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Uncovering the Risks of Legacy Lab Information Systems and Keys to a Successful LIS Switch

For medical laboratory professionals, it’s no secret that being adaptable is crucial for staying competitive in the rapidly evolving diagnostics industry. However, labs today struggle to address a looming issue that is one of the biggest inhibitors to lab growth: aging technology infrastructure.

At this point, almost all clinical labs have advanced from operating on paper and spreadsheets to laboratory information system software (LIS). But most labs don’t realize that their LIS is from a generation of legacy systems (founded 20+ years ago – before the age of cloud computing). With rapid changes in healthcare, the limitations of legacy systems pose serious near-term risks. Statistics show that many labs are well aware of this and are asking the question “Should we switch our LIS?”

To Switch or Not to Switch?

Fear of the costs associated with switching systems is one reason labs are reluctant to take on a transition. Implementation expenses, onboarding time, and potential disruption to operations can make a LIS transition seem like a daunting project. All vendors claim many of the same things like “fast implementation!”, “automation!”, “faster turnaround times!”,  which makes choosing the right vendor all the more challenging. This has kept lab managers on the fence about committing to an upgrade.

However, the winds have shifted and more labs are finding compelling reasons to switch. These include the major limitations of legacy LISs (still fresh in the minds of lab managers having weathered the storm of a pandemic), PAMA reimbursement rate cuts, the changing market demands (molecular, PGx, and genomics), and growing staffing pressures. Technological innovations like AI-powered solutions and new regulations in healthcare (21st Century CURES Act) have also led to a trend of healthcare organizations investing more in technology infrastructure.

Sixty-eight percent of surveyed laboratory executives reported that their highest priority for labs’ budgets is investing in new technology to improve quality and reduce costs. The hospital laboratory market has evolved in recent years to become more automated and artificial intelligence (AI) based. Technology investments have the potential to accelerate remote diagnosis and ease the staffing shortage burden in laboratories. 2022 U.S. Laboratory Market Report

To determine whether a switch is worthwhile, labs are evaluating the risks and potential hidden costs of sticking with incumbent systems against the potential advantages of a modern system. In this post, we share insights about the state of the LIS market, highlight key factors to successful system migration, and share tips for finding optimal solutions.


The Forecast for Healthcare is in the Cloud

The basis for why legacy LISs will risk obsolescence is simply because they were designed to be on-premise systems, having been built before the modern era of cloud computing and data exchange standards. It’s important to note that the vast majority of labs are still using legacy systems.

CAPTODAY’s 2022 LIS Report shows that 29 major LIS vendors have a total of over 7000 lab contracts in the US with the oldest having gone to market in 1972 and the “newest” in 2007. For context, cloud computing first became popularized in 2006, which helps to illustrate just how dated most systems are.

While most industries were quick to adopt cloud-based applications, healthcare lagged behind due to compliance hurdles, data security concerns, and general resistance to change. However, the enactment of the 21st Century Cures Act is catalyzing a dramatic shift toward cloud technology adoption.

A primary goal of the Cures Act is to improve the exchange of electronic health information, which can only be accomplished if healthcare systems move to the cloud and adopt a universal data transfer protocol (already underway with FHIR API). Even executives of major LIS companies acknowledge the importance of cloud computing (“LIS Vendors on Where Their Focus is”, CAPTODAY) and are rushing to create “cloud-based versions” of their software. But they will face major challenges in re-architecting decades-old legacy systems and data structures to become true unified cloud-based platforms. Not to mention they face the undesirable task of migrating potentially thousands of customer installations (with different software versions and unique customizations) from on-premise installations to the cloud. Platform migrations will also pose a significant challenge to existing third-party integrations.

The Mounting Risks

Choosing to stay with a legacy LIS vendor to wait and see if they’ll restructure and successfully update their products to modern standards may be overly optimistic. LIS vendors who have yet to fully transition to a modern cloud architecture are vulnerable to acquisition and being phased out, as we’ve seen happen to several major vendors in recent years. These risks leave customers a precarious situation.

The Obsolescence Risk

If a LIS provider’s business hasn’t grown considerably in recent years, their customers might want to brace for impact. Since 2018, the industry witnessed the sudden end of Merge Healthcare’s LIS which sent labs scrambling for new solutions. In 2022 came the acquisitions of ApolloLIMS, HorizonLIMS, and Sunquest by Clinisys, and Medicus LIS by CompuGroup Medical. It may be just a matter of time before these products become deprecated. Due to the cost of supporting multiple products long-term, it’s probable that labs will need to switch from these systems at the end of their contracts. The pricing implications remain uncertain, but market consolidation trends suggest the possibility of considerable price hikes.

Additionally, the legacy LIS business model is license-based, so major product updates are infrequent, inconvenient to implement, and come at a significant cost (similar to early versions of Microsoft Windows that released updates for purchase every few years on CD-ROM). This leaves labs missing out on crucial enhancements and technological advancements for years at a time. It’s not uncommon for labs to run on software versions that are 5-10 years old.

