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Establishing a Real-Time Consultative Network: The CLARi. ENT Experience Kenneth J. Bloom, MD, FCAP Establishing a Real-Time Consultative Network: The CLARi. ENT Experience Kenneth J. Bloom, MD, FCAP Chief Medical Officer, Clarient, Inc. Clinical Professor of Pathology, USC

My Experience with Telepathology/Virtual Pathology § Performing virtual pathology since 1985 § Commercialized first My Experience with Telepathology/Virtual Pathology § Performing virtual pathology since 1985 § Commercialized first virtual pathology system in a reference laboratory setting § Currently supporting over 700 pathology practices using utilizing various aspects of virtual services. § I review approximately 90% of my cases virtually § I have a consultative network of virtual pathologists to help me in my practice. § I have implemented about 40 virtual microscopy systems

The Evolution of Virtual Pathology in a Reference Setting - Basic Business Strategy • The Evolution of Virtual Pathology in a Reference Setting - Basic Business Strategy • Strategies based on disruptive innovations have the highest chance of creating growth. • Introduce benefits such as • Simplicity • Convenience • Ease of use • Lower price Clayton M. Christensen, The Innovator’s Dilemma

The Disruptive Playbook • Scratch an unscratched itch • Make it easier to get The Disruptive Playbook • Scratch an unscratched itch • Make it easier to get an important job done • Make an ugly business attractive • Find a way to prosper at the low end of established markets by providing a good enough solution at low prices • Democratize a limited market • Expand the market by removing barriers such as lack of skills or access

Implementing a playbook • Make it easier to get an important job done • Implementing a playbook • Make it easier to get an important job done • Quantitative assessment • Find rare events • Obtain measurements easily • Simplify and improve access to second opinions • Make an ugly business attractive • Reduce Fed’Ex costs • Democratize a limited market • Allow access to complex/difficult immunostains • Eliminate the need for clients to obtain space, people and equipment

Manpower/Resource implications • Shortage of qualified histotechnologists • Shortage of subspecialty Expertise • Need Manpower/Resource implications • Shortage of qualified histotechnologists • Shortage of subspecialty Expertise • Need for high priced equipment without adequate volume • Lack of space • Competing resources • More residents being trained in advanced technology but those technologies not available to them in the job market

What problem am I trying to solve? § Reduce logistical costs § Improve turn-around What problem am I trying to solve? § Reduce logistical costs § Improve turn-around time § Reduce workforce requirements § Allow clients 24/7 operations § Empower local pathologists § Access to expertise § Access to new technologies § Access to more complete menu § Access to Information Technology

Traditional Clinical IHC Workflow IHC Biomarker Ordered • Take pictures • Sign Out Report Traditional Clinical IHC Workflow IHC Biomarker Ordered • Take pictures • Sign Out Report Block Pulled & Slides Sectioned Pathologist Review & Interpretation IHC Stain Performed Slides Collated & Delivered To Pathologist

Virtual Microscopy Workflow • Pathologist Review & • Incorporate Images Into Interpretation Reports • Virtual Microscopy Workflow • Pathologist Review & • Incorporate Images Into Interpretation Reports • Image Analysis • Off-Site Review • Consultation Review. Tumor Board & Virtual Microscopy Presentations. QA/QC Review. Educational/Research

Virtual Microscopy Imaging of entire slide Each image ~ 0. 4 Gb • • Virtual Microscopy Imaging of entire slide Each image ~ 0. 4 Gb • • • Image acquisition Image storage Image retrieval Real-time browsing Real-time consultation Image analysis

Virtual Microscopy Image Acquisition Too expensive $0. 91 per slide Not sufficiently fast 6 Virtual Microscopy Image Acquisition Too expensive $0. 91 per slide Not sufficiently fast 6 -7 minutes on average at 20 X Not good enough for diagnosis Excellent at 20 X; Diagnostically equivalent in most cases Image storage Too expensive $1. 00 per slide - kept 30 days Reviewing images Too slow Real-time virtual microscopy Throughput of imager Image quality

ACIS ACIS

Zeiss/Trestle with Slide Loader Zeiss/Trestle with Slide Loader

Selecting the Hardware § Hardware is a commodity. § It will be out of Selecting the Hardware § Hardware is a commodity. § It will be out of date as soon as you purchase it. § It was out of date as soon as the vendor starting building it. § Hardware will always become better, faster and cheaper. § Will the vendor be in business in 5 years § Is the vendor solving my problem or a different problem § What is the total cost of ownership § Cost, training, maintenance, repeats No different than buying IHC, Flow, FISH, Molecular Equipment

Problem being solved • Pathologist needs access to tests and/or expertise that is not Problem being solved • Pathologist needs access to tests and/or expertise that is not available locally – Traditionally, the pathologist is at the mercy of the reference lab or university pathologist • Ability to seek another opinion instantly • Achieve near real-time results (order stain, results back at the speed of instruments and scanners NOT fed-ex overnight) • We want the local pathologist to retain as much control as possible. – Access to test result and/or slides as soon as they are ready – Ability to review slides with experts – Ability to provide up to date results at tumor board even if case is not yet completed

Expert University Clarient Consultat ive Network University Stains performed and scanned Sent to Clarient Expert University Clarient Consultat ive Network University Stains performed and scanned Sent to Clarient via local courier + airlines Local Pathologist reviews complex tumor. Needs to order special studies Monday Morning Monday Evening Report returned Local Pathologist reviews case on Path. Site. Orders consultation Tuesday Morning Local Pathologist releases results to clinician Tuesday Evening

The Consultative Team • Hector Battifora • Larry Weiss • Shriram Jakate • Neal The Consultative Team • Hector Battifora • Larry Weiss • Shriram Jakate • Neal Goldstein • Keith Kaplan • Ossama Tawfik • Scott Binder • Noel Weidner • Jeff Myers

The Consultative Team • City of Hope • University of California, Los Angeles • The Consultative Team • City of Hope • University of California, Los Angeles • University of California, San Diego • Rush University • University of Michigan • University of Kansas • Mayo Clinic • Yale University • Beth Israel, Boston

The Process • • • Call, e-mail, page consultant or daily login Go to The Process • • • Call, e-mail, page consultant or daily login Go to Clarient Home Page Login Worklist loads automatically Click on case Review Slides - Take images Order tests if necessary Prepare report Call submitting pathologist

Clarient Home Page Clarient Home Page

Login to System Login to System

Review Worklist - Select Case Review Worklist - Select Case

Review Slides Review Slides

Review Slides Review Slides

Virtual Slide Virtual Slide

Virtual Slide Virtual Slide

Order Additional Tests Order Additional Tests

Review Images Review Images

Prepare Report Prepare Report

Virtual Multi-headed Scope Conference with Experts Virtual Multi-headed Scope Conference with Experts

Change is inevitable, except from vending machines Woody Allen Change is inevitable, except from vending machines Woody Allen

Thank you! Thank you!

Production genius or marketing genius § Henry Ford § Did he conceive the concept Production genius or marketing genius § Henry Ford § Did he conceive the concept of an assembly line after discovering that could not sell cars for more than $500 or did he invent the assembly line because he had already determined that he could not be successful selling cars for more that $500. Harvard Business Review, October 2006