Episode 2: The interplay of quality reagents, lab results, and patient care (Part 2 with Dr. Scott Kephart, Quasar Instruments)

00:00 Welcome and Recap
00:58 Price Versus Value
01:32 Fixed Costs and Downtime
03:13 False Results Fallout
05:16 Buffers and pH Basics
06:20 Inhibitors and Dilution
08:05 Mass Spec Friendly Salts
10:49 Prep Errors and Support
12:31 Starting Labs Right
14:34 Patient Centric Quality
16:31 Hydrolysis and Stress Tests
17:28 Supply Chain Reliability
18:55 Final Wrap Up

Andrew: [00:00:00] Welcome back to Imagine More, Create Solutions. I’m your host, IMCS, co-founder and Chief Scientific Officer, Andrew Lee.

In our last episode, you’ll recall our chat with Dr. Scott Kephart. President of Quasar Instruments, where we talked about the importance of investing in high-quality reagents and stress testing your validations. In this episode, we dive into the impact of poor quality and false lab results, especially for smaller and physician-owned labs.

Let’s jump right in.

Again, we’ve talked about price [00:01:00] versus value, and we’re kind of hounding on value, not only on, you know, the differences of the enzyme itself, but paying attention to the details. How are vendors’ pricing structures? Is it per mL or per sample? But again, I think that’s only on the consumable side.

If we kind of pull that back again to what sort of value is that bringing to the table, and why should these operators actually pay attention to the value cost rather than just the price of the consumables itself?

Scott: When we run our financial engine, one thing we have to explain to them is that the finances of a lab are 80- 85% of a fixed cost business.

What that means is that when you run a variable cost business. When your productivity goes to zero fully variable cost business, when your productivity goes to zero, your costs go to zero. And when your productivity is high, your costs are high. So, it ramps in a fixed cost business, those costs are fixed, whether you’re running samples or not running samples.[00:02:00]

And when we look at a detailed analysis of the profitability of the business modeling, the cost per sample is difficult to calculate in LC-MS. They’re probably running around $10, $15 per sample in consumables, depending on how you want to do that. Income levels per sample, per sample run are probably running.

It’s highly dependent on the payer mix of the customer and their testing policies. It’s a very complex analysis, but you know, let’s call it a hundred dollars per sample. So when you look at the business aspect, if your cost per sample is 10 bucks per sample and you save 10%, which is a huge savings, you’re saving a buck.

For example, your cost went down from $10 to $9, which is a big percentage change, and any purchasing agent would be excited about a 10% savings. Your income went from 90 to 91. It didn’t really change the income that much, and you’re introducing variables that might affect that whole hundred-dollar income.

And [00:03:00] that’s where we model our engine, which will model downtime. It will model the cost of downtime. It’ll model kind of the true cost of this business. And that’s really critical for them to understand that, really, saving a buck. It can end up costing you a hundred bucks.

Claire: The cost of reruns, the cost of retests, and the cost of false.

Scott: Oh, absolute

Claire: negatives.

Andrew: It also sounded like you have to pay the payers back.

Scott: Yes.

Andrew: Or reimburse the payers. If you’ve reported out false results, that’s going to be huge.

Claire: Many labs have been shut down because of the fines associated with putting out bad results by Medicare. You not only have to pay it back to Medicare, but they fine you, and then there’s also the lawsuits that the payers produce because you have to return their money, and they want interest on it.

Scott: Yeah. It’s, you know, and the difference you had mentioned, reruns and you had mentioned, you know, reporting negative results. A high-quality lab with a high-quality, [00:04:00] oversight will catch its own errors. That’s what triggers a rerun. If you don’t have the quality on the backend to catch your errors, robust quality controls, those types of things, where you can detect errors, then you’re actually releasing false results, and that’s when it gets scary fast.

