Innovation is very important to medical reference laboratory PAML. So much so that it created a division dedicated to its pursuit. Dr Francisco R. Velázquez, President and CEO, says, “Their job is to go around the organization and look for opportunities to improve our quality, our service, and our costs, with the caveat that everything they do must have, at the end of the day, some financial impact.” They call this team the Performance Solutions Group.

The Washington company, which was founded in 1957, serves physicians, hospitals, members of the community, employers, and other allied health professionals. It is ranked among the top clinical reference laboratories in the country and is considered an industry leader in joint venture partnerships with community-based hospitals. Its laboratory outreach program partners with hospitals allowing them to significantly grow their laboratory outreach businesses. 

PAML has eight joint ventures, each a freestanding LLC based on a community partnership model. Dr Velázquez and his team of executives lead each of these ventures, as well as the primary PAML brand and two PAML product lines. 

With the responsibility of 11 entities, no two days look the same for Dr Velázquez. He says, “I do move around a lot and I like to go spend time in our various facilities and with our various partners.”

The company’s partners are varied and range from testing partnerships (such as a health system in Montana) to high-level, nationwide joint ventures. 

PAML’s strategic partnerships include one with the molecular technology company, Axela, a spin-out of the University of Toronto. “They have a very unique technology that we see as beneficial for our partners, so we partner with them and help develop assays that can be used in the American market,” says Dr Velázquez. Partnerships account for many advances, though PAML also prides itself on its ability to produce innovative resources in-house.

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One of these resources is a new, progressive cost-accounting system. “We're going to see more bundle payments, more population health management, more regionally integrated networks and more value-based care,” says Dr Velázquez. “So, the common dominator to all those is not revenue. The common denominator is that you must understand your cost structure, very, very, very, very well so you can make informed decisions as to which one of these market models you can participate in and what the advantages and disadvantages are, from a financial perspective.

In order to do that you have to have real-time access to the ways your costs are changing throughout the day. “What most laboratory companies do is they react on a monthly or weekly or quarterly basis to what happened. To what already happened. We believe it’s more important to react while it's happening so we can correct it or change course,” says Dr Velázquez.

So, the business performance division at PAML has engineered a system that keeps track of metrics, on a real-time basis, “So we always know how we're doing, with pretty much anything, at any given time, with the appropriate report or report structure.” 


PAML’s role in the economic development of the region, specifically in the area of life sciences, is something very important to the company. To that end, Dr Velázquez is in a number of leadership groups looking at medical education, healthcare, and healthcare-related technology. One of the projects he’s currently working on is the new medical school in the area. This, along with other projects, generates dialogue and development throughout the community and company.

Opening lines of communication is critical to Dr Velázquez and he makes a point of regularly spending time with the company’s clients, partners, and employees. “I tend to walk around whenever possible and just ask people how are they doing and what's going on and what can we be doing better or different,” he says, though he agrees this isn’t the norm in a lot of organizations. 

“My theory, without any analytics behind it, is that employees have about 65 percent of the answers to all the questions we are asking, if we just take the time to ask.”

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