Northwell Health Laboratories: The 10-Year Outcomes After Deciding to Keep the Lab

The Northwell Health system began its existence in 1990 with merging of a tertiary hospital, North Shore University Hospital (Manhasset, New York), with a community hospital, Glen Cove Hospital (Glen Cove, New York), to form the North Shore Health System; further local community hospital acquisitions followed. The 1997 integration with the other major tertiary hospital in Nassau County, namely, Long Island Jewish Medical Center (LIJ; New Hyde Park, New York), heralded the formation of the North Shore-Long Island Jewish (NSLIJ) Health System composed of 2 tertiary hospitals and 6 community hospitals. In 2016, the now 19-hospital health system (17 owned hospitals and 2 affiliates) was renamed Northwell Health.

In 1993, the health system purchased a small outreach laboratory with the intent of using this ambulatory laboratory as the nidus for standardizing instrumentation and practices for ambulatory and inpatient laboratory services in the nascent health system. The North Shore Health System Laboratories were incorporated in 1997 as a wholly owned business unit of Northwell Health, with occupation of a separate off-site facility in 1998 (the “Core Lab”). As hoped, cost efficiencies were achieved from consolidation, increased automation, management of distributed system capacity, and volume growth, providing the foundation for building outreach services. Specifically, consolidation of in-system reference laboratory services to the Core Lab had already reduced the cost of those services from $32.6 million to $28.8 million, a savings of $3.8 million (11.7%; 1997 actuals). Following the 1998 occupancy of the Core Lab site at 10 Nevada Drive, Lake Success, New York (and renaming of the laboratory to “North Shore-LIJ Laboratories”), growth of outreach services enabled the Core Lab to start generating a favorable financial margin for the health system by the fourth year of operation, growing from a $0.6 million positive margin (2002) to $3.7 million (2008). The growth of North Shore-LIJ Laboratories also brought regional recognition, both within and beyond the North Shore-LIJ Health System.

In 2002, and representing North Shore-LIJ Laboratories, the vice president for NSLIJ Laboratory Services was 1 of 6 founding members of a new organization of regional not-for-profit clinical laboratory providers, The Compass Group (www.thecompass-group.org; accessed March 21, 2019). The mission was to examine shared challenges in the laboratory industry and brainstorm solutions to improve quality, save money, and integrate more fully with clinical services.⁴  A key component of The Compass Group actions was to generate operational benchmarks of member laboratories so as to assess the performance, productivity, and quality of those laboratories. The Compass Group became a national sounding board for how not-for-profit regional laboratories could compete with commercial laboratories, growing from the original 6 to 18 network-based or network-affiliated regional laboratories by 2008.

The 2008 year-end quantitative metrics of the Core Laboratory were as follows. It occupied a 60 000 sq ft facility in Lake Success, New York, and was able to perform 98% of tests (5.90 million of 6.02 million total) received from the following sources: (1) health system hospitals; (2) physician practices; (3) nursing homes; (4) in-system reference testing; and (5) clinical trials. Hospital-derived testing represented 36% of Core Laboratory revenue (2.12 million tests; $27.7 million). “Outreach” revenue derived from physician practice/nursing homes/reference testing represented 59% of total net revenue (3.74 million tests; $43.2 million); and clinical trials, 5% (0.26 million tests; $3.4 million). The laboratory had 8 community-based patient service centers for blood draws and 3 Northwell physician-office–based patient service centers. There were approximately 5000 requisitions per day across all lines of business, and approximately 30 000 laboratory test pick-ups per month, primarily throughout Queens in New York City, and Nassau and Suffolk Counties of Long Island. In October 2008, projected revenue for 2008 was $69.2 million, based on 5.9 million tests (year-end actuals were $72.8 million on 6.0 million tests). This was to be compared with total net revenue of $47.4 million in 2006, and $59.9 million in 2007. Importantly, outreach revenue had grown from $26.2 million in 2006 to $43.2 million in 2008—a 64% increase. Additional assets (inclusive of the 8 hospitals in the health system) included professional depth of more than 50 pathologists in various subspecialties; professional PhD expertise in microbiology, virology, molecular pathology, and cytogenetics; and a highly experienced and qualified management team with more than 10 years of success and innovation in establishing and running the Northwell Health Laboratories network.

