Apr 20, 2018 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
Though ACA reforms may have slowed healthcare spending, rapidly increasing deductibles and cost sharing requirements have many experts questioning if patients can afford care at all, despite the increased availability of insurance coverage
Much of the debate surrounding efforts to replace and repeal the Affordable Care Act (ACA) has centered on premiums as a central facet of out-of-pocket spending. However, new data from a Kaiser Family Foundation (KFF) survey reveals that premiums are only one factor affecting consumers’ ability to pay healthcare bills. High-deductible health plans (HDHPs) are another culprit. This directly impacts clinical laboratories and anatomic pathology groups that find revenues down as more American’s avoid costs by delaying or opting out of testing and treatments.
The KFF report highlights both the complexity of managing healthcare costs and how the current focus on premium prices might miss other important considerations that make healthcare inaccessible to many Americans.
High Deductibles and Consumers’ Lack of Savings
An increasing number of insurance plans now include high deductibles—particularly in the individual markets, though employer-based insurance plans are experiencing steady increases as well.
This leaves consumers facing larger bills and making tough decisions about whether their healthcare is affordable—even with insurance.
When healthcare consumers cannot afford the out-of-pocket costs of healthcare, they are less likely to schedule wellness visits, adhere to treatments, or follow through on physician-ordered clinical laboratory tests they don’t consider essential to their well-being or simply cannot afford.
Even when they follow protocols and recommendations, that does not mean patients will be able to pay medical laboratories for tests performed, or anatomic pathology groups for specialized services, when the bill comes due.
The Ever-Growing Deductible Dilemma
In its 2017 study, “Do Health Plan Enrollees have Enough Money to Pay Cost Sharing?,” the KFF compares median data on liquid assets from 6,254 single and multi-person households—spanning a range of incomes and age brackets—to the average cost of both standard employer-based insurance and individual market insurance deductibles.
They further note that their data modeling and estimates present a “conservative estimate,” because chronic conditions might cause an extended period of out-of-pocket spending, and that median assets might not be available at a single time or throughout the year.
Concerning a previous 2016 KFF study on high-deductible insurance plans, the authors noted in a press release, “In 2016, 83% of covered workers face a deductible for single coverage, which averages $1,478. That’s up $159 or 12% from 2015, and $486 or 49% since 2011. The average deductible for workers who face one is higher for workers in small firms (three to 199 employers) than in large firms ($2,069 vs. $1,238).”
In the press release following KFF’s 2016 survey, Drew Altman, CEO (above), Kaiser Family Foundation, noted, “We’re seeing premiums rising at historically slow rates, which helps workers and employers alike, but it’s made possible in part by the more rapid rise in the deductibles workers must pay.” (Image copyright: Kaiser Family Foundation.)
In their latest look at deductibles and out-of-pocket spending, the KFF study authors note, “About half (53%) of single-person non-elderly households could pay the $2,000 from their liquid assets towards cost sharing, and only 37% could pay $6,000, which … was less than the maximum out-of-pocket limit for single coverage in 2016. For multi-person families, 47% could pay $4,000 from their liquid assets for cost sharing, while only 35% could pay $12,000.”
This sets the stage for the grim picture now facing many Americans. Despite increased access to medical insurance, being able to use the insurance to obtain care can be a struggle for a sizeable part of the lower to middle class population.
Creating a More Affordable Future for Healthcare
Data from the Q1 National Health Interview Survey (NHIS) conducted by the Centers for Disease Control and Prevention (CDC) show that growth in high-deductible plans might skew these numbers further still. They found that the number of persons under the age of 65 enrolled in HDHPs increased from 25.3% in 2010 to 40.0% in the first quarter of 2016 despite uninsured rates dropping from 22.3% to 11.9% over the same period.
In the 2017 study, KFF outlines the complexity of the issue: “There are significant differences across the income spectrum … For example, 63% of multi-person households with incomes of 400% of poverty or more could pay $12,000 from liquid assets for cost sharing, compared with only 18% of households with incomes between 150% and 400% of poverty, and 4% of households with incomes below 150% of poverty.”
While there are no simple answers to address today’s increasing deductibles, KFF emphasizes the importance of looking at the bigger picture.
