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Society to Improve Diagnosis in Medicine Forms Coalition to Address Preventable Diagnostic Errors; Proper Use of Clinical Laboratory Test Is One Goal

SIDM estimates approximately one in 10 patients with serious medical conditions are initially misdiagnosed, a problem that can be addressed if the right medical laboratory test is ordered at the right time for individual patients

Clinical laboratory leaders know that lab tests are essential to a large proportion of medical diagnoses. Therefore, any formal effort to reduce diagnostic errors that affects how doctors order and use lab tests also will impact medical laboratories that perform those tests.

One such formal effort is underway, led by the Society to Improve Diagnosis in Medicine (SIDM). Dubbed the Coalition to Improve Diagnostics (CID), the collaboration comprises more than 50 leading healthcare and patient advocacy organizations, all joined to end diagnostic errors, one of the most common causes of preventable medical errors.

“Diagnostic error is one of the most important safety problems in healthcare today and causes the most patient harm,” said Paul L. Epner, CEO and co-founder of the SIDM, in a news release. “While many organizations have diagnostic quality on their radar, it generally is not seen as a top priority. Those who’ve joined the coalition acknowledge that diagnostic quality and safety are vital to improving healthcare.”

To participate in the coalition, organizations must promise to pursue ways to circumvent troublesome diagnostic errors and submit action plans to the SIDM outlining proposals to diminish such errors. There are no fees associated with being part of the coalition.

12-Million Patients Each Year Affected by Diagnostic Errors

Epner told Modern Healthcare that this coalition is the only one that exists that focuses solely on diagnostic errors and ways to eradicate them. “There are a lot of systematic things that we understand are problems, but we aren’t very good at implementing solutions,” he said. “In terms of having standard solutions, we are early.”

The National Academy of Medicine (NAM) defines diagnostic error as “the failure to establish an accurate and timely explanation of the patient’s health problem(s) or to communicate that explanation to the patient. Simply put, these are diagnoses that are missed altogether, wrong, or should have been made much earlier.”

The SIDM website lists the following key sources for acquiring data on diagnostic errors:

  • Autopsy data;
  • Physician self-reports of experiencing diagnostic error;
  • Patient self-reports of experiencing diagnostic error;
  • Hospital incident reporting systems;
  • Statistical analysis of unexpected hospitalizations;
  • Research studies designed to measure diagnostic error; and
  • Medical malpractice claims data.
“Providing an accurate medical diagnosis is complex and involves uncertainty, but it’s obviously essential to effective and timely treatment,” Paul L. Epner, CEO and co-founder of the SIDM, said in a news release announcing the formation of the coalition. “Nearly everyone will receive an inaccurate diagnosis at some point in their life and for some, the consequences will be grave. Major improvement is needed to systematically identify how to improve diagnostic quality and reduce harm to patients.” (Photo copyright: Society to Improve Diagnosis in Medicine.)

The SIDM states that diagnostic errors affect an estimated 12-million patients in the US each year, and that approximately one in 10 patients with a serious medical condition are initially misdiagnosed. In addition, an estimated 40,000 to 80,000 people die each year from diagnostic errors in US hospitals, and it is probable that at least that many patients suffer from permanent disability annually due to improper diagnosis. It is also likely that diagnostic errors cause more harm to patients than all other medical errors combined and are responsible for an increasing number of malpractice cases, the SIDM notes.

John’s Hopkins Finds Most Misdiagnoses in Three Categories of Medicine

A study published in the peer-reviewed journal Diagnosis, reported that one in three malpractice cases that resulted in death or serious harm to patients are due to misdiagnosis. The research for this study was carried out by a team from the Johns Hopkins University School of Medicine and was funded by the SIDM.

After analyzing more than 55,000 malpractice claims, the researchers found that 34% of those cases which resulted in death or permanent disability could be attributed to inaccurate or delayed diagnosis, an SIDM analysis of the John’s Hopkins study noted.

The research team also examined underlying disease states to search for misdiagnosis patterns and discovered that three quarters or 74.1% of the misdiagnosed cases occurred in just three categories of medical conditions:

  • Cancer (37.8%);
  • Vascular events (22.8%); and
  • Infection (13.5%).

