In-house labs don’t have to mean red ink
Note these steps toward greater lab efficiency
[Editor’s note: This is the second installment of a two-part series on ways to improve the cost-effectiveness of your practice’s laboratory services. Part one ran in last month’s issue of Physician’s Managed Care Report.]
Stricter federal regulations on physician-owned laboratories along with increasing pressure from managed care organizations to cut costs by shipping out lab work conspire to make it tougher than ever to keep your laboratory in the black.
These are the challenges faced by Patricia A. Buelow, administrator for the Physicians Clinic of Iowa in Cedar Rapids. Because of these two key factors, the multispecialty practice of 47 physicians has dropped some of its practice-based laboratory services.
There is a chance, however, that the practice will reconsider and once again offer the services. "It becomes inconvenient to the patient and that’s a real concern," says Buelow. Federal safeguards against inappropriate referral to physician-owned labs is a good thing, but compliance requires significant investment. The controversial Clinical Lab Improvement Act (CLIA) of 1995 added substantial requirements for office-based labs.
"We closed our lab for that reason CLIA," Buelow says. But, after going without some of their office-based lab services, Cedar Rapids practice officials now think that perhaps the investment is worth it, she says.
Some basic management principles can help physician-based laboratory services operate in a way that is both cost-effective and beneficial to patient care, says Alan H.B. Wu, PhD. Wu is director of the department of pathology and laboratory medicine at Hartford (CT) Hospital and professor of laboratory medicine at the University of Connecticut in Farmington.
Wu recently presented a paper on improving lab efficiencies to the Connecticut Primary Care Association Conference in Westbrook, CT, and he also spoke with Physician’s Managed Care Report in several interviews on the topic.1 Here are four recommendations he makes for reducing lab costs and at the same time improving patient care:
• Urge physicians to focus more on prognostic indicators for risk stratification and prevention.
The key to surviving in a capitated environment is likely to be the ability to identify high-risk patients and apportion available resources wisely, Wu points out. Lab tests can go a long way toward assisting in the complex challenge of identifying high-risk populations. The ability to do this will vastly improve as managed care continues its spread, he says.
Currently, the most widely used biomarkers are tests for cholesterol and lipoprotein for assessment of risks for cardiovascular diseases. But new lipid markers are under study: apolipoprotein B and lipoprotein(a); apolipoprotein B; and Lp(a) as an independent genetic risk factor for atherosclerotic vascular disease. In particular, rapid and recent innovation in cardiology treatment is resulting in better and more diverse lab tests as well.
Keeping current on the most up-to-date methods related to testing of heart disease would contribute significantly to your practice’s ability to identify high-risk patients and possibly treat them preventively, before heart attacks occur.
• Use point-of-care (POC) testing devices, which have higher costs than incremental central lab expenses, only when they reduce overall operating expenses according to current outcomes analyses.
Choosing between a POC device and a regular laboratory process is like choosing between making a phone call on your car phone and waiting until you reach a less expensive regular telephone. The new technology is more convenient, but that convenience costs you. The same is true of the interesting but not always cost-efficient POC testing devices, says Wu.
These devices are hand-held instruments that can run tests in rapid turnaround time, and they can be used by primary caregivers without extensive training. The chart above shows some examples of these devices. These devices are widely used, but they are likely to be improved upon technologically in the future. On a per unit cost basis, POC testing devices are more expensive than the incremental costs incurred for laboratory-based testing.
In physician offices, sometimes POC devices can enable physicians to make important patient management decisions while the patient is in the office, thus potentially reducing follow-up visits. Overall, you have to weigh the value of the time saved in getting fast results and not using lab staff for basic tests vs. the overall lower cost of traditional lab methods. If you are in a capitation contract that rewards cost-efficient hospital stays as well, POC devices also are something to consider. Typically, studies show that traditional lab procedures are less expensive and provide no better patient care, Wu says. More of these devices are likely to appear on the market in the future, however, and you’ll need to weigh the pros and cons of each and when to use them on a case-by-case basis.
• Accept and follow clinical guidelines.
Clinical guidelines provide major improve ments in lab efficiencies, Wu says. Several reputable groups issue new and revised guidelines from time to time, including the American College of Physicians in Philadelphia, and the Agency for Health Care Policy and Research (AHCPR) in Bethesda, MD. For example, the AHCPR guideline for management of sickle cell disease in newborns recommends use of some laboratory tests for diagnosis (such as electrophoresis) and abandonment of others, such as solubility tests.
One study showed that the use of 14 different practice guidelines led to an overall reduction of 20.6% in lab tests, 42.3% reduction in chest X-ray films, and a 34.2% reduction in electrocardiograms without adverse clinical effects.2 Also, in many cases the use of clinical guidelines including not only lab procedures but other clinical procedures contributes to lower lengths of stay in hospital settings.
• Keep an eye on new technologies, particularly in the booming area of genetics. DNA probes can substantially improve diagnostic efficiency.
Recent developments in DNA technology have led to improvements in diagnosis and prognosis of cancer, as well as genetic and infectious diseases, Wu says. For example, DNA amplification methods such as polymerase chain reaction are enabling detection of trace amounts of genetic material present in a clinical sample.
For infectious diseases, matching probes with viral or bacterial DNA sequences have led to the creation of rapid, specific assays that can signal presence of a disease. In the future, many new DNA assays will become available and are bound to change the way traditional tests are performed. These new tests will have a major effect on clinical outcomes and costs, says Wu. Once these tests become available, they will give physicians another diagnostic tool, which in turn may drive up lab costs. At this point, genetic testing is pretty universally performed in academic hospitals, but as genetic testing capabilities develop further, physicians are likely to see testing capabilities move into office-based settings in the future.
References
1. Wu AH. Reducing the inappropriate utilization of clinical laboratory tests. Conn Med 1997; 61:15-21.
2. Wachtel TJ, Sullivan P. Practice guidelines to reduce testing in the hospital. J Gen Intern Med 1990; 5:335-41.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content