In August 2008 and in response to a June 2008 Request-for-Proposals put forth by Northwell corporate leadership, a proposal from a potential commercial laboratory partner was received: a joint venture would be created for operation of Northwell Health Laboratories, to be controlled by the commercial laboratory with Northwell retaining a minority interest. Further discussions were held with the first commercial laboratory September through November 2008, and exploratory discussions were considered with another potential commercial laboratory partner later in November 2008.

A Northwell Board of Trustees subcommittee was tasked with the evaluation process, with the considerations given in Table 2. In October 2008, the subcommittee heard arguments from Northwell laboratory leadership for why Northwell Health Laboratories should be retained by the system in full. The actual figures presented to the Board of Trustees subcommittee were the Core Lab's 2006–2007 actual net revenue and that projected for 2008–2009 (Figure 2, A); and actual (2007) and projected (2008) test volumes by source categories (Figure 2, B). The 5-year strategic goals for Core Laboratory growth (2009–2014) also were presented:

1. Continue to support the health system's hospital-based clinical laboratory needs;

2. Generate incremental physician outreach revenue and increase regional market share;

3. Become recognized as a national reference laboratory through further development of test protocols and growth in areas of molecular diagnostics, anatomic pathology, and specialized testing;

4. Continue to grow clinical trials business focusing on high margin/high complexity testing;

5. Sustain the existing nursing home client base (n = 18) while continuing to assess the impact of nursing home support on the health system's efforts to provide continuum-of-care;

6. Enhance and drive the North Shore-LIJ Health System brand.

The Northwell laboratory leadership also projected cost control in operating expenses of hospital laboratories based on the following: reference testing internalization; effective management of test capacities at system hospitals to maximize cost efficiencies; leveraging the total system volumes to improve procurement costs and optimize technologies deployed at the hospitals; cross-support of the hospital workforces so as to minimize local site needs for overtime pay; and sharing in cost savings achieved through management of the differential shift timing of hospital-derived, nursing home, and physician office outreach volumes being tested at the Core Laboratory.

Decision-making about entering into a joint venture continued into January 2009. In the end, Northwell Health executive leadership and the Board of Trustees Executive Committee accepted the recommendation of the Board of Trustees subcommittee to retain Northwell Health Laboratories as a fully owned system asset. The story can now be told of the 10-year outcome of this decision.

Immediately following the decision to retain the laboratory as a fully owned system asset, and endorsing the vision of Northwell Health Laboratories as an in-system integrated laboratory network, health system leadership approved creation of the “Laboratory Service Line,” effective January 2009. Service line leadership was united into a single position: the “system chair” of the Department of Pathology and Laboratory Medicine, with coappointment as senior vice president for Laboratory Services. This unified approach to service line governance created a strong dyad of medical (chair and senior vice president) and managerial (vice president) leadership, with their respective reporting to the health system chief medical officer and chief operating officer. Among many elements of the chair/senior vice president's employment agreement, that individual was commissioned to “identify and develop new clinical programs consistent with market opportunity, patient need, and financial feasibility.”

In January 2009, of the 54 pathologists in the health system, 50 were employees of their respective hospitals, on a salary model; the hospitals were responsible for the professional component revenue cycle. During the course of 2009, a total of 52 pathologists were converted to employment by a newly formed business unit, the Department of Pathology and Laboratory Medicine; the last 2 pathologists were brought from private employment into the department in 2014. All professional component billings were moved from the hospitals to the department, and administrative support for departmental function was built from scratch. The 2009 restructuring of pathologist employment increased professional Part B revenues by 78% when compared to 2008 ($69.04 collected per work relative value unit [wRVU] in 2009, versus $38.86 per wRVU in 2008), through better performance of the revenue cycle. In 2011, the central region anatomic pathology services, serving North Shore University Hospital, LIJ, and the Core Lab outreach program, were integrated.¹⁴  As previously reported,⁵  in 2009 two system vice chairs (Anatomic Pathology; Laboratory Services) and departmental division chiefs (see below) were appointed through internal promotion, with only 1 chief position requiring external recruitment. In 2012, two regional associate chairs were appointed to oversee community hospital pathology practices in the eastern and western regions of the health system. Creation of this unified pan-system departmental structure enabled design and execution of cohesive departmental strategies to support health system missions and goals. When new hospitals were further acquired by the Northwell Health system, the respective pathologists were brought into department employment on a schedule that respected their prior contractual agreements.

