What is a Laboratory Information System?

By Psychē Systems

laboratory information system

The healthcare industry is dependent on patient information that is easily accessible. Patients cannot have effective treatment if medical professionals can’t access their health information. This is where a laboratory information system comes in. These systems are the lifeblood of the healthcare industry and make it possible to support critical patient care and improve workflow in healthcare facilities. 

What is a Laboratory Information System? 

A laboratory information system, commonly referred to as an LIS, is a type of medical software that laboratory facilities use to store important patient data that medical offices and treating physicians need in order to properly diagnose and treat a patient. This data primarily includes both incoming and outgoing laboratory testing orders and test results. Furthermore, an LIS is able to track lab orders and transmit data to a patient’s electronic health record (EHR). As with all electronic health records, a patient’s personal information, including their name, birth date, gender, address, and medical history, exists in this laboratory information system. 

A laboratory information system can also store and process the following information:

  • The physician who read the lab results
  • The date of the patient’s facility admission or lab work
  • The department that ordered the lab work
  • Workflow management
  • Comparison of a patient’s lab results
  • The type of specimen taken and subsequent tracking of where it is in the analysis process
  • Quality assurance
  • ICD codes for billing purposes
  • Communication among staff, including documentation of phone calls or emails

Many medical professionals use clinical lab software to treat patients. A laboratory information system allows pathologists, oncologists, hematologists, microbiologists, immunologists, and other medical professionals to access important lab results easily and efficiently in order to move forward with a diagnosis or treatment plan for existing conditions. Lab tests can also aid in the research of new diseases and viable treatments, as well as determining the risk of someone developing a disease in the future, such as breast cancer. 

These electronic systems cut back on data entry errors and ensure patient history is more complete.

How Did the LIS Start? 

The laboratory information system dates back to the 1960s. Massachusetts General Hospital and a company called Bolt Beranek Newman joined forces to create a system of multi-user functionality that would later develop into the modern systems we use today. 

The creation of this system back in the 1960s revolutionized the healthcare industry. However, it wouldn’t be until the 1980s that software developers were able to expand upon the idea to include analytical capabilities. Now, laboratory information systems have become a vital component of accessible healthcare. 

Psychē was one of the earliest laboratory information systems on the market.

How Does a Laboratory Information System Work? 

Like any electronic system, a lab information system consists of many components that enable it to work efficiently. In order to be successful, a laboratory information system needs to have storage organization capabilities and the ability to engage in sample tracking. Sample tracking tells laboratories where samples are in the process, when a lab test was ordered, if it’s been completed, and whether the physician has reviewed the results. 

Storage organization makes it possible to find out where the blood or tissue sample was stored, right down to the refrigerator shelf or freezer that was used. This is particularly helpful in busy healthcare environments where mistakes could be costly. Efficient laboratory information systems also include: 

  • Electronic notebooks
  • Client tracking
  • Compliance and training database
  • Data centralization
  • Equipment tracking, including when to reorder certain items, when maintenance on said items is due, or whether to calibrate certain instruments before use. In fact, you can customize a laboratory information system to automatically reorder certain items when it runs out. 

Types of Laboratory Information Systems

Historically, on a technical level, there were two types of laboratory information systems: one used for clinical pathology, and one used for anatomic pathology. These days, laboratory information systems are expanding to include the complex workflows that include molecular testing.

Clinical pathology diagnoses a variety of diseases such as heart disease, cancer, and rheumatoid arthritis. This practice of pathology involves the study of various bodily fluids, such as blood/bone marrow, urine, saliva and human tissues. Clinical pathology is used in conjunction with medical technologists, referring physicians, and hospital administrators to ensure that there is optimal utilization of laboratory testing and accuracy.

Anatomic pathology, on the other hand, usually studies tissues obtained through surgical procedures such as a biopsy. These samples could also be taken from an autopsy to determine cause of death, which is known as Forensic Pathology. 

So why do we need different forms of lab information systems? Even though both types of pathology take place in a laboratory setting, they have very distinct workflows. For example, anatomic pathology workflows tend to require more samples than clinical pathology, causing differences in accessioning and specimen tracking at the patient and test level. Clinical pathology workflows may require fewer samples with multiple tests required for each individual specimen.  Molecular testing can also require understanding a patient’s family history for a proper diagnosis. Having the right system to document the appropriate information and complete the job is vital. 

What’s the Difference Between LIMS and LIS?