These serious cases resulted in $1.8 billion in malpractice payouts over the course of 10 years, according to the SIDM. 

“It is not just inconvenient to have a wrong or delayed diagnosis. For many patients, misdiagnosis causes severe harm and expense, and in the worst cases, death,” said David Newman-Toker, MD, PhD, Director, Armstrong Institute Center for Diagnostic Excellence at Johns Hopkins University School of Medicine, in an SIDM news post. “If we’re going to reduce serious harms from medical errors, major strides must be made to improve diagnostic accuracy and timeliness. This study shows us where to focus to start making a difference for patients. It tells us that tackling diagnosis in these three specific disease areas could have a major impact on reducing misdiagnosis-related harms.”

The John’s Hopkins research confirms that misdiagnosis is a common and costly form of medical errors that can have catastrophic results. The team concluded that it will take a system-wide effort involving physicians, patients, and their families to improve the accuracy of diagnosis.

The SIDM’s Coalition to Improve Diagnostics is one such effort and is primarily supported by a $2.45 million grant awarded by the Gordon and Betty Moore Foundation. The main purpose for this grant was to help increase awareness about diagnostic errors and develop ways to prevent such errors in the future. 

“We think this is a new frontier of safety and quality we want to be part of,” Daniel Yang, MD, Program Officer for Diagnostic Excellence Initiative at the Moore Foundation, told Modern Healthcare.

Clinical laboratory tests are essential to the diagnostic process. Therefore, lab managers and staff should constantly review their procedures to ensure accuracy in testing and reporting of results to ordering physicians. If preventable medical errors are to be significantly reduced, labs will be a big part of the team effort that will make it happen.

—JP Schlingman

Related Information:

Coalition Tackling Diagnostic Errors Gains Some Traction

Four New Organizations Commit to Improve Diagnostic Quality and Safety

Improving Diagnosis in Health Care

The Frequency of Diagnostic Errors in Outpatient Care: Estimations from Three Large Observational Studies Involving US Adult Populations

40+ Healthcare Organizations Launch Unprecedented Effort to Improve Accuracy and Timeliness of Diagnosis

Analysis: One in Three Malpractice Cases with Serious Patient Harms Are Due to Misdiagnosis

Serious Misdiagnosis-Related Harms in Malpractice Claims: The “Big Three” – Vascular Events, Infections, and Cancers

Senior Citizens on Medicare Are Particularly Vulnerable to New Scams Involving Fraudulent Genetic Test Orders

Medical fraudsters are targeting Medicare recipients with schemes to persuade them to agree to genetic tests advertised as informing them if they are predisposed to specific chronic diseases or cancer

Medicare scams involving orders for unnecessary, expensive testing are not new. However, clinical laboratory managers and anatomic pathologists need to be aware—particularly those working in hospital and health system labs—that an entirely new wave of fraud involving medical laboratory testing is gaining momentum. This time, instead of specialty cardiology, toxicology, and pain management testing, the scam involves genetic tests.

The shifting focus to genetic tests by fraudsters is a recent development to which many hospital-based medical laboratory professionals may be unaware. One reason that the hospital lab managers can be extraordinarily compliant with federal and state laws is because they don’t want to threaten the license of their hospital. So, hospital lab staff often are unaware of the types and extent of fraud involving certain lines of clinical lab testing that surface in the outpatient/outreach market.

The growing number of fraudulent activities associated with genetic tests is now an issue for federal healthcare fraud investigators. Former US attorney Robert M. Thomas, Jr., a whistleblower attorney, adjunct professor at Boston University School of Law, and a civil rights advocate, wrote in STAT, “What’s going on here is the same pattern of activity that has occurred throughout the healthcare system: a great majority of law-abiding actors and a few that seek out opportunities to game the system of government reimbursement. If you can get a saliva swab and a Medicare number [to provide a specimen for a genetic test] from an unsuspecting senior and falsify a doctor’s order (or find a shady doctor to write one), there’s an easy four-figure sum to be had.”

