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SINCE PASSAGE OF THE AFFORDABLECARE ACT OF 2010, almost everyaspect of healthcare in the United

States has changed significantly. Changescertainly are occurring in the clinical labo-ratory sector, and many lab directors expectCongress and the Trump administrationwill make still more changes.

To get an idea of how those changes haveaffected labs and to analyze how clinical labscan prepare for what’s ahead in the comingyears, THE DARK REPORT interviewed RalphTaylor, Chief Executive Officer of SysmexAmerica in Lincolnshire, Ill. SysmexAmerica serves clinical labs in North andSouth America with automated hematology

kk CEO Summary: To bring testing closer to patients, clinical labora-tories will need to offer sophisticated point-of-care systems for tworeasons. First, that’s what patients want, and second, a shortage ofapplicants for lab tech jobs will force labs to use more senior staff toprocess abnormal test results, leaving lower-level staff to manage nor-mal results. Abnormal results will be produced in the central laboratory,and normal results will be produced closer to patients. Therefore, hos-pital labs will become almost like referral labs for abnormal specimenswhile normal testing will migrate to near-patient settings. To makethese changes, labs will need to work with companies developing auto-mated systems that reduce staff hands-on time.

INTEHealthcare’s T Bringing Chan

N E W S M

“Today, patients want to get diagnosis and treatment faster with fewer visitsto the doctor’s office. They want speedier and more comprehensive deliveryof clinical services, be it laboratory tests, imaging, or other procedures.”

—Ralph Taylor, President, Sysmex America, Inc.

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and urinalysis analyzers and middlewareinformation systems.

Taylor joined Sysmex as an ExecutiveVice President in 2007, and in March,Sysmex named Taylor CEO. He is responsi-ble for management and strategy and contin-ues to lead operations in Latin America whilealso growing the flow cytometry business.

In the interview, Taylor focused on threegeneral themes: 1. How Sysmex views the way the health-

care system is transforming in theUnited States.

2. How Sysmex’s executives believe clini-cal laboratories will respond to health-care’s transformation by changing howthey are organized and deliver testresults to physicians and patients.

3. How Sysmex and other companies serv-ing labs are developing technologies,products, and services that will helpmedical labs meet the changing needs ofhospitals, physicians, and payers.

EDITOR: Let’s start with the changes hap-pening to healthcare. What are the primarydrivers of change that you see here in theUnited States, and, more broadly, across theglobe?

TAYLOR: We are watching the trend inwhich healthcare is moving closer to thepatient. Today, for example, patients seekfewer encounters with the healthcare system.They want to receive diagnosis and treat-ment faster with fewer visits to the doctor’soffice. They want faster and more compre-hensive delivery of clinical services, be it lab-oratory tests, imaging, or other procedures. EDITOR: Is this trend something youngergenerations, such as Genera tion X and theMillennials, are pushing?TAYLOR: In part, yes. We see this trendhappening among all patients. But it is par-ticularly true with Millennials. This genera-tion is more educated about healthcare.Compared with older generations,Millennials are savvier in how they selecthealthcare providers and in how theyacquire the care they need.EDITOR: What does this mean forproviders?TAYLOR: For providers, a greater propor-tion of their patients are now well-informed. They show up having researchedtheir health conditions. They know the typeof care and treatment they want. EDITOR: How are physicians and hospitalsresponding to these informed patients?

ERVIEW Transformation Now

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TAYLOR: For informed patients, we seeinnovative providers adopting a con-sumer-based approach to delivering care.They recognize that growing numbers ofpatients now go on the Internet to ratehealthcare providers on such factors asconvenience, wait times, and the qualityof care they receive.EDITOR: How can medical technolo-gists, pathologists, and other lab profes-sionals respond to these consumers? TAYLOR: When you see such changesoccurring at the macro level, then we aslab professionals need to focus on how wecan meet those demands by doing ourjobs more efficiently. That means we needto deliver test results faster and providemore information about what those testresults mean. EDITOR: Do you see connectionsbetween this consumer-based emphasisand how payment models are changing asMedicare and private payers move awayfrom fee-for-service and to paymentarrangements that reward providers onpatient outcomes and satisfaction?

