Following the loss of its histology accreditation, pressure on APS laboratory continues to mount
Government-run healthcare systems around the world often under-invest as demand grows and new healthcare technologies enter clinical practice. One such example is taking place in New Zealand, where public pathology and medical laboratory services are under extreme stress as physician test orders exceed the ability of the island nation’s clinical laboratories to keep up.
“The escalating pressure is complicating what was already a very difficult rescue job at one of the country’s busiest labs—Community Anatomic Pathology Services (APS),” RNZ reported. In 2023, APS lost its histology accreditation after it came to light that lab workers were not only exposed to toxic chemical levels at the facility, but that patients were waiting weeks for test results to return from the lab.
“The service is in crisis mode and, without urgent investment … there is a real risk that it will fail. The changes required are of such urgency that it is recommended that they be placed at the top of the agenda,” the report reads, RNZ reported.
“The size of New Zealand’s economy is restricting what our country spends on health. Health is already the second highest demand on the New Zealand tax dollar,” wrote Andrew Blair, CMInstD (above), then General Manager of Royston Hospital, Hastings, New Zealand, in an article he penned for Jpn Hosp, the journal of the Japan Hospital Association. “The tolerance of New Zealanders would be challenged if a government attempted to increase taxes further to meet the growing demands for expenditure on health, but at the same time the population’s expectations are increasing. This is the challenging situation we face today.” For New Zealand’s clinical laboratories, the demand for testing is increasing annually as the country’s population grows. (Photo copyright: Blair Consulting.)
Increased Demand on APS Leads to Problems
Established in 2015, APS tests thousands of anatomic and tissue samples yearly and is utilized by approximately a third of NZ’s population, according to RNZ.
The big story, however, is that from 2022 to 2023 utilization increased by a third. “The overall increasing demand is greater than the capacity of the service,” Te Whatu Ora (Health New Zealand), the country’s publicly-funded healthcare system, told RNZ.
As planned care increased, public hospitals started outsourcing operations to private surgical centers. A domino effect ensued when all of those samples then made their way to APS. There was an “increased volume of private surgery being carried out by 600 specialists in the region and 2,000 general practitioners, with up to 450 histology cases a day,” RNZ noted, adding, “The backlog has hit turnaround times for processing samples, which had been deteriorating.”
To make matters even more dire, working conditions at the country’s clinical labs is unfavorable and deteriorating, with short staffing, outdated workspaces and equipment, and exposure to dangerous chemicals.
“Conditions got so bad from 2019-2021 that workers were exposed to cancer-causing formaldehyde in cramped workspaces, and flammable chemicals were stored unsafely,” RNZ reported.
While pay increases and safety improvements have provided some relief, the memory of past incidences coupled with increasing delays continue to undermine confidence in New Zealand’s laboratory industry.
Patients Also at Risk Due to Long Delays in Test Results
“We recognize the concern and impact any delayed results can cause referrers and their patients,” Health New Zealand said in a statement, RNZ reported.
Nevertheless, a 2023 article in The Conversation noted that, “38,000 New Zealanders had been waiting longer than the four-month target for being seen by a specialist for an initial assessment.”
However, according to plastic surgeon and Melanoma Network of New Zealand (MelNet) Chair Gary Duncan, MBChB, FRACS, when patients return to their doctors for test results, those results often have not come back from the medical laboratory. Therefore, the physician cannot discuss any issues, which causes the patient to have to make another appointment or receive a melanoma diagnosis over the telephone, RNZ reported.
“Slow pathology services are unfair to patients. Such delays could result in the spreading of the melanoma to other parts of the body and require major surgery under anesthetic,” dermatologist Louise Reiche, MBChB, FRACS, told RNZ. “Not only will they suffer an extensive surgical procedure, but it could also shorten their life.”
Improvements at APS Underway
Changes are currently underway that may decrease the long delays in test results at New Zealand’s labs. “A business case was being done to set up an electronic ordering system to cut down on manual processing errors,” RNZ reported.