This aligns with a recent fraud alert from the US Department of Health and Human Services Office of Inspector General (OIG) that states: “Scammers are offering Medicare beneficiaries ‘free’ screenings or cheek swabs for genetic testing to obtain their Medicare information for identity theft or fraudulent billing purposes. Fraudsters are targeting beneficiaries through telemarketing calls, booths at public events, health fairs, and door-to-door visits.

“Beneficiaries who agree to genetic testing or verify personal or Medicare information may receive a cheek swab, an in-person screening or a testing kit in the mail, even if it is not ordered by a physician or medically necessary.

“If Medicare denies the claim, the [Medicare] beneficiary could be responsible for the entire cost of the test, which could be thousands of dollars.”

In a STAT column, former US attorney Robert M. Thomas, Jr. (above), noted that “All a scammer must do is find a medical laboratory willing to split the profit from the testing once the DNA samples are in hand. With more and more labs opening, there are plenty of doors upon which to knock.” This makes it imperative that clinical laboratory managers train their staff to identify and question potentially fraudulent test orders. (Photo copyright: Twitter.)

How the Scam Works

As with similar fraud cases, the scamsters pay inducements to often-unaware patients, physicians, and others to encourage an order for a genetic test. They then bill federal health programs and private insurers at inflated prices.

Thomas describes one such scenario used to increase genetic test orders. “A typical scheme might go something like this: A scammer offers free ice cream sundaes, gift cards, or even casino chips at a retirement community or ‘Medicare expo’ for anyone who would like to hear about the exciting new technology of genetic testing and what it might reveal about ‘your family’s risk of cancer’ or some other come-on,” explained Thomas. “The scammer describes this sophisticated technology and downplays or ignores the medical necessity criteria and the need for a doctor’s order. He or she persuades some attendees to provide saliva samples and gets identifying information, such as the senior’s name, date of birth, and Medicare number.

“The scammer then approaches a testing lab, saying, ‘I can find you a lot more business and get you a lot more patients if you share the proceeds with me.’ This, of course, violates the federal anti-bribery law known as the Anti-Kickback Act. But the lure of high-volume profits can be strong enough for some to ignore that roadblock,” he noted.

What Medical Laboratories Need to Know about Fraud and Genetic Tests

Regardless of how the fraudster proceeds—whether asking the lab company outright to split profits or by simply sending a high volume of the same genetic test to the lab without explanation—clinical laboratory managers should be alert to such activities.

Thomas writes: “An ethical lab would detect that something is amiss with such a request [involving a genetic test]. An alert lab might question how an individual, who is not a doctor, has gotten so many saliva samples and [so much] personal information from so many ‘patients.’ Other [genetic testing] lab companies may simply play the game without asking enough questions, or worse, knowing that the tests are not medically necessary, as required by the rules. The promise of easy money can be just too alluring.”

Physicians and medical laboratories that participate in these scams are in violation of the federal anti-bribery laws. In “Federal Investigations into Alleged Kickback Schemes between Hospitals and Physicians Increase in Number and Scope,” Dark Daily reported on new OIG investigations into hospitals alleged to have violated anti-kickback legislation.

Current Cases Involving Genetic Testing Scams

Fraudulent medical test ordering schemes are an ongoing problem that Dark Daily has repeatedly covered. Though the genetic testing aspect is relatively new, there are several recent and current cases that outline the consequences of participating in the new scam.

For example, in February GenomeDx Biosciences Corp. (GenomeDx) agreed to pay $1.99 million to settle a federal case regarding unnecessary genetic testing. In this case, post-operative prostate cancer patients were given a genetic test called Decipher even though they “did not have risk factors necessitating the test,” a Department of Justice (DOJ) press release states. The DOJ claimed GenomeDx fraudulently billed Medicare for the tests, violating the False Claims Act.

A similar federal case involved a doctor who was charged with ordering genetic tests for patients he never saw or treated. Though the doctor was licensed to practice medicine in Florida, the “patients” in question resided in Oklahoma, Arizona, Tennessee, and Mississippi. One patient testified to having responded to a Facebook ad that offered a $100 gift card “for people interested in genetic testing,” a press release from the US Attorney’s Office District of New Jersey stated.

One important recommendation is that medical laboratory professionals learn how to spot and question potentially fraudulent testing requests. This shift to genetic testing is just the latest threat. Even clinical labs that are well prepared could be caught unaware, particularly if the fraudster sends genetic test orders to multiple labs to process what are probably medically-unnecessary tests.