TAYLOR: Yes, absolutely, there is a con-nection. Consumers are searching forservice efficiencies in healthcare—just asthey do when buying other products.They want more information about thecare they receive. In particular, they wantinformation about what forms of treat-ment are best. Providers need to respondto those demands for information. EDITOR: Can these changes be seen inthe health systems and hospitals wheremany lab professionals work?

TAYLOR:We do see this, particularly aspayers evolve in how they reimburse hos-pitals. For example, we see some hospitalscompeting in terms of the way they pro-vide services. More intense competitionwill drive improvements in efficiencythroughout the healthcare system.EDITOR: Given what you’ve said abouthow health systems need to have a moreconsumer-focused approach to care, doyou foresee health systems, hospitals,physicians, and even insurers taking dif-ferent approaches to meet this demandfor consumer-facing care? TAYLOR: We believe hospitals andinsurers will soon be able to publish dataon the results they’ve produced from pay-for-performance programs. As that hap-pens, physicians and hospitals willbecome much more cognizant of howthey’re measured and how their perform-ance compares with that of other physi-cians and hospitals. EDITOR: Will this published data givebetter-performing providers a competi-tive advantage?TAYLOR: All evidence to date says, yes,that will be true. With access to patient out-comes data and satisfaction scores, mostpatients will be able to select among the topperformers and avoid poor performers. EDITOR: What type of patients will usethis information to shop for a hospital, aphysician, or a lab?TAYLOR: Only the more informedpatients will bother to seek out that infor-mation. They will research all providerswho deliver their care. That research willinclude each provider’s background andprior experience. By contrast, the every-day healthcare consumer will not do thateven though such information will bemore readily available.EDITOR: Can providers use outcomesdata and patient satisfaction scores totheir advantage?TAYLOR: That is happening already.Many hospitals and insurers use existing

Ralph TaylorNEWSMAKERINTERVIEW

k“Sysmex strongly believesthat core labs will continue toanchor lab testing services inthe communities they serve.What will change is the type of lab testing that makes up the largest volume of specimenstested in core labs.”

RalphTaylor

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rankings and similar information in theirmarketing materials. In the future, moresuch marketing will be used to drive patientstoward better-performing providers.EDITOR: Now that we’ve covered thatfirst theme about what changes are occur-ring, let’s go one level deeper. Given thechanges you’ve described in healthcare,will these changes affect how labs organ-ize themselves to deliver testing services?TAYLOR: My answer is consistent withthe major changes we just discussed forthe healthcare system at large. Asproviders shift their focus to patient-cen-tric healthcare—delivered as close to thepatient as possible—so also will clinicallaboratory testing services move closer topatients. EDITOR: Do you have examples that arealready in the marketplace? TAYLOR: Today, you can see health sys-tems and hospitals trying to accommo-date patients’ schedules rather thanrequiring patients to show up accordingto the hospital’s or the lab’s schedule.Another example is how some clinicallabs are establishing patient service cen-ters in retail settings, including pharma-cies and grocery stores.EDITOR: THE DARK REPORT has writtenabout this trend. Last year, Labora toryCorporation of America and QuestDiagnostics announced agreements withnational grocery and pharmacy chains toput PSCs into retail stores. TAYLOR: That strategy makes sensebecause it’s patient friendly. It’s time-con-suming for patients to drive to the localhospital, find a parking place, and then getto the PSC in the hospital or the nearbyphysicians’ office building. Conversely,it’s much more convenient for patients togo from where they live to a grocery storeor pharmacy to have their lab specimenscollected. We expect that kind of accessi-bility will increase across the marketplace. EDITOR: Is “faster and more conven-ient” a trend in lab test turnaround times,

and, if so, are Sysmex’s lab clients movingin this direction? TAYLOR: That answer is a definite yes!We already have some labs making testresults available to patients within thesame day or—in some cases—by the nextmorning. Along with a faster TAT inreporting lab results, as appropriate, thoseresults will include more commentary andguidance from labs about what thoseresults mean. Many physicians alreadyfind this added value helps improve theirmedical practice productivity. EDITOR: Given that you see early signsof labs shortening test turnaround timesand adding clinically-useful commentaryin lab test reports, how is this trend con-sistent with moving more lab testingcloser to the patient? What is the futurefor core laboratory facilities versus point-of-care and near-patient testing?TAYLOR: Sysmex strongly believes thatcore laboratories will continue to anchorlab testing services in the communitiesthey serve. What will change is the type oflab testing that makes up the largest vol-ume of specimens tested in core labs.EDITOR:Would you explain that?TAYLOR: Core laboratories have some-thing unique and irreplaceable. This iswhere the expert knowledge of lab medi-cine resides in a community or region. Incore labs, you have experienced clinicalpathologists, chemists, and laboratory sci-entists working in close collaborationwith each other and with referring physi-cians. The core lab of the future will be thecenter of sophisticated diagnostic expert-ise and capabilities. EDITOR: Given that core labs will con-tinue as the medical community’s mostsophisticated testing resource, what typeof testing will be dispersed within thecommunity and done closer to the patientthan is currently done?TAYLOR: As mentioned earlier, thetrend is to serve patients in convenientsettings, so that routine screening and