“Much of the discussion around affordability has centered on premium costs. A broader notion of affordability will have to focus on the ability of families,” they note. “To adequately address the issue of affordability of health insurance, reform proposals should be evaluated on the affordability of out-of-pocket costs, especially for low and moderate-income families, and be sensitive to the financial impacts that high cost sharing will have on financial wellbeing.”
In the meantime, lack of access to preventative care and regular checkups can increase long-term healthcare costs and health risks, creating a spiral of financial concerns for patients as well as the healthcare professionals and the clinical laboratories serving them.
—Jon Stone
Related Information:
The Biggest Health Issue We Aren’t Debating
Do Health Plan Enrollees Have Enough Money to Pay Cost Sharing?
Average Annual Workplace Family Health Premiums Rise Modest 3% to $18,142 in 2016; More Workers Enroll in High-Deductible Plans with Savings Option Over Past Two Years
Americans Are Facing Rising Out-of-Pocket Healthcare Costs—Here’s Why
Americans’ Out-of-Pocket Healthcare Costs Are Skyrocketing
Americans Are Shouldering More and More of Their Healthcare Costs
Medicare Out-of-Pocket Costs Seen Rising to Half of Senior Income
Consumer Reaction to High-Deductible Health Plans and Rising Out-of-Pocket Costs Continues to Impact Physicians and Clinical Laboratories
Because of Sizeable Deductibles, More Patients Owe More Money to Clinical Pathology Laboratories, Spurring Labs to Get Smarter about Collecting from Patients
Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service
Apr 18, 2018 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Three innovative technologies utilizing CRISPR-Cas13, Cas12a, and Cas9 demonstrate how CRISPR might be used for more than gene editing, while highlighting potential to develop new diagnostics for both the medical laboratory and point-of-care (POC) testing markets
CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats) is in the news again! The remarkable genetic-editing technology is at the core of several important developments in clinical laboratory and anatomic pathology diagnostics, which Dark Daily has covered in detail for years.
Now, scientists at three universities are investigating ways to expand CRISPR’s use. They are using CRISPR to develop new diagnostic tests, or to enhance the sensitivity of existing DNA tests.
One such advancement improves the sensitivity of SHERLOCK (Specific High Sensitivity Reporter unLOCKing), a CRISPR-based diagnostic tool developed by a team at MIT. The new development harnesses the DNA slicing traits of CRISPR to adapt it as a multifunctional tool capable of acting as a biosensor. This has resulted in a paper-strip test, much like a pregnancy test, that can that can “display test results for a single genetic signature,” according to MIT News.
Such a medical laboratory test would be highly useful during pandemics and in rural environments that lack critical resources, such as electricity and clean water.
One Hundred Times More Sensitive Medical Laboratory Tests!
Co-lead authors Jonathan Gootenberg, PhD Candidate, Harvard University and Broad Institute; and Omar Abudayyeh, PhD and MD student, MIT, published their findings in Science. They used CRISPR Cas13 and Cas12a to chop up RNA in a sample and RNA-guided DNA binding to target genetic sequences. Presence of targeted sequences is then indicated using a paper-based testing strip like those used in consumer pregnancy tests.
MIT News highlighted the high specificity and ease-of-use of their system in detecting Zika and Dengue viruses simultaneously. However, researchers stated that the system can target any genetic sequence. “With the original SHERLOCK, we were detecting a single molecule in a microliter, but now we can achieve 100-fold greater sensitivity … That’s especially important for applications like detecting cell-free tumor DNA in blood samples, where the concentration of your target might be extremely low,” noted Abudayyeh.
“The [CRISPR] technology demonstrates potential for many healthcare applications, including diagnosing infections in patients and detecting mutations that confer drug resistance or cause cancer,” stated senior author Feng Zhang, PhD. Zhang, shown above in the MIT lab named after him, is a Core Institute Member of the Broad Institute, Associate Professor in the departments of Brain and Cognitive Sciences and Biological Engineering at MIT, and a pioneer in the development of CRISPR gene-editing tools. (Photo copyright: MIT.)