It’s interesting. I usually have a technique of, with our financial engine of battling the, ‘I could get this cheaper, I could save 2 cents there’. Actually, run our analysis at a cost per sample of zero. So I just say, okay, let’s forget saving money. Let’s say you got all your reagents for free.

You didn’t pay for a single thing. Look at the impact that makes. And they know that’s ridiculous. I do it on the cost of instruments too, but if you compare that to the cost of not running, you can’t save yourself the profitability in this business. You have to keep running, and you have to produce quality results, and you have [00:05:00] to have customers.

You know, the commercial labs, if you produce bad results, you lose customers, and those customers are extremely valuable and hard to replace.

Claire: Well, the thing is, the more tests you run, the larger the mistake is.

Andrew: And more frequent. Yep. You know, we covered a lot on the enzymes as well as the cost of quality, but then are there any other aspects, say for instance, buffer?

Would that also be something to be paying attention to? I mean, the devil’s in the details, right? Claire? Anything about buffers?

Claire: Enzymes work within a specific pH. Urine samples range between a pH of five and nine, and most enzymes work in a very specific, small range. Say 5.4 to 5.6 for each enzyme’s different.

So if you don’t have the correct buffering capability, it’s not made [00:06:00] correctly. Your enzyme’s not going to work efficiently. You’re not going to hydrolyze your samples. Also, in the mass spec, if you do a sample cleanup, you need the correct pH. If your pH is wrong, you won’t clean up your samples, you won’t collect the analyte of interest at all.

pH is really important in LC-MS/MS technology and the sample prep of urine.

Andrew: The other thing is you mentioned: inhibitors. We published a paper on that in JAT a few years back. The pH of urine is already five to nine, and the pH of the buffer is important. The enzyme performs at a very specific pH range. Your extractions or your analysis on LC-MS all perform at a very pH-specific range, but we actually showed that you need a certain large quantity of buffer to start to dilute out, you know, a simple compound like urea.

You know, urea is a common denaturant, a protein denaturant that’s in urine, right? That chemical is just discovered in urine, and that’s why it’s called urea. There’s a lot of it in urine, and it’s [00:07:00] classic for protein denaturation, but if you don’t dilute enough of it, then you might be just messing up and denaturing or unfolding or destroying your enzyme that you paid so much for.

So these processes and these robust testing, these are things that we’ve done at IMCS, not only on the enzyme side, on the pH side, as well as on the buffers and the dilution of the urine samples. To make sure, you know, Scott. He has one less thing to worry about.

Claire: Right, and that’s a good point, Andrew. We have many independently published papers that stress enzyme testing, adding lots of glucuronide to each sample, and incubating them with our enzyme, and then testing.

That’s our point in producing this. This data, this information for customers, is stress testing our enzyme, and we have the data to prove it. Anyone going on our website can read. Independent laboratories have tested our enzyme when we’ve done our own internal testing too. And it’s also great that Scott has [00:08:00] tested our enzyme and stressed it and doesn’t have to worry about it.

Andrew: You know, there’s another component to it, like you mentioned, are these little details. We did cover that maxim or that, you know, adage about the devils and the details. There’s a lot of technical details on this complex analytical workflow. You know, some of the things I can bat right off the top of my head is like a buffer’s choice.

We were just on buffers, but Claire also mentioned salts. Buffers are salts. They are salts to maintain a specific pH, but if they are incompatible with a mass spec, you’re adding a lot of buffer or salt, and you have to try to control your pH, which you have to do, but then you’re also mucking up your systems by adding those buffer salts.

But you know, again, for our in-house R&D and our new product with the RT, we’ve actually used a volatile salt. Volatile salt, [00:09:00] meaning that it vaporizes upon ionization with the mass spec. So, acetate is a volatile salt vinegar, right? That you can smell it and it kind of vaporizes, so it doesn’t actually crum up your system.

That’s a fantastic buffer to use acetate buffer. But we’ve seen in the market some of these tris or EDTA. Salts that are used in there, and those are really, really non-volatile. Or they will muck up your mass spec. Those are salts that you should not be using.

