Why Replace Your Laboratory Information System? Things To Consider

Many clinical laboratories and pathology groups acquired their laboratory information systems (LIS systems) in the early days of plenty, when capital budgets were overflowing with abundance or were, at least, reasonably adequate. 

Many of these organizations still use the lab information system (medical LIS) they acquired 10 or more years ago to their detriment. That’s because there have been many changes in the last few years, both in the laboratory operating and regulatory environments, with new regulatory constraints and an emphasis on cost containment and LIS software capabilities.

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The older LIS systems may not be optimum for serving the needs of the laboratory or hospital at large. Nevertheless, replacing the legacy pathology lab reporting software with an associated large capital or operating budget expenditure often requires a lot of groundwork. 

Key Justifications for Replacing Legacy LIS Software

To justify replacing the antiquated healthcare LIS, it will be necessary to develop and present strong operating, cost-impact, and business-related justifications.

Some substantial reasons for replacing laboratory information system software include:

• Inadequate laboratory information system functions and limited scalability hinder test volume expansion and new client acquisition, constraining the laboratory’s overall revenue opportunities.

• The LIS lab solution is expensive to operate and maintain, and its pricing model no longer aligns with your lab's cash flow or financial situation.

• The LIS system’s integration with laboratory billing/lab revenue cycle management (lab RCM) systems and other institutional laboratory software systems is poor. 

• The laboratory’s legacy pathology lab management software and hardware are inconsistent with national and industry standards, creating interoperability challenges with modern lab systems.

• The laboratory information system operates on an outdated platform that lacks cloud capabilities and modern, user-friendly design.

• The laboratory information system vendor’s support services are poor. Problem fixing and enhancements are substantially delayed. Certain enhancements may have regulatory implications, putting the institution at risk.

• The lab information system provides little or no comprehensive applications for molecular diagnostics, digital pathology, flexible reporting, direct-to-consumer lab testing, artificial intelligence, and other “leading-edge” technologies, placing the lab at a competitive disadvantage.

• The LIS system has a performance problem with significant “slow-down” issues affecting the lab’s turnaround times.

• Maintaining the LIS software requires significant “in-house” expertise, and the current LIS company/lab vendor is not sufficiently responsive to the lab’s changing needs.

• The laboratory information system has difficulty complying with changing federal and state regulations.

• Important security aspects of the LIS system are subject to penetration and not compliant with HIPAA requirements.

• The original LIS company is no longer in business, and support for the pathology lab management solution is limited or non-existent.

• The original LIS company has replaced the lab’s current LIS model with a more modern version and will soon discontinue enhancements and support for the older LIS system.

• The lab’s LIS system has been acquired by a larger company with a competing lab information system (and the new company has failed to provide contractual assurances of continuing support).

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A Guide to Replacing Your Legacy Laboratory Information System

If any of the above replacement criteria have been met, a replacement laboratory information system may be appropriate.

In times of tight budgets, there is much competition for limited capital funds. To combat this, it will be necessary to prepare a well-thought-out and quantified rationale to justify why the laboratory should receive budget approval for a replacement LIS system. 

Very often, a rigorous financial spreadsheet analysis will be required with expected financial criteria that must be met for the proposal to qualify for funding. A spreadsheet model for this analysis may be available from your financial office, the LIS system department, or the laboratory information system companies offering you the LIS software upgrade.

Discover More: What You Need to Know Before Contracting with a Laboratory Information System (LIS) Company

How SaaS and Transaction-Based Pricing Make LIS System Upgrades More Affordable

Today, various financing alternatives may remove or diminish the capital budget allocation requirement. Approaches include leasing and paying for the laboratory information system per transaction (based on testing types and volume and similar to the SaaS provider model). 

A transaction could be defined as requisition processing from accessioning through reporting. The number of tests processed could also be factored into the transaction volume cost formula. 

The SaaS model may be most attractive to laboratories with limited capital budgets, as there are little or no “upfront” costs, and the monthly costs for LIS system services will vary with workload. Therefore, if laboratory volume decreases, the monthly cost also decreases in contrast to a capital acquisition, where, after initial LIS system acquisition expenses, there will be a fixed monthly cost for service and support that will not vary even if the business declines. 

Discover More: LigoLab Informatics Platform - Uniquely Designed with Tiered Pricing to Deliver Maximum Value

Partnering with Lab Vendors and Finance Teams to Justify LIS Software Replacement

When considering the best laboratory information system software replacement options for your lab, they should include discussions of various payment options with the prospective LIS software vendors and your institutional CFO.

Granted that, except in unusual and critically apparent circumstances, it will be necessary for the laboratory to do the required analysis and “number crunching” to help justify its case for a replacement laboratory information system. 

To the extent that rigorous and definitive analysis and cost-benefit projections are made, the laboratory’s chances of obtaining the necessary approvals and budget allocation shall be enhanced.

Discover More: Best Pathology Lab Reporting Software - 2025 Buyers Guide and Checklist

Upgrade to LigoLab’s Advanced LIS Software and Future-Proof Your Lab Business

Don’t let outdated laboratory information system software hold your business back. 

LigoLab’s all-in-one medical LIS and lab billing informatics platform is designed to empower clinical, molecular, and anatomic pathology labs with cutting-edge features and functions that drive efficiency, accuracy, and financial growth.

Ready to make the switch? 

Contact LigoLab today to explore how a future-ready all-in-one informatics platform can revolutionize your lab’s technical and financial operations.

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Article References: 

Winsten, Dennis, “Why Spend the Money? Justification of Laboratory Information Systems”, Clinics and Laboratory Medicine, R. Aller & F. Elevitch, Editors, W.B. Saunders Company, March 1991.

Weiner, H, and Winsten, D., Chapter 6, Pathology Informatics-Theory and Practice, Editors: Pantanowitz, L, Tuthill, J.M., Balis, U. American Society for Clinical Pathology press, 2012.

Mr. Winsten is president of Dennis Winsten & Associates, an independent healthcare information systems consulting firm headquartered in Tucson, Arizona. He has over 40 years of computer experience, including more than 30 years in healthcare systems. Learn more at  www.dwinsten.com.