This rural health system has nearly a decade of experience offering cash-only package pricing for medical services including, most recently, inpatient stays
While healthcare networks and hospital organizations nationwide argued over pricing transparency, Pomerene Hospital in Millersburg, Ohio, embraced the concept. The not-for-profit hospital developed packages of care that include “one all-inclusive price for tests, procedures, and episodes of care, rather than a lengthy list of itemized charges that didn’t even include professional fees” for its self-paying customers, Modern Healthcare reported.
A companion proposed rule (CMS‑9915‑P) will, if passed, require health plans and healthcare insurers to disclose covered healthcare costs to customers upon request, including “an estimate of such individual’s cost-sharing liability for covered items or services furnished by a particular provider.”
These rules have created a fire storm of controversy. Hospital systems and healthcare organizations like the American Hospital Association (AHA) argue that revealing payer-negotiated rates will undermine health networks’ negotiating power with insurers and increases hospital prices.
They may be right. But that hasn’t stopped one health
network in rural Ohio from providing a blueprint on price transparency that
could be a model for the rest of the nation—at least for one segment of its
customer base.
Bundled Care Packages Increase Revenues at Pomerene
Pomerene is a not-for-profit healthcare provider established
in 1919. Originally, the tiny hospital had “a six bed women’s ward, a three bed
men’s ward, six private rooms, a three bed OB ward, and a nursery with five
cribs. There were ten physicians on staff,” notes the hospital’s website.
Today, Pomerene has more than 325 employees, 80 physicians, and 55 licensed beds. The hospital has 30 departments on three floors and is one of the largest employers in Holmes County.
Pomerene has developed bundled care packages for more than 300 services—including inpatient care—for Amish and Anabaptist patients, as well as any other self-pay patients who pay their bills in full at the time of service, Modern Healthcare reported.
The initiative came in response to concerns raised by the
area’s Amish and Anabaptist communities, which make up roughly 40% of the
county’s population. They do not use commercial health insurance. Instead, they
pay their medical bills out of pocket, and when they are unable to pay for
medical services, benefit actions and church support fill the financial gaps.
Church members asked Pomerene for guaranteed bundled pricing.
They did not want the uncertainty of hospital bills that might include lists of
itemized charges, but not professional fees and other potential costs.
“We have our own healthcare,” a retired Amish carpenter (who asked that his name not be used) told Reuters. “They (hospitals) give you a bill. If you can’t pay it, your church will.”
Both religious groups also value thriftiness and are known
to be fierce negotiators. In recent years, they lobbied Pomerene Hospital to
include inpatient care in its all-inclusive pricing structure.
“We assume a certain level of risk with this financial arrangement,” Pomerene Hospital CEO Jason Justus, who at the time was Pomerene’s Chief Financial Officer, told Modern Healthcare. “But it’s about saying what we’ll do and doing what we say. That builds a great deal of trust in the community.” Justus took over as CEO in July, 2019, reported The Daily Record.
Jason Justus, CEO, is shown above to the right of Tony Snyder, former CEO of Pomerene Hospital until July of 2019. Initially, Snyder was concerned that posting the hospital’s prices would discourage the Amish from seeking care at his hospital. “They are shrewd business folks, they are price sensitive, and they will shop,” he told Modern Healthcare. “They don’t expect you to lose money, but they don’t want to be paying exorbitant margins.” Fortunately, price transparency had the opposite effect. “We were holding our breath,” Justus said. “We were optimistic it would work, and we were pleasantly surprised when it did.” (Photo copyright: The Daily Record.)
In total, nearly one-quarter of the hospital’s patient revenue comes from bundled-service packages, with 3,387 packages provided last year, Modern Healthcare reported. In 2018, Pomerene brought in $36,971,931 in operating revenue, according to Modern Healthcare Metrics.
Bundled Payments Drive Innovation
Bundled payments also have forced hospital administrators and staff at Pomerene to find innovative ways to cut costs by shortening patient stays. For example, Modern Healthcare reported that the length of hospital stay for childbirth, which at the time averaged two-to-four days, dropped to 24 hours after the hospital created a 24-hour package for obstetrical deliveries. Within 18 months, 80% of childbirth cases fit the 24-hour model.