We often hear the terms laboratory information systems (LIS) and laboratory information management systems (LIMS) used interchangeably; however, they have some major differences. As noted above, the biggest difference is that a LIMS isn’t exclusive to medical settings. Unlike an LIS, which is solely used for the purpose of collecting and storing patient data at a healthcare facility, you can use a LIMS at water treatment plants along with other non-medical settings such as pharmaceutical labs, in drug trials, and at environmental testing labs. 

Since laboratory information systems primarily collect and process patient information in a clinical setting, they must meet the reporting requirements outlined under HIPAA (the Health Insurance Portability and Accountability Act) and other hospital accreditation agencies. This is in contrast to a LIMS, which has to meet the reporting requirements of various scientists in the field, as well as the Food and Drug Administration (FDA). 

Benefits of Testing Lab Software

Laboratory testing is a vital component of disease diagnosis and treatment. As such, there are many benefits of testing lab software. Here are just a few: 

  • Great Results: With an LIS, patients’ lab results are easily accessible. Furthermore, it reduces the risk of misdiagnosis or specimen misplacement since everything is streamlined and organized in one place. 
  • Reduced Costs: One of the biggest benefits of laboratory information systems is that they can help reduce costs over time. Since staff can access patient information quickly, this cuts down on time spent sorting through files manually. Furthermore, it reduced costs for regulatory audits or projects, as staff requirements to complete a task are reduced.
  • Security: All healthcare facilities need to prioritize their patients’ security. An LIS makes this possible, especially since it has the ability to limit unwarranted access.. 
  • Faster Turnaround Time: Automate much of your workflow with the right LIS to get patients their results sooner.
  • Usability and Reusability: Since many of the same tests are usually ordered, you can save time by creating automated tests that can be ordered time and again. 

Starting a Laboratory Business: Tips to Get Started

If you’re looking to start your own laboratory business, there are a few entrepreneurial requirements you must meet first. As with any company, you will need to have a company description and an executive summary. The executive summary is the most important part of this proposal, as it will outline your experience in this area and what makes you an ideal fit to start a laboratory. This executive summary will also come in handy if you are seeking any type of financial backing. 

Your business plan should also include the following: 

  • Targeted demographic/market analysis
  • Types of services/products you will provide
  • Request for funding
  • Management information
  • Impact of governmental requirements
  • Staff/board of directors qualifications
  • Strategies for continued business growth 

When opening up your own laboratory business, you need to highlight your strengths and why your business will be successful. Once you’ve created your business plan, you will need to set up your business structure to determine whether it’s going to be a sole proprietorship, corporation, or Limited Liability Company (LLC). 

Startup Money

Next, you will need to secure startup money. This is often called “seed money” and can help pay for the laboratory space, equipment, insurance, and any other fees throughout the setup process. After this, you’ll need to find a space to open up your laboratory. In order to open your own lab, you’ll have to purchase lab equipment, either from a manufacturer or through a pharmaceutical auction. Next, you’ll need to hire personnel with the necessary skills and experience to carry out the functions of the laboratory. 

In order to fully function as a medical laboratory, you will need:

  • Updated medical licenses for all personnel 
  • To be in compliance with local zoning ordinances
  • To be in compliance with handling bodily fluids 
  • Malpractice insurance
  • Approval from the Centers for Medicare & Medicare Services
  • Permits from state-issued blood banks

Establishing a New Lab Test

Regardless of whether you’re a new lab getting set up or already established, there may come a time when you want to introduce a new test due to popular demand or increased need – such as COVID-19 testing. In order to establish a new lab test, there is a specific template you need to use. We outline these steps below: 