Claire: So, Andrew,

Andrew: Yeah?

Claire: Tris and EDTA will actually clog your system, clog your columns, or clog your source.

So you have to clean that constantly.

Andrew: It’s probably a multitude of different problems. I won’t pinpoint to exactly what is clogging systems or any of that. But then tris is a very strong, it’s one of the good buffer salts, so it will not vaporize on mass spec, or it could actually form a counter [00:10:00] ion.

So like, you could have a sodium or a tris salt instead of just a proton. So instead of having that analyte with that specific mass that you’re analyzing, it could actually have a completely different mass and you no longer see it on your system. And that could result in your false negatives and so forth.

But if your LC-MS is running well and it’s already been stress tested, all those should be addressed. And you know, again, like you said, the doctors should not be worrying about this. ‘Oh crap. Is this a volatile assault? Is it not?’ Well, from IMCS with Scott, it’s already a volatile assault. You don’t have to worry about it.

You know, this is the system that we’ve got you prepared on. And you’ve covered an interesting side of things. Right? Those details that they don’t have to worry about. It’s sample prep. Right. I’m sure you guys get a lot of calls on that. I mean, do you want to kind of touch on that?

Scott: Yeah, yeah. It’s, it’s funny, we’ve been talking about stress testing and stress that it’s hearing this talk [00:11:00] about, I mean, I,  just realized that we do controlled stress testing to remove stress later.

The stress of the instrument being down, the stress of having results. You know, the weird ionization that you talked about, or the unexpected ionization that you talked about when you start failing QCs, and you start failing this, and you don’t know why, and you have to do the stress of figuring out what’s going wrong. Either bring in instrument backup, calling a repair, cleaning it, venting it, all these things stress out, especially our customer base, a lot.

We’re kind of a frontline defense for our customers, so they call us for service calls, and then they’ll call, you know, an LC-MS Service Center, but always the mass spec is broken. When we call the mass spec broken, 90% of the time it’s a prep error, and I would classify. You know, poor reagents into a prep error kind of classification.

Doesn’t have to necessarily be human error, but yeah, most of the time, [00:12:00] most of these issues that we deal with can be traced back to some sort of error or something happening during the prep process.

Andrew: Well, we covered a lot. I mean, the right process, the right procedures. I like that, you know, that line control, stress testing, so that we can reduce future stress.

I think we should do a lot of that, actually. We try to avoid it. The pain upfront, thinking that we can just kick the can, and it will come back to bite us.

Scott: Yeah.

Andrew: So Scott, based on today’s discussions, are there any key elements that you’d like to summarize and leave for the practices for our audience?

Scott: Yeah, and I’ll focus on, you know, the POLs, the smaller labs, and the new labs. They want to start out with a robust process. That process includes methodology, instrumentation, analytic procedures that they’re using, and the consumables that they’re buying. Actually a lot of people think that when we sell this, their [00:13:00] paradigm is the FDA approved instruments.

And so they think the validation’s going to take a week. Just checking something so they don’t understand that this is an LDT. Unfortunately, the analyzer world, the FDA, they use the word validation. We use the word validation. What we’re doing is really what they had done for the FDA combined with an IQ OQ that they’re doing on-site.

So it’s very, very challenging. Getting the labs started with the right processes and the right consumables is critical. The first six to eight months of the lab operation is absolutely critical. It’s during that point that confidence will be lost. A new reference lab, a commercial lab, they have new customers.

So if they mess up in that six-to-eight-month period, they’re going to lose those customers that they have invested heavily in. A lot of my customers, because it’s a POL, because it’s an in-house lab, they don’t think they have to worry about customer care. They absolutely do. They have independent physicians, they have physicians working with them with [00:14:00] opinions.