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common tests will be pushed outside thecore lab, meaning to point-of-care andnear-patient settings. EDITOR: Is this trend why specimen col-lection will shift into retail stores and sim-ilar settings?TAYLOR: Yes, particularly for routinescreening and other common tests, morespecimens will be collected in such con-venient settings as CVS’ Minute Clinicsand in PSCs in supermarkets and otherretail stores. Quest, LabCorp, and otherlarge lab companies are moving draw sta-tions into pharmacies, such as Walgreens.If these pharmacies had the equipment todo the testing there, then they would doso. That’s the next logical step in the evo-lution of moving care closer to patients.EDITOR:Our readers will note your state-ment that lab tests in retail pharmacies is anext logical step in the move to bring labtests closer to patients. What other disrup-tive trends do you see coming?TAYLOR:How about the news that CVSHealth will acquire Aetna? That createsthe opportunity for CVS to establish anintegrated health delivery system thatincludes the health insurer and can pro-vide care in 9,600 CVS pharmaciesnationwide. EDITOR:What would you say about thetrend of consolidation in the hospital sec-tor and the way integrated health systemsare establishing large spheres of influ-ence? The Aurora and Advocate combi-nation in Milwaukee and Chicago andNorth well Health in New York are exam-ples of such big health systems. From yourperspective, how do these big health systems change the landscape for clinicallaboratories?TAYLOR: There are two important waysthat these systems affect labs. First, thesesystems have learned to adapt to the crisisthat most other labs face because all labshave an aging population in the work-place and need to hire and retain skilledstaff while facing a shortage of applicants

to fill those lab-tech positions. One conse-quence of this crisis is that the labs inlarger health systems are supplementingthose workers with less-skilled staff whothen run most of the analyzers and otherlab systems.EDITOR: What is the second way largehealth systems affect labs?TAYLOR: The second way large healthsystems affect labs is that they are separat-ing normal results from what we mightcall abnormal results. Normal lab testresults will be produced closer to patients.However, abnormal results will be pro-duced in the core laboratory. EDITOR: By that, do you mean lab testsfor generally-healthy patients will movecloser to the point of care? And tests forpatients with complex conditions or diffi-cult-to-diagnose diseases, will be referredto core labs?TAYLOR: Yes. Sysmex believes that spe-cialized laboratory staff will handle theabnormal test results, meaning the skilledstaff will be assigned to those samples.When that happens, the hospital lab willbecome almost like a referral lab forabnormal specimens within its commu-nity. Mean while, normal testing willmigrate to near-patient settings. EDITOR: This is consistent with yourearlier prediction that core laboratorieswill be an essential resource in their serv-ice areas because they have the sophisti-cated expertise and experience to performcomplex testing and to help physicianswith difficult-to-diagnose patients. Howwill IVD manufacturers support thisdevelopment?TAYLOR: While these changes are hap-pening, Sysmex and other IVD manufac-turers will respond by developingautomation for laboratories specificallydesigned to remove the hands-on time foreach sample. EDITOR: What areas of lab workflowwill be the most difficult to automate inthis way?

