PathologyWatch CEO Dan Lambert Discusses the Future of Digital Pathology on The DaVinci Hour Podcast

Digital-based services are transforming the dermatology industry, allowing clinics and patients alike to experience streamlined turnaround times and greater interoperability between healthcare providers.

At the forefront of these advancements, PathologyWatch is a full-service dermpath lab that effectively combines groundbreaking digital dermatopathology tools with the quality of customer care expected from a local provider.

Dan Lambert, PathologyWatch CEO, recently met with Dr. Maxwell Cooper of The DaVinci Hour Podcast to discuss the role of AI in current pathology workflows, the hurdles faced in the push for digital pathology, and the efficiency created by relying on these newer technologies. 

The full episode can be found here. These are a few of the highlights from the interview: 

Dr. Cooper: Tell us a little bit about PathologyWatch, like what was the impetus for starting it, and what . . . do you guys offer to dermatology practices?

Dan Lambert: We looked at this market and said, “How are we going to actually introduce the AI in a way that the market will truly adopt it?” And the more that we looked at it, it didn’t make a lot of sense to just develop the AI as a tool and then try to license it. It really needed to be a part of the laboratory, a part of the process, a part of the workflow of the physician. . . .

There are a few reasons why this process is so much better than what existed before. As you know, most [pathologists in residency] are using digital pathology to learn and study, and then they get out in the real world, and the industry is mostly microscopes and fax machines. . . . We’re replacing these very old systems with an entire end-to-end software process that takes out those fax machines, that takes out the microscopes.

A few very specific reasons why we’re growing so fast (we’re in about 70 dermatology clinics and we just started selling about two years ago): The first one is that there can be some potential financial upside for the dermatologist to view the case digitally because, even though we’re providing the primary console, if you look at the case on a secondary console, there may be potential opportunities for increased case complexity, for example.

Secondarily, it’s also just simply better patient care, but you now have both the dermatologist and the dermatopathologist or the general pathologist looking at the case. 

Other reasons: On average, we see about 25 hours of labor reduction in the dermatologist’s office because, instead of them having to deal with fax machines, we’re integrated with ModMed, EZDerm, and eClinicalWorks—all the major EMRs for our field. Going digital also enables a whole new world of being able to very easily send the case to expert consults anywhere or have your primary dermatopathologist be really anywhere in the world. And so it’s freeing up a lot of labor that otherwise would have had to be right there in the lab. I think all those pieces together make this really transformational, and that’s why we’re getting so much adoption very quickly.

Dr. Cooper: It sounds like you’ve really brought a significant amount of efficiency to what . . . previously was somewhat of an outdated process. I guess I’m wondering, as you know, physicians—and medicine at large—is resistant to change and cannot always be the best about adopting new technology or new ways of doing things. What were some of the hurdles or maybe some of the skepticism you received at first, and how did you convert those dermatologists that may have been skeptical at first to adopting your services?

Dan Lambert: Yeah, I think that’s really true. And I think those first two or three clients were so much harder than the last two or three clients. At this point, it’s very well validated, and I think everyone’s more comfortable using digital, and we don’t get as much pushback anymore. But I think early on, it was a question of “How do we know if digital is safe? How do we know that the scanner picked up all the tissue?” Actually, the scanners have really good controls in them, and we’ve fine-tuned the scanners over time to be really safe. We do use some redundant imaging to make sure that there’s not a piece of tissue that’s missing. And then also convincing the community that algorithms can really help detecting blurry spots or screening out things that happen inside the lab where the case really needs to go back and the slide needs to be redone. You know, a very common problem in pathology. . . .

[When all their conditions are aligned], they say, “Okay, you know what, I’m willing to give this a shot.” And they tend to not send all of their volume up front—they send a few samples, make sure they can see the digital, make sure that the quality of the reports is good and they’re definitive diagnoses. And then they start sending more and more; and I think that’s become a very common pattern.

