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Pressure to Cut Costs in Labs Acts as Catalyst for Creative Computer

October 29, 1985|JAMES BATES | Times Staff Writer

Until earlier this year, Judy and Bill Lantz had three secretaries at their Woodland Hills medical laboratory who typed reports detailing the results of blood and urine tests.

The secretaries could prepare about 30 typed reports daily, drawing information from test results on strips of paper resembling airline tickets that were recorded by lab equipment or technicians.

But, four months ago, the Lantzes bought a $40,000 computer system from Creative Computer Applications, a Calabasas-based company that has been a leader in developing equipment to streamline the recording of laboratory test results.

The Lantzes' test results are now automatically entered into the computer by machines or by lab technicians, then printed out for the doctors. By automating test results, the Lantzes say, they can perform tests for up to 100 patients a day without using the three secretaries and without risking transcription errors.

Strides in 7 Years

Since it was founded seven years ago in a bedroom, Creative Computer Applications has had considerable success persuading laboratory operators such as the Lantzes to use computers to collect and organize medical test results. It has reached more than $4 million in annual sales and has started to sell its products to major hospital and medical equipment companies.

The company's growth is being fostered by a push in the health-care industry to keep a lid on costs, largely because of the tightening of Medicare benefits. It is also aided by advances in the personal-computer field that have brought the price more within reach of small laboratories.

"Whenever you get pressures on costs, computers end up being one of the solutions," said James McCamant, editor of the Medical Technology Stock Letter in San Francisco.

Creative Computer's sales have doubled each year since 1981. Company officials say that, after losing more than $700,000 in its 1983 and 1984 fiscal years, they will report a profit when they finish calculating the final results for the 1985 fiscal year, which ended Aug. 31. Creative Computer earned $215,559 in the first 11 months, according to an Oct. 1 prospectus the company filed with the Securities and Exchange Commission.

Automation Not New

Automation is hardly new in medical laboratories. Many blood and urine tests have been done by machine for years. One blood analyzer in the Lantzes' lab, for example, will perform seven tests on a sample of blood, including a count of white and red blood cells.

Other tests, however, must still be performed by people using microscopes because they require judgments. Those procedures include noting whether there is a wide variation in the size of red blood cells, which could indicate anemia, and categorizing the white blood cells in a sample to help detect infections.

The equipment sold by Creative Computer does not change the way tests are performed but assists in recording the data. The Lantzes' system, for example, consisted of three personal computer terminals, a computer memory system, a printer and so-called "interface" devices that link the computer with their lab.

One of the interfaces is a small black box that links a blood analyzer with a lab computer. The blood analyzer previously printed out the results on a card; now it feeds them electronically through the box into the lab computer.

Another device, which resembles a telephone answering machine, allows a lab worker to punch into the computer data describing characteristics of the white and red blood cells as the worker views a blood sample under a microscope.

Management System

Besides assembling the devices that help record test results, the company buys equipment from manufacturers and resells it as part of a laboratory management computer system called Cyberlab. That package includes software to help with administrative jobs such as keeping track of billing.

Many of Creative Computer's clients have been small laboratories such as the one owned by the Lantzes. Potential clients, however, include some of the nation's largest hospital chains.

Clinton L. Packer, president of Shared Data Research, a Hudson, Ohio-based firm that studies the use of computers in health care, projects that the nation's hospitals will spend $2.4 billion this year on computers, $4 billion in 1987 and $6 billion by 1990. He believes that a significant part of that money will be for laboratory computer systems. In a recent study, Packer found that there are about 4,500 hospitals with labs that could be computerized. That is about three times the number that already have computers.

Creative Computer is beginning to penetrate that market. In May, it signed an agreement with Hospital Corp. of America, the nation's largest hospital chain, to sell equipment and software for its hospital labs.

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