—Dava Stewart

Related Information:

Genetic testing: The Next Big Arena for Fraud?

Fraud Alert: Genetic Testing Scam

Genetic Testing Company Agrees to Pay $1.99 Million to Resolve Allegations of False Claims to Medicare for Medically Unnecessary Tests

Florida-Based Doctor Charged with Fraudulently Ordering Genetic Tests

Federal Investigations into Alleged Kickback Schemes between Hospitals and Physicians Increase in Number and Scope

Studies by KHN, Navigant, and Others Report That Independent and Rural Hospitals Are Closing at Record Rates, Leaving Patients Without Critical Nearby Healthcare Services

Negative financials, low population growth, and excess inpatient capacity cited as reasons communities—especially rural areas—may lose their independent hospitals, including access to nearby clinical laboratory testing and anatomic pathology services

Could America’s independent rural hospitals actually disappear altogether? Metrics compiled by multiple healthcare monitoring organizations suggest that, with the increase in mergers and acquisitions of health networks, it’s a distinct possibility.

If so, what would happen to all the clinical laboratories affiliated with and servicing those hospitals? And how might hospital-based medical laboratories that are absorbed into larger healthcare networks be required to alter their workflows? For almost three decades, the clinical laboratory profession has seen similar hospital acquisitions lead to consolidation, standardization, and regionalization of the medical laboratories inside these hospitals. Often these organizational restructurings mean layoffs of lab managers and medical technologists.

Probably the more serious challenge is what will happen to all the rural patients who cannot get to larger health networks located in urban settings.

Hospital Closings Create Risks for Rural Communities

Experts say rural hospitals—especially providers serving small populations in southern and midwestern states—are in precarious positions going forward.

Kaiser Health News (KHN) reported in August that more than 100 rural hospitals closed since 2010, and these closures have serious implications for patients, such as a lengthy transport to another hospital’s emergency department.

“Across America, rural patients spend more time in an ambulance than urban patients after a hospital closes,” Alison Davis, PhD, Professor of Agricultural Economics at the University of Kentucky, and Executive Director of the Community and Economic Development Initiative of Kentucky, told KHN. Her team analyzed ambulance call and transport time data and found that a trip can grow from an average of 14 minutes before a hospital closed to 25 minutes after, KHN reported. (Photo copyright: Northern Kentucky Tribune.)

430 Rural Hospitals Likely to Close!

Rural hospitals usually do not have many nearby competitors. So, what brings so many  of them to the brink of closure? According to a Navigant (NYSE:NCI)) analysis of more than 2,000 rural hospitals, “21% are at high risk of closing based on their total operating margin, days cash-on-hand, and debt-to-capitalization ratio. This equates to 430 hospitals across 43 states that employ 150,000 people!”

Navigant identifies the following as factors in the decline of these struggling rural hospitals:

  • “Low rural population growth;
  • “Payer mix degradation;
  • “Excess hospital capacity due to declining inpatient care; and
  • “An inability for hospitals to leverage technology due to lack of capital.”

Also, a lack of Medicaid expansion has led to rural hospital closures as well, as Dark Daily reported earlier this year in “Rural, For-Profit Hospitals Closing at an Alarming Rate Putting Some Independent Clinical Laboratories and Pathology Groups at Risk,” February 8, 2019.

Navigant goes on to state, “Further review of the community essentiality (trauma status, service to vulnerable populations, geographic isolation, economic impact) of rural hospitals at high financial risk suggests 64% or 277 of these hospitals are considered highly essential to their community’s health and economic well-being. In 31 states, at least half of these financially distressed rural hospitals are considered essential.”

After reviewing the 2,000 rural hospitals Navigant’s analysts concluded that, unless trends reverse, one-in-five rural hospitals (21%) risk closing, a news release stated. And these hospitals are “essential” to the area’s residents.

“We show that two in three of these hospitals are considered highly essential to their communities: that’s 277 hospitals nationwide,” wrote David Mosley, Navigant’s Managing Director, in a STAT blog post. “Furthermore, if these hospitals close, already fragile rural economies will crumble while residents will be forced to travel long distances for emergency and inpatient care.”