At the time (January 2009), Northwell Health Laboratories (the Core Lab) already had strong integrated infrastructure for Finance; Quality Management and Process Improvement; Regulatory and Compliance; Accessioning and Billing; Logistics; and Laboratory Information Services (Table 3).¹⁵  Further structural steps were undertaken during calendar year 2009 to make the “service line” a reality⁵:

1. Creation of an integrated table of organization for the Laboratory Service Line, including internal appointment of key system-level senior management positions, each working closely with a medical leadership counterpart in the Department of Pathology and Laboratory Medicine.⁵ 

2. Departmental and service line leadership worked together as the integrated service line “Executive Group,” an approximately equally balanced group of medical and managerial leadership.

3. Management of all clinical laboratory sites in the health system as a “virtual business,” involving 10 hospital-based clinical laboratory budgets (now 19), 1 Core Laboratory, and 1 Department of Pathology. Accountability of the hospital-based clinical laboratories remained to the local site hospital leadership; management (finances included) of those laboratories was as an integrated pan-system laboratory service line.

4. The creation of pan-system divisions enabled standardization and delivery of high-quality clinical services: Cytopathology; Hematopathology; Pediatric Pathology; Autopsy; Blood Banking & Transfusion Medicine; Cytogenetics & Molecular Pathology; and Infectious Diseases Diagnostics. In 2012, Near-Patient Diagnostics (aka, point-of-care testing) was added as a division. In 2014, Pathology Informatics was added as a division, including recruitment of a vice chair of Pathology Informatics/chief medical information officer for the service line.

5. Integration of the 14 existing “Methods Committees” (for standardization of laboratory practice across the entire health system) into 1 coordinated structure for system-wide laboratory performance.⁵ 

6. Management of all interactions with health system leadership and hospital-based leadership as a single “service line.”

On the last point, a fundamental premise was in play: all health care is local. The purpose of the system-wide service line was to support local care, and specifically, the ability of local hospital-based clinical laboratory staff and pathologist leadership to provide local care (ambulatory as well as in-patient), and to support their working relationships with local clinical staff (physician, nursing, and other), patients, and their communities. The service line was a resource for provision for local care, not a mechanism for pulling test volume out of local sites. The Core Lab was both an in-system reference lab, and an engine for driving the necessary infrastructure for pan-system operations and management of the Laboratory Service Line.

A key step to enhance the operations of the service line was the aforementioned integration in February 2011 of the anatomic pathology services of 2 tertiary hospitals (North Shore University Hospital and LIJ) with the Core Laboratory's Anatomic Pathology outreach service. This enabled simultaneous subspecialization of this central 27-pathologist practice group and a 30% increase in pathologist productivity.¹⁴  By now making available a fully subspecialized practice group for the Core Laboratory outreach programming, “full service” subspecialty support of physician practices throughout the market region became more attractive to potential clients. The central Anatomic Pathology Services unit also functioned as a real-time in-system “stat” consultative unit for system pathologists—especially those in the community hospitals—for cases being handled at the local level.

The January 2018 system-wide descriptors for the Northwell Health Laboratories (aka, the Laboratory Service Line) are given in Table 4. Service line growth from 2008 to 2018 has been as follows:

1. Inclusive of testing for in-system hospitals and outreach, Core Laboratory net revenue grew from $73 million (2008) to $320 million (2018) (Figure 3). This is an annualized growth rate of 16.0%. The net financial margin grew more than 10-fold during these same 10 years (data not shown).

2. Hospital-based clinical laboratory expense management was excellent, with increases in laboratory expenses directly attributable to specific programmatic initiatives at individual hospital sites, and cost savings otherwise achieved at hospital sites (Figure 4). These costs include the “Core Lab charge-back” for reference testing.