Another unique use of CRISPR technology involved researchers David Liu, PhD, and Weixin Tang, PhD, of Harvard University and Howard Hughes Medical Institute (HHMI). Working in the Feng Zhang laboratory at the Broad Institute, they developed a sort of “data recorder” that records events as CRISPR-Cas9 is used to remove portions of a cell’s DNA.
They published the results of their development of CRISPR-mediated analog multi-event recording apparatus (CAMERA) systems, in Science. The story was also covered by STAT.
“The order of stimuli can be recorded through an overlapping guide RNA design and memories can be erased and re-recorded over multiple cycles,” the researchers noted. “CAMERA systems serve as ‘cell data recorders’ that write a history of endogenous or exogenous signaling events into permanent DNA sequence modifications in living cells.”
This creates a system much like the “black box” recorders in aircraft. However, using Cas9, data is recorded at the cellular level. “There are a lot of questions in cell biology where you’d like to know a cell’s history,” Liu told STAT.
While researchers acknowledge that any medical applications are in the far future, the technology holds the potential to capture and replay activity on the cellular level—a potentially powerful tool for oncologists, pathologists, and other medical specialists.
Using CRISPR to Detect Viruses and Infectious Diseases
Another recently developed technology—DNA Endonuclease Targeted CRISPR Trans Reporter (DETECTR)—shows even greater promise for utility to anatomic pathology groups and clinical laboratories.
Also recently debuted in Science, the DETECTR system is a product of Jennifer Doudna, PhD, and a team of researchers at the University of California Berkeley and HHMI. It uses CRISPR-Cas12a’s indiscriminate single-stranded DNA cleaving as a biosensor to detect different human papillomaviruses (HPVs). Once detected, it signals to indicate the presence of HPV in human cells.
Despite the current focus on HPVs, the researchers told Gizmodo they believe the same methods could identify other viral or bacterial infections, detect cancer biomarkers, and uncover chromosomal abnormalities.
Future Impact on Clinical Laboratories of CRISPR-based Diagnostics
Each of these new methods highlights the abilities of CRISPR both as a data generation tool and a biosensor. While still in the research phases, they offer yet another possibility of improving efficiency, targeting specific diseases and pathogens, and creating new assays and diagnostics to expand medical laboratory testing menus and power the precision medicine treatments of the future.
As CRISPR-based diagnostics mature, medical laboratory directors might find that new capabilities and assays featuring these technologies offer new avenues for remaining competitive and maintaining margins.
However, as SHERLOCK demonstrates, it also highlights the push for tests that produce results with high-specificity, but which do not require specialized medical laboratory training and expensive hardware to read. Similar approaches could power the next generation of POC tests, which certainly would affect the volume, and therefore the revenue, of independent clinical laboratories and hospital/health system core laboratories.
—Jon Stone
Related Information:
Multiplexed and Portable Nucleic Acid Detection Platform with Cas13, Cas12a, and Csm6
Rewritable Multi-Event Analog Recording in Bacterial and Mammalian Cells
CRISPR-Cas12a Target Binding Unleashes Indiscriminate Single-Stranded DNase Activity
Researchers Advance CRISPR-Based Tool for Diagnosing Disease
CRISPR Isn’t Just for Gene Editing Anymore
CRISPR’s Pioneers Find a Way to Use It as a Glowing Virus Detector
With New CRISPR Inventions, Its Pioneers Say, You Ain’t Seen Nothin’ Yet
New CRISPR Tools Can Detect Infections Like HPV, Dengue, and Zika
Breakthrough DNA Editing Tool May Help Pathologists Develop New Diagnostic Approaches to Identify and Treat the Underlying Causes of Diseases at the Genetic Level
CRISPR-Related Tool Set to Fundamentally Change Clinical Laboratory Diagnostics, Especially in Rural and Remote Locations
Harvard Researchers Demonstrate a New Method to Deliver Gene-editing Proteins into Cells: Possibly Creating a New Diagnostic Opportunity for Pathologists
Apr 16, 2018 | Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement, Management & Operations
Recent studies exploring the economics behind the high price of US healthcare independently point to the price of labor, goods, services, administrative costs, and pharmaceuticals as primary reason why the US spends almost twice as much as peer countries on healthcare
It is regularly reported that the cost of healthcare in the United States is notably more expensive that in most developed nations. Overutilization of medical services in this country is often given as a reason why this is true. But the findings of a new research study suggest that the reason healthcare in the US is expensive is not due to overutilization. Rather, it is because of the much higher prices American patients pay for services, including clinical laboratory testing.