“Here is free market economics at work,” said Robert Michel,
Dark Daily’s Editor-in-Chief. “This hospital understands that it must
meet the needs of this unique group of patients with good service and quality
at a fair price. That understanding comes with an incentive for the hospital’s
staff to identify and implement innovations to cut costs while improving
quality.”
However, Pomerene Hospital’s policy of disclosing prices to patients in advance of services remains uncommon in the healthcare industry. “Outside of Medicare, bundled pricing is rare-to-nonexistent among full-service US hospitals, most of which say they don’t know their actual costs for providing care and, therefore, can’t offer such prices,” Modern Healthcare stated.
For competitive reasons, Pomerene does not publicly post its
package prices and only prospective cash-paying patients are provided the cost
breakdowns. That will most likely change following enactment of the CMS final
rule.
Other Health Systems That Bundled Prices
Though Pomerene does not shares its price-packaging methods
with other hospitals, its track record for attracting cash-paying patients made
it an example to other hospitals serving similar religious communities.
The Medical Center at Scottsville in Kentucky followed Pomerene’s lead and discounted cash prices—paid upfront or before discharge—by 25% for 300 medical services, including childbirth and common surgical procedures. This was to attract the area’s Mennonite population, noted Quartz magazine.
“I will tell you they are very conscientious about cost.
They are very business-savvy and will shop around,” Eric Hagan, Regional
Vice President of Operations at Med
Center Health and Administrator of the Medical Center at Scottsville, told Quartz.
Will Americans as a whole be just as eager to shop for
medical services? The answer to that question may determine whether increased
price transparency throughout healthcare, including clinical laboratory testing
and anatomic pathology services, results in lowering their healthcare costs.
Many other healthcare systems also are partnering with private genetic testing companies to pursue research that drive precision medicine goals
It is certainly unusual when a major health network announces that it will give away free genetic tests to 10,000 of its patients as a way to lay the foundation to expand clinical services involving precision medicine. However, pathologists and clinical laboratory managers should consider this free genetic testing program to be the latest marketplace sign that acceptance of genetic medicine continues to move ahead.
Notably, it is community hospitals that are launching this
new program linked to clinical laboratory research that uses genetic tests for
specific, treatable conditions. The purpose of such genetic research is to
identify patients who would benefit from test results that identify the best
therapies for their specific conditions, a core goal of precision medicine.
Clinical laboratory leaders will be interested in this
initiative, as well other partnerships between healthcare systems and private
genetic testing companies aimed at identifying and enrolling patients in
research studies for disease treatment protocols and therapies.
The Future of Precision Medicine
Modern Healthcare reported that data from the WholeMe DNA study, which was funded through donations to the AdventHealth Foundation, also will be used by the healthcare network for research beyond FH, as AdventHealth develops its genomics services. The project’s cost is estimated to reach $2 million.
“Genomics is the future of medicine, and the field is rapidly evolving. As we began our internal discussions about genomics and how to best incorporate it at AdventHealth, we knew research would play a strong role,” Wes Walker MD, Director, Genomics and Personalized Health, and Associate CMIO at AdventHealth, told Becker’s Hospital Review.
“We decided to focus on familial hypercholesterolemia
screening initially because it’s a condition that is associated with
life-threatening cardiovascular events,” he continued. “FH is treatable once
identified and finding those who have the condition can lead to identifying
other family members who are subsequently identified who never knew they had
the disease.”
The AdventHealth Orlando website states that participants in the WholeMe study receive information stored in a confidential data repository that meets HIPAA security standards. The data covers ancestry and 22 other genetic traits, such as:
Asparagus Odor Detection
Bitter Taste
Caffeine Metabolism
Cilantro Taste Aversion
Circadian Rhythm
Coffee Consumption
Delayed Sleep
Earwax Type
Endurance vs Power
Exercise Impact on Weight
Eye Color
Freckling
Hair Curl and Texture
Hand Grip Strength
Height
Lactose Tolerance
Sleep Duration
Sleep Movement
Sleeplessness
Sweet Tooth
Tan vs. Sunburn
Waist Size
Those who test positive for a disease-causing FH variant will be referred by AdventHealth for medical laboratory blood testing, genetic counseling, and a cardiologist visit, reported the Ormond Beach Observer.