Fierce Healthcare noted that “Of Montana’s 12 at-risk rural hospitals, all of them are considered essential to their communities. Kansas has 29 total at-risk rural hospitals with 25 of them—or 86%—considered essential to their communities. Georgia and Mississippi have seen 77% and 61% of their essential rural hospitals at financial risk, respectively.”

Navigant’s list of states with the highest percentage of rural hospitals at risk of closing includes:

  • Alabama: 21 hospitals (50%)
  • Mississippi: 31 hospitals (48%)
  • Georgia: 26 hospitals (41%)
  • Maine: eight hospitals (40%)
  • Alaska: six hospitals (40%)
  • Arkansas: 18 hospitals (37%)
  • Oklahoma: 17 hospitals (29%)
  • Kansas: 29 hospitals (29%)
  • Michigan:18 hospitals (25%)
  • Kentucky: 16 hospitals (25%)
  • Minnesota: 19 hospitals (21%)

Comparing Independent Hospitals to Health Networks

But it’s not just rural independent hospitals that are struggling. Modern Healthcare Metrics reports that 53% of all stand-alone hospitals in the US have suffered operating losses during each of the last five years (2012 to 2017). Conversely, about half (26%) of health system-affiliated providers have lost money.

Statistics compiled by the American Hospital Association (AHA) show there are approximately 5,000 non-federal acute care community hospitals in the US. In 2017, about 75% of them were part of multi-hospital systems, an increase from 70.4% in 2012, Modern Healthcare Metrics data indicated.

Modern Healthcare reported that during the period 2012 to 2017:

  • Average length of stay increased 6.4% at independent hospitals, while it decreased at health system hospitals by 23.5%;
  • Occupancy rates fell to 43.6% from 53.9% at independent providers, compared to rates falling to 53.7% from 61% at system-owned hospitals;
  • Independent hospitals seem to rely on patients having longer lengths of stay;
  • Hospices and skilled nursing facilities compete with stand-alone hospitals.

Change is coming to parts of the nation that depend on independent hospitals, and it’s not good. Medical laboratory leaders are advised to prepare for serving patients who may lose access to nearby tests and diagnostic services. On a positive note, medical laboratories in independent hospitals that consolidate with healthcare systems could bring expertise, adding value to their new networks.

—Donna Marie Pocius

Related Information:

Fewer Independent Hospitals Can Weather Operating Headwinds

The Effect of Rural Hospital Closures on Community Economic Health

American Hospital Association: Fast Facts on US Hospitals

After a Rural Hospital Closes, Delays in Emergency Care Cost Patients Dearly

Rural Hospital Sustainability  

One in Five U.S. Rural Hospitals at High Risk of Closing

Lawmakers Need to Act to Prevent Rural Hospitals Closing

More than One in Five Rural Hospitals at High Risk of Closing: Report

Rural For-Profit Hospitals Closing at an Alarming Rate, Putting Some Independent Clinical Laboratories and Pathology Groups at Risk

At MIT, New DNA Microscopy Maps Cells and Their Genetic Sequences Using Chemicals Rather than Light

Genetic data captured by this new technology could lead to a new understanding of how different types of cells exchange information and would be a boon to anatomic pathology research worldwide

What if it were possible to map the interior of cells and view their genetic sequences using chemicals instead of light? Might that spark an entirely new way of studying human physiology? That’s what researchers at the Massachusetts Institute of Technology (MIT) believe. They have developed a new approach to visualizing cells and tissues that could enable the development of entirely new anatomic pathology tests that target a broad range of cancers and diseases.

Scientists at MIT’s Broad Institute and McGovern Institute for Brain Research developed this new technique, which they call DNA Microscopy. They published their findings in Cell, titled, “DNA Microscopy: Optics-free Spatio-genetic Imaging by a Stand-Alone Chemical Reaction.”

Joshua Weinstein, PhD, a postdoctoral associate at the Broad Institute and first author of the study, said in a news release that DNA microscopy “is an entirely new way of visualizing cells that captures both spatial and genetic information simultaneously from a single specimen. It will allow us to see how genetically unique cells—those comprising the immune system, cancer, or the gut for instance—interact with one another and give rise to complex multicellular life.”

