Clinical Laboratory & Diagnostics in India & MENA

Out of the approximately 25 Million new births in India, there are an estimated 1.6 Million babies born with birth defects including about 620,000 with genetic disorders. Despite very good evidence that early detection of conditions, such as congenital hypothyroidism, Phenylketonuria, Homocystinuria and others, is absolutely essential for appropriate management to be instituted there is no mandatory newborn screening program in place.

While it may be a fatalistic attitude of many people to accept the misfortune of families that have an affected baby, this is no longer justifiable in the many advanced medical centers, both government and private, where thousands to millions of babies are born every year. It has to be accepted standard of care for those managing ante-natal cases to make the parents aware of the possibility of genetic disorders and also that a simple test exists to detect many of the conditions.

I am sure that many of the hospital laboratories are perfectly capable of performing a TSH screen using EIA or biochemical tests for some of the other inborn errors of metabolism (IEM), but how many hospitals have a mandatory policy of testing every new born for these conditions? As parents paying for a safe delivery – for both the mother and child – not getting the information about the screening tests from the care givers can be a case for medical negligence.

Clearly it is not the technology that is preventing Indian born babies from getting tested. There are many reference labs in India including NeoGen Labs and Dr Lal PathLabs that offer the complete complement of tests  including Tandem Mass Spectrometry that screen for about 50 genetic disorders, but anecdotal evidence is that hospitals use these services quite rarely – and then only for testing already sick babies – too late for the right management to be started.

It cannot be that our expert neonatologists and pediatricians are unaware of the advantages of early newborn screening  - our NICUs are full of babies who are bearing the brunt of our of healthcare system not doing their job even before they were born. Taken individually all the players seem to be doing their job – the labs are offering the tests, the pediatricians are taking care of the sick babies, the obstetricians are making sure that the birth is OK, the health ministry focusing on the more prevalent problems like infectious diseases and malnutrition. However this is of little use to parents who get an affected baby with Congenital Hypothyroidism who is mentally retarded because the system failed them. It will probably need some well publicized court cases to get our hospitals to start doing what they should in the first place – offer newborn screening to all babies!

Posted by Sunil Tadepalli at 02:32 PM | Permalink | Comments (4) | TrackBacks (0)

In my visits to most small to medium clinical laboratories, I have noticed that there is widespread use of personal computers. Almost every lab has 2-3 PCs that are used for Internet access, email, documents and printing. Clearly the concept of a PC to improve personal productivity and communication has caught on and is well understood by most laboratory workers. Some labs are also using the PC and a simple spreadsheet or database program to print their reports.

If this describes your laboratory accurately, it may be time for you to consider using a network and a ‘Server’ in a topography described as a ‘Client-Server’ environment. Some of you will be introduced to the network and the client-server environment by LIS vendors , but you may find that the solutions that they propose are expensive and may not fit your requirements exactly.

Actually, if you are comfortable with using a PC, installing operating systems like Windows XP or Vista and other programs a good option for you may be to start off creating a network and setting up a ‘Small Business’ kind of network yourself. Some of these programs come with very good out-of-the-box functionality and you may not even need to pay for expensive custom-built or line-of-business applications.

In my next few blogs, I will try and describe how to go about creating your own network and client-server system and how to get the maximum benefits from your investments in information technology.

First, how do you know that you need a network? If you answer yes to one or more of the following questions, then you need one:

·         Are there 3 or more PCs in your laboratory?

·         Do you and your co-workers share files or work on the same document?

·         Does your work get impacted if one or more PCs in your lab stops working?

·         Do you have a database program. This can even be a simple list of contacts – do you and your co-workers have your own versions of the contact list in your own PC?

·         Are you considering getting accredited and need to manage a large number of documents in the lab such as SOPs & quality documents?

Next, I will post the basics of getting a client-server network in place – what hardware and software you need? How much it will cost? What are the applications you can use it for?

In the meantime, if you have any questions, please do send in your comments.

Posted by Sunil Tadepalli at 02:25 PM | Permalink | Comments (2) | TrackBacks (0)

You may have noted that the name of the blog has changed and now includes the Middle East & Africa. Well, I have now shifted my base of operations from Delhi to Dubai and this explains the long hiatus between blog entries. I have now settled down in my new position and can resume my dialogue with you.