One in 250 people have FH, and 90% of them are undiagnosed,
according to the FH Foundation,
which also noted that children have a 50% chance of inheriting FH from parents
with the condition.
AdventHealth plans to expand the free testing beyond central
Florida to its 46 other hospitals located in nine states, Modern Healthcare
noted.
Other Genetics Data Company/Healthcare Provider Partnerships
Helix (above) is one of the world’s largest CLIA-certified, CAP-accredited next-generation sequencing labs. The partnership with AdventHealth offered study participants Exome+: a panel-grade medical exome enhanced by more than 300,000 informative non-coding regions; a co-branded ancestry + traits DNA product for all participants; secure storage of genomic data for the lifetime of the participant; infrastructure and data to facilitate research; and in-house clinical and scientific expertise, according to Helix’s website. (Photo copyright: Orlando Sentinel.)
Business Insider noted that Helix has focused on clinical partnerships for about a year and seems to be filling a niche in the genetic testing market.
“Helix is able to sidestep the costs of direct-to-consumer
marketing and clinical test development, while still expanding its customer
base through predefined hospital networks. And the company is in a prime
position to capitalize on providers’ interest in population health management,”
Business Insider reported.
Ochsner’s program is the first “fully digital population
health program” aimed at including clinical genomics data in primary care in an
effort to affect patients’ health, FierceHealthcare
reported.
Hereditary breast and ovarian cancer due to
mutations in BRCA1 and BRCA2 genes;
Lynch
syndrome, associated with colorectal and other cancers; and
FH.
Color also offers genetic testing and whole genome sequencing services to NorthShore’s DNA10K program, which plans to test 10,000 patients for risk for hereditary cancers and heart diseases, according to news release.
And, Jefferson Health offered Color’s genetic testing to the healthcare system’s 33,000 employees, 10,000 of which signed up to learn their health risks as well as ancestry, a Color blog post states.
“Understanding the genome warning signals of every patient will be an essential part of wellness planning and health management,” said Geisinger Chief Executive Officer David Feinberg, MD, when he announced the new initiative at the HLTH (Health) Conference in Las Vegas. “Geisinger patients will be able to work with their family physician to modify their lifestyle and minimize risks that may be revealed,” he explained. “This forecasting will allow us to provide truly anticipatory healthcare instead of the responsive sick care that has long been the industry default across the nation.”
It will be interesting to see how and if genetic tests—free
or otherwise—will advance precision medicine goals and population health
treatments. It’s important for medical laboratory leaders to be involved in health
network agreements with genetic testing companies. And clinical laboratories should
be informed whenever private companies share their test results data with
patients and primary care providers.
Researchers are discovering it’s possible to determine a person’s age based on the amount of protein in the blood, but the technology isn’t always correct
Mass spectrometry is increasingly finding its way into clinical laboratories and with it—proteomics—the study of proteins in the human body. And like the human genome, scientists are discovering that protein plays an integral part in the aging process.
This is a most interesting research finding. Might medical laboratories someday use proteomic biomarkers to help physicians gauge the aging progression in patients? Might this diagnostic capability give pathologists and laboratory leaders a new product line for direct-to-consumer testing that would be a cash-paying, fast-growing, profitable clinical laboratory testing service? If so, proteomics could be a boon to clinical laboratories worldwide.
When research into genomics was brand-new, virtually no one imagined that someday the direct-to-consumer lab testing model would offer genetic testing to the public and create a huge stream of revenue for clinical laboratories that process genetic tests. Now, research into protein and aging might point to a similar possibility for proteomics.
For example, through proteomics, researchers led by Benoit Lehallier, PhD, Biostatistician, Instructor of Neurology and Neurological Sciences, and senior author Tony Wyss-Coray, PhD, Professor of Neurology and Neurological Sciences and co-director of the Stanford Alzheimer’s Disease Research Center at Stanford University in California, gained an understanding of aging that suggest intriguing possibilities for clinical laboratories.
In their study, published in Nature, titled, “Undulating Changes in Human Plasma Proteome Profiles Across the Lifespan,” the scientists stated that aging doesn’t happen in a consistent process over time, reported Science Alert.
The Stanford researchers also found that they can accurately
determine a person’s age based on the levels of certain proteins in his or her
blood.