The news release goes on to state that the new technology “shows how biomolecules such as DNA and RNA are organized in cells and tissues, revealing spatial and molecular information that is not easily accessible through other microscopy methods. DNA microscopy also does not require specialized equipment, enabling large numbers of samples to be processed simultaneously.”

The images above, taken from the MIT study, compares optical imaging of a cell population (left) with an inferred visualization of the same cell population based on the information provided by DNA microscopy (right). Scale bar = 100 μm (100 micrometers). This technology has the potential to be useful for anatomic pathologists at some future date. (Photo and caption copyrights: Joshua Weinstein, PhD, et al/Cell.)

New Way to Visualize Cells

The MIT researchers saw an opportunity for DNA microscopy to find genomic-level cell information. They claim that DNA microscopy images cells from the inside and enables the capture of more data than with traditional light microscopy. Their new technique is a chemical-encoded approach to mapping cells that derives critical genetic insights from the organization of the DNA and RNA in cells and tissue.

And that type of genetic information could lead to new precision medicine treatments for chronic disease. New Atlas notes that “ Speeding the development of immunotherapy treatments by identifying the immune cells best suited to target a particular cancer cell is but one of the many potential application for DNA microscopy.”

In their published study, the scientists note that “Despite enormous progress in molecular profiling of cellular constituents, spatially mapping [cells] remains a disjointed and specialized machinery-intensive process, relying on either light microscopy or direct physical registration. Here, we demonstrate DNA microscopy, a distinct imaging modality for scalable, optics-free mapping of relative biomolecule positions.”

How DNA Microscopy Works

The New York Times (NYT) notes that the advantage of DNA microscopy is “that it combines spatial details with scientists’ growing interest in—and ability to measure—precise genomic sequences, much as Google Street View integrates restaurant names and reviews into outlines of city blocks.”

And Singularity Hub notes that “ DNA microscopy, uses only a pipette and some liquid reagents. Rather than monitoring photons, here the team relies on ‘bar codes’ that chemically tag onto biomolecules. Like cell phone towers, the tags amplify, broadcasting their signals outward. An algorithm can then piece together the captured location data and transform those GPS-like digits into rainbow-colored photos. The results are absolutely breathtaking. Cells shine like stars in a nebula, each pseudo-colored according to their genomic profiles.”

“We’ve used DNA in a way that’s mathematically similar to photons in light microscopy,” Weinstein said in the Broad Institute news release. “This allows us to visualize biology as cells see it and not as the human eye does.”

In their study, researchers used DNA microscopy to tag RNA molecules and map locations of individual human cancer cells. Their method is “surprisingly simple” New Atlas reported. Here’s how it’s done, according to the MIT news release:

  • Small synthetic DNA tags (dubbed “barcodes” by the MIT team) are added to biological samples;
  • The “tags” latch onto molecules of genetic material in the cells;
  • The tags are then replicated through a chemical reaction;
  • The tags combine and create more unique DNA labels;
  •  The scientists use a DNA sequencer to decode and reconstruct the biomolecules;
  • A computer algorithm decodes the data and converts it to images displaying the biomolecules’ positions within the cells.
The visualization above was created from data gathered by DNA microscopy, which peers inside individual cells. It demonstrates how DNA microscopy enables scientists to identify different cells (colored dots) within a sample—with no prior knowledge of what the sample looks like. (Photo and caption copyright: Joshua Weinstein, PhD, et al./Cell.)

“The first time I saw a DNA microscopy image, it blew me away,” said Aviv Regev, PhD, a biologist at the Broad Institute, a Howard Hughes Medical Institute (HHMI) Investigator, and co-author of the MIT study, in an HHMI news release. “It’s an entirely new category of microscopy. It’s not just a technique; it’s a way of doing things that we haven’t ever considered doing before.”

Precision Medicine Potential

“Every cell has a unique make-up of DNA letters or genotype. By capturing information directly from the molecules being studied, DNA microscopy opens up a new way of connecting genotype to phenotype,” said Feng Zhang, PhD, MIT Neuroscience Professor,

Core Institute Member of the Broad Institute, and Investigator at the McGovern Institute for Brain Research at MIT, in the HHMI news release.