This recent study contradicts the claims of some experts who say overutilization is to blame for the high cost of healthcare in the United States. The research was conducted by researchers at the Institute for Health Metrics and Evaluation (IHME) in Seattle and the UCLA David Geffen School of Medicine. They attribute the overarching factor in high healthcare costs not to high utilization of services—such as clinical laboratory and anatomic pathology testing—or increased rates of illness.
Instead, the researchers found that it’s simply a matter of higher prices for healthcare delivered in this nation, compared to other healthcare systems around the globe. This is what makes America’s healthcare system so expensive. And, lacking financial incentives for stakeholders to lower prices, these researchers suggest that continued high costs could negatively impact providers’ quality of care.
High Cost of Diagnostic Services, including Medical Laboratory Testing
The IHME/UCLA researchers published their findings in the Journal of the American Medical Association (JAMA), in which they argued that increases in US healthcare cost are independent of increases in:
- Disease prevalence;
- US population age;
- Use of healthcare services; or,
- Overall population size.
Joseph L. Dieleman, PhD, Assistant Professor at IHME and lead researcher on the investigation, stated, “After adjustments for price inflation, annual healthcare spending on inpatient, ambulatory, retail pharmaceutical, nursing facility, emergency department, and dental care increased by $933.5 billion between 1996 and 2013—from $1.2 trillion to $2.1 trillion.”
Data produced by the study identified one overlying factor in increased spending—increased prices. According to Dieleman, health spending in 2015 “reached $3.2 trillion and constituted 17.8% of the US economy.”
In an editorial response to Dieleman’s investigation, also published in JAMA, Patrick H. Conway, MD, MSc (above), President and CEO of Blue Cross Blue Shield of North Carolina in Durham, stated that “the United States is on an unsustainable growth path in terms of healthcare costs and must get costs under control.” He added that data from Dieleman’s study has important implications for quality of healthcare, which may include medical laboratory diagnostics. (Photo copyright: Duke University.)
Price Spirals and Artificial Price Hikes: No Real Incentive for Regulation
Pricing for medical care is notoriously opaque. Patients are often unaware of the cost of services until the bill arrives. This lack of transparency prevents patients from comparing prices between healthcare providers and medical laboratories.
To try and create some cost transparency for consumers, Conway noted that some states, such as Maryland and Vermont, have adopted multi-payer payment models or all-payer rate settings. However, there could be resistance to such reforms, according to some experts.
Health economist Austin Frakt, PhD; and Aaron E. Carroll, MD, MS, Vice Chair for Health Policy and Outcomes Research, and Director of the Center for Health Policy and Professionalism Research at Indiana University School of Medicine, co-authored a New York Times article that agrees with Conway’s assertion. In it, they state that attempts to create regulation for healthcare prices “would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies—and pretty much every other provider of healthcare in the United States.”
No Incentive to Lower the Prices of Medical Services
An opinion piece in the Wall Street Journal, Keith Lemer, CEO, WellNet Healthcare Group, shared a similar view. He stating that insurers and preferred provider organizations (PPOs) have no “natural incentive to keep provider prices down.” Lemer looks at the Affordable Care Act and its establishment of a medical loss ratio rule, which “requires insurers covering individuals and small businesses to spend at least 80 cents of every premium dollar on medical expenses.”
Lemer uses the cost of a routine blood test as an example, stating that when providers raise costs of such tests, “insurers can charge higher premiums, while also boosting the value of their 20% share,” which goes “towards administrative costs and profits.”
Lemer argues that the deck is stacked against consumers, and that the medical loss ratio “encourages insurers to ignore providers” artificial price hikes,” while attracting customers “with the promise of steep discounts through their PPO plans.” The resulting affect is what Lemer calls a “price spiral” that’s difficult to escape.
