Clinical Laboratory Management SECOND EDITION Clinical Laboratory Management SECOND EDITION Lynne S. Garcia, EDITOR IN CHIEF LSG & Associates, Santa Monica, California EDITORS: Paul Bachner John C. H. Steele, Jr. Department of Pathology & Laboratory Medicine, University Clinical Pathology Laboratories, Department of Pathology, of Kentucky Chandler Medical Center, Lexington, Kentucky Medical College of Georgia, Georgia Regents University, Augusta, Georgia Vickie S. Baselski Clinical Microbiology, University of Tennessee Health Alice S. Weissfeld Science Center at Memphis, Memphis, Tennessee Microbiology Specialists Inc., Houston, Texas Michael R. Lewis David S. Wilkinson Department of Pathology, Fletcher Allen Health Care, Department of Pathology, VCU School of Medicine, Burlington, Vermont Richmond, Virginia Andrea J. Linscott Donna M. Wolk Department of Pathology, Ochsner Medical Center, Clinical Microbiology, Department of Laboratory Medicine, New Orleans, Louisiana Geisinger Health System, Danville, Pennsylvania, and Wilkes University, Wilkes-Barre, Pennsylvania Dale A. Schwab Nichols Institute, Quest Diagnostics, Inc., San Juan Capistrano, California WASHINGTON, DC Copyright © 2014 American Society for Microbiology. ASM Press is a registered trademark of the American Society for Microbiology. All rights reserved. No part of this publication may be reproduced or transmitted in whole or in part or reutilized in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage and retrieval system, without permission in writing from the publisher. Disclaimer: To the best of the publisher’s knowledge, this publication provides information concerning the subject matter covered that is accurate as of the date of publication. The publisher is not providing legal, medical, or other professional services. Any reference herein to any specific commercial products, procedures, or services by trade name, trademark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favored status by the American Society for Microbiology (ASM). The views and opinions of the author(s) expressed in this publication do not necessarily state or reflect those of ASM, and they shall not be used to advertise or endorse any product. Library of Congress Cataloging-in-Publication Data Clinical laboratory management / Lynne S. Garcia, editor in chief, LSG & Associates, Santa Monica, CA ; editors, Paul Bachner, Department of Pathology & Laboratory Medicine, University of Kentucky Chandler Medical Center, Lexington, KY [and eight others]. — 2nd edition. pages cm Includes bibliographical references and index. ISBN 978-1-55581-727-5 — ISBN 978-1-55581-728-2 (e-ISBN) 1. Medical laboratories— Administration. 2. Pathological laboratories—Administration. I. Garcia, Lynne Shore, editor of compilation. II. Bachner, Paul, editor of compilation. [DNLM: 1. Laboratories—organization & administration. 2. Clinical Laboratory Techniques.] R860.C56 2014 610.72’4—dc23 2013036960 doi:10.1128/9781555817282 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 Address editorial correspondence to: ASM Press, 1752 N St., N.W., Washington, DC 20036-2904, USA. Send orders to: ASM Press, P.O. Box 605, Herndon, VA 20172, USA. Phone: 800-546-2416; 703-661-1593. Fax: 703-661-1501. E-mail: [email protected] Online: http://www.asmscience.org Contents Contributors xxiii Preface xxvii Acknowledgments xxviii I SECTION Basic Concepts and the Current Healthcare Environment 1 1 Principles of Management 3 Organizing 28 Organizational Chart • Time Management • Policies • Procedures • Jeffrey Casterline and John R. Snyder Workflow • Staffing Directing 31 Introduction 3 Communicating • Delegating • Motivating • Managing Change • Leadership, Management, and Administration 4 Coaching Leadership • Management • Administration Controlling 35 Management Concepts 6 Setting Performance Standards • Evaluating Employee Cultural Lag • Review of Management Thought Performance • Problem Solving • Decision Making Decision Making 11 Summary 38 What Is Decision Making? • Types of Decisions • Individual versus KEY POINTS 38 Group Decision Making • The Problem-Solving/Decision-Making GLOSSARY 38 Process • Risk REFERENCES 39 Management Ethics 17 APPENDIXES 40 Definitions • Characteristics of High-Ethics Organizations • Benefits of Strong Workplace Ethics • Management Roles and Responsibilities 3 Relevant Economic and Business Summary 19 Concepts 43 KEY POINTS 19 GLOSSARY 19 Roxanne Mercer and Ann L. Harris REFERENCES 20 Introduction 43 OTHER READING 21 APPENDIX 22 Overview of Laboratory Industry Trends during the Past Decade • Forecast for the Future Strategic Business