In other words, DNA microscopy could someday have applications in precision medicine. The MIT researchers, according to Stat, plan to expand the technology further to include immune cells that target cancer.

The Broad Institute has applied for a patent on DNA microscopy. Clinical laboratory and anatomic pathology group leaders seeking novel resources for diagnosis and treatment of cancer may want to follow the MIT scientists’ progress.    

—Donna Marie Pocius

Related Information:

A Chemical Approach to Imaging Cells from the Inside

DNA Microscope Sees “Through the Eyes of the Cell”

DNA Microscopy Offers Entirely New Way to Image Cells

DNA Microscopy: Optics-free Spatio-Genetic Imaging by a Stand-Alone Chemical Reaction

This New Radical DNA Microscope Reimagines the Cellular World

DNA Microscopy Offers a New Way to Image Molecules

DNA Microscope Shows Cells Genetic Material

Trends Reshaping Hospitals Worldwide Also Impact Clinical Laboratories and Anatomic Pathology Groups

As hospitals are forced to innovate, anatomic pathologists and medical laboratories will need to adapt to new healthcare delivery locations and billing systems  

As new challenges threaten the survival of many hospitals worldwide, medical laboratories may be compelled to adapt to the needs of those transforming organizations. Those challenges confronting hospitals are spelled out in a recent report from management consulting firm McKinsey and Company with the provocative title, “The Hospital Is Dead, Long Live the Hospital!

A team of analysts led by McKinsey senior partner Penny Dash, MB BS, MSc, looked at nine trends affecting hospitals in North America, Europe, Asia, and other regions. These trends, the authors contend, will force hospitals to adopt innovations in how they are structured and how they deliver healthcare.

Here are nine challenges hospitals face that have implications for medical laboratories:

1. Aging Patient Populations

“Patient populations are getting older, and their needs are becoming more complex,” McKinsey reports, and this is imposing higher cost burdens. The US Census Bureau projects that by 2030 approximately 20% of the US population will be 65 or older compared with about 15% in 2016.

The federal Centers for Medicare and Medicaid Services (CMS) reports that this age group accounts for a disproportionate share of healthcare costs. In 2014, CMS states, per-capita healthcare spending was $19,098 for people 65 or older compared with $7,153 for younger adults.

The Census Bureau graphic above illustrates how the age of the US population is changing. People are living longer, and as Dark Daily reported in May, this could present opportunities for medical laboratories and anatomic pathologists, as early detection of chronic diseases affecting older patients could ultimately reduce treatment costs. (Photo copyright: US Census Bureau.)

2. Patients Are Behaving More Like Consumers

“Patients—along with their families and caregivers—expect to receive more information about their conditions and care, access to the newest treatments, and better amenities,” McKinsey reports.

Dark Daily has reported extensively on the rise of healthcare consumerism and the opportunities this might offer for clinical laboratories.

3. More Community-based Outpatient Care

Clinical advances are increasing the range of treatments that can be performed in outpatient settings, McKinsey reports. The authors point to multiple studies suggesting that patients can receive better outcomes when more care is delivered outside the hospital. Dark Daily has often reported on the impact of this trend, which has reduced demand for in-hospital laboratory testing while increasing opportunities for outpatient services.

4. Move Toward High-Volume Specialist Providers

Compared with general hospitals, specialized, high-volume “centers of excellence” can deliver better and more cost-effective care in many specialties, McKinsey suggests. As evidence, the report points to research published over the past 12 years in specialist journals.

Some US employers are steering patients to top-ranked providers as part of their efforts to reduce healthcare costs. For example, Walmart (NYSE:WMT) pays travel costs for patients to undergo evaluation and treatment at out-of-state hospitals recognized as centers of excellence, which Dark Daily reported on in July.

UnitedHealthcare’s new preferred lab network also appears to be a nod toward this trend. As The Dark Report revealed in April, the insurer has designated seven laboratories to be part of this network. These labs will offer shorter wait times, lower costs, and higher quality of care compared with UnitedHealthcare’s larger network of legacy labs, the insurer says.

