This is not easy.
Healthcare has always been subject to dramatic shifts – and we are seeing this in spades over the past few years . The introduction of ACA is forcing hard decisions on every provider of health care. In addition, in the last year there has been unprecedented payer pressure in the toxicology space. We are sorry it is forcing us to change our business model, but we have no choice but to change.
I want to share some thoughts with you below. Please digest them and we will have Town Hall meetings next Tuesday to discuss these in more depth.
In changing our business model to reflect industry changes we made some internal adjustments that frankly stalled sales over the summer:
·In July we raised our bill rate to 2x Medicare. It was a necessary step; however, this change created a lot of noise with our customers and we needed to focus resources on communicating to them why the change was required.
·On July 25th we implemented our new LIS system SCC. Since 2009, we have used a software system called APeasy. As we grew, this software slowed us down immensely. Building a new scalable, integrated software solution was more than necessary. It took 2 years to complete. The first couple of weeks it was bumpy and tested everyone within PCLS. Our salesteam did a phenomenal job battling this adversity – but it took them away from filling their sales funnels and forced them to focus on retaining business.
·We chose to discontinue our cytology and clinical chemistry (except PHI) product lines. Both were distracting us from our core toxicology business. This hurts total daily sample count, but helps the company’s bottom line.
In addition we have had some external forces hit us:
·A Palmetto LCD was released no longer covering our most common PGX, 2D6, which reduced our volume of genetics to only the psychotherapeutic panel.
·Private payers have chosen to reduce amount of coverage or frequency allowed at a faster pace than expected for toxicology testing reducing our RPA.
We sincerely thank all the employees for working long hours to deal with the above challenges. We know all of you want to know where PCLS is headed. Here are some of the initiatives PCLS continues to be focused on:
•One pipe toxicology process flow. This means we restructured our menu to have the most efficient work flow process while reducing re-preps. Our goal remains to have the lowest cost in the industry.
•Turn Around Time of 80% of results in 24 hours with minimal outliers
•70% customers ordering electronically to reduce key errors
•We are focused on increasing our reach in TN, FL, TX, KY, SC, NC, and MI to maximize our managed care, lobbyist and sales representation.
•Continued focus on local and nation in-network status with Humana, Cigna, Aetna, and other health care players
•Sales structure that supports greater collaboration of gaining new customers, hospitals, accountable care organizations while also supporting and nurturing our current customers.
•Quality circle work groups to look at each step in the chain ultimately getting to root cause analysis to change future outcomes.
•Future menu of a bladder cancer and prostate cancer diagnostic tests
We remain committed that it is to our advantage if PCLS reacts to the industry changes faster than its competition. The industry needs a leader and we can move to be that leader. We need to have an employee empowered system of change in order to move forward. This involves making changes in your respective area. We need your suggestions and support as a team. Please reach out and share your ideas to anyone in the company or bring them to the town halls on Tuesday.
Thanks,
Paul and Mark