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TAYLOR: Even with new automated sys-tems that reduce staff hands-on time, thefact is that much testing must still gothrough accessioning, the one part of clin-ical labs where hands-on processes arestill required. In their struggle to addressthis problem, labs and companies servinglabs do not yet have an answer.EDITOR: Now that we’ve connectedhow patients will drive change and howhospitals and health systems are respond-ing to those changes, are there othertransformative forces that will cause labsto operate differently over the next threeto five years?TAYLOR: Yes. Probably the most signif-icant of these other transformative forcesis the new Medicare 2018 ClinicalLaboratory Fee Schedule. It substantiallylowers the prices for many key lab testsand this will negatively change labfinances. EDITOR: Many expect the Medicare feecuts will cause some labs to shrink orclose, but will there be other conse-quences from these price cuts?TAYLOR: Those lower rates will drivelabs to look for more efficiencies. And,when calculating a lab’s total cost of test-ing, the manufacturer’s costs may be oneof the smallest components of total costs.Therefore, labs will need to drive efficien-cies into the cost of each test. That willforce them to be creative in rethinkingcurrent testing models. One obvious wayto drive down testing costs is to reducelabor costs. Even though some staff arenot highly paid, their salaries are a majorelement driving the cost of each test. EDITOR: Now that we’ve covered the firsttwo themes, we can address the third theme:How will Sysmex and other companiesdevelop the products and services that labswill need in a transformed marketplace? TAYLOR: I will repeat one theme centralto our strategic thinking about healthcareand the lab testing marketplace. Sysmexand all companies serving clinical labs will

need to look at how they can develop ana-lyzers to move testing closer to thepatient. For Sysmex, the XW-100 was thefirst entry in this new world of CLIA-waived CBC testing. EDITOR: You surprised many IVD exec-utives with the FDA clearance to sell aCLIA-waived hematology analyzer thatcan do routine CBCs in near-patient set-tings, including physician offices. TAYLOR: That may be true. But yourreaders should understand the more sig-nificant aspect of FDA’s clearance.Sysmex had to work in close communica-tion with the FDA to develop a path todevelop a CLIA-waived system for what isa CBC with three-part differential. Thenext step would be to develop a five-partdifferential with a CLIA-waived status. Ifwe can do that, we would obviously beproviding more useful information to cli-nicians and patients from a hematologyperspective. EDITOR:What other clinical lab tests doyou want to develop for use in CLIA-waived systems?TAYLOR: Sysmex intends to expand itsportfolio of testing that is CLIA-waived.To accomplish that, we are exploringwhether it is possible to create a CLIA-waived suite of analyzers and instrumentsthat functions as a near-patient lab. Forexample, we are trying to determine if wecan add the most commonly-requestedimmunohistochemistry tests. EDITOR: That is an ambitious goal.TAYLOR: Yes, it is, but it’s not immedi-ately achievable. If we can do all that,however, we would provide a greater formof intelligence to assist doctors who needdiagnostic test results. What I’m describ-ing is a type of mini-CLIA-waived labsuite. That’s an area we are assessing andthe CLIA-waived XW-100 is the first stepin that direction.EDITOR:Will this CLIA-waived suite ofanalyzers and instruments be developedin stages?

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TAYLOR: Certainly, yes. We knew wecould develop the first CLIA-waived CBCwith three-part differential. But it was stilla challenge to make that a reality. Nowour task is to create a suite of products inthe CLIA-waived space. The next step forus is to provide more relevant parametersto our XW-100 so it can handle abnormaltesting. Another development challenge isto help laboratories manage those samplesin specific ways that require the minimumamount of staff work. As we do that, wewill help clinical labs reduce the amountof lab-staff intervention that is neededfrom laboratory technicians.EDITOR: Do you have a guiding visionfor all of these future analyzers and tests?TAYLOR:My vision for the future is thatone day the lab technician will not besomeone who stands in front of a hema-tology, immunochemistry, or other ana-lyzer. Instead, the future lab tech will sit ata terminal reviewing and acting on datacoming from many different analyzers.The lab tech of the future will not betouching tubes and loading analyzers. EDITOR: Are you hoping, therefore, tobring an end to the current era wherehighly-trained clinical laboratory scien-tists spend their time managing analyzersor a section of an automated line?TAYLOR: Definitely. Our vision is thatthe lab systems of the future will be oper-ated and managed by lab staff that havemuch less training than is true today.These new staff members basically will bemachine minders. That is not the bestterm, but it describes what they will do. EDITOR: In your view, will the highly-skilled clinical laboratory scientists con-tinue to be essential to every laboratorybecause they will spend their time ensuringthe quality of lab test results? If so, will theybe the source of added value for labs in thefuture, meaning these clinical pathologists,chemists, and other lab scientists will col-laborate with providers to help them makefaster, more accurate diagnoses?