Planning Overview 45 2 Management Functions 23 Market Assessment • Key Strategies Laurence P. Vetter Competitive Environment 47 Clinical Laboratory Competitive Market • Business Entities, Introduction 23 Strategic Alliances, Joint Ventures, Mergers and Acquisitions, and Integrated Networks Planning 24 Strategic Planning • Selecting a Planning Group • Environmental The Economic Environment 49 Analysis • SWOT Analysis • Vision and Mission Statements • Goals Four Stages of the Business Cycle • The National Economy: and Strategies • Prioritization • Accountability • Measuring Success Fiscal and Monetary Policies • Assess Infrastructure and Develop (Metrics) Production Strategies • Cost Accounting Principles • System-Wide v vi CONTENTS Approach to Establishing a Fee Schedule • Consumer Price Index • Regulation of Workplace Safety and Human Resource Pricing Strategies Management 85 Promotional (Marketing and Sales) Strategies 53 Occupational Safety and Health Administration • American Market Research • Marketing Strategies • Sales Strategies • National Standards Institute • National Institute of Occupational Advertising Strategies Safety and Health • CLSI • Centers for Disease Control and Prevention • Food and Drug Administration • Equal Customer-Focused Concepts and Service Employment Opportunity Commission • Department of Strategies 59 Transportation and International Air Transport Association • Who Is the Customer? • Understanding Customer Behavior • Key Hazard Communication Standard • Blood-Borne Pathogens • Concepts and Recognized Customer Service Strategies • Service Ergonomics • Tuberculosis • Latex • Sharps • General Laboratory Delivery Strategies Safety • Chemicals • Transportation of Clinical Specimens • Summary 64 Employment Discrimination KEY POINTS 64 Accreditation and Licensure 93 GLOSSARY 65 Brief History • Laboratory Inspection and Accreditation • Personnel Certification and Licensure REFERENCES 67 Regulations Affecting Transfusion Medicine 99 ADDITIONAL READING 68 APPENDIX 70 Overview of Changes in Transfusion Medicine that Have Resulted in Increased Scrutiny • Safety • Regulatory Organizations that Specifically Impact Transfusion Medicine • Biological Product 4 Current Challenges to Financial Deviation Reporting • The Cost of Increasing Regulatory Oversight Regulation of Laboratory Business Practices 109 Stability within the Diagnostic Negotiated Rule-Making Process • Corporate Compliance • Key Laboratory 71 Elements of a Model Compliance Plan for Hospitals • The Legal Environment Roxanne Mercer and David S. Wilkinson Laboratory Reimbursement and Medical Introduction 71 Necessity 113 Medicare • Other Federally Funded Programs • National Workforce 71 Coverage Determination and Local Medical Review Policies • Availability of Personnel • Training Programs • On-the-Job Reimbursement Methods • Code of Medical Necessity (Reasonable Training • Recruitment and Retention • Generational Diversity and Necessary Services) • Overview of the Reimbursement Process Workplace 74 • Registration and Coding • Claims Processing and Submission • Centralized versus Decentralized Operations • Local and Regional Remittance Advice • Audit and Benchmark Monitors Integration of Laboratory Services Compliance—the Next Generation: HIPAA 124 Work Flow 76 Covered Entities • Privacy Standards: Rules Governing Protected New Technology • Testing Site Options Health Information • Administrative Requirements • Personnel Policies and Procedures • Patient Informed Rights • Business Doing More with Less 78 Associates and Business Associate Agreements • Standards for Systematic Approaches to Managing Change • Rightsizing Electronic Transactions • HIPAA Compliance and Enforcement Shrinking Reimbursement 79 Summary 128 Gross versus Net Revenue • Medicare • Managed Care • Billing KEY POINTS 128 Regulations and Unfunded Mandates 79 GLOSSARY 128 Regulations • Unfunded Mandates REFERENCES 133 Summary 80 APPENDIXES 137 KEY POINTS 80 GLOSSARY 80 6 The Changing Practice of REFERENCES 81 Medicine 139 APPENDIX 83 Susan D. Roseff, Denise E. Russell, and Margaret 5 The Impact of Regulatory M. Grimes Requirements 84 Introduction 139 Susan D. Roseff, Denise E. Russell, Christina E. Overview of Major Changes 139 Anderson, and Roxanne Mercer Shift from Inpatient to Outpatient Care • Shift from Centralized to Decentralized Testing • Shift to Primary Care: Patient-Centered Introduction 84 Medical Home • Shortages of Qualified Staff • Quality of Care and Error Reduction • Pay for Performance • Healthcare Reform Brief History • Overview of the Current State of Laboratory • Advances in Technology • Wellness and Prevention • The Aging Regulations Population • Recognition of Women’s Health Needs CONTENTS vii The Impact of Technology 142 Reimbursement Strategies in a Managed-Care Market • Healthcare The Electronic Medical Record • Meaningful Use/Value- Stakeholders in a Managed-Care Market Based Purchasing • Patient Access to Information • Patient Impact of Healthcare Reform 173 Confidentiality • Advances in Diagnostic Testing Patient Protection and Affordable Care Act • Payment Reform and The Emergence of Clinical Practice Guidelines 144 Provider Reimbursement Strategies • Current Trends and Issues The Role of Evidence-Based Medicine and Outcomes with Healthcare Reform • Hospitals and Laboratories: Concerns in Data • Concerns about Utilization and Quality • Clinical Practice Healthcare Reform Guidelines and Clinical Pathways Defined • Use of Clinical Practice Changing Emphasis on Quality and Value 179 Guidelines • Pros and Cons • Developing Clinical Pathways and Health Maintenance Organization Network Management • Guidelines Patient Management • Disease Management • Healthcare Reform: Medicolegal Issues 148 Demonstration Projects Malpractice Litigation • Patient Safety • Disclosure of Adverse The Educated Consumer 184 Events/CMS Never Events • CMS Serious Reportable Events • Baby Boomers and Generation Xers: The Educated and Savvy Enterprise Risk Management • Insurance • HIPAA and Patient Consumer • Consumer-Driven Healthcare • The Increasingly Confidentiality • Contracts • Specimens • Documentation • Litigious Environment Research Liability Changing Technology 186 Training Physicians for Practice in the 21st Technological Advances • Direct Consumer Access • Direct Access Century 153 Testing • Advances in Genetic Testing and Molecular Pathology • The Educational Goal: The Complete Physician • New Paradigms Personalized Medicine • New Regulations to Address Changing in Medical Training • Incorporating New Knowledge and Training Technology: HIPAA • Impact of Reform on Electronic Health Techniques into the Curriculum • Training Physicians for the Records and Meaningful Use Managed-Care Environment Consolidation in the Healthcare Industry 198 External Forces Impacting Undergraduate and Overview: Laboratories, Hospitals, Physician Practices, Graduate Medical Education 156 and Managed-Care Organizations • Integrated Delivery Finding the Right Mix: How Many Physicians Do We Need? • Systems • Laboratories: Change from Revenue Centers to Cost Current Challenges to Academic Centers Centers • Internal Consolidation in Hospital Laboratories • Summary 157 Regional Integrated Laboratory Networks KEY POINTS 157 Strategies for Success in the 21st Century 200 GLOSSARY 157 Strategic Redesign • Developing System-Wide Thinking and a Common Culture • Differentiating a Competitive Advantage • REFERENCES 159 Training Adequate, High-Quality Laboratory Professionals for APPENDIX 163 the Future Workforce • Moving from Top-Down Management to Bottom-Up Customer Focus • Evidence-Based Medicine • Meaningful and Relevant Information 7 The Changing Healthcare Summary 205 Environment 164 KEY POINTS 206 Ann Harris and David S. Wilkinson GLOSSARY 206 REFERENCES 210 Introduction 164 APPENDIXES 214 Changing Reimbursement Models 168 Change from Traditional Indemnity to Managed-Care Insurance • Four Stages of Managed-Care Market Development • II SECTION Managerial Leadership 217 8 The Foundations of The First Foundational Factor Is Integrity 221 The Definition of Integrity • Honoring Your Word • The Pitfalls in Leadership 219 Honoring Your Word • What Is Your Word? • What Is the Current David S. Hefner and Katharine R. Becker State of Your Word? • Trust and Its Relationship to Honoring Your Word • Preparation for Making a Commitment or Giving Your Word Introduction 219 The Second Foundational Factor Is Authenticity 224 Distinguishing Management from Leadership 219 The Definition of Authentic • Knowing Yourself • How Do You What Is “Leadership” and How Do You Become a Leader? • Respond in Various Situations? • The Importance of Context • The Management • Leadership Path to Authenticity viii CONTENTS The Third Foundational Factor Is Commitment to Formal Channels of Communication • Informal Channels of Something Bigger than Yourself 226 Communication Succeeding as a Leader • What Happens Next? Types (Methods) of Communication 251 Summary 227 Oral (Face-to-Face) Communication • Telephone Communication • Written Communication • PowerPoint Presentation • Electronic KEY POINTS 227 Communication • Visual Communication • Body Language and ACKNOWLEDGMENTS 229 Other Nonverbal Communication REFERENCES 229 Barriers to Communication 255 APPENDIXES 231 Physical Barriers • Nonverbal Barriers • Verbal Barriers • Psychological Barriers 9 Employee Needs 232 The Importance of Listening 256 Effective Listening • Ineffective Listening • Stages of Listening John C. H. Steele, Jr. Types of Listening 257 Introduction 232 Nonlistener • Marginal Listener • Evaluative Listener • Active Listener The Laboratory Workforce—Is There an Approaching Crisis? 