Additionally, “the situation is much improved due to dispersal of work around [the] city and country for now. The teamwork around the region has been a veritable lifesaver,” a source familiar with the work told RNZ.
Construction of a new lab for APS is also allegedly in the works. However, to date no announcement has been made, according to RNZ.
Time will tell if New Zealand’s government can repair its pathology system. News stories showcasing damage caused by lengthy delays in clinical laboratory test results—and the ensuing patient harm due to rationed care in general—continue to reveal the weakness in government-run healthcare systems.
This comes on top of months of strikes by NZ medical laboratory workers seeking fair pay and safe working conditions
Te Whatu Ora (aka, Health New Zealand, the country’s publicly funded healthcare system) recently ordered health and safety checks at multiple clinical laboratories in 18 districts across the country. This action is the result of safety issues detected after procedural discrepancies were discovered in separate labs.
According to Radio New Zealand(RNZ), Health New Zealand found “significant risks” at some medical laboratories and that “staff at one in Auckland were exposed to toxic fumes, at others two [people] caught typhoid, and delays jeopardized patients’ care.”
“Two lab workers were hospitalized this year after having caught typhoid from samples, one at a private lab in Auckland, and a second at Canterbury Health Laboratories, CHL,” RNZ reported.
A Health New Zealand internal document states there will need to be a “comprehensive” fix to deal with risks present in the island nation’s medical laboratory industry. The assessment states that the organization needs “a more detailed picture of the occupational health and health and safety risks present in our laboratories,” RNZ reported.
“The overall state of the laboratories and the practices they have in place pose an inherited risk from the former DHBs [district health boards] and will likely need a comprehensive approach to addressing significant and/or ongoing risks,” Health New Zealand said in the internal document. “There is growing demand on our laboratories in terms of the volume of the work, which can put pressure on processes, and work is often undertaken in facilities that, over time, may have become not fit for purpose.”
This story as an example of how clinical laboratory staff can be exposed to disease and toxic chemicals when procedures are not diligently followed. It is a reminder to all lab managers that diligence in following protective protocols is imperative.
“Te Whatu Ora is committed to identifying, tracking and mitigating all potential risks and issues within our service until they are fully resolved and no longer identifiable as an issue/risk,” Rachel Haggerty (above), Director, Strategy, Planning and Purchasing, Hospital and Specialist Services, for Health New Zealand told NZ Doctor. Clinical laboratory workers in New Zealand have been striking for fair pay and safe working environments for months. Now, they risk becoming infected by deadly pathogens and chemicals as well. (Photo copyright: NZ Doctor.)
Lab Worker Strikes and Staff Shortages
Community Anatomic Pathology Services in Auckland lost its histology accreditation last year because it was discovered that lab workers were exposed to toxic chemical levels at the facility. In addition, patients were forced to wait weeks for test results from that lab.
The laboratory was also penalized back in 2017 for how substances were handled when formaldehyde levels in excess of the recommended limits were detected.
Bryan Raill, a medical scientist at the Counties Manukau District Health Board, said the laboratory workers union in New Zealand believes staff shortages and lab conditions are contributing to the lab woes. Raill is also president of the medical laboratory workers division of APEX, a specialist union representing more than 4,000 allied, scientific, and technical health professionals throughout New Zealand.
“It’s not only your physical environment, being safe there, but you have to be safe in terms of what you do,” Raill told RNZ.
Raill said the two typhoid infections were a red flag and that Te Whatu Ora needs to do more.
“They’re stepping out of the inertia they’ve been bound, so this is a good thing, but it needs to be a wider thing,” he said.
“They should look at the other health and safety aspect of the workload and the work environment that staff are working under,” Raill explained in an iHeart podcast. “The person who caught typhoid in Christchurch spent four days in ICU, and there had been a workplace exposure to another pathogen two years earlier and the recommendations that came out of that hadn’t been followed. For example, [the lab workers] were not vaccinated against typhoid.”
IT Implementation Delays also to Blame
Along with strikes and staff shortages, clinical laboratories in New Zealand are also dealing with information technology (IT) issues. Technical problems have delayed some needed lab upgrades by more than a year.