I think, in general, pathologists are fairly resistant about being automated out of a job. I think that concern is in your field as well, in radiology, but we’re just not finding that. This is technology designed to assist and help go faster. Really excellent dermpaths are not going to be replaced by AI in the next few years, realistically. I think it’s an important concept to understand. Also, reimbursements are being cut; there does need to be ways to make pathology more efficient, and I think this is an answer, and the more-forward-thinking pathologists actually are really embracing this and getting involved. That’s exciting to see: that the community is moving things forward, too. . . . 

Dr. Cooper: What’s some of the positive feedback you’ve received from your clients? What have they told you [about] how this has changed their practice? How has this improved things? What are a couple of the positive comments you’ve received?

Dan Lambert: We actually have about 15 case studies—and for anyone that’s interested, we do share these case studies pretty openly. Our website is . . .

[One piece of feedback we’ve received] is improvement in the turnaround time because we’ve developed local laboratories in multiple locations. We’re getting really good turnaround. 

The second thing is the savings on just the time in the dermatologist’s office dealing with faxes or auto faxes—we’re eliminating a huge portion of that. We use enhanced interfaces that deliver the results directly attached to the patient record, so it’s a lot safer that way too. So you’re not putting the wrong patient record in the wrong chart. 

Also the ability to see the case—to see what the lab is seeing. That ability means that you can call up the pathologist, and you can both be looking at the case at the same time to discuss that case. In some ways, it has actually increased the amount of communication which has a lot of benefit to the patient. 

And then, overall, elimination of errors. Our labs certainly have a much lower error rate than general labs because it is software-based, and we do have patient identification controls that are better than other locations. So it’s a whole slew of benefits. . . .

I think that we can genuinely help a lot of practices move away from how it works right now.

Annual American Academy of Dermatology (AAD) Weekend Recap

Hosted in Boston, MA, this year’s Annual AAD convention—held March 25–29, 2022—promised more than a feeling: It marked a roaring return to in-person events for attendees worldwide. It felt good to be back among friends, colleagues, customers, and industry peers.  

This year’s event attracted over 13,000 guests to the Boston Convention and Exhibition Center, including 7,000 healthcare professionals. And the PathologyWatch team was there! 

Here are some of the highlights:

Friday, March 25 (Convention Day Arrives)

The show opened at 10 a.m., and we enjoyed a steady flow of traffic for most of the day, thanks to our premium location near the main Hall A entrance. Our booth’s design and messaging helped our representatives introduce dermatologists to digital pathology’s advantages.

PathologyWatch AAD Boston

It was refreshing to reconnect with colleagues and clients across the country. This included a visit from Dr. Roman Bronfenbrener, who stopped by to adore his larger-than-life testimonial banner. He picked it up after posing for photos and paraded it around other booths!  

Roman Bronfenbrener, MD

Roman Bronfenbrener, MD PathologyWatch

PathologyWatch hosted two events at this year’s AAD convention: First, we hosted a happy hour on the convention’s first night. Second, we cosponsored a private dinner with Castle Biosciences, which provided a unique opportunity to promote our technology, introduce our founders and clinical team, and connect with valued guests and customers before the convention ended.  


We selected City Tap, a nearby restaurant and bar, to arrange our happy hour event. The weather was perfect, and the private patio space worked really well. 

PathologyWatch happy hour

We set up a central station of food and beverages to encourage people to mingle freely. There was plenty of room for networking, with tables and chairs available for people who wanted to relax and talk after a long day on the convention floor.

PathologyWatch AAD 2022 happy hour

Soon, there were over 100 people engaged in dozens of conversations around the outdoor space. Our executive team and sales directors easily mixed in with the crowd, answering questions and bonding over hot wings and pizza. 

PathologyWatch happy hour AAD 2022PathologyWatch Happy Hour AAD 2022

Later in the evening, strings of outdoor lights brightened up the event and kept discussions going strong. The happy hour was a memorable and impactful part of the convention. We were able to get reacquainted with familiar faces and meet many new people.