Higher Costs Do Not Equate to Better Care
A special JAMA communication from Irene Papanicolas, PhD, and other members of the Department of Health Policy and Management, Harvard T. H. Chan School of Public Health, Harvard Global Health Institute, and Department of Health Policy at the London School of Economics and Political Science, reports that higher US costs do not coincide with better care.
In comparison to 10 other high-income countries the US spends “approximately twice as much,” Papanicolas noted. She added that despite the higher spending in the US, the nation “performs poorly in areas such as healthcare coverage and health outcomes.”
To illustrate the difference in average costs, Papanicolas and colleagues listed “comparison prices” on a series of healthcare services between countries in 2013. For example, the price of a single computed tomography (CT) scan varies widely:
- $896 (US);
- $97 (Canada);
- $279 (Netherlands); and,
- $500 (Australia).
The high prices of clinical laboratory (AKA, pathology laboratory in Australia) diagnostics have already caused a sharp decline in the use of important imaging utilization and are at risk of affecting other aspects of clinical pathology, such as anatomic pathology (histopathology in AU) services.
PricewaterhouseCoopers (PwC) Health Research Institute’s annual medical cost report predicts 2018 medical costs will rise by 6.5% and that “price continues to be a major driver of healthcare costs” that are outpacing the economy. PwC recommends “increasing collaboration across the industry” to address the growing issue of rising medical costs and shift the burden of cost away from patients.
Clinical Laboratories Contribute to High Costs
Although US healthcare cost is a topic of intense conversation, little change may come if there is no incentive to change. Each of the recent JAMA published articles ends on the same repeated note: a plea for active debate among policy makers, healthcare providers, patients, insurers, and politicians, with the goal of decreasing healthcare costs, without sacrificing patient care.
This is also true for clinical laboratory and anatomic pathology stakeholders, which are critical aspects of the healthcare continuum, and therefore, contribute to the overall financial burden on healthcare consumers.
— Amanda Warren
Related Information:
Why the US Spends So Much More Than Other Nations on Healthcare
Healthcare Spending in the United States and Other High-Income Countries
Factors Associated with Increases in US Healthcare Spending, 1996-2013
Factors Associated with Increased US Healthcare Spending: Implications for Controlling Healthcare Costs (Editorial Response)
The Best Healthcare System in the World: Which One Would You Pick?
The Deception Behind Those In-Network Health ‘Discounts’
Medical Cost Trend: Behind the Numbers 2018
Apr 13, 2018 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations, News From Dark Daily
PwC’s list of 12 factors that will shape the healthcare landscape in 2018 calls attention to many new innovations Dark Daily has reported on that will impact how medical laboratories perform their tests
PwC’s Health Research Institute (HRI) issued its annual report, detailing the 12 factors expected to impact the healthcare industry the most in 2018. Dark Daily culled items from the list that will most likely impact clinical laboratories and anatomic pathology groups. They include:
How clinical laboratory leaders respond to these items could, in part, be determined by new technologies.
AI Is Everywhere, Including in the Medical Laboratory
Artificial intelligence is becoming highly popular in the healthcare industry. According to an article in Healthcare IT News, business executives who were polled want to “automate tasks such as routine paperwork (82%), scheduling (79%), timesheet entry (78%), and accounting (69%) with AI tools.” However, only about 20% of the executives surveyed have the technology in place to use AI effectively. The majority—about 75%—plan to invest in AI over the next three years—whether they are ready or not.
One such example of how AI could impact clinical laboratories was demonstrated by a recent advancement in microscope imaging. Researchers at the University of Waterloo (UW) developed a new spectral light fusion microscope that captures images in full color and is far less expensive than microscopes currently on the market.
“In medicine, we know that pathology is the gold standard in helping to analyze and diagnose patients, but that standard is difficult to come by in areas that can’t afford it,” Alexander Wong, PhD, one of the UW researchers, told CLP.
“The newly developed microscope has no lens and uses artificial intelligence and mathematical models of light to develop 3D images at a large scale. To get the same effect using current technologies—using a machine that costs several hundred thousand dollars—a technician is required to ‘stitch together’ multiple images from traditional microscopes,” CLP noted.