3. As reflected in professional wRVUs (Figure 5), anatomic pathology work for community hospitals remained essentially stable, although some variation occurred owing to changes in network affiliations of multispecialty physician practice groups. In turn, anatomic pathology volumes at 3 tertiary hospitals (LIJ, Lenox Hill Hospital [New York, New York], and Southside Hospital [Bay Shore, New York]) grew, largely as a function of growth in cancer service volumes.

4. Outreach anatomic pathology work (“Core,” Figure 5) more than doubled; fluctuations in more recent years reflect changes in laboratory network affiliations of multispecialty physician practice groups.

Performance outcomes against the strategic goals declared by laboratory leadership in October 2008 (vide supra) are given in Table 5. With 1 exception (lack of growth in clinical trials volumes), the performance of Northwell Health Laboratories successfully met these goals. In particular, Core Laboratory outreach volumes grew at an annualized rate of 10.3%, and revenues at an annualized rate of 17.8%.

One 2008 goal, “support of hospital-based laboratory services,” merits particular consideration. Quantitative data for Northwell Hospital laboratory services are given in Table 6. Core Lab charge-back to hospitals rose as new hospitals were acquired by the health system, owing to centralization of reference laboratory testing. Starting in 2012 when pan-system laboratory service line metrics became routine, hospital-based costs-per-test (minus blood) have risen from $10.31 (2012) to $12.22 (2018), an annualized rate of 4.5%. Using the data in Table 6, billable laboratory tests per adjusted discharge have risen from 32.9 (2012) to 38.1 (2018), an annualized rate of 2.5%. These 2 cost rises are the equivalent of an imputed $4.5 million rise in the annual costs of laboratory testing system-wide from 2012 to 2018, using the 451 808 adjusted discharges system-wide in 2018 as the basis for the calculation. Blood costs per adjusted discharge have remained essentially constant: $67.72 in 2012 versus $68.48 in 2018. Overall, the imputed system-wide increases of $4.5 million in the unit costs of laboratory services per discharge from 2012 to 2018 are to be compared with a total hospital laboratory spend of $242 million (2018). This is less than a 2% rise in laboratory costs per adjusted discharge during a 6-year period. The rise of hospital laboratory costs can thus instead be linked to strategic growth in clinical programming at specific hospital sites (Figure 4) and have been deemed appropriate for the strategic programs of the health system. Lastly, laboratory productivity, as measured by billable tests per technical full-time equivalent, has remained constant; the modest increased productivity in billable tests per total laboratory full-time equivalent reflects improved efficiencies in nontechnical staffing needs (Table 6).

It is therefore a reasonable statement that the decision to retain Northwell Health Laboratories as a wholly owned health system asset was justified by outcomes in the 10 years after 2008. And after 20 years of occupancy of the original “Core Laboratory” facility, Northwell Health Laboratories moved to new quarters in early 2019.¹⁶  However, this story, including the financial component, is not complete without consideration of the value-added activities of the Northwell laboratories.

The fundamental mission of a clinical laboratory is delivery of high-quality patient care. A default premise of the entire laboratory industry is that clinical laboratories provide accurate, safe, and timely results, and there are extensive regulations and compliance requirements to ensure that this premise is true. The question is therefore, does a wholly owned in-system laboratory network enable better patient care than an alternative arrangement? Establishing an evidence base to answer this question remains a challenge since the laboratory industry has focused extensively on the evidence base of quality and safety,¹⁷  without necessarily addressing whether one model of laboratory service delivery is better than another. In these 10 years, Northwell Health Laboratories has attempted to provide strategic in-system leadership for innovation and enhancement of patient care, and responsiveness to challenges and operational difficulties. Among innumerable examples during the 10 years are national and international leadership in responding to the novel H1N1 influenza virus pandemic in 2009¹⁸ ; demonstrating how in-system consolidation of anatomic pathology services can help drive subspecialization to support high-acuity patient care¹⁴ ; and improvement in diagnostics for respiratory virus infections.¹⁹  The consistent year-to-year effort to advance the delivery of health care is an essential element of being an effective in-system laboratory. Patient care is also served through leadership and volunteerism provided by pathology medical and managerial personnel at all levels of the institution and throughout its extensive geography.