Additionally, the study of proteomics may finally explain why blood from young people can have a rejuvenating effect on elderly people’s brains, noted Scientific American.
Each of these findings is important on its own, but taken
together, they may have interesting implications for pathologists who follow
the research. And medical laboratory leaders may find opportunities in mass
spectrometry in the near future, rather than decades from now.
Three Distinct Stages in Aging and Other Findings
The Stanford study found that aging appears to happen at
three distinct points in a person’s life—around the ages 34, 60, and 78—rather
than being a slow, steady process.
The researchers measured and compared levels of nearly 3,000
specific proteins in blood plasma taken from healthy people between the ages of
18 and 95 years. In the published study, the authors wrote, “This new approach
to the study of aging led to the identification of unexpected signatures and
pathways that might offer potential targets for age-related diseases.”
Along with the findings regarding the timeline for aging, the researchers found that about two-thirds of the proteins that change with age differ significantly between men and women. “This supports the idea that men and women age differently and highlights the need to include both sexes in clinical studies for a wide range of diseases,” noted a National Institutes of Health (NIH) report.
“We’ve known for a long time that measuring certain proteins in the blood can give you information about a person’s health status—lipoproteins for cardiovascular health, for example,” stated Wyss-Coray in the NIH report. “But it hasn’t been appreciated that so many different proteins’ levels—roughly a third of all the ones we looked at—change markedly with advancing age.”
Tony Wyss-Coray, PhD (above), Professor of Neurology and Neurological Sciences at Stanford University, was senior author of the proteomics study that analyzed blood plasma from 4,263 people between the ages 18-95. “Proteins are the workhorses of the body’s constituent cells, and when their relative levels undergo substantial changes, it means you’ve changed, too,” he said in a Stanford Medicine news article. “Looking at thousands of them in plasma gives you a snapshot of what’s going on throughout the body.” (Photo copyright: Stanford University.)
Differentiating Aging from Disease
Previous research studies also found it is indeed possible
to measure a person’s age from his or her “proteomic signature.”
The researchers published their findings in Aging Cell, a peer-reviewed open-access journal of the Anatomical Society in the UK, titled, “Plasma Proteomic Signature of Age in Healthy Humans.” In it, the authors wrote, “Our results suggest that there are stereotypical biological changes that occur with aging that are reflected by circulating proteins.”
The fact that chronological age can be determined through a
person’s proteomic signature suggests researchers could separate aging from
various diseases. “Older age is the main risk factor for a myriad of chronic
diseases, and it is invariably associated with progressive loss of function in
multiple physiological systems,” wrote the researchers, adding, “A challenge in
the field is the need to differentiate between aging and diseases.”
Can Proteins Cause Aging?
Additionally, the Stanford study found that changes in protein levels might not simply be a characteristic of aging, but may actually cause it, a Stanford Medicine news article notes.
“Changes in the levels of numerous proteins that migrate
from the body’s tissues into circulating blood not only characterize, but quite
possibly cause, the phenomenon of aging,” Wyss-Coray said.
Can Proteins Accurately Predict Age? Not Always
There were, however, some instances where the protein levels inaccurately predicted a person’s age. Some of the samples the Stanford researchers used were from the LonGenity research study conducted by the Albert Einstein College of Medicine, which investigated “why some people enjoy extremely long life spans, with physical health and brain function far better than expected in the 9th and 10th decades of life,” the study’s website notes.
That study included a group of exceptionally long-lived Ashkenazi Jews, who have a “genetic proclivity toward exceptionally good health in what for most of us is advanced old age,” according to the Stanford Medicine news article.
“We had data on hand-grip strength and cognitive function
for that group of people. Those with stronger hand grips and better measured
cognition were estimated by our plasma-protein clock to be younger than they
actually were,” said Wyss-Coray. So, physical condition is a factor in
proteomics’ ability to accurately prediction age.
Although understanding the connections between protein in
the blood, aging, and disease is in early stages, it is clear additional
research is warranted. Not too long ago the idea of consumers having their DNA
sequenced from a home kit for fun seemed like fantasy.
However, after multiple FDA approvals, and the success of
companies like Ancestry, 23andMe, and the clinical laboratories that serve them,
the possibility that proteomics might go the same route does not seem so
far-fetched.