Healthcare Intermediaries Could Become Involved with Clinical Laboratory Data
Pricing is one of the biggest concerns for patients and government entities. This is a particular concern for the pharmaceutical sector. PwC’s report notes that “stock values for five of the largest intermediaries in the pharmacy supply chain have slumped in the last two years as demands for lower costs and better outcomes have intensified.”
Thus, according to PwC, pressure may come to bear on intermediaries such as Pharmacy Benefit Managers (PBMs) and wholesalers, to “prove value and success in creating efficiencies or risk losing their place in the supply chain.”
Similar pressures to lower costs and improve efficiency are at work in the clinical laboratory industry as well. Dark Daily reported on one such cost-cutting measure that involves shifting healthcare payments toward digital assets using blockchains. The technology digitally links trusted payers and providers with patient data, including medical laboratory test results. (See, “Blockchain Technology Could Impact How Clinical Laboratories and Pathology Groups Exchange Lab Test Data,” September 29, 2017.)
PwC’s latest report predicts 12 forces that will continue to impact healthcare, including clinical laboratories and anatomic pathology groups, in 2018. Click on the image of the cover above to access an online version of the report. (Photo copyright: PwC/Issuu.)
The Opioid Crisis Remains at the Forefront
Healthcare will continue to feel the impact of the opioid crisis, according to the PwC report. Medical laboratories will continue to be involved in the diagnosis and treatment of opioid addition, which has garnered the full attention of the federal government and has become a multi-million-dollar industry.
Security Remains a Concern
Cybersecurity will continue to impact every facet of healthcare in 2018. Healthcare IT News reported, “While 95% of provider executives believe their organization is protected against cybersecurity attacks, only 36% have access management policies and just 34% have a cybersecurity audit process.”
Patients are aware of the risks and are often skeptical of health information technology (HIT), Dark Daily reported in June of last year. Clinical laboratories must work together with providers and healthcare organizations to audit their security measures. Recognizing the importance of the topic, the National Independent Laboratory Association (NILA) has named cybersecurity for laboratory information systems (LIS) a focus area.
Patient Experience a Priority
Although there have been significant improvements in the area of administrative tasks, there is still an enormous demand for a better patient experience, including in clinical laboratories. Healthcare providers want patients to make changes for the better that ultimately improve outcomes and the patient experience is one path toward that goal.
“Provider reimbursements will be based in part on patient engagement efforts such as promoting self-management and coaching patients between visits,” PwC noted in its report, a fact that Dark Daily has continually reported on for years. (See, “Pathologists and Clinical Lab Executives Take Note: Medicare Has New Goals and Deadlines for Transitioning from Fee-For-Service Healthcare Models to Value-Based Reimbursement,” April 1, 2015.)
Demands for Price Transparency Increase
As they follow healthcare reform guidelines to increase quality while lowering costs, state governments will continue to ramp up pressure on healthcare providers and third parties in the area of pricing. Rather than simply requiring organizations to report on pricing, states are moving towards legislating price controls, as Dark Daily reported in February.
Social Factors Affect Healthcare Access
The transition to value-based care makes the fact that patients’ socioeconomic statuses matter when it comes to their health. “The most important part of getting good results is not the knowledge of the doctors, not the treatment, not the drug. It’s the logistics, the social support, the ability to arrange babysitting,” David Berg, MD, co-founder of Redirect Health told PwC.
One such transition that is helping patients gain access to healthcare involves microhospitals and their adoption of telemedicine technologies, which Dark Daily reported on in March.
“Right now, they seem to be popping up in large urban and suburban metro areas,” Priya Bathija, Vice President, Value Initiative American Hospital Association, told NPR. “We really think they have the potential to help in vulnerable communities that have a lack of access.”
Data Collection Challenges Pharma
The 21st Century Cures Act, along with the potential exploitation of Big Data, will make it possible for organizations to gain faster, less expensive approvals from the US Food and Drug Administration (FDA). As Dark Daily noted in April, the FDA “released guidelines on how the agency intends to regulate—or not regulate—digital health, clinical-decision-support (CDS), and patient-decision-support (PDS) software applications.