And if the physician staff doesn’t have faith in the results they’re getting from the in-house lab, they’re going to be very vocal about it, as they should be. You know, they need quality results. You know, going back to the lab, if you have the right processes, it’s so much easier to start out with the correct processes to breeze through your first audits.

To establish policies and procedures that give you the quality consistency that you need. It’s very difficult to go back and fix the lab that is having issues. Those are very challenging. Kind of the last point that I’d like to make, and it was brought up in this talk quite a bit, but I really, really try to iterate it.

I iterate with my staff, our customers. We always talk samples. We always talk year end. We always talk the mass spec samples. At the end of the day, these are all patients. These are all patients that decisions are going to be made for them. We do a lot of customers in rehab and pain management.

That’s the main markets we [00:15:00] focus at. I’m terrified of being associated with the lab that releases false results, false negatives, and false positives. Even those patients in the rehab world, you have somebody that’s going through a difficult point in their life. They’re asking for help. The thought of falsely accusing them of a false positive of something that they didn’t do at a low point in their life terrifies me.

So that’s kind of, you know, where we focused it. I glanced over that beginning. But being patient-centric, really developing policies and procedures focused around the patients is critical not only to the patients, it’s also critical to the long-term success of any lab.

If you try to make decisions that are not patient-centric, in my experience, you get in trouble. It’s not a question of if it’s a question of when.

Andrew: Wow, that’s a completely different perspective. You know, we all live in our own world, sort of a bubble. I mean, I myself would be more of a scientist looking for [00:16:00] the latest and greatest enzymes, what sort of features or characteristics they have.

But if you trickle further into it, it is really patient-centric. We need to do the right thing, right? It’s not just a cost per sample. It is that value that we need to start looking at. Impressing, you know, the client’s perspectives, our colleagues’ perspectives. That just kind of opens up this discussion quite a bit.

But, Claire, do you have anything else that you’d like to add to this as we sort of wrap up?

Claire: Yes, and again, I’m just going to reiterate, the one thing that’s extremely important but not focused on enough is hydrolysis and the importance of beta-glucuronidase. Common pain points are false negatives, screening results not matching the confirmation results, Very high concentrations of glucuronide, and pain care samples.

You want to have a good [00:17:00] enzyme that will hydrolyze all of the glucuronide in your sample. Then again, as Scott has mentioned, you need to stress test your analytical methods and your validations to make sure that your results are accurate.

You need to test this with real patient urine, real pain care samples. So they have high amounts of glucuronide and high amounts of different drugs and flavonoids, and everything else that’s in urine.

Scott: One little plug for you guys. I’m not sure how much it matters now, but, we all went through COVID.

We all went through having these labs, having to operate in the supply chain nightmare that we had to deal with, and my staff had to deal with. We never had an issue with you guys. You guys had our back, had our customers back all through that. That says a lot. I mean, it’s not only that you can have a high-quality product, you can validate a high-quality product, you can have faith in a high-quality product.

If you can’t get the product, it doesn’t help you. So yeah. Thanks. Thanks for that. That was a, [00:18:00] a huge benefit for us.

Andrew: Awesome. Well, we really enjoy working with you guys. I mean, you guys are growing handover fist, so it’s always fantastic to see businesses be successful, and that success model comes with, you know, that compassion, patient-centric model, and high-quality service.

And I think, Scott, you encompass a lot of those features that you’ve highlighted in our products. Your services are fantastic.

Scott: Thank you.

Claire: I think your business philosophy, Scott, is outstanding, and that’s the way I work in all of my businesses, especially when I was in the lab. I worked to make sure that we stressed and validated all of our methods so we had accurate results.

And also in selling enzyme, I will not say anything that’s not true. It’s a matter of integrity because it’s all about patients.

Andrew: Well, let’s wrap it up, folks. I hope you enjoyed this episode. If you want [00:19:00] to stay connected, follow us on LinkedIn, and for more episodes, find us on Spotify or visit our website www.imcstips.com. Catch you on the next one. Take [00:20:00] care.