TAYLOR: Yes. Lesser-skilled staff willhandle specimens, load and unloadmachines, and do similar tasks. The qual-ified lab staff will do all of the interpre-tive work, authorizations, and samplevalidation.EDITOR:Does that mean lab profession-als should expect to see Sysmex and otherIVD manufacturers offer analyzers,instruments, and automated solutionsdesigned to reduce hands-on labor?TAYLOR: I believe that will be the case.Our strategy, and possibly the strategy ofour competitors, will be on two levels.First, we will continue to drive forwardwith automation by working to minimizethe level of manual intervention with eachsample. Second, we will look at how wepresent lab test results—meaning theforms in which the data reside—so thatwe can provide greater information thatallows faster and more specific data inter-pretation. That is the next logical evolu-tionary step given where we are now afterdeveloping the Sysmex XW-100.

EDITOR: How does your CLIA-waivedsystem fit with this strategy?TAYLOR: The reason we started theXW-100 project was to fulfill the unmetneed for CLIA-waived testing in doctors’offices. We aim to create a type of CLIA-waived mini-lab environment to offer keyimmunochemistry testing and also clini-cal chemistry testing along with urinaly-sis. If we could do that, we would bemoving some core laboratory testing to aCLIA-waived environment. EDITOR: Where else might this type oftesting be performed?

k”...the future lab tech will sit at a terminal reviewing and acting on data coming from many different analyzers.The lab tech of the future will not be touching tubes andloading analyzers.”

RalphTaylor

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TAYLOR: The next logical need to fill isfor the patient who is at the pharmacywaiting to get clinical lab testing donethere. If we can meet that need, it wouldbe an extension of that philosophy. EDITOR: Now that the XW-100 is onthe market, do you worry that competi-tors will duplicate it or make somethingbetter?TAYLOR: Yes, absolutely. In everyindustry, everyone wants to produce thenext better mousetrap. If you go back fiveor six years, we showed that the FDA wasreluctant to give certification to a CLIA-waived product in hematology. Our expe-rience is that the FDA is open to this ideaif you provide the right controls in termsof the result. So, in that way, we created apathway for how it could be done forother CLIA-waived tests.EDITOR: Does that mean other IVDcompanies are expected to launch similarinstrument systems?TAYLOR: Our competitors are likely tofollow that path because there are about70,000 CLIA-waived labs in the UnitedStates. There’s a lot of people eyeing thehematology part of that market because itdidn’t have a CLIA-waived product. EDITOR: This has been an enlighteningconversation, Ralph. Any closingthoughts? TAYLOR: I’d like to emphasize onepoint, and it is that—no matter in whatsetting the lab sample is collected—it willbe experienced, trained clinical labora-tory professionals who will oversee thenetwork of labs and sites performingthose tests. As medicine becomes morecomplex and personalized, the need forthe expertise of pathologists, clinicalchemists, and clinical laboratory scien-tists of all disciplines will be greater thanever before. TDR

—Joseph Burns Contact Sysmex Media Relations at 224-543-9500 or mediarelations@sysmex.com.

IN NOVEMBER, the FDA cleared a completeblood cell count test from Sysmex and its

XW-100 Automated Hematology Analyzer.For this analyzer, the FDA granted a

CLIA waiver, allowing it to be used in non-traditional laboratory sites, such as physi-cians’ offices, clinics, or other facilitieswith a CLIA Certificate of Waiver. Also, awide range of support staff can run theanalyzer, allowing for fast availability ofresults, the FDA said. The XW-100 is thefirst, automated, CLIA-waived hematol-ogy analyzer to offer an accurate, same-visit CBC with differential and asample-to-result time of three minutes,Sysmex said.

This technology provides healthcareprofessionals with a report of 12 parame-ters in the same patient visit to assist inestablishing a diagnosis and treatmentplan. The XW-100 is a quantitative, auto-mated hematology analyzer intended forin vitro diagnostic use to classify and enu-merate the following parameters forvenous whole blood: WBC, RBC, HGB,HCT, MCV, PLT, LYM%, Other WBC%,NEUT%, LYM#, Other WBC#, NEUT#.

It is not approved for use in diagnos-ing or monitoring patients with primary orsecondary chronic hematologic diseasesor disorders, oncology patients, criticallyill patients, or children under the age of 2.

CLIA Waiver for XW-100Supports Fast Results

Ralph Taylor NEWSMAKERINTERVIEW

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