“Physician decision-support software utilizes medical laboratory test data as a significant part of a full dataset used to guide caregivers,” Dark Daily noted. “Thus, if the FDA makes it easier for developers to get regulatory clearance for these types of products, that could positively impact medical labs’ ability to service their client physicians.”
Healthcare Delivery During and Following Natural Disasters
PwC predicts the long-term physical results, financial limitations, and supply chain disruptions following natural disasters will continue to affect healthcare in 2018. The devastation can prevent many people from receiving adequate, timely healthcare.
However, new laboratory-on-a-chip (LOC) and other “lab-on-a-…” testing technologies, coupled with medical drone deliver services, can bring much need healthcare to remote, unreachable areas that lack electricity and other services. (See Dark Daily, “Lab-on-a-Fiber Technology Continues to Highlight Nano-Scale Clinical Laboratory Diagnostic Testing in Point-of-Care Environments,” April 2, 2018, and, “Johns Hopkins’ Test Drone Travels 161 Miles to Set Record for Delivery Distance of Clinical Laboratory Specimens,” November 15, 2017.)
PwC’s report is an important reminder of from where the clinical laboratory/anatomic pathology industry has come, and to where it is headed. Sharp industry leaders will pay attention to the predictions contained therein.
—Dava Stewart
Related Information:
Top Health Industry Issue of 2018
PwC Health Research Institute Top Health Industry Issues of 2018 Report: Issuu Slide Presentation
12 Defining Healthcare Issues of 2018
Is Laboratory Medicine Ready for Artificial Intelligence?
Artificial Intelligence Imaging Research Facilitates Disease Diagnosis
Blockchain Technology Could Impact How Clinical Laboratories and Pathology Groups Exchange Lab Test Data
Skepticism, Distrust of HIT by Healthcare Consumers Undermines Physician Adoption of Medical Reporting Technologies, But Is Opportunity for Pathology Groups, Clinical Laboratories
Pathologists and Clinical Lab Executives Take Note: Medicare Has New Goals and Deadlines for Transitioning from Fee-For-Service Healthcare Models to Value-Based Reimbursement
Researchers Point to Cost of Services, including Medical Laboratories, for Healthcare Spending Gap Between the US and Other Developed Countries
Telemedicine and Microhospitals Could Make Up for Reducing Numbers of Primary Care Physicians in US Urban and Metro Suburban Areas
New FDA Regulations of Clinical Decision-Support/Digital Health Applications and Medical Software Has Consequences for Medical Laboratories
Lab-on-a-Fiber Technology Continues to Highlight Nano-Scale Clinical Laboratory Diagnostic Testing in Point-of-Care Environments
Johns Hopkins’ Test Drone Travels 161 Miles to Set Record for Delivery Distance of Clinical Laboratory Specimens
Apr 6, 2018 | Compliance, Legal, and Malpractice, Digital Pathology, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Management & Operations, News From Dark Daily
Softened FDA regulation of both clinical-decision-support and patient-decision-support software applications could present opportunities for clinical laboratory developers of such tools
Late 2017, the Food and Drug Administration (FDA) released guidelines on how the agency intends to regulate—or not regulate—digital health, clinical-decision-support (CDS), and patient-decision-support (PDS) software applications. The increased/decreased oversight of the development of these physicians’ tools could have important implications for anatomic pathology groups and clinical laboratories.
Physician decision-support software utilizes medical laboratory test data as a significant part of a full dataset used to guide caregivers. Thus, if the FDA makes it easier for developers to get regulatory clearance for these types of products, that could positively impact medical labs’ ability to service their client physicians.
Additionally, clinical pathologists have unique training in diagnosing diseases and understanding the capabilities and limitations of medical laboratory tests in supporting how physicians diagnose disease and make treatment decisions. Thus, actions by the FDA to make it easier for developers of software algorithms that can incorporate clinical laboratory data and anatomic pathology images with the goal of improving diagnoses, decisions to treat, and monitoring of patients have the potential to bring great benefit to the nation’s medical laboratories.
FDA Clarifies Role in Regulating CDS/PDS Applications
The new guidelines clarified items specified in the 21st Century Cures Act, which was enacted by Congress in December of 2016. This Act authorized $6.3 billion in funding for the discovery, development, and delivery of advanced, state-of-the art medical cures.