In contrast, a modern SaaS model LIS can deploy frequent updates and product enhancements at no additional cost and without disruption, allowing labs to stay at the forefront of technology.

The Innovative Competitor Risk

It’s understandable that some labs might not see the writing on the wall. Many labs are still riding on waves of considerable success experienced throughout the pandemic and continue to run smoothly on strong client relationships, so a technology overhaul is not yet a priority. But the emergence of over 1,000+ new high-complexity independent labs opened during the last two years deserves acknowledgment. These labs are open to leveraging modern technology for new differentiators that offer a better client experience, posing a competitive threat to those still clinging to legacy systems.

The On-Premise Risk

The disadvantages of an on-premise system start with the fact that it is hosted on an on-site server and will require maintenance and upkeep, diverting resources that could be better utilized elsewhere. This also introduces challenges and complications for interfacing the LIS with other systems like external portals and EHRs, sendout labs, and installations on other lab locations. The risk of catastrophic data loss is also very real. LIS vendors should be accustomed to receiving support requests from labs in stormy areas due to power outages and occasional flooding.

Cloud-based LIS systems provide automated backups, disaster recovery options, high availability for increased performance and redundancy, minimizing downtime and ensuring uninterrupted business operations. By entrusting security measures to a trusted cloud vendor, data becomes both more secure and more accessible. The ease of integrating with various other cloud-based systems (which all systems wi) is also a huge advantage

The Staff Burnout Risk

With demand for clinical lab technicians expected to grow partially due to a labor force shortage, labs need to be aware of factors that contribute to staff burnout. The low-hanging fruit opportunity is to implement technology that automates tedious tasks to support lab staff in being more efficient.

Surveys reveal that 57 percent of employees experienced negative effects on their job satisfaction due to working on outdated equipment. Slow, unreliable, and inefficient workflows negatively impact employee job satisfaction and contribute to high turnover. Something as trivial as a task that requires 2-3 extra clicks multiplied by a hundred times per shift quickly adds up.

Intuitive user interfaces with comprehensive support documentation help to ensure that the LIS platform minimizes disruption to daily operations for lab staff. LISs designed with modern software principles reduce the number of actions that a user needs to take per task for increased productivity and provide user guardrails to reduce errors. The result is increased job satisfaction and reduced staff turnover.

When Bespoke Becomes Burden

Building a LIS in-house has plenty of advantages: it can be built to exact specifications,  labs are no longer beholden to unresponsive support from vendors, and updates can be made on a whim. While it may seem like a luxury for labs with the technical talent to be able to develop custom-made systems, the reality is that it can quickly turn into a maintenance nightmare.

System maintenance and updates rely heavily on the original developers, making the system vulnerable to disruption if key personnel resign. Bespoke systems are usually on-premise so they also come with the costs and risks previously mentioned. And with salaries for a single healthcare software developer averaging over $105,000 in the US (ZipRecruiter, June 2023) – about twice the annual cost of an off-the-shelf LIS, it rarely makes financial sense for labs to go this route.

It’s also incredibly challenging to attract and retain a team of software developers that are also revenue cycle experts and healthcare integrations professionals to build a fully-functional system equivalent to solutions on the market. Oftentimes, bespoke LISs are developed and maintained by the lab’s main stakeholders as a temporary solution that balloons beyond its original scope, sapping resources away from developing the lab’s core business. We’re always impressed when we meet labs that have scaled with homegrown systems, as it is certainly no easy feat, but it’s evident that bespoke systems will inevitably hinder a lab’s growth.

Keys to a Successful LIS Switch

Finding the Right LIS

The concerns mentioned above are legitimate factors that have prompted labs to consider transitioning to a new LIS. The crucial next step is identifying a vendor that is the ideal fit for your lab’s needs. While this process can be time-consuming, it is essential to exercise patience and thoroughness during your evaluation.

Come well-prepared with a list of questions for the demo sessions. Your team’s objective is to demand proof that the solution works to the extent that inspires confidence in the vendor’s capabilities. You can also evaluate how cooperative and engaged the vendor is rather than being pushy to close the sale. This can be a strong indicator of how the company approaches customer support. Observing how effectively a vendor responds to your team and how comprehensively they demonstrate workflows relevant to your lab holds much greater value than merely watching a slideshow presentation.

Ensure that the LIS can fully support all the modalities and workflows performed in your lab. Many LIS systems specialize in specific modalities, potentially being limited in others. For example, a molecular-based LIS attempting to expand to support toxicology may not be a fit for toxicology labs because their reports may be missing logic about detecting metabolites of prescription medications.

