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Horizontal and Vertical Integration of Diagnostics into Healthcare Processes

Posted Sep 03 2009 11:11am

Integrated diagnostics can be defined as the integration of the diagnostic activities of specialties such as pathology, lab medicine, and pathology into related healthcare processes such as therapeutics (see for example: Siemens' Pursuit of an Integrated Diagnostics Portfolio; The Evolution of Integrated Diagnostics into Integrated Diagnostic Centers ). This goal is pursued in order to get beyond the "diagnostic silos" that are the norm today. By this latter term, I mean that the various diagnostic professionals work independently to generate their reports but, of course, frequently refer to the previously published reports of the other groups. The development of an integrated diagnostic center is one way to solve the silo problem (see for example: Can Existing Breast Clinics Evolve into Integrated Diagnostic Centers? ). Such a center is an example of horizontal integration. This macroeconomic and business strategy term refers to ownership and control of businesses in separate parallel markets. In this example, I view the practice of radiology, pathology, and lab medicine as separate markets.

In hospital and medical office workflow, diagnostics can be viewed as being upstream of treatment in the sense that it occurs prior to treatment. Using again a business term, vertical integration involves the control by clinicians of upstream diagnostic processes.The classic example of vertical integration in today's healthcare system is cardiology. Cardiologists frequently manage and control some of the heart and vascular imaging modalities in hospitals. This specialty thus tends to function as a partly vertically integrated industry.

In previous posts, I have discussed in-office histopathology labs whereby gastroenterology and urology practice groups process and interpret histopathology slides in-house, with the pathology reports generated by pathologists who work as contractors for the group (see: Corrected Definition for a Pod Lab and a Look at In-Office Labs ). I have already pointed out that these in-office labs can be considered as examples of integrated diagnostic centers (see: More on Integrated Diagnostic Centers; Trend or Lukewarm Idea? ). Below is a excerpt from that note:

...a urology or gastroenterology group practice with an in-office histology lab is already functioning, to a large extent, as what I have defined as an IDC [integrated diagnostic center]. By decreasing the time to process tissue specimens and the use of telepathology or an on-site pathologist, a final surgical pathology report for a patient could potentially be generated in a small number of hours. Similarly, histopathology labs could also be "integrated" into ambulatory surgery centers (ASCs) and these latter facilities could also then function as IDCs.

There is certainly nothing wrong with vertical integration in healthcare, by which I mean integrating upstream diagnostic processes with downstream clinical processes. However, there is a quality difference between horizontal and vertical integration of diagnostics. In the former, the various diagnosticians closely collaborate, communicate, and learn from each other. I believe that this results in higher quality integrated diagnostic reports. With vertical integration, as in the case of in-office histopathology labs, the diagnostic pathology processes differs little from the previous ones in which the tissue specimens are referred to a separate and outside pathology group for processing and interpretation. Of course and in this case, the pathologist is on-site, which should result in better communication with the clinicians in the group.

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