5. Impact of Clinical Advances

Better treatments and greater understanding of disease causes have led to significantly lower mortality rates for many conditions, McKinsey reports. But the authors add that high costs for new therapies are forcing payers to contend with questions about whether to fund them.

As Dark Daily has often reported, new genetic therapies often require companion tests to determine whether patients can benefit from the treatments. And these also face scrutiny from payers. For example, in January 2018, Dark Daily reported that some insurers have refused to cover tests associated with larotrectinib (LOXO-101), a new cancer treatment.

6. Impact of Disruptive Digital Technologies

The McKinsey report identifies five ways in which digital technologies are having an impact on hospitals:

  • Automation of manual tasks;
  • More patient interaction with providers;
  • Real-time management of resources, such as use of hospital beds;
  • Real-time clinical decision support to enable more consistency and timeliness of care; and
  • Use of telemedicine applications to enable care for patients in remote locations.

All have potential consequences for medical laboratories, as Dark Daily has reported. For example, telepathology offers opportunities for pathologists to provide remote interpretation of blood tests from a distance.

7. Workforce Challenges

Many countries are contending with shortages of physicians, nurses, and allied health professionals, McKinsey reports. The authors add that the situation is likely to get worse in the coming decades because much of the current healthcare workforce consists of baby boomers.

An investigation published in JAMA in May indicated that, in the US, the number of active pathologists decreased from 15,568 to 12,839 between 2007 and 2017. In January, Dark Daily reported that clinical laboratories are also dealing with a generational shift involving medical technologists and lab managers, as experienced baby boomers who work in clinical laboratories are retiring.

8. Financial Challenges

In the United States and other countries, growth in healthcare spending will outpace the gross domestic product, the McKinsey report states, placing pressure on hospitals to operate more efficiently.

9. More Reliance on Quality Metrics

McKinsey cites regulations in Canada, Scandinavia, and the UK that require hospitals to publish quality measurements such as mortality, readmittance, and infection rates. These metrics are sometimes linked to pay-for-performance programs, the report states. In the United States, Medicare regularly uses quality-of-care metrics to determine reimbursement, and as Dark Daily reported in July, a new Humana program for oncology care includes measurements for medical laboratories and anatomic pathology groups.

The McKinsey report reveals that several trends in healthcare are forcing healthcare leaders to adopt new strategies for success. The report’s authors state that their “results show that contemporary healthcare providers around the world are facing several urgent imperatives: to strengthen clinical quality; increase the delivery of personalized, patient-centered care; improve the patient experience; and enhance their efficiency and productivity.”

These pressures on hospitals typically also require appropriate responses from clinical laboratories and anatomic pathology groups as well.

—Stephen Beale

Related Information:

The Hospital Is Dead, Long Live the Hospital!

The Nine Forces Changing the World for Hospitals

Older People Projected to Outnumber Children for First Time in US History

CMS: Health Expenditures by Age and Gender

Results of Harvard Study into Medicare Costs Offers Opportunities for Clinical Laboratories

Pathology Groups and Clinical Laboratories Have Unique Opportunity to Take Leadership Role in Healthcare Consumerism

Consumer Trend to Use Walk-In and Urgent Care Clinics Instead of Traditional Primary Care Offices Could Impact Clinical Laboratory Test Ordering/Revenue

Walmart Flies Employees to Top Hospitals for Surgeries in a Bid to Cut Healthcare Costs

New UnitedHealthcare Preferred Lab Network Launches July 1

Precision Medicine Requires Targeted Cancer Therapies, but Payers Reluctant to Pay for Some Genetic Testing Needed to Match a Patient with Right Drug

Telemedicine Gaining Momentum in US as Large Employers Look for Ways to Decrease Costs; Trend Has Implications for Pathology Groups and Medical Laboratories

Trends in the US and Canadian Pathologist Workforces From 2007 to 2017

With Experienced Baby Boomers Retiring in Ever-Larger Numbers, Clinical Laboratories and Pathology Groups Use New Methods to Improve Productivity, Reduce Costs

Humana’s New Oncology Value-based Care Program Includes Quality and Cost Measurements of Provider Performance, Clinical Laboratories, and Pathology Groups

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