Positive Results: Testing company grows to serve 10,000 labs

TRAVERSE CITY – You go to the doctor and they do some tests. You get the results. But who’s there to make sure that these tests are being performed correctly? Companies like the American Proficiency Institute (API), a Traverse City-based company that has become one of the country’s largest clinical proficiency testing providers.

Since 1967 this type of testing has been mandated by the government as a condition for hospital laboratory accreditation. Three times a year, testing companies, such as API, send out blind samples to be tested. The labs send back their results and the proficiency company tests them for accuracy, grading the lab with a report card. Those scores are then sent on to the state and federal health departments.

API is one of only nine companies in the country doing this type of testing. The company was created in 1991 in the living room of company president Daniel Edson, a medical technologist. He and his business partner, computer programmer Leith Butler, wanted to create a company with a unique culture, based on pride in ownership of work.

Their first clients were instrument manufacturers. By 1993, they had 800 enrolled. But they believed that the proficiency testing field would expand to include doctors’ offices, as well, so they began planning for that.

“We had an idea that doctors’ offices where going to come under that same scrutiny (as medical labs) at some point, we just didn’t know when,” said Edson.

That forethought paid off. In 1994, the federal government passed a law requiring doctors offices and clinics to subscribe to proficiency testing.

“All at once, there were 50,000 doctor’s offices that never had to do this before,” Edson said. “So what we hit upon was how to sell to them.”

And on a bike ride with some physician friends, the “how” came to him. API would become the first to market their service through medical supply distributors–a decision that would bring API’s total number of laboratories to 10,000 in the United States and abroad, of which 60 percent came through distributors.

However to suddenly begin serving such a large number of clients, API needed an advanced system for shipping. That system for packaging and shipping the test kits was designed by Sue Empson, API’s first full-time hire back in 1993. “She’s ‘the soul’ of our company,” Edson said.

Edson believes that API’s success is a result of their people.

“At Disney, they say the front line is the bottom line and we certainly endorse that concept here. We pay our customer service staff more than others typically would, provide full benefits for their entire family, train them on a superb computer system, talk about the company vision, then allow them to grow to professional levels they might not have thought possible.”

He also believes in the importance of building relationships with his customers and vendors. As the largest Fed-Ex customer in northern Michigan, they often work together to solve shipping concerns and to expedite the entire process.

And that doesn’t appear to be slowing down any time soon. API has recently expanded its focus.

“We were brainstorming about what other industries might need this kind of service, so we thought about water quality and food,” explained Edson.

Discovering that two major companies already dealt in water, API began to look at the food industry. They now send out samples of Salmonella, E. coli and Listeria to the laboratories of large companies such as Pillsbury, Hershey’s, Land-O-Lakes and Frito-Lay to analyze their testing procedures.

“We have about 400 labs in that right now, but we think it could be a lot bigger– it could be international.”

But API isn’t forgetting its roots. They now have over 200 “systems,” groups of labs managed by one organization, that include Scripps Clinic, U of M, and University of Nebraska. “The systems have been a big part of our recent growth because we listened to their needs and developed special software that saves them time in overseeing multiple labs.”

They also allow labs to enter and receive results over the Internet.

“Once again, we’re the first company in our industry to offer this level of service,” Edson said. BN