There are a lot of interesting events happening in Dubai on the healthcare front. Dubai Health Care City (DHCC) is but one example of these changes. It is attracting Healthcare, Pharma & Life Science Companies from all over the world and aims to make Dubai the hub of medical services in the region. In August 2007, the Licensing & Specifications Department of the Department of Health & Medical Services (DOHMS) of the Government of Dubai published the Medical Laboratories Standards. This is a fairly comprehensive document and has similarities with the ISO 15189:2003 Standard.

I am looking forward to working with laboratories in the Middle-East & North Africa and making new friends and colleagues in the community here.

Posted by Sunil Tadepalli at 11:12 PM | Permalink | Comments (1) | TrackBacks (0)

In the context of human error in health care, as described eloquently by Dr. Ashok Rattan, it is imperative to establish systems to dictate work processes rather than rely on objective human judgment. While accreditation programs and quality certifications such as ISO address rules and principles that govern the outcomes of a laboratory, it is important to review the work flow of a laboratory from a manufacturing industry perspective to address productivity, efficiency, costs and errors.

Six Sigma is a quality management program that measures and improves a company's operational performance by identifying and correcting defects in its processes and products. Originally, Six Sigma was defined as a process variation that would produce no more than 3.4 defects per million parts (or "opportunities"). Today, however, Six Sigma is applied to produce a product that satisfies the customer and minimizes supplier losses to the point at which it is not cost effective to pursue a higher quality.

Six Sigma was pioneered at Motorola in the mid-1980s, followed by other large companies such as General Electric, which ultimately popularized the process. Although Six Sigma is usually applied to manufacturing companies, it can be applied wherever the control of variation is desired. In the lab industry, it has been taken to exceptional levels by Quest Diagnostics. The following link describes in concept at some length: http://www.questdiagnostics.com/brand/b_home_six_sigma.html .

Lean is all about reducing ‘wasteful processes’ and improving speed and efficiency.  Waste is basically defined as anything that adds no value to the process (anything that a customer would not be willing to pay for). The results in Lean projects are often dramatic reductions in turnaround times and savings in staffing and work space. The aim is to usher an ‘assembly line’ mindset in drawing up work-flow protocols, much like the Toyota production lines where Lean techniques were first formulated.

Six Sigma targets variation. Lean attempts to eliminate wasteful processes. Both aim to improve lab processes.

Posted by Shravan Subramanyam at 08:41 AM | Permalink | Comments (1) | TrackBacks (1)

Most patient safety reporting systems concentrate on analyzing adverse events; injury has already occurred before any learning takes place. Progressive systems exemplified by the aviation industry also concentrate on analyzing close calls, which affords the opportunity to learn from an event that did not result in a tragic outcome.  Failure Mode and Effect Analysis (FMEA) is a method long in use in engineering to proactively evaluate system and product vulnerabilities. FMEA is a new way of looking at problem-prone, high-risk processes before an error occurs. By proactively identifying potential failures, actions can be taken to prevent or minimize the effect of an error. As an engineering tool, FMEA is used during product or process design and is intended to inform designers of any changes to the product that will prevent errors from occurring after launch.

A hospital laboratory can be viewed as an existing process (e.g. already launched) with many observed, preventable errors. FRACAS (Failure Review and Corrective Action System) and RCA (Root cause analysis) are additional Engineering tools that have specifically been designed to deal with observed errors. Preventing errors that have never occurred is also an important purpose of FMEA.

Errors occur in the clinical laboratory, some with potentially devastating consequences for the patient. Traditionally, these errors have been thought to be because of individual human failure. We assume that, with adequate training, education, and orientation, technologists and other lab personnel will perform flawlessly. Laboratory processes are designed on the premise that nothing will go wrong. Most labs have in place processes to identify, capture, assess, and investigate events that deviate from accepted policy or procedure. We have methods for tracking and trending incidents, errors, and accidents.

Now, based on long experience in the engineering field, health-care workers are looking at new theories of error prevention. These are based on the assumption that everything will fail, humans err frequently, and the cause of an error is often beyond the individual's control.

TO ERR IS HUMAN

In 1999, in United States of America, the Institute of Medicine released a report entitled, ‘To Err Is Human’, that detailed significant problems with patient safety in our health-care system. The report cited two large studies, one conducted in Utah and Colorado and the other in New York that found adverse events occurred in 2.9% and 3.7% of hospitalizations. In Colorado and Utah hospitals, 6.6% of adverse events led to death, as compared with 13.6% in New York hospitals. In both of these studies, more than half of these adverse events resulted from medical errors and could have been prevented.