The Laboratory Service Line is an exemplar within the health system for leadership and management of a pan-system clinical service, and for effective communication and accountability to health system stakeholders—including corporate leadership, hospital leadership, medical and nursing leadership, and regulatory and compliance leadership. Two fundamental premises are that the Laboratory Service Line must exercise self-discipline in expenditure of health system resources and must consistently be favorable to financial budgetary targets. In the first instance, the unification of clinical laboratory financial management as a laboratory service line had to be matched with a consistent record of integrity, transparency, and accountability in the financial performance of the service line. In the second instance, with rare exception, hospital-based clinical laboratories (8 sites in 2008 growing to 19 sites in 2018), department, and Core Laboratory budgetary performance was favorable when compared to annual budgetary targets.

Since 2008, Northwell Health has grown from 15 hospitals to 21 hospitals, and a network of more than 650 ambulatory practice sites has been built. In keeping with 1998 projections, 48% of health system revenue is now from ambulatory services ($5.4 billion out of total health system revenues of $11.2 billion; 2018). The clinical laboratories of newly acquired hospitals have been successfully integrated into the Laboratory Service Line, with immediate opportunity to take advantage of the service line infrastructure and cost efficiencies. In the ambulatory sector, physician practices joining the health system were often outreach clients of Northwell Health Laboratories already, facilitating their integration into the health system. In turn, the continued growth of Northwell into new geographic regions (Manhattan, Westchester County, Brooklyn) gave opportunity for the Northwell laboratories to serve as ambassador for the health system in the ambulatory medical practice community.

Opportunity to serve at the regional level has become increasingly important. Northwell Health Laboratories have previously reported on their service to nonaffiliated regional institutions in times of crisis, particularly emergent rehabilitation in December 2011 (continuing through 2015) of the clinical laboratory of St. John's Episcopal Hospital, Far Rockaway, New York.⁵  Further examples are as follows:

In April 2014, a joint venture entitled CLNY (for “Clinical Laboratory of New York”) was formed between Northwell Health Laboratories and New York City Health + Hospitals (NYC H+H). This was the brain child of the chief financial officer of NYC H+H, and the vice president of Laboratory Services of Northwell. This alliance sought to achieve cost efficiencies and improved laboratory performance through: (1) use of 1 central laboratory for reference testing; (2) standardization of laboratory technologies and procedures across both health systems; (3) negotiating better pricing for procurement and contracting; (4) standardization of Laboratory Information Services across both organizations; and (5) enhanced performance of logistics and operations. Modelling of laboratory data imputed an annualized cost benefit upon completion of the 5-year project of approximately $23 million annually for NYC H+H and $15 million for Northwell. The annual cost savings outcomes through the first 5 years of implementation have exceeded projections, and a strong working relationship between the clinical laboratories of NYC H+H and Northwell has been fostered. This partnership between a public charitable entity (NYC H+H) and a private non-profit entity (Northwell) for the provision of laboratory services is unique in the country.

At 3:00 pm on Wednesday, June 15, 2016, the Northwell Health Laboratories were asked by the chief medical officer of NYC H+H to provide emergency support of the clinical laboratories of Coney Island Hospital (CIH), Brooklyn, New York, in response to their regulatory difficulties with the New York State Department of Health. With intense involvement of Northwell Health Laboratories' medical and managerial leadership through all levels of the CIH clinical laboratory, full rehabilitation of that laboratory was achieved in May 2018. Similar to Northwell laboratory's support of St. John's Episcopal Hospital beginning in December 2011,⁵  the CIH clinical laboratory remains as an affiliate member of the Northwell Health integrated laboratory network.

