Lab Quality Confab - ComeXium Presentation

What Labs in France are Learning about the Power of Quality Management Systems to Support Standardization and Performance of Multi-site Laboratory OrganizationsNovember 2015

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French market overview Public versus private laboratoriesPRIVATE

PUBLICPatients without prescription

Patients with prescriptions from any doctors (even from hospital)

Samples taken by nurses

There is no samples taken by DoctorsPatients in Emergency services

Patients followed by clinics

Most of the laboratories inside the hospital do not receive external patients6,400 biologistsM 4,500 Revenues4,000 Labs - 6 labs / 100,000 habs70% reimbursed by Social System 30% other (private insurance or patient)4,300 biologistsM 2,500 Revenues*1,100 Labs

* Testing price is included in the financial package for reason to stay Cour des comptes reports : https://www.ccomptes.fr/.../rapport_securite_sociale_2013_depenses_biologie_medicale.pdf

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French market overview Key facts pushing French government to change rulesA revenue growth due to growth of population age and chronical pathologies (M )

Cumulated factors pushed the government to change the rules French population is getting olderLow renewal of medical biologist population

Growth of the importance of the biology in medical decisions* Calculated with published growth figures 3,6633,7693,8693,9934,0994,1884,2614,3684,467*4,551*4,579*

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French market overviewNew rules in place since January 2010How it happened ?Government decided to abandon the past obligations in place since 1975 and voted the obligation to accredit laboratories as EN ISO 15189

The official why ?

Budget Control Compensate volume growth by price reductionsMedical reputationProvide a better level of quality proven for all test resultsProvide ability to participate to multi-countries programs

Price decreased by 3 to 4% per yearVolume growth as expected Accreditation generated new costs to absorb

Margin decreased, pushing biologists to think about either sell or regroup

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French market overview Why ISO 15189 generated consolidation in France ?Investment requiredNew recurring costsCompliant devicesComputer systemsMetrology devicesBuildings complianceInternal Quality controlsExternal Quality controls Metrology follow-upQuality specialistWhat must be done ?What does it require ?

Change devices such as centrifuge, freezers, Implement quality systems Implement metrology probes, temperature systemSubscription to external controls for each assay typeWork for compliance and renewalsImplement daily controls for each assay typeSubscription to regular mapping and calibrationHire Quality specialist to coordinate

ConsequenceFixed costs absorbed by revenue and volume growth

QualityConsolidation

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TPFrench market overview New organization based around shared technical platformsThe total number of small laboratories decreased by 60% within 3 years

*Point of collectionTechnical platform

Group of POC* :Labs entity owning742 Labs4,047 POC*742 LabsGroup of POC* :POC : 4100POC : 4,047

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French market overviewHuge Impact on profitability due to potential synergiesSavings on reagents by 35% because of volumes

No more equipment on site (except inside clinics) less technical resources required

Savings are also realized by better control and the shared servicesfees are not impacting each small lab anymore Other costs are all controlled or negotiated at higher levels (telecom, cleaning, )* EBITDA : Earn Before Interest Taxes Depreciation and Amortization

@Point of collection level@Structure levelInternalization of low volume assays for independent lab ( ie : molecular biology )

Additional volumes generate new decreases in direct costs (double effects)

Economy of scales on shared services

35%25%

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Interview The challenges of consolidation

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All the challenges faced during consolidation show the value of implementing a QMSChallengesSucceed in human approachSucceed in organization reengineeringSucceed in optimizing the business

KEEP THE FOCUS ON CLIENTS

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Challenges faced during consolidationGive comfort to people / Involve all employees Succeed in human approach

Clarify the post-consolidation organizationLeverage talents and competenciesShare information and documentationReport events (non conformities complaints and adverse events)Implement a clear GovernanceQMSQMSQMSQMSQMS

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Challenges faced during consolidationImplement industrial processes and logisticsSucceed in organization reengineeringAnticipate & Manage synergiesOrganize Workload

Manage sub-projects / conduct changes

Report events (non conformities complaints and adverse events)

Standardize processes

QMSQMSQMSQMSQMS

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Challenges faced during consolidationCombine Medical, Finance and performanceSucceed in optimizing the businessRenegotiate contractsImplement new assaysFocus on clients and medical approach

Make production system matching with volumes

QMSQMSQMSQMS

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Challenges faced during consolidationISO15189 & QMS Provide costs savings and reputation growthPre-AnalyticalAnalyticalPost-Analytical68% of non conformities*13% of non conformities*19% of non conformities*Client impactA satisfied client is a client who comes back and speaks positively to othersExpired materialNurses for sampleInvestigation Stay in hospitalMachine downtimeAdministrative staff

Expired reagentsMachine recalibrationTests repass / controlNew samplesMachine downtimeTechnical staffMedical issue : alerts not provided on time or provided with no reasonPoor Quality CostsQMS provides costs savings and reputabilityAdministrative staffMedical staffOffice suppliesAdditional time in delivering results

Trust issue

Reputation= Revenues* BD studies : http://cms.bd.com/resource.aspx?IDX=20149

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Succeed in Managing your riskBuy-in from medical staffExisting client relationshipsBuy-in from lab staffRISKRISKRISKChallenges faced during consolidationQMS also comes with its own set of risks requiring management

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Pascal AmramFounder and CEO at Le Laboconcept of point of collections in train stations

1994 Lab Acquisition : 1 point of collection inside Paris with clinical activities2009 Start QMS Programs First Opening in train station2010 2 New point of collection bought2011 Open in 2 train stations 2012 Open in 1 train station 2015 3 New point of collection bought 3 New clinical business absorbed the development is on going10 point of collection / 4 clinics / 2 dialysis centers / Medical centers / Health Residenceswww.lelabo.pro

Shared experiencesGrowing through both consolidation and organic growth

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Pascal AmramFounder and CEO at Le Laboconcept of point of collection in train stations

HOW QMS ALLOWED FOR GROWTH:

Going fast with standardized processes through the ability to duplicate the model for pre and post analytical phases

Ensuring an efficient communication between actors

Allowing corrective actions based on real-time KPIs and Client satisfaction

Shared experiencesGrowing through both consolidation and organic Growth

QMS was required to support our growth and achieved efficiency through a software suite

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Interview The benefit of QMS software in a large growing organization

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ConclusionLessons learned with consolidation

QualityConsolidationQMS and consolidation require each others

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ConclusionLessons learned with consolidationUsing automated QMS, a reason for successConsolidation process can be accelerated and a lot of operational and human risks can be avoided when using a QMS and much more with a full QMS software suite.QMS is first considered as an expense but actually the QMS automation generates savings in time & money, and positions the labs as a proactive organization. The strategy of consolidation must be oriented on client services first and not only on cost effectiveness

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Conclusion QMS full automation : a market shared in France by few players90% of the French market Shared by 2 players

Bioleen QMS60%France & North-AmericaDL Sant30%FranceOthers10%N/A

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ConclusionLessons learned with consolidationDriving consolidation with clear steps and projects

Plan & PreventBuild the targetCreate performanceManage processesSatisfy your clientsOrganizePrepareSynergizeProduceDeliver Manage Quality

ClientsConsolidation projects

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