Experts say Amazon could be planning a roll-out of healthcare services to its Prime members and others
Clinical laboratory leaders will want to note that the Telehealth and home healthcare industries have expanded with the launch of Amazon Care, a virtual medical clinic and home care services program from global retailer Amazon.com, Inc. (NASDAQ:AMZN).
Amazon is piloting Amazon Care as a benefit for its 53,000
Seattle-area employees and their families, according to published reports. Could
this indicate the world’s largest online retailer is moving into the primary
care space? If so, clinical laboratory leaders will want to follow this
development closely, because the program will need clinical laboratory support.
Amazon has successfully disrupted multiple industries in its
corporate life and some experts speculate Amazon may be using its own employees
to design a new medical delivery model for national roll-out.
The S&P report goes on to state, “In as little as five years, the Seattle-based e-commerce company could interlink its system of capabilities and assets to launch various healthcare products, insurance plans, virtual care services, and digital health monitoring to a broader population. The rollout would be part of a larger plan by Amazon to deliver convenient, cost-effective access to care and medications across the U.S., likely tied to Amazon’s Prime membership program, according to experts.”
Modern Healthcare reported that Amazon Care services include telemedicine and home visits to employees enrolled in an Amazon health insurance plan.
Experts contacted by S&P Global Market Intelligence
suggest Amazon:
Plans a “suite of customized health plans and
services for businesses and consumers;”
May offer health services to its five million
seller business and more than 100 million Amazon Prime members; and
Sees healthcare as a growing market and wants
greater involvement in it.
How Amazon Care Works
Amazon Care offers online, virtual care through a
downloadable mobile device application (app) as well as in-person home care for
certain medical needs, such as:
Colds, allergies, infections, and minor injury;
Preventative consults, vaccines, and lab tests;
Sexual health services; and
General health inquiries.
Becker’s Hospital Review reported that once a participant downloads the Amazon Care app to a smartphone or tablet and signs up for the program, he or she can:
Communicate with healthcare providers via text
or video;
Plan personal visits if needed;
Set payment methods in their user profile; and
Receive a “potential diagnosis” and treatment
plan.
The graphic above is taken from the S&P Global Market Intelligence report, which states, “Amazon is one of several tech firms vying for a share of the healthcare market where national spending is expected to reach $6.0 trillion by 2027, up from $3.6 trillion in 2018, according to the Centers for Medicare and Medicaid Services.” (Graphic copyright: S&P Global Market Intelligence.)
“The service eliminates travel and wait time, connecting employees and their family members to a physician or nurse practitioner through live chat or voice,” an Amazon spokesperson told CNBC, “with the option for in-person follow-up services from a registered nurse ranging from immunizations to instant strep throat detection.”
The “mobile health nurse” may also collect clinical laboratory
specimens, the Verge
reported.
Amazon has partnered with Oasis Medical Group, a family primary care practice in Seattle, to provide healthcare services for Amazon Care patients.
Paving the Way to Amazon Care
The Healthcare Financial Management Association (HFMA) compares Amazon’s piloting of Amazon Care to similar healthcare projects that studied population health by first involving employee health plans.
HFMA’s analysis noted that Amazon Care is similar to Haven, a patient advocate organization based in Boston and New York that was created in 2018 by Amazon, JPMorgan Chase, and Berkshire Hathaway to lower healthcare costs and improve outcomes for participating companies.
Tech Crunch reported that in 2018 Amazon also purchased PillPack for nearly $1 billion and integrated its prescription delivery services into Amazon Care.
More recently, Amazon acquired Health Navigator and plans to bring those offerings to Amazon Care as well, CNBC reported. Founded in 2014, Health Navigator provides caregivers with symptom-checking tools that enable remote diagnoses.
Should Telemedicine Firms Be Nervous?
Dark Daily recently reported on Doctor on Demand’s launch of its own virtual healthcare telehealth platform called Synapse. The e-briefing also covered Doctor on Demand’s partnership with Humana (NYSE:HUM) to provide virtual primary care services to the insurer’s health plan members, including online doctor visits at no charge and standard medical laboratory tests for a $5 copayment.
So, should telemedicine firms be concerned about Amazon competing in their marketplace? Business Insider predicts Amazon will need time to beef up its medical resources to serve people online and in-person through Amazon Care.