In addition, “The impacts of new test, surgeries, and medicines/treatments on pathology services have also historically not been understood well nor accounted for and we are considering a number of options, as outlined in the risk register, to manage this,” said Rachel Haggerty, Director, Strategy, Planning and Purchasing, Hospital and Specialist Services, for Te Whatu Ora.
Future efforts will deal with training of lab personnel and focus on ventilation and hazardous substance management.
Dark Daily has reported extensively on the ongoing problems within New Zealand clinical laboratory industry.
Clinical laboratory personnel can be exposed to dangerous diseases and toxic chemicals when procedures are not diligently followed. This latest situation in New Zealand serves as a reminder that following protective protocols is imperative in labs worldwide to protect workers and patients.
The newly approved legislation will “eliminate regulations preventing patients from learning about diagnostic testing and services provided by local clinical laboratories,” according to a press release issued by the Pennsylvania Senate Republicans.
Republican state Senator Rosemary Brown was the bill’s primary sponsor. She was joined as co-sponsors by a bipartisan group of colleagues.
“The regulations prevent patients from learning about clinical laboratories and the services they provide,” Brown said in the press release. “Patients deserve to know about their options when they are selecting a clinical laboratory to perform these important tests and procedures.”
The press release noted that Pennsylvania is the only state that prohibits clinical laboratories from advertising to residents.
“It’s time for Pennsylvania to catch up with the rest of the nation and enable patients to have access to this information,” said co-sponsor of the bill Republican Senator Tracy Pennycuick (above) in a press release. “Our bill would enable advertising while maintaining the important consumer protection provisions that ensure tests and procedures can only be performed based on a doctor’s order.” Once enacted into law, clinical laboratories in Pennsylvania will be able to advertise their services just like labs in other US states. (Photo copyright: Montgomery County Republican Committee.)
Details of Senate Bill 712
The bill applies to clinical laboratory tests ordered by licensed healthcare practitioners and performed by the medical laboratories themselves. Labs are prohibited from making claims “about the reliability and validity of the testing that is inconsistent with the testing proficiency standards” in federal law, the bill states, and labs must disclose that the test “may or may not be covered by health insurance.”
Brown, Pennycuick, and co-sponsor Republican Senator Lynda Schlegel Culver, discussed the need for the new legislation in a March 2023 memo, observing that 70% of healthcare decisions are influenced by clinical laboratory tests.
“As our state and the nation’s healthcare system continues to grow and evolve, consumers are demanding greater transparency and to be more engaged in how healthcare is delivered to them,” they wrote, adding that the state’s current restrictions are “outdated.”
“We believe permitting outreach to Pennsylvania consumers with accurate, scientifically based diagnostic information can be a source of personalized, highly relevant insight to help foster better, more informed dialogue with licensed healthcare providers, which enables Pennsylvania consumers to take action to improve their health,” they wrote.
“Patients should have access to information about the services and procedures available at their local clinical laboratories,” said Senator Culver in the press release. “I want to make sure patients can make informed decisions about where and how to obtain these important health services. Our bill would remove the gag order on this specific set of healthcare services.”
Similar legislation, HB1558, sponsored by Republican Representative Paul Schemel, is currently pending in Pennsylvania’s House of Representatives.
Larger Push for Healthcare Consumerism
Dark Daily and our sister publication The Dark Report have reported extensively about the rise of consumerism in healthcare—including factors such as price transparency—as it applies to medical laboratories.
And in “Millennials Set to Reorder Healthcare and Lab Testing,” The Dark Report advised clinical laboratories on the need to reconfigure key aspects of their services to accommodate the rising numbers of Millennials in the workforce. For example, these consumers are accustomed to using mobile devices to interact with retailers and want the same convenience when obtaining healthcare services from doctors and labs.