  1. Step 1: Select Your Test. Your first step will be to decide which test you want to move forward with. This isn’t done by preference, but rather due to evidential demand. Once you determine that demand exists for a particular lab test, you will then have to analyze the cost of such testing, how complex it will be, the manual work involved, and where to conduct the testing. You will also need to determine whether or not your lab currently has the capabilities to conduct such testing. Even though there may be a demand for certain tests, it may not always be fiscally possible. 
  2. Step 2: Research. As with anything medicine-related, you need to research the type of testing you want to bring in-house. Research teams usually include lab managers, medical billing specialists, and IT specialists. The goal of the research team is to determine whether or not there is enough service, support, and space available to conduct such testing, as well as to go over billing codes, reimbursement, necessary training, physical requirements, test reliability, and how much waste will be produced. The research team will also need to determine whether or not the laboratory testing is or will be FDA-approved. 
  3. Step 3: Talk with Vendors. After you complete the research phase, it’s time to talk to vendors. Vendors can provide you with details on other labs that currently use the testing you’re looking to add. This gives you the chance to visit the other labs to see how they conduct their testing and ask any questions about how successful the testing has been at their facility so you have some preliminary information. Vendors will provide you with equipment, training, and testing kits. 
  4. Step 4: Final Decision. Once you complete all the steps above, you should have all the information you need to make a final decision about moving forward. Once you make the decision to move forward, you will need approval from the management team. When seeking approval, you should include all relevant factors including but not limited to the cost of the testing, the benefits, impact it will have on the patients, and pertinent literature to support the need. 
  5. Step 5: Go Through the Process. First, you will need to make sure that the test is either FDA-approved or cleared. Furthermore, each new lab testing must have a Certificate of Compliance, Certificate of Waiver, Certification of Registration, Certificate of Provider-Performed Microscopy Procedures, or Certificate of Accreditation. 
  6. Step 6: Documentation. The next step will be to develop documentation between the lab and the vendor. This document includes important information such as who is responsible for administering the lab testing, how results will be verified, and what the written procedures are. This documentation may also include a patient log and training log. 
  7. Step 7: Training. Once you determine who will administer the new lab testing, those individuals will need to undergo specific training. Once you train them on how to perform the new test, you can evaluate them for competency. You can continuously evaluate staff six months and a year after you implement the new tests. Evaluations will continue annually after the one-year mark. 


Due to the expenses that come with starting up a lab, there are ways to gain funding for the operation. One way is to receive funding from a venture capital firm. These firms invest in startup companies with the potential for a stake in the business.

Another way to receive funding is through government grants. Under certain conditions, small businesses engaged under R&D can get research grants under the Small Business Technology Transfer (STTR) or Small Business Innovation Research (SBIR) programs. These programs allow small businesses to take on federal R&D objectives that could eventually lead to commercialization.

SBA Options

A few other SBA options are guaranteed loan programs, surety bonds, and equity financing. With a guaranteed loan, the SBA guarantees the repayment of loans. These kinds of loans usually aren’t available to small businesses if the company that is borrowing has access to other kinds of funding.

A surety bond works in a similar fashion, where the SBA guarantees a surety that the SBA will take on a percentage of the loss if the contract is breached for some reason.

The SBA offers equity financing through the SBA’s Small Business Investment Company (SBIC). The SBA goes to private investment funds to provide the capital to these businesses, and the SBA gives these investors access to low-cost, government-guaranteed debt.

Why Do Labs Need Medical Lab Software? 

Even though a laboratory plays a vital role in the diagnosis and treatment of many serious conditions, it is still a business and needs to efficiently operate as one. As such, medical lab software is necessary for the following reasons: 

  • It reduces intake errors and minimizes the risk of medical negligence.
  • In addition, it helps to automate billing to ensure that the patient is billed correctly, claims are accurately sent to the insurance company, the office is paid, and that payments are made on time. 
  • It helps staff easily locate errors or ways to improve the system to create a better workflow. 
  • Also, it increases employee productivity.
  • It ensures you are doing certain procedures correctly. 
  • Additionally, it allows for record management. 

While this isn’t an exhaustive list, a laboratory information system is part of making sure the lab runs smoothly. A smooth-running lab means better patient care. As with anything, you need to make sure that your LIS will fit the needs of your patients and support the overall efficiency and services of the lab itself. 

Psychē Systems Can Fill All Your Laboratory Information System’s Needs. Contact Us Today!

If you run a lab and you’re looking for a new laboratory information system, look no further than Psychē Systems. For over four decades, we’ve innovated and helped medical laboratories of every type create specialty systems that allow them to optimize efficiently and cost-effectively. We have modern laboratory information systems designed to fit every need your lab may have. 

At Psychē, we can customize our LIS options to fit your budget and your client’s preferences. We make sure that our systems operate off of our best-in-class applications. This includes NucleoLIS, which supports molecular and clinical laboratory testing. WindoPath is a fully CAP- and CLIA-compliant application that supports all areas of anatomic pathology, including cytology, urology, gastroenterology, and dermatopathology. And finally, MicroPath is a unique, flexible application that supports microbiology testing. 

We have a full suite of robust connectivity solutions, including Outreach for online orders and results, our e.Query management reporting tool, a comprehensive EMR Hub that allows integration and interfacing to electronic medical records (EMR), and more. We can host all of our solutions securely on-premise or within our hosted services environment.

Contact us today to learn more about our options for laboratory information systems and how we can tailor your system to your needs. We have an unwavering commitment to and focus on innovation. Psychē Systems meets the high standards of the healthcare industry for patient safety, laboratory integrity, and customer efficiency.