In Summer 2016, Northwell Health provided consultative services to the City of New York and State of New York regarding strategies to improve access of Brooklyn residents to health care services, particularly in the central sector. The Northwell consultative report, entitled “The Brooklyn Study: Reshaping the Future of Healthcare,” was issued in October 2016,²⁰  and ultimately led to the announcement by the state governor in January 2018 of the “One Brooklyn Health initiative.”²⁰  A key part of this initiative was partnership between 3 hospitals in central Brooklyn to support an integrated health care delivery system: Brookdale University Hospital Medical Center, Interfaith Medical Center, and Kingsbrook Jewish Medical Center. Working quietly in the background, the Northwell Health Laboratories have helped to provide pathologist leadership and staffing, laboratory administrative leadership, and operational and regulatory support to 2 of the 3 hospitals, namely, Brookdale and Interfaith; cost efficiencies also are achieved through use of Northwell for reference laboratory purposes. Northwell is also now providing pathologist leadership and staffing to a fourth hospital in that region of Brooklyn, Wyckoff Heights Medical Center.

The outcome of these regional activities is that the Northwell Health Laboratories' network of affiliations extends considerably beyond the geographic boundaries of the Northwell Health system, to include the affiliation with New York City Health + Hospitals, and other hospitals in the region (Figure 6). A key part of the management affiliations is use of a managed service organization model (Figure 7). This model enables local hospital sites to retain authority over their clinical laboratories, making their own decisions for optimizing the functionality of an affiliation with Northwell Health Laboratories.

In the midst of continued downward pressures on revenue and reimbursements for laboratory testing services—arguably no different than those in 1998 but of greater magnitude—diversification of revenue is worth pursuing. In 2015, Northwell Health Laboratories formally formed a Business Development unit for development of entrepreneurial opportunities. The first entrepreneurial joint venture, Technopath Northwell Clinical Diagnostics, was formed with Technopath Clinical Diagnostics (Tipperary, Ireland) in September 2017 as a successful outcome for “Enterprise Ireland,” the Irish State agency that works with Irish businesses to help them start, grow, innovate, and win export sales in global markets.²¹  The goal of this joint venture is to provide quality control products and informatics solutions that enhance the accuracy of laboratory testing in the US market. Diversification has also included partnering in 2015 with OPKO/BioReference Laboratories, Inc (Miami, Florida) for cost-effective solutions for genetics and genomics testing, through a joint venture entitled the “Northwell Health Genomics Alliance.”^22,23 

The Northwell Health Laboratories established a Pathology Informatics division to leverage the massive data streams emanating from the laboratory and help drive better patient care in both the inpatient and ambulatory settings. Interdisciplinary programming is well underway for innovation in early detection of acute kidney injury in hospitalized patients²⁴ ; management of ambulatory patients with chronic kidney disease; anticoagulation management in the inpatient and ambulatory settings; early detection of sepsis; antibiotic stewardship; and facilitating information exchange directly between the laboratory and health system pharmacists. The Pathology Informatics group has also provided extensive support for Northwell Health system management of patients in shared-risk or full-risk managed care plans, and for assistance in Northwell Health's navigating the challenges—and opportunities—of the newer value-based payment systems. A key theme of this effort is the extensive ambulatory-inpatient continuity of data sets that the Northwell Health Laboratories have for health system patients, which can be leveraged for strategic Population Health, Coordinated Care, and Value-Based Payment programs.

It is now a decade since the fall of 2008 when Northwell Health leadership traversed the decision of whether or not to monetize the health system Core Laboratory. This report documents the 2009–2018 outcomes of both the Core Laboratory per se, and the Northwell Laboratory Service Line writ large, which support the premise that retaining the Northwell Health Laboratories as a wholly owned system asset was a good decision. The 10-year outcomes are presented as an example for other health systems that are facing such decision-making in the current time frame.

Through the past 10 years, the Northwell Health Laboratories have striven to demonstrate at the national level the strong asset that an in-system laboratory network can be. This has included cofounding the Project Santa Fe group and advancing the concept of “Clinical Lab 2.0,” as previously mentioned.⁷  A 1-figure summary of Northwell Health Laboratories' evolution was presented on May 1, 2018, in the morning plenary of the Executive War College, New Orleans, Louisiana (Figure 8). In essence, the transformation of Northwell Health Laboratories into, first, a high-performance “Clinical Lab 1.0” laboratory and then into a leader of “Clinical Lab 2.0,” has been an evolutionary process from the inception of this effort in 1993.