When extrapolated to the more than 33 million admissions to United States hospitals each year, the results imply that between 44,000 and 98,000 Americans die each year as a result of medical errors. These studies show that more people die because of medical errors than from motor vehicle accidents, breast cancer, or AIDS. Total national costs including lost income, lost household production, disability, and health-care costs of medical errors resulting in injury are estimated to be between $17 billion and $29 billion.

The Institute of Medicine report made several major points. The cause of accidental injury is most often not careless people but faulty systems. These systems must be redesigned, and patient safety must become a national priority. The concept that errors result largely from the failures of systems, not from individual carelessness or inadequacy, is fundamental to the new effort to address safety. This runs counter to the traditional focus of medical training on individual performance.

Posted by Ashok Rattan at 10:24 PM | Permalink | Comments (1) | TrackBacks (0)

I have decided to spend three days attending the Microsoft TechMela being held at Mumbai from the 14^th – 16^th June. This is a great event and has high energy with about 2,000 mostly young developers participating enthusiastically in the technical sessions and trying out moves on the six Xbox 360 gaming consoles installed in the foyer.

What impressed me about Microsoft is that the company having just had a major launch of Vista and Office 2007 is already planning and preparing for the launch of its new products – more about these later. Truly, this is a company that not only has the ability to anticipate future trends, but also the clout make them happen.

From Day 1, the major takeaways from the sessions were:

·         The next major inflection point in software development is here – from products and applications for individual PCs to the client – server environment to Internet and now on to service oriented applications.

·         The Internet has now evolved to the next version – Web 2.0 – with a huge number of applications and services available on the Internet. User created content is on the rise.

·         There seems to be a conscious move by industry leaders to work towards convergence – the PC, the Mobile Phone and the TV will soon be working in a truly interconnected way – a change that could happen sooner than you think – A Unified Communications strategy is very much on the cards from Microsoft.

·         Hardware performance will continue to improve – no end in sight yet. This is being driven by even higher amounts of digital information being created every second – from data to images to audio and video.

·         I was impressed by the focus on a technology called ‘virtualization’ in which a single piece of hardware such as a PC or a Server can run multiple operating systems and environments. This is being made possible by advances on both the hardware and the software front.

·         More and more analog devices will shift to the digital format – it was music and photographs at first – now it seems to be the turn of the telephone. The speakers were of the opinion that since digitization supports software advances, the pace of change of the technology could be very rapid indeed and the world’s telecom network may be in for a major overhaul soon.

·         Broadband connectivity is improving in all countries of the world and so is mobile phone usage – this is potentially very disruptive to many companies and business models.

Like most other industries such as telecommunications, financial services and manufacturing, healthcare is not immune to these changes that are on the anvil. Surely better communication, lower total cost of ownership and better interoperability between disparate systems can only benefit our industry.

Posted by Sunil Tadepalli at 11:36 PM | Permalink | Comments (1) | TrackBacks (0)

Investopedia.com says, "Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.".

Goodwill, being an intangible asset, is very difficult to value. Purchased goodwill is normally the balancing figure between the purchase price of an acquired entity and the total fair value of the acquired assets, both tangible and intangible, and liabilities (say, in the case of liquidation). Frequently, however, the goodwill represents over half of the total purchase price.

Since lab services are increasingly commoditised, the value of goodwill can sway considerably depending on the acquirer/ seller. There are various methods to compute a business valuation, most of them taking goodwill into account indirectly. Net asset value, discounted cash flow (of future earning estimate), price-earnings multiple, etc are popular options of business valuation.

A general rule of thumb in the service industry is EBITDA (Earnings Before Interest Tax Depreciation & Amortisation) multiplied by a commonly used factor (depending on the growth potential, country, etc.) For example, in US labs, the factor is 7 to 8. A lab with an EBITDA of $10 Million per year would sell for around $70 Million. Now if the resale value of all the tangible goods (building, equipment, fixtures, etc) was $45 Million, the difference ($25 Million) accounts for 'goodwill'.

Note: In India, since the market hasn't quite matured in terms of M&A (Mergers and Acquisition) activity, the price-earnings multiple is not standardised. The factor is usually based on historic transactions. Until sufficient data gets collected, the 'discounted cash flow' method is used. Though more complicated, it is a viable option. 

 

Posted by Shravan Subramanyam at 10:50 PM | Permalink | Comments (0) | TrackBacks (0)