Global management consulting firm McKinsey and Company addressed many of these issues in report titled, “Driving Growth through Consumer Centricity in Healthcare.” The authors suggested that healthcare providers need to “redefine the consumer experience” by emulating “consumer-focused companies in other sectors” with “personalized offerings and services, value-based pricing, and an elevated experience—all from distinctive, high-quality brands.”
The report also noted that providers still have a lot of work to do. “Many consumers believe that the health system does not support their care needs, and they perceive that the quality of their healthcare is negatively affected by their personal attributes, including income, insurance coverage, weight, and age, among other factors,” the authors wrote.
Huron, a healthcare consulting company, identified five current trends in healthcare consumerism based on a survey of US consumers, Healthcare Dive reported. They are:
Greater digital functionality, including telehealth, wearable devices to report health data, and mobile apps for scheduling, communication, and payment.
Affordability, shorter wait times, and online ratings as factors driving consumers to choose providers.
Accurate diagnoses and effective treatment plans as drivers of consumer satisfaction.
Increasing demand for technology-enabled conveniences such as virtual care.
More price transparency in response to concerns about affordability.
Pennsylvania’s decision to join the rest of the nation and allow clinical laboratories to advertise their services may be evidence that the growing number of consumers who want direct access to medical care and the ability to choose their provider—be it hospital, physician, or clinical laboratory—are encouraging the pathology and medical laboratory professions to lobby their state lawmakers to make it easier to advertise their services to the public.
Healthcare providers of all types will benefit from acknowledging Gen Z’s preference for digital interactions, self-testing, and over-the-counter medications
Each generation has its own unique connection to how it manages its health, and the latest studies into the healthcare habits of Generation Z (aka, Gen Z or Zoomers) are providing valuable insight that savvy clinical laboratory managers and pathologists—in fact all healthcare providers—can use to better serve their Gen Z patients.
According to McKinsey and Company, Gen Z’s “identity has been shaped by the digital age, climate anxiety, a shifting financial landscape, and COVID-19.” And Pew Research states that Zoomers “are also digital natives who have little or no memory of the world as it existed before smartphones.”
As the largest demographic, “Gen Z stands 2.6 billion members strong. … Globally, they hold purchasing power of more than $500 billion and mobile buying power of $143 billion,” wrote Stacy Rapacon, Managing Editor at Senior Executive Media, in an article she penned for HP’s The Garage.
Meeting Gen Zers’ healthcare needs on their terms would seem to be a judicious choice.
“Gen-Z’s buying power may exceed $3 trillion,” wrote Bernhard Schroeder (above), a clinical lecturer on integrated/online marketing at San Diego State University, in Forbes. “Their spending ability exceeds the gross domestic product of all but about 25 of the world’s countries.” Thus, it behooves healthcare leaders, including clinical laboratory managers and pathologists, to consider how best to approach treating Gen Z patients. (Photo copyright: San Diego State University.)
Gen Z Leads in Digital Healthcare Use, Self-testing, OTC Drugs
“Gen Z engages in every type of digital healthcare activity more than other generations,” a recent study by PYMNTS noted. A total of 2,735 consumers were surveyed, and though all reported using digital healthcare to some degree, Gen Z stood out.
Patient portal access was the highest digital method accessed by Zoomers (62%), followed by telemedicine appointment usage (55%), the PYMNTS report found.
Knowing the direction Gen Z is trending may lead clinical laboratory leaders to expect self-testing to be on the rise, and that hunch would be correct. “There are two converging trends; the rise of women’s health technology and increased use of at-home sample collection for diagnosis tests,” Clinical Lab Products reported.
“Ongoing innovation in these areas could significantly improve the accessibility of women’s health testing. It will also have repercussions for labs, potentially changing the way samples are received and processed, and the way results are distributed. The quantity and quality of samples may be impacted, too. It’s important for labs to be aware of likely developments so they can prepare, and potentially collaborate with the health technology companies driving change,” CLP noted.
Another area feeling the impact of Gen Z’s healthcare spending is the over-the-counter (OTC) drug market.
