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Slide#1
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Recently there have been hot arguments both for and against investment
in TLA in Japan and the U.S. Especially, there is much doubt about the
economics.As a pioneer of TLA,I would like to express my opinion on this.
In TLA the age of pioneers has already ended,and now is the time of the
spread of TLA when we should construct practical systems.And I feel it
is not fair to criticize pioneers from the economic side only.
Because the main goal for pioneers in Japan and the U.S. has been what
we can do by TLA.
And I know the criticism from the U.S.that Japan has introduced TLA with
no thought of profit due to financial support from the government.But Japan
is already changing its course towards a world where profitability is important.So
I would like to show some examples.
In this presentation I mention in what process the U.S. has come to have
doubts about investment effectiveness in TLA, whether it is really doubtful
economically,the differences between laboratories in Japan and the U.S.,
whether the future shines bright for TLA,and so on. |
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Slide#2
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Why has the U.S.come to have doubts about investment effectiveness in TLA?
It is true that we had the special economic situation in Japan.
As I show in (1)and (2), we had the situation in which bills from laboratories
were approved and paid for for the most part. That is, payment for bills
based on the number of analysis from each laboratory had been approved
through the lax check system under "The whole nation insurance system".
And like (3), we had financial support for progressive trials from the
nation and local governments.
Bubble Economy is also one of the reasons like (4). |
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Slide#3
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In Japan the Bubble Economy which had the peak in 1989 burst in 1990.In
the clinical testing market the number of installation of biochemical autoanalyzers
per year dropped by 35% from the peak of 1989 in the left graph.This seems
a drop of demand for replacement. Because this market is already mature.
About LAS I show the cumulative number of installation of systems in the
right graph .The time when LAS started to be marketed was 1989-1990 just
when the Bubble Economy burst. The LAS market is young.
So the peak year on installation was 1997 in the bad market because there
was users' desire to invest.
This shows users' expectations for LAS are high as a tool to improve productivity,and
the number of users are increasing for sure.
But the pace of installation has fallen to 20 facilities per year in 1998,1999.
It is clear that users have come to be careful with introduction of LAS. |
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Slide#4
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The next reason is the one which is usually talked about "behind the
walls" in the meeting like this.But this is one of the big reasons
why LAS which isn't cost-effective is constructed.
That is, there are not a few decision-makers of installation who want to
be pioneers who are thought highly of in the medical world instead of to
be good managers.So they want the large and new LAS different from other
laboratories.
So they introduced needlessly large system,compete on the number of connected
analyzers,and connect analyzers which have mechanism not suitable for connection
at high cost.It is natural for them to make presentations by their own
valuation in scientific societies . |
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Slide#5
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Next is also the reason talked about behind the walls.That is resistance
from various laboratory staff to protect their rights and interests.
Resistance to losing jobs by automation from technologists, resistance
to cutting posts by integration of the fields from managers and pathologists.
From technologists,managers to pathologists they resist automation which
takes their jobs.And leaders in laboratories don't want to throw staff
out of easy jobs and fire them.
So introduction of Workcell system of each field leaves integration half
done,and cuts and a reshuffling of staff half done,too.And cost cuts in
laboratories is put off. Naturally the financial goal gets unimportant,and
evaluation standard has been shifted on purpose to speed,safety on biohazard,
and testing capacity toward the future. |
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Slide#6
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Finally, I must point out lack of knowledge and technology of leaders.Particularly
from the laboratory management I want to point out lack of ability of system
design.
To almost all users selection of analyzers was more important than total
system design. So they concentrated their energies on connecting various
analyzers which have different transportation structures. There are not
a few examples that left efficiency half done as the whole system
And there are many examples that introduced the large and expensive connection
by robots and got the opposite result such as high system price, great
consumables expenses and so on. |
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Slide#7
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I point out four main reasons here.I must say doubts about effectiveness
of investment in TLA from the U.S.are what Japan have to take seriously.But
(2),(3),and (4) seem to hold true for the U.S.,too.
I myself must think them over,even if I have been acquitted on the charge
of pursuit of investment effectiveness as a pioneer in this field. But
I would like to say that our LAS is very low-in-price because it is our
own work. |
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Slide#8
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I list achievements of TLA pioneers.They including me made many wasted
efforts ,but only through the process we can confirm and project things
listed here.I often hear criticism on overinvestment of pioneers from the
U.S.But I think the wasted efforts by pioneers was the necessary process
in the U.S.,too.