One way to distinguish whether a vendor is truly modern or merely repackaging a legacy system is by verifying whether they are “cloud-native” rather than just “cloud-based.” Cloud-native applications are designed to leverage cloud technologies fully, making them more reliable, efficient, cost-effective, and quicker to deploy. This stands in contrast to a cloud-based application, which may technically be software hosted on a cloud server, but not necessarily engineered to harness the advantages of cloud technology.

Additionally, ask the vendor to provide Application Programming Interface (API) documentation. The Cures Act has mandated that certified health IT developers offer an API by the end of 2022 to promote interoperability among healthcare systems. LIS platforms complying with the Cures Act by providing APIs can significantly empower labs by optimizing EHR interfacing processes and making labs more prepared for the future.

Ensuring a Smooth Transition

A vendor that is experienced in performing migrations from legacy systems is critical for a smooth transition, but the lab can also play an important role in supporting the implementation.

Designate lab staff to coordinate with the vendor’s implementation team to provide the necessary assets for setup and onboarding. This includes instrument manuals, test compendiums, provider and patient data exports, payer information, and contact information for account representatives for EHRs and other systems that require integration. A competent vendor will accommodate your pace, so being well-prepared often results in shorter timelines.

For larger labs, a phased implementation approach is usually best. Avoid a disruptive “rip and replace” strategy by onboarding each department in phases to minimize operational disruption and mitigate the risk of losing accounts. A gradual adoption ensures a smooth implementation.

Partner with end-to-end industry experts. The most adept LIS vendors will have a team that possesses deep knowledge of the lab industry and firsthand lab experience. Ideally, they will have on-staff experts for instrument interfacing, EHR integrations, lab management, and network engineers to provide end-to-end implementation support. Some vendors may employ third-party service providers, which can make the process uncoordinated.

Before Dendi, we were juggling 3 different systems, each with their own limitations. We urgently pieced together this fragmented setup to meet demand during the pandemic but knew it wasn’t a long-term solution. Consolidating multiple LISs and migrating to Dendi LIS seemed like a massive infrastructure project, but it turned out to be impressively swift. The move was absolutely transformative for us. Dendi’s ability to seamlessly integrate with other systems and reference labs is an absolute game-changer. We now operate more cohesively and efficiently than ever before. Dendi has set a new standard of operational excellence at Natural State Labs and Natural State Genomics.
Bryan Brannon, Chief Information Officer
Natural State Laboratories & Natural State Genomics


The Dendi platform is probably the most modern and easy-to-use lab software in the market today. We have successfully implemented Dendi LIS with several of our key partners and have seen tremendous benefits in operational efficiency.

Dendi’s forward-thinking approach to integrations has also opened up many opportunities that we previously would not have had. We have been able to build our own business analytics platform by partnering with Dendi, which allows Mako to continue serving its clients in new and disruptive ways, while our competition is still struggling to modernize.
Austin Fitzwater, Chief Technology Officer
Mako Medical


Our homebrew LIS served us perfectly well during the pandemic. But as we grew our test menu and service offerings, continuing to reinvent the wheel was just not an option. We evaluated several solutions, but the Dendi LIS stood out because of its modern User Interface, its ability to integrate with different systems, like state health departments, and also provided seamless support for our multiple lab locations. But above all, what I have appreciated most is Dendi’s culture of innovation and its caring and supportive staff. Throughout the transition, the Dendi team was supportive, patient and responsive to our sometimes idiosyncratic requests. With Dendi LIS, we feel well-equipped to continue growing and expanding our operations while ensuring top-notch service to our patients.
Nadine Dabby, Chief Technology Officer


Switching to Dendi’s LIS has helped our lab immensely! The system provides the reliability we desperately need while taking care of patients. We experience very minimal downtime and their customer service is right there to get us up and running quickly! Our end-users LOVE the portal interface and rave at how easy it is to use! It also interfaced with each of our instruments, billing company, and facility EMR systems, streamlining our processes! Our only complaint is that we didn’t switch to Dendi LIS sooner!
Janene Shelledy, MT(ASCP), Lab Manager
Solutions Lab and Healthcare Services


Working with legacy vendors can sometimes feel like dancing in old shoes – they’re comfortable, but not always efficient. Transitioning labs to modern solutions isn’t just about embracing innovation, it’s also about compliance with regulations like TEFCA. It’s a journey of balancing tradition with transformation, a necessary step to ensure both progress and alignment with the current healthcare data standards.
Loyd Bittle, CEO & Founder
Innovar Healthcare


The Takeaway: Prepare for the Long Haul

Many labs underestimate the potential risks of operating on legacy systems and overestimate the difficulty of switching systems. While it’s difficult to overcome the inertia of inaction to make a major change, legacy systems pose significant risks to the long-term success and competitiveness of independent labs. By recognizing the drawbacks of legacy systems, understanding the industry trends, and embracing a smooth transition to a modern LIS solution, labs can position themselves for growth, operational efficiency, and avoid the risk of obsolescence.