“Since the pandemic began, more Americans are paying closer attention to their symptoms and looking for easily accessible information about over-the-counter medications, especially for allergies, coughs, and headaches,” said Kim Castro, Editor and Chief Content Officer for US News and World Report, in a press release.
Zoomers Want Healthcare on Their Own Terms
Gen Z grew up with the internet, Amazon, Netflix, Google, and social media since birth.
“The ‘norm’ they experienced as children was a world that operated at speed, scale, and scope. They developed an early facility with powerful digital tools that allowed them to be self-reliant as well as collaborative,” anthropologist Roberta Katz, PhD, a senior research scholar at Stanford’s Center for Advanced Study in the Behavioral Sciences (CASBS) told Stanford News.
As digital natives, Gen Z can be more science and data driven and yet still expect to find health advice on YouTube or TikTok. According to an article published by Harvard Pilgrim Healthcare, “Gen Z is the first generation to grow up surrounded by digital devices, and they expect their health benefits to be digital, too. From choosing a benefits package to finding a provider, Gen Z wants to take care of their health on their own terms. And that may just include video chatting with a doctor from the back of an Uber.”
In its 2022 US Digital Health Survey, research firm Insider Intelligence found that “Half of Gen Z adults turn to social media platforms for health-related purposes, either all the time or often.”
“Gen-Z will make up 31% of the world’s population by 2021 and they have deeply formed perceptions and beliefs … This has led to an amazing change in the way Gen-Z is disrupting several industries simultaneously,” wrote Bernhard Schroeder (above), a clinical lecturer on integrated/online marketing at San Diego State University, in Forbes.
What Can Clinical Laboratories Learn from These Findings
Gen Z seeks accuracy and trustworthy information. “Gen-Zers’ natural penchant for skepticism and frugality—coupled with low levels of confidence in the US healthcare system—makes them less likely to trust providers, more likely to research prices before seeking care, and more apt to worry that their health insurance won’t cover their treatment,” Insider Intelligence noted.
According to Contract Pharma, “Gen Z is concerned with holistic health and self-care, rather than a one size fits all pharmaceutical approach. They share a hesitancy for traditional healthcare models but with very interesting differences. By understanding these differences, the consumer healthcare industry can focus on agile and distinctive brands to harness Gen Z’s tremendous purchasing power.”
Savvy clinical laboratory leaders can better serve their Gen-Z client physicians and patients by better understanding why Zoomers are more inclined to order their own lab tests (without a physician), collect their own specimens to send into labs, and/or collect their own specimens to do home testing (think COVID-19 self-test kits). Zoomers may need an entirely new business model from their healthcare providers, including clinical laboratories.
Proposal comes as patient advocacy group reports poor compliance by hospitals with the federal price transparency regulation; AHA pushes back
Recent data compiled by Patient Rights Advocate, a non-profit group dedicated to nationwide healthcare transparency, appears to indicate that as many as two thirds of US hospitals continue to ignore hospital transparency rules established by Congress in 2021, according to an op-ed published in the Washington Examiner.
This may be why the Biden Administration has now proposed new amendments aimed at strengthening those requirements. According to KFF Health News (formerly Kaiser Health News), this new proposal “aims to further standardize the required data, increase its usefulness for consumers, and boost enforcement.”
However, “the goal of exact price tags in every situation is likely to remain elusive,” KFF Health News noted.
“Noncompliant hospitals are preventing patients and payers from shopping around for high-value care—and inflating healthcare costs in the process,” wrote Sally C. Pipes, President and CEO of Pacific Research Institute, in her Washington Examiner column.
Pathologists who were near the top of a Health Care Cost Institute (HCCI) list of medical specialties that most often billed out of network may be affected by CMS’ proposed new amendments to the transparency rule.
“The nonprofit group Patient Rights Advocate just published its fifth report exploring how hospitals are complying with federal price transparency requirements. About two-thirds are still flouting the rules. That’s unacceptable,” wrote Sally Pipes (above), President and CEO of Pacific Research Institute, in an op-ed she penned for the Washington Examiner. Federal law also requires clinical laboratories to post their prices for testing. (Photo copyright: The Heartland Institute.)