Corporate decisions to monetize the laboratory are of high interest in the current laboratory industry. The emerging trend has changed from binary (divest or not) to somewhere in between, with some health systems choosing joint ventures with commercial laboratories, as recently highlighted.¹  In one example, on August 2, 2018, ProMedica (Toledo, Ohio) announced that, rather than selling the laboratory to a commercial entity, a joint venture was being formed with Sonic Healthcare USA (Austin, Texas) that will allow the health system to maintain control of both its inpatient and outreach laboratory business.^1,25  Importantly, ProMedica outlined its commitment to keep the laboratory as a key clinical service into the future, reduce lab costs, focus on serving patients with a standard menu of tests, and retain 90% of testing locally.²⁵  At the same time, ProMedica aims to benefit from Sonic's advanced analytics.¹ 

On the one hand, the Northwell outcomes presented in this report may provide a template for quantitative assessment of outcomes of laboratory services relationships with commercial entities being established by other health systems. On the other hand, this report may provide a benchmark for health systems assessing how to retain their clinical laboratories as a wholly owned system asset.

Potential areas where Northwell Health Laboratories may be falling short of potential should be considered. First, the clinical laboratories are a massive source of quantitative clinical data, which when linked with the structured data of the electronic health record and other data streams (pharmacy, billing and revenue cycle, managed care contracting), should be a powerful driver for innovation in health care delivery.⁷  Moreover, innovation is a team effort, working closely with medical, nursing, pharmacy, administrative, financial, and other health system teams. Northwell Health Laboratories feel that we have not achieved our potential for the pace of innovation and consider this gap in pace-of-innovation as an ever-present challenge. Second, the market is trending away from volume-based and toward value-based payment models. While Northwell Health Laboratories have made early inroads on clinical wellness programs to improve patient outcomes, we again feel that we have not yet harnessed the full potential of the clinical laboratory for effective utilization management of health care resources. Third, as an integrated health system serving a highly diverse regional population, Northwell Health has opportunity to build the evidence base for the practice of precision medicine, a vision not yet realized.²⁶ 

Regardless of the 10-year outcomes reported herein, the threats to Northwell Health Laboratories remain. In particular, the financial benefits provided to the parent health system may not be sustainable, owing to downward pressure on laboratory revenues, and ever-present competition from regional and national laboratories. Managed care agreements with Northwell may not respect the in-system posture of Northwell Health Laboratories. Northwell's ultimate stakeholder, the consumers, may not recognize the value provided by the Northwell laboratories as opposed to other alternatives. We hope that our continued efforts to develop evidence in support of the value-added contributions of the in-system laboratory through “Clinical Lab 2.0” activities will continue to provide strong justification that we are a laboratory of merit, to all of our stakeholders.

In conclusion, the performance of Northwell Health Laboratories in the 10-year interval spanning 2009 to 2018 has validated the 2008 decision to retain them as a wholly owned system asset. We are now working to leverage this asset to drive a higher level of system performance in the delivery of cost-effective health care, as the health system adapts to newer models of payment for health care services.

We express our deepest gratitude to the employees of Northwell Health, whose unswerving dedication to patient care is both inspiration to the authors of this report, and a central reason for our efforts to provide leadership. This includes the approximately 1200 laboratory professionals in the health system (hospitals and Core Laboratory) in 2008, which increased to more than 2100 individuals by 2018. This also includes the now >62 000 employees of Northwell Health writ large, who collectively create the health care ecosystem served by our clinical laboratories. The senior leadership of Northwell Health deserves particular acknowledgement, as it has been their support of our vision for laboratory services in continuity during the 25 years described in this report. These individuals are Michael Dowling, MSW, president and chief executive officer; Mark Solazzo, MBA, executive vice president and chief operating officer; Lawrence Smith, MD, executive vice president and dean, Donald and Barbara Zucker School of Medicine at Hofstra/Northwell; and Merryl Siegel, RN, MSN, senior vice president of Post-Acute Services.