But that’s the point of Amazon’s pilot, isn’t it? What comes
from it will be interesting to watch.
“Meanwhile, telemedicine firms can ink strategic
partnerships and strengthen their existing payer relationships to safeguard
against Amazon’s surge into the space,” Business Insider advised.
It remains to be seen how medical laboratory testing and reports
would fit into an expanded Amazon Care health network. Or, how clinical laboratories
will get “in-network” with Amazon Care, as it grows to serve customers beyond
Amazon’s employees.
As Dark Daily recently advised, medical laboratory leaders will want to ensure their lab’s inclusion in virtual care networks, which someday may include Amazon Care.
In a federal lawsuit, seven healthcare organizations and hospitals systems allege HHS exceeded its statutory authority and clinical laboratories will want to watch how this court case unfolds
There is quite a brouhaha over the final new federal rule requiring hospitals to allow patients and the public to see the prices they charge for services—including clinical laboratory and anatomic pathology prices. Some very influential hospital associations and healthcare systems are opposing implementation of this rule.
For more than a decade, Dark Daily has
reported on the federal government’s efforts to enact pricing transparency in
healthcare. In many e-briefings, we advised pathologists
and medical
laboratory leaders that the outcome of those efforts will likely affect
clinical laboratory workflows and bottom lines, and that many clinical laboratories
are not prepared to negotiate directly with customers over the price of their
services.
Now, the federal Centers for Medicare and Medicaid Services
(CMS) has passed a final
rule (CMS-1717-F2) that expands on an earlier rule mandating pricing
transparency for hospital procedures—including medical
laboratory and anatomic
pathology services. This new rule requires hospitals to disclose not only
their chargemaster
prices, but also prices negotiated with payers.
Hospital leaders are not pleased by this, and though the
final rule does not go into effect until January 1, 2021, they are already
pushing back through representative organizations such as the American Hospital Association (AHA), which has
brought a lawsuit to federal court that seeks to overturn the new rule.
New Transparency Rules Include Rates Negotiated with Health
Insurers
Beginning Jan. 1, 2019, CMS required hospitals to disclose chargemaster prices to customers. These are essentially the “list prices” for hospital procedures. However, as Dark Daily reported in “California Healthline Report Finds Hospital Chargemaster Prices Fluctuate Dramatically Even Among Hospitals Located Near Each Other,” June 12, 2019, there were problems. Chargemaster prices typically do not reflect the actual fees charged to patients or payers. Thus, consumers still found it problematic to price shop before committing to healthcare.
In an effort to remedy this, the
new 2020 final rule expands the pricing information hospitals are required to
provide and includes several categories of prices negotiated with health insurers.
Simultaneous to this final rule, CMS also announced a
proposed rule (CMS-9915-P) titled, “Transparency
in Coverage,” that if passed, will require health insurers to disclose
pricing for healthcare services as well.
In a federal Department of Health and Human Services (HHS) press
release, the Trump Administration stated that both rules will “increase
price transparency to empower patients and increase competition among all
hospitals, group health plans, and health insurance issuers in the individual
and group markets.”
“Under the status quo, healthcare prices are about as clear
as mud to patients,” said CMS Administrator Seema Verma in the HHS press
release. “This final rule and the proposed rule will bring forward the
transparency we need to finally begin reducing the overall healthcare costs.”
AHA Sues HHS in Federal Court
In response, four hospital organizations and three health
systems filed a
lawsuit in federal court against the HHS. The suit alleges the final rule
“exceeds the agency’s statutory authority,” and violates the First Amendment by
requiring public disclosure of prices negotiated with payers. This information,
they say, is “highly confidential and commercially sensitive.”
In court
documents, the plaintiffs argue that “the Final Rule is arbitrary and
capricious and lacks any rational basis. The agency’s explanation for the Final
Rule runs counter to both logic and evidence. In fact, it is belied by the
agency’s own research regarding what patients care about most when selecting a
hospital: their own out-of-pocket costs. The agency’s justification for the
Final Rule therefore does not stand up to even the barest of scrutiny. That is
the epitome of arbitrary and capricious agency action.”