Hospitals, Clinical Laboratories Required to Post Chargemaster Prices
That rule also required hospitals to provide a list of charges for at least 300 “shoppable services,” including at least 14 laboratory and pathology tests.
“We’re closer to that, but we’re not there,” Gerard Anderson, PhD, a professor at the Johns Hopkins Bloomberg School of Public Health, told KFF. The goal may be the kind of pricing transparency that consumers are accustomed to when purchasing goods and services, but healthcare, he said, poses unique challenges.
“Each patient is unique and uses a slightly different bundle of services,” Anderson added. “You might be in the operating room for 30 minutes, or it might be 45. You might need this lab test and not that one.”
The KFF Health News story noted that health insurers have been subject to even stricter regulations, “with more prescriptive details and tougher penalties for noncompliance,” since 2022. CMS’ latest proposed amendments would bring requirements for hospitals that are more in line with those that apply to payers, KFF reported.
As described in the Federal Register, the proposed rule aims to:
Require hospitals to include a new data element known as the “consumer-friendly expected allowed charges,” KFF Health News noted.
Require hospitals to “affirm the accuracy and completeness of their standard charge information displayed in the MRF.”
Require hospitals to place a link to pricing information in the footers of their web pages.
The rule also includes provisions for enhanced enforcement of pricing transparency requirements. Under one proposal, CMS would publicly identify hospitals that are not in compliance.
Jeffrey Leibach, MBA, a healthcare finance strategist and Partner with the consulting firm Guidehouse, told KFF Health News that the new rules will make it easier for third-party data firms to create online price comparison tools. “And, ultimately, consumers who want to shop will then find this data more easily,” he said.
The proposal comes on the heels of a July report from Patient Rights Advocate (PRA) indicating that only 36% of US hospitals were in full compliance with the current transparency requirements. The report was based on an analysis of 2,000 hospital websites. However, that was an improvement over earlier reports. In February, the group reported that 24.5% were fully compliant, compared with 16% in August 2022.
Most hospitals in the report posted negotiated prices, but in many cases, “their pricing data was missing or significantly incomplete,” PRA contended. A total of 69 hospitals “did not post a usable standard charges file,” the report stated.
PRA Uses Humor to Highlight Discrepancies, AHA Pushes Back
According to KFF Health News, PRA is running a satirical ad campaign in which retailers adopt the “hospital pricing method,” listing estimates on store shelves instead of actual prices.
“When they ask for a price, we give them an estimate,” says one retail manager in the video ad. “Then we bill them whatever we want.”
This new video pokes fun at the lack of price transparency in healthcare. The American Hospital Association took issue with the clip’s tone.
“People need price certainty,” PRA founder and Chairman Cynthia Fisher, MBA, told KFF Health News. “Estimates are a way of gaming the people who pay for healthcare.”
However, executives from the American Hospital Association (AHA) pushed back on the video ad and PRA’s claims about HPT compliance. AHA contends that hospitals were flagged as being noncompliant if they left spaces blank or used formulas, both of which are permitted under the current rules.
“Very few health services are so straightforward where you can expect no variation in the course of care, which could then result in a different cost than the original assessment,” AHA Group Vice President for public policy Molly Smith, MS, told KFF. “Organizations are doing the best they can to provide the closest estimate. If something changes in the course of your care, that estimate might adjust.”
As for the July PRA report, in a July 25 AHA press release, Smith stated, “Patient Rights Advocate has put out a report that blatantly misconstrues, ignores, and mischaracterizes hospitals’ compliance with federal price transparency regulations.”
CMS, she said, “has found that as of last year 70% of hospitals had complied with both federal requirements and over 80% had complied with at least one. Due to the ongoing efforts of the hospital field, these numbers are surely higher today. Third party analyses have agreed that hospitals have made tremendous progress.”
But then what is motivating the government’s new amendments to the price transparency rule? Regardless, clinical laboratories and pathology groups should continue to monitor progress of these new amendments to the federal hospital transparency rule.