Therefore I don't think it is fair to criticize pioneers from investment
profitability only . |
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Slide#9
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The age of pioneers has already ended .With introduction of TLA Japan is
changing its course towards a world where investment effectiveness is important.
Surprisingly, part of users haven't stopped overinvesting yet saying that
they want to be progressive,but the majority of users are getting to know
investment effectiveness is important.
The first reason is that hospital management is getting worse rapidly because
payment standard is strict now.So revenues in the sample testing section
are decreasing in laboratories.Because biochemistry and hematology playing
central roles in the sample testing are the target of automation.
Unless each laboratory improves cost-efficiency ,a number of hospitals
give clinical testing to commercial labs and stop testing by their own
staff. So they tend to "choose and survive" rather than to lose
their jobs. Streamlining laboratories including cut and reshuffling of
staff is the mainstream now.This shows that a cost cut is necessary with
TLA.
The second reason is that a number of users are obliged to get new ones
for replacement 6 or 7 years after the first installation .
It is natural for them to want more efficient systems than those of the
first time.
The third reason is that systems which think of profitability come in the
market,when the medical economy is getting worse. |
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Slide#10
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For example,package front-end processing systems such as Hitachi Modular
and ALOKA APS Series,an analyzer which can connect to transportation system
easily,on a high quality basis ,and at low costs and reduce reagents to
a very small quantity like JEOL BM2250,and package LAS which compactly
integrates various fields like A&T-Package#1.
Hardware becoming compact,low-in-price,integrated ,many users introduce
LAS from economical effectiveness of investment except for users who want
large hardware and try their ideas. |
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Slide#11
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By the way,I hear the opinions from the U. S. that in Japan TLA hasn't
led to a staff cut.So investment in TLA isn't effective.But I don't think
this opinion is right.
To explain my opinion I show the chart between some Japanese labs and American
labs.In this chart I show labor cost.For example,wages per year plus insurance
etc.of one technologist are $57,000 in Japan and $44,000 in the U.S.
Comparing laboratories which handle the same amount of samples, the U.S.
labs have about three times staff.And total labor cost is about twice that
of Japan. |
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Slide#12
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When we compare expenses in Japan and America before introducing TLA,fixed
costs of space and expenses for utilities in America are lower than those
in Japan.Expenses for reagents and consumables and for equipment and facilities
are the same level, and labor cost in the U.S. is four or five times higher
than that in Japan.
In Japan more than 80% of sample testing is done in the morning on weekdays.So
I would like to let you know that in Japan streamlining and saving labor
have already been done a lot before TLA.In other words , we have to streamline
laboratories which already have the small number of technologists.There
are not many technologists reduced by TLA.
If you don't need to think the social problem and can thoroughly streamline
laboratories by TLA in the U.S.,this chart shows that financial effectiveness
in the U.S. is even more than that in Japan. |
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Slide#13
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I believe you understand that in Japan's TLA we have to streamline laboratories
which have the smaller number of technologists than that of the U.S.There
are some few technologists reduced by TLA.
But TLA pays well in spite of staff reduction like that .
Here I show a good example.
In the TLA investment of this lab, total investment including analyzers
was about $2 million . And among total investment , the total amount of
transportation system,its control system,and connection on the LIS side
was $1 million except for analyzers which they bought to renew.
I show the financial effectiveness by this TLA at the lower right in the
chart. A labor cost cut is $0.24 million per year by 5 staff reduction
. Savings of reagents and consumables are $0.23 million per year.
The investment in TLA had already paid for itself in two years in this
laboratory.
This demonstrates that TLA can give a laboratory great benefit ,if a user
and a manufacturer share the goal of a cost saving and combine manufacturer's
reliable technology with user's clear concept.
In a word ,I want to say this demonstrates TLA pays well ! |
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Slide#14
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To be honest,I am weak in laboratory management which focuses on cost reduction.
But as one of the TLA promoters I have to object to the criticism and opinions
from the U.S.that TLA technology has failed economically.
It is sure that TLA is a very economical tool, if users and manufacturers
have a clear economic goal and introduce it. The cause of overinvestment
is not TLA technology,but concepts and attitudes of users and manufacturers.
When we see TLA as technology which users easily buy in the market,unfortunately
the price went down slowly. So there are doubts on economic effectiveness.
But effectiveness of investment in TLA is improved clearly and a lot.
Finally,I want to make sure economic result is just part of the final goal
of TLA. "Improvement of medical quality" is just the final goal.
We must focus on the economic side temporarily, but we always must not
forget this final goal.
Thank you very much!
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