Making a Business Case for Digital Pathology

| February 22, 2015

Last week Simon Häger, Product Manager from Sectra, wrote an interesting article on their website entitled “How to Build a Business Case to Justify the Investment in Digital Pathology“. Simon breaks down the gains into some basic categories in terms of return on investment, namely,  increased pathologist efficiency, savings in external consultations, reduced cost of internal glass slide handling and real estate savings against the costs of scanners, storage, software and IT infrastructure.  The real estate savings are perhaps one area that folks in the past have not considered considering space required for individual pathologist offices rather than shared reading rooms analogous to radiology.  

He concludes that “Based on the potential gains and the estimated costs, one can determine the return on investment for presentation to the hospital board of directors. Even if pessimistic estimations are used in calculations you will normally gain a three-digit return on investment (in %) over a five-year horizon, and one thing that is certain is that there will always be someone in the room challenging your assumptions. 

Your ROI is based on assumptions and will not be exact. However, even if only 30% of the potential savings are realized, the investment will still be worthwhile, not to mention all the economic health benefits that will be realized on top of that.”

I encourage you to check out the models and value propositions presented.

Many pathology departments stand on the threshold of adopting digital pathology. The creation of an appealing business case for digital pathology is necessary to justify the acquisition of the new hardware and software and can be difficult to compile. This document guides you through the process of creating the business case.

Keep it simple

Before getting into to costs and cost savings, I want to make something clear. I claim the biggest benefits of digitizing probably lies beyond the cost savings within the pathology department itself. Instead the bulk of gains will be health economically related and found in quality improvements throughout the entire cancer care chain, providing value for several care specialties and in the end increased the value for patients. Although benefits such as reduced lead time, shorter waiting times, increased diagnosis precision and faster treatments are obvious, they are very hard to monetize in a business case.

Having that said, presenting a more narrow economic model focusing on the increased efficiency and reduced costs for the pathology department is easier to quantify and usually provide enough decision basis to justify the investment. By showing black numbers in such model one can argue that the investment is worthwhile since all the health economic benefits that will be realized throughout the cancer care pathway will add on top of that. Now, let’s look at an example of how a business case for a pathology department could be created.

Read full article here.

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Category: Advocacy, Anatomic Pathology, Business, Clinical Laboratories, Digital Pathology News, Laboratory Management & Operations, Marketing, Pathology News

Comments (1)

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  1. Nicholas says:

    While I prefer digital pathology, the business case isn’t completely there and some of the points presented, such as real estate space, isn’t as significant as one might expect.

    For instance, pathologists can easily have share reading rooms even with the use of glass slides. They would only need slightly more space than radiologists (ie a small shelf) to put cases they are currently working on and minimal desk space for their microscope which won’t be much different than needing 2 (or in some instances, 3) computer monitors on their desk rather than the 1 they currently need.

    On the flipside, even with digital pathology, pathologists are not going to want to loose their personal offices, so there will be significant pushback on that front.

    Also, you still need to store and keep the slides, but now you also need server space that will occupy its own room (ie you need the extra room). The only real storage space savings would only come when we decide that the physical slides can be thrown out, which will never happen with the increasing need for molecular testing that can potentially be done not only on tissue blocks, but slides as well.

    The real benefits with digital is what most people already have thought of…less sorting of slides, and less shipping costs for consultations. Whether or not pathologists will be more efficient using the computer is debatable as many studies have shown that it take a bit longer per slide on the computer than on a real glass slide. Perhaps that is just a matter of training (or slow computers/poor quality monitors being used in the studies)