-
IPOX Data Expl
Path Shortage
Overt Cost Reduction
Profit Potential
Standard
SOON
Comp
Pwr, Cost
YES
• “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
• “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
• “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
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
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
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
A “Big Hairy Audacious
Business Case”
Dot-com era justification to ask for
ridiculous sums of money to
commercialize a hair-brained idea
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
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