PathologyWatch Happy Hour AAD 2022

PathologyWatch Happy Hour AAD 2022

Saturday, March 26

We developed the Digital Digest Quiz, a 12-question pathology test featuring digital slides on the PathologyWatch slide viewer to give people a reason to stop by the booth. Placing the video monitor at the front of the booth was visually appealing and created a simple segue to inspire conversations about our proprietary technology.

PathologyWatch AAD 2022

That evening, we gathered at Oceanaire Seafood Room for a cosponsored dinner with Castle Biosciences. We reserved a private room behind the bar that offered the perfect setting for an intimate meal with industry members


PathologyWatch Greg Osmond, MD

Even though it’s only April, it’s been an incredible year for PathologyWatch as we continue to expand our technology and services to support dermatological experts across the country. Thank you to all of our customers and partners who support us in our quest to innovate digital pathology and patient care.

4 Revenue Outlets to Help Your Derm Practice Thrive

By Darren Whittemore, DO

To increase revenue and expand your patient base, you may have tried engaging with people on social media, advertising special service packages, or even parking a dancing balloon guy on the curb by your derm practice to drum up business. Nothing seems to work. 

Serious change requires serious strategies. By tracking changes in billing and health insurance requirements and offering your resources and expertise to support pharmaceutical companies as they use technology to gather research data, you can uncover additional ways to help your practice grow. So give the dancing balloon guy the day off, and let’s explore four hidden revenue-building opportunities that can help point your derm practice in the right direction. 

Outsource Medical Billing

Unless your accounts team has expertise in ever-changing CPT codes, AFA policies, and other Medicare, value-based care reimbursement guidelines, outsourcing medical billing is a popular and cost-effective option. Around 90 percent of healthcare leaders have considered outsourcing in both clinical and nonclinical functions to be more cost-efficient and better equipped to handle value-based care models. And here’s why: 

A recent survey by Harmony Healthcare found that 33 percent of hospital executives reported the average claims denial rate hovering around 10 percent. In fact, across the nation, hospitals face average denial rates between 6 and 13 percent. When rejections occur, you need an experienced team that can respond quickly and are better equipped to handle changing requirements for medical reimbursements.

For example, board-certified dermatologist Dina Strachan, M.D., at Aglow Dermatology in New York, notes that every step needed to collect money from both patients and insurance comes with a cost attached. There is a huge time factor involved in understanding the fine print of the myriad high-deductible plans, and a lot of time is tied up in collecting and processing bills. By outsourcing billing, and placing a link on her website where payments can be made, a lot of time is recaptured.

“We don’t have to spend time opening and sorting mail, punching in, and processing credit card payments—it’s a time savings,” she said.

Apply to Host a Clinical Trial

Emerging cloud technologies are helping pharmaceutical companies tap into innovative alternatives for collecting rich, segmented research data. currently lists 404,694 studies with locations in all 50 States and in 220 countries.

With in-person testing sites no longer being the only option for research, pharma can use both virtual and hybrid models to collect data.  

Depending on the length of the study and the interaction levels required by the clinical trial directors, pharmaceutical companies will often pay clinics willing to dedicate their time and resources to help facilitate a relevant clinical trial.

Along with the revenue potential, most healthcare providers enjoy the option to provide their patients with the most recent treatments available, particularly in skin cancer and other chronic cases. According to the Dermatology Learning Network, interviews with dermatologists that have participated in clinical research show they can be professionally, intellectually, and financially rewarding.

“It allows you to give your patients cutting-edge treatment at a severely discounted price or for free,” said Dr. Mitchel Goldman, medical director of La Jolla Spa MD, in La Jolla, California.

In addition to the excitement of being involved in the development of new products and offering patients new treatment options, Steven R. Feldman, M.D., Ph.D., of Wake Forest University Baptist Medical Center in Winston-Salem, NC, noted the potential financial benefit to practices as well.

“In an era where managed care is paying less for each office visit, you can charge your usual office rate,” Feldman said in reference to patients enrolled in trials.