232 Elements of Effective Communication 257 Skills for Effective Communication • Organizational Climate • Theories of Human Needs 233 Using Body Language • Using Positive Language Maslow’s Hierarchy of Needs • Alternative Theories Leadership Essentials for Improving Meeting Employee Needs 234 Communication 259 Level 1 and 2 Needs • Level 3, 4, and 5 Needs • Higher-Level Needs The Interaction Process • Adapting Communication Styles The Role of Generational Differences 236 Summary 260 Characteristics of the Generations • Meeting the Needs and Wants KEY POINTS 260 of the Four Generations GLOSSARY 261 Summary 240 REFERENCES 261 KEY POINTS 240 APPENDIX 263 GLOSSARY 240 REFERENCES 240 APPENDIX 242 12 Effective Meetings 264 Mark G. Hanly 10 Motivating through Intelligent Introduction 264 Leadership 243 Things To Do before the Meeting 265 Christa Pardue Determine If There Is a Need for a Meeting • Determine What Type of Meeting Is Needed • Develop the Agenda • Use of the What Is Motivation? 243 Consent Agenda • Determine Whom To Invite to the Meeting • Determine the Venue of the Meeting • Determine the Technology/ Knowledge of Self 244 Equipment Required for the Success of the Meeting Creating the Vision • Humility • Basic Needs Things To Do during the Meeting 268 Knowing What Others See in You 245 Things To Do after the Meeting 269 Factors of Motivation • The Right People Need the Right Leader • Actually Fix the Problems Calculating the Cost of Meetings 269 Knowing the Emotions of Leading 246 Recurrent Meetings 269 Emotional Intelligence • The Need for Purpose • Human How To Be an Effective Participant in a Meeting 269 Motivation Theory Summary 270 Summary 248 KEY POINTS 270 KEY POINTS 248 GLOSSARY 271 GLOSSARY 248 REFERENCES 271 REFERENCES 249 13 Conflict Management 272 11 Successful Communication 250 Jean Egan Diane C. Turnbull Introduction 272 Introduction 250 Conflict Defined 272 Channels of Communication 251 CONTENTS ix What Conflict Is and Is Not 273 14 Managing Change 281 Constructive Conflict 273 Kellie Gibbs Destructive Conflict 273 Common Causes of Conflict 273 Introduction 281 Internal and External Origins of Conflict 274 Key Concepts of Change 282 Internal Sources of Conflict • External Sources of Conflict Types of Change 282 Power Is the Underlying Issue 275 Factors Affecting Change 283 Two Basic Beliefs about Handling a Conflict 275 The Change Curve 283 Five Conflict Resolution Styles 275 Laboratory Change Roles 284 Working with Each Style To Resolve Conflict 276 How To Become an Agent of Change 285 Creating an Environment Where Conflict Is Addressed Why People Resist Change 285 and Resolved 276 Fear • Lack of Trust • Comfort • Perception of Need • Lack of The Role of the Manager • The Role of the Staff • Creating the Knowledge/Competence • Poor Communication • Exhaustion/ Right Environment To Resolve Conflict Saturation A Communication Model To Manage and Resolve Forms of Resistance to Change 286 Conflict 277 Steps to Managing Change 286 The GGMG Model Prepare • Implement • Monitor • Sustain • Reevaluate A Seven-Step Plan for Resolving Conflict 277 Changes that Are Common Today 286 When Conflict Resolution Fails 278 Looking Ahead 286 Key Steps in Resolving Conflict Paradigm Shifts in Today’s Healthcare Industry 287 What the Organization Can Do 278 Trends and Changes 287 Summary 278 Competing in the Future in the Healthcare Arena 288 KEY POINTS 279 Summary 289 GLOSSARY 279 KEY POINTS 289 REFERENCES 279 GLOSSARY 289 APPENDIX 280 REFERENCES 289 APPENDIX 291 III SECTION Personnel Management 293 15 Employee Selection 295 Retention 304 Resignation and Termination 305 Anthony S. Kurec Progressive Discipline 305 Introduction 295 Summary 306 Diversity in the Workplace 296 KEY POINTS 306 Criterion-Based Job Description Requirements 296 GLOSSARY 306 Job Description Review • Minimal Personnel Requirements REFERENCES 306 Search Process 299 APPENDIX 308 Search Committee • Advertising Interview Process 300 16 Performance Appraisals and Screening Résumés • Interview Formats • Interview Questions • Competency Assessment 309 Interview “Do’s and Don’ts” Hiring Process 302 Kari Jones, Diane C. Halstead, and Donna L. Orientation 302 Oblack Documentation 304 Introduction 309