A brief
filed by the plaintiffs contends that patients’ actual out-of-pocket costs
are determined by a complex set of factors and aren’t reflected in negotiated
rates. In addition, the brief states, “the sheer burden of compliance with the
rule is staggering, and way out of line with any projected benefits associated
with the rule.”
Charles N. Kahn III (above), President and CEO, Federation of American Hospitals (FAH), said in an AHA press release that, “CMS’ final rule fails to offer patients easy-to-understand information regarding their out-of-pocket obligations for care, so we feel obligated to contest the regulation. We contend the agency exceeded its authority and should go back to the drawing board.” (Photo copyright: FAH.)
Details of the Final Rule on Hospital Price Transparency
If it goes forward, starting Jan. 1, 2021, the final rule
requires hospitals to disclose five types of standard charges, according to the
HHS and AHA press releases:
The chargemaster rate, also known as the gross
charge;
The discounted cash price, which CMS defines as
the amount the hospital will accept from self-paying patients;
The payer-specific negotiated charge, defined as
“the charge that the hospital has negotiated with a third-party payer for an
item or service.” This would be the charge that applies if a patient uses an
in-network provider;
The maximum charge negotiated with payers; and
The minimum charge negotiated with payers.
Hospitals must list these charges for all billable “items
and services,” including medical laboratory and pathology services, in a
machine-readable format, such as a CSV file that
can be opened in a spreadsheet program.
In addition, they must provide a “consumer-friendly” list of charges for at least 300 “shoppable services,” defined as services that consumers can schedule in advance. Each list would include 70 services specified by CMS and an additional 230 services selected by the hospital.
The CMS-specified shoppable services include 14 laboratory
and pathology tests. They include:
Basic metabolic panel
Blood test, comprehensive group of blood
chemicals
Obstetric blood test panel
Blood test, lipids (cholesterol and triglycerides)
Kidney function panel test
Liver function blood test panel
Manual urinalysis test with examination using
microscope
Automated urinalysis test
PSA (prostate specific antigen)
Blood test, thyroid stimulating hormone (TSH)
Complete blood cell count, with differential
white blood cells, automated
Complete blood count, automated
Blood test, clotting time
Coagulation assessment blood test
Blood Brother Clinical Laboratories Also Affected by
Price Transparency
Price transparency is also at the center of two federal
lawsuits involving Laboratory Corporation of America (LabCorp) and Quest
Diagnostics. The Dark Report, Dark Daily’s sister publication, reported
on these suits in “Lawsuits
Alleging Overcharges to Proceed in Two Courts in 2020,” December 16, 2019.
The plaintiffs in those cases are uninsured or underinsured
customers who claim they were charged far more for medical laboratory tests
than customers covered by insurance. In both cases, customers were charged at
the chargemaster rates. The plaintiffs contend that the medical laboratories
should have disclosed their rates in advance.
Whichever way this all goes, clinical laboratories will need
to monitor the multiple efforts by the states and the federal government to
make it easy for patients to see the prices of hospital, physician, and other
medical services in advance of treatment. This has the potential to be a disruptive
trend, particularly for hospitals.
The software applications (apps) and hardware monitoring devices involved in digital therapeutics enable physicians and patients to target and alter specific behaviors that affect certain medical conditions, such as substance abuse or depression. Combined with or without drugs, digital therapeutics are achieving positive results, according to the United Kingdom’s PwC (PricewaterhouseCoopers) Health Research Institute (PwC HRI).
The report goes on to state that digital therapeutics “is
reshaping the landscape for new medicines, product reimbursement and regulatory
oversight … [and that] new data sharing processes and payment models will be
established to integrate these products into the broader treatment arsenal and
regulatory structure for drug and device approvals.
“Connected health services,” the report continues, “enabled by devices that transmit data or connect to the Internet, give additional visibility into care delivery and new ways to improve patient outcomes.”
Digital therapeutics combine apps and monitoring devices for
the management and treatment of medical conditions. While similar to customer
wellness apps, digital therapeutics focus on specific clinical outcomes.
The non-profit Digital Therapeutics Alliance says that, unlike common “wellness” apps, digital therapeutics “possess the unique ability to incorporate additional functionalities into a comprehensive portfolio of synchronous products and services. This includes potential integration with mobile health platforms; the provision of complementary diagnostic or adherence interventions; the ability to pair with devices, sensors, or wearables; the delivery of interventions remotely; and integration into electronic prescribing, dispensing, and medical record platforms.”