Reexamine Health Insurance Partnerships 

Over the past 20 years, health insurance companies have consolidated to cut costs, meet higher demands, and, in some cases, move toward the government and individual health insurance markets under the Affordable Healthcare Act. This transition has given health insurance companies an advantage over physicians. 

“Most dermatology practices lack the scale to negotiate with large health insurance companies on an even playing field,” Todd Petersen, CEO of Vitalskin Dermatology, explains. “These terms set year-over-year reimbursement rates and allow the insurance company to set billing, coding and utilization management rules. Consequently, nominal year-over-year increases can be largely offset by increased denial rates and tighter billing and coding rules.”

Although dermatology costs aren’t a high price point for health insurance carriers (accounting for less than 2 percent of medical costs), Petersen points out that pharmaceutical spending for dermatology-related drugs, such as psoriasis-related treatments, accounts for 6.5 percent of total spending with signs of future increases.  

“For dermatology practices with market share and a large psoriasis patient population, using this strategy at the negotiating table may prove beneficial and provide the practice with improved revenues,” he says. 

Invest in EMR Technology

Moving to digital-based technology, such as EMR or EHR, creates more efficient and profitable processes in a few ways: 

  1. Participates in the Medicare Merit-based Incentive Payment System (MIPS)
    Values-based care and reimbursements are growing and allow for additional revenue streams. EMR technology is required for billing compliance and patient dashboard access and to collect data and submit electronic data to CMS. According to Petersen, the initial investment cost of EHR technology will pay itself off down the road. “When considering whether to make the investment of complying with MIPS, consider the following: value-based reimbursement is not going away, and many practices have found the implementation of EHRs has helped them improve their billing compliance,” he writes.
  2. Enables faster turnaround times for lab test results
    For Allen-Taintor Dermatology, not only did partnering with a lab that specializes in digital dermatopathology provide a faster turnaround time for lab results (turnaround time is now 75 percent faster, with results often received within two days of submission), but it also enabled their dermatologists to use a digital slide to encourage a conversation about the patient’s biopsy results and possible cancer care. As faster turnaround time increases the speed of business, more patients can flow through the practice with increased revenue as a result.
  3. Expands access to care
    Digital-based patient files mean doctors aren’t limited by location to reach out for expertise on a patient’s case. With digital technology, a specialist in Boston or Switzerland can securely review a patient file and discuss a diagnosis in real time with the dermatologist. That leads to quicker results and prompt patient care, which again improves revenue.

With the dermatology field expected to grow by almost 11.4 percent by 2026, dermatologists can leverage revenue-building strategies by reducing overhead costs through outsourced billing services, research reimbursement rates with health insurance and government health program partnerships, participate in clinical trials, and expand digital patient care services. By tapping into these revenue outlets, you can help to prepare your derm practice for a future of growth. 

Should You Join a Dermatology Group Practice or Start Your Own?  

By Eva Vertes George, MD

If you’ve toyed with the idea of starting your own dermatology clinic, you are not alone. In an industry worth almost $8.5 trillion with marked growth exceeding $800 billion by 2021, approximately 31.4 percent of physicians are independent practice owners. 

Innovations in healthcare technology will likely trigger a new batch of medical startups utilizing emerging digital technologies to fill the growing need for dermatological care. The problem is that physicians have spent the majority of their time learning how to serve patients as dermatologists, not how to run businesses. That lack of business savvy may prevent many talented healthcare professionals from going into business for themselves. 

Experts estimate over 5,000 dermatology businesses operate in the US, with indicators showing a consistent 1 percent growth in the dermatology industry since 2020. Cost, culture, and the customer determine whether a new practice is dialed in for future success as a solo practice or as part of a group practice.

Based on these factors, let’s discuss the advantages of (and a few of the possible deterrents to) joining an existing dermatology group practice based on cost, culture, and the targeted customer base. 


Estimating the total cost to open and maintain a new clinic is likely the biggest obstacle for dermatologists planning to take the next step toward ownership. When you consider overhead costs associated with property, lab equipment, staff, marketing, and billing software, it’s no wonder that new clinic owners often underestimate the amount of money it takes to keep the doors open.

Because it often takes at least two years to turn a profit, Jerome Obed, DO of Broward Dermatology and Cosmetic Specialists in Florida, recommends having at least two years’ worth of money to live on when first opening a private dermatology practice.

If cash flow isn’t reliable, joining an existing practice is a strategic option. This is mainly because access to an active revenue stream, insurance credentials, and a robust client base is immediate. Another advantage of joining an existing practice is that you don’t have to put limited funds toward marketing, nor do you need business experience. 


A trusting patient relationship needs a positive work culture to thrive. “Positive work culture will always support the healthcare professional-patient relationship. It will build patient trust and gain confidence among staff who provide patient care,” an NIH report concludes. “It will allow them to feel that other than the goal of working to cure their diseases, they receive care.”

The NIH study found that when patients see doctors and nurses who are satisfied in doing their work and providing services, it encourages patients to follow instructions. “When they feel teamwork is active among staff and stable leadership exists from their managers, these patients may be more than willing to allow themselves to seek medical advice and treatment.”

The advantages of joining an existing dermatology group practice have a considerable impact on your success. But the ease of stepping into an established practice can also interfere with the long-term benefits. For instance, joining an established practice means someone else decides who you will treat, the billing software you will use, and the length of your appointments. 

By comparison, when you open your practice—and on the condition that your financing is secure—you have more control over your patient volume. You’re also in charge of your office hours, appointment times, services, billing, and lab partnerships. 

In a group practice, the bottom line is the main focus. It’s part of the motivation to maintain a fast pace and see as many patients as possible. It can also mean a lower pay rate for you. It’s no wonder almost half (42 percent) of physicians experience burnout. And that’s something to be mindful of when making long-term business decisions. 


It’s important to establish the type of patient care you want to offer. Those decisions can help you prioritize resources, possible clinic locations, and equipment purchases. For example, does your area report high incidences of skin cancers? How many dermatology clinics presently specialize in the services you hope to promote? One phone call can help you establish the wait time for new patients. Addressing these questions can guide your professional goals for your patients. But there are other factors to consider. 

Your customer base includes more than your patients: It includes billing partners, insurance companies, lab partnerships, marketing firms, other healthcare providers, and more. When you own your clinic, you get to select and nurture those valued relationships. 

Strategic partnerships, such as your dermpath lab, can help streamline your workflow process and reduce overhead costs. For example, working with a lab with expertise in digital pathology means you don’t need to invest in expensive lab and testing equipment. Partnering with a lab that integrates with your EMR technology and offers locum tenens services may open up new opportunities to expand your services without investing in an expanded staff. 

By working with innovative, digital-based companies like PathologyWatch, it’s easier to see the possibilities of opening your own practice.

The healthcare industry will show plenty of opportunities for dermatology services in 2022. Choosing the best way to promote your expertise with optimal patient care can be a rewarding next step in your career. Improve your chances of long-term success by weighing the pros and cons of a group practice versus starting your own dermatology clinic (your financial strength, work culture, and customer relationships) and chart your new path forward.

Dan Lambert, CEO at PathologyWatch, Chats with Silicon Slopes Host on the Impact of Digital Pathology

Things are changing fast in the dermatology field. As more dermatologists turn to digital-based services, the options for expanding patient care services, accelerating turnaround times on diagnoses, facilitating interoperability among health services agencies, and streamlining workflow processes to better control overhead costs are transforming the dermatological patient experience. 

At the heart of some of those changes occurring in Utah’s pathology labs is PathologyWatch, a full-service dermpath lab that combines the dermpath expertise and cutting-edge technology of an academic center with the efficiency and customer service of a private lab.

Dan Lambert, CEO at PathologyWatch, met recently with Caitlin Hansen of Silicon Slopes to discuss the business side of running a series of digital pathology laboratories, the future of AI technology on patient care, and the vision Dan has for the future of PathologyWatch and digital dermatopathology. 