“Digital therapeutics are the next frontier,” Sai Jasti, Chief Data and Analytics Officer, GlaxoSmithKline (NYSE:GSK), told PwC HRI. “I think we will see a lot more collaboration between pharmaceutical and technology companies to drive this forward, ultimately to the benefit of patients.”
Digital Therapeutics That Already Have FDA Approval
Digital therapeutics and their connected devices are subject
to the approval process of the federal Food and Drug Administration (FDA), and
some have already received that coveted clearance:
reSET from Pear Therapeutics is a 90-day prescription digital therapeutic (PDT) for substance use disorder (SUD). The Boston-based company also worked with Sandoz Inc., a division of Novartis, to receive FDA approval for reSET-O, a PDT for treating individuals with Opioid Use Disorder (OUD).
“Digital technologies and data science have incredible potential to unlock the next chapter of medical innovation and to help individuals finally take control of their own health in a meaningful way,” said Richard Francis, Division Head and CEO, Sandoz, in a press release. “New digital therapeutics such as reSET-O also have the potential to fundamentally change how patients interact with their therapies and thus improve patient outcomes.”
Both reSET and reSET-O are software mobile apps that use cognitive behavioral therapy (CBT) to help individuals struggling with addictions.
“Nearly 50,000 drug overdose deaths involving opioids, including prescription pain medications and heroin, took place in the U.S. in 2017,” said Corey McCann, MD, PhD, President and CEO of Pear Therapeutics, in the press release following receiving FDA approval. “There is an urgent need for new and innovative therapeutics to address this public health epidemic. This groundbreaking decision by the FDA ushers in a new standard for treating patients with Opioid Use Disorder and it signals a new path for therapeutic software to be used in conjunction with pharmacotherapy to improve efficacy.”
Natural
Cycles is a birth control app created by a Sweden-based company of the same
name. It was approved by the FDA in 2018. This mobile app helps women track
their fertility to prevent unwanted pregnancies via the rhythm method. The app
analyzes data from past menstrual cycles and body temperature readings to
determine when the user is most fertile. On the days the user is most likely to
be ovulating, the app displays “Use Protection” on the mobile device’s screen.
“We know that women are more likely to use contraceptive methods when they have a variety of methods available to them, and the reality is that not every method is going to work for every woman,” Rebecca Simmons, PhD, Research Assistant Professor, Department of Obstetrics and Gynecology, University of Utah, told Health. “This is really exciting, in the sense that the more methods we have, the more likely it is that people can find something that works for them—and then can avoid unwanted pregnancy.”
Apple, headquartered in Cupertino, Calif., received FDA clearance in 2018 for an electrocardiogram (ECG) app for its Apple Watch Series 4 that allows users to take an ECG from their wrist to detect irregular heart rhythms and atrial fibrillation (AFIB).
“The role that technology plays in allowing patients to capture meaningful data about what’s happening with their heart—at the moment when it’s happening, like the functionality of an on-demand ECG—could be significant in new clinical care models and shared decision-making between people and their healthcare providers,” said Nancy Brown, CEO of the American Heart Association, in a press release.
Patients, Providers, and Big Pharma All Like Digital
Therapeutics
There is some evidence that patients and healthcare
providers are intrigued and willing to try digital therapeutics. In a PwC HRI survey,
more than 50% of respondents said they “would be somewhat or very likely to try
an FDA-approved app or online tool for treatment of a medical condition.”
The graphic above is taken from the PwC HRI 2019 annual report on digital therapeutics and connected care. It shows that “a majority of consumers surveyed are interested in FDA approved digital apps or online tools to treat their medical conditions.” (Graphic copyright: PwC HRI.)
Pharmaceutical companies also are interested in digital therapeutics. A 2018 PwC HRI survey found that 80% of pharmaceutical executives had plans to invest in digital therapeutics in the near future.
With precision medicine and pharmacogenetics, clinical laboratories
could play an essential role in supporting digital therapeutics in the future. But
to truly be competitive in this space and take advantage of the opportunity, medical
laboratories will need to increase their information technology and digital
capabilities.