Here are some of the highlights from that interview. 

Caitlin Hansen: Can you give me a little more info about the technology?

Dan Lambert: Right now, you go into the dermatologist; then they take a biopsy, and that gets FedExed or couriered to a local lab where it’s cut into really thin slices and stained. A physician looks at that under a microscope, types up a report, and that report might be faxed somewhere. 

For us, we’re taking that process, which is very manual, and we’ve streamlined it. We make the slide digital, so that, for the first time, the dermatologist can look at that slide as part of the process, much like a radiologist would show you an X-ray. 

We’re enabling not only dermatologists but, down the road, other physicians as well to actually show you what your cancer looks like in the patient room. Also, the integration with EMR means it’s much faster for the dermatologist’s office. [This creates] a lot fewer errors, and it allows for multiple opinions on the same case, which has never been done before because it’s really just been glass slides. And so the transformation to digital across this industry is reducing costs, it’s making things faster, and it’s also drastically improving patient care.

CH: I’m curious how you feel like this is going to affect the accuracy of diagnosis as well.

DL: We see from major academic medical centers that, at the end of the day, recognizing cancer under a microscope or digital, it’s about pattern recognition, And computers, especially with deep learning, have gotten better and better at recognizing these patterns and will eventually greatly improve the diagnostic accuracy. 

It will help doctors for a long time. And then, at some point in the future, it will probably be accurate enough that we can start phasing out the human review of some of these cases. This stands to take out major costs from what is almost a $17-billion-a-year industry, which is pathology. And it’s one of the few innovations that I think can take out the true costs for a very overburdened healthcare system. . . .

CH: I’m curious about your specific focus as the CEO. . . . What does the day-to-day look like for you, and what do you put most of your focus on? 

DL: So we just raised the $25 million Series B. With that funding, now it’s going from the point where you have a product that has proven product market fit, but moving into scale means that you need a lot of really highly qualified people to build the business. I’m spending about 50 percent of my time just on straight recruiting; trying to bring in engineers. . . .

CH: You mentioned you just moved facilities. Where did you relocate to? 

DL: [We had to] move from one lab in Murray to a bigger lab in Murray. . . . It is exciting to grow. We employ about 50 people right now, and we’ll probably be at about 80 people by the end of next year, which is exciting to see the team [become] some of my close friends. It almost feels like family now. . . .

CH: What is on the horizon for you?

DL: The next phase for us is continuing development of AI. Learning to recognize cancer samples better, faster; finding those rare cases that frankly many, many physicians miss. Having gone through a couple of startups, I started this four years ago with the understanding of trying to leave something behind that’s like a true legacy or trying to make medicine truly better. It turns out that’s a hard journey. But so far it’s worked, and I’m really happy that I made that decision. . . .

CH: Are you in hospitals and clinics? How are you integrating to make sure that this technology is being used now?

DL: When we looked at the business early on, we could have gone two routes: We could have sold to hospitals, which is generally a longer sales cycle, or focus on outpatient clinics. They can make a decision usually in about a month. So we decided to go after the independent dermatology clinics that are primarily located in Utah. 

We now have five labs in different states, so we’ve scaled up quite a bit. If you go to a dermatologist here in Utah, we process the majority of skin cancer samples in the state and so your sample is probably going through our laboratories. And I’m really proud of that because I genuinely believe it’s a higher standard of care than what has existed in the past.

CH: So switching back to you being the CEO and running your company. I think that culture and motivation comes from the top down and leading by example. What is the kind of culture that you inspire your employees to abide by and how do you keep them motivated?

DL: I think in any company, you have to pick a set of values. That also means making sometimes hard decisions about what you prioritize. And I think, in this company, the culture of truth, transparency, and accuracy of the diagnostic process is more important than anything. . . .

I want our company to be the kind of place that you would send your family member samples to, and that means enforcing a really high standard of care. 

To view the full interview, click here.