“Today, we’re announcing three new guidances—two draft and one final—that address, in part, important provisions of the 21st Century Cures Act, that offer additional clarity about where the FDA sees its role in digital health, and importantly, where we don’t see a need for FDA involvement,” FDA commissioner Scott Gottlieb, MD, Commissioner of Food and Drugs, noted in a statement. “We’ve taken the instructions Congress gave us under the Cures Act and [we] are building on these provisions to make sure that we’re adopting the full spirit of the goals we were entrusted with by Congress.”
Helping Doctors’ Decision-Making
The first guideline concerns clinical decision support systems that are designed to help doctors make data-driven decisions about patient care. The new guidelines make it easier for software developers to get regulatory clearance, which, the FDA hopes, will spark innovation and makes regulation more efficient.
“CDS has many uses, including helping providers, and ultimately patients, identify the most appropriate treatment plan for their disease or condition,” Gottlieb said in the FDA’s statement. “For example, such software can include programs that compare patient-specific signs, symptoms, or results with available clinical guidelines to recommend diagnostic tests, investigations or therapy.
“This type of technology has the potential to enable providers and patients to fully leverage digital tools to improve decision making,” Gottlieb continued. “We want to encourage developers to create, adapt, and expand the functionalities of their software to aid providers in diagnosing and treating old and new medical maladies.”
Identifying Digital Health Applications That Receive/Don’t Receive FDA Oversight
The second guideline discusses and delineates which digital health applications are considered low risk and, thus, will not fall under FDA regulations.
Products that are not intended to be used for the diagnosis, cure, mitigation, prevention, or treatment of a condition will not be regulated by the FDA. These technologies are not considered medical devices and may include gadgets such as weight management and mindfulness tools. They can provide value to consumers and the healthcare industry while posing a low risk to patients.
“Similarly, the CDS draft guidance also proposes to not enforce regulatory requirements for lower-risk decision support software that’s intended to be used by patients or caregivers—known as patient-decision-support software (PDS)—when such software allows a patient or a caregiver to independently review the basis of the treatment recommendation,” Gottlieb noted in the statement.
Scott Gottlieb, MD (above), FDA Commissioner of Food and Drugs, noted in a statement, “We believe our proposals for regulating CDS and PDS not only fulfill the provisions of the Cures Act, but also strike the right balance between ensuring patient safety and promoting innovation. Clinical laboratories may find opportunities to work with CDS/PDS developers and support their client physicians. (Photo copyright: FDA.)
However, products that are intended to be used for the diagnosis, cure, mitigation, prevention, or treatment of a condition are considered medical devices and will fall under FDA regulations.
“The FDA will continue to enforce oversight of software programs that are intended to process or analyze medical images, signals from in vitro diagnostic devices, or patterns acquired from a processor like an electrocardiogram that use analytical functionalities to make treatment recommendations, as these remain medical devices under the Cures Act,” noted Gottlieb.
Items such as mobile apps that are utilized to maintain and encourage a healthy lifestyle are not deemed to be medical devices and will fall outside FDA regulations. The guidelines also defined that Office of the National Coordinator for Health Information Technology (ONC)-certified electronic health record (EHR) systems are not medical devices and, thus, will not be regulated by the FDA.
Software-as-a-Medical Device Gets FDA Oversight
The third guidance document deals with the assessment of the safety, performance, and effectiveness of Software as a Medical Device (SaMD).
“This final guidance provides globally recognized principles for analyzing and assessing SaMD, based on the overall risk of the product. The agency’s adoption of these principles provides us with an initial framework when further developing our own specific regulatory approaches and expectations for regulatory oversight and is another important piece in our overarching policy framework for digital health,” Gottlieb noted in the statement.
SaMD is defined by the International Medical Device Regulators Forum (IMDRF) as “software intended to be used for one or more medical purposes that perform these purposes without being part of a hardware medical device.”
Gottlieb noted that the three important guidance documents being issued would continue to expand the FDA’s efforts to encourage innovation in the ever-changing field of digital health. “Our aim is to provide more clarity on, and innovative changes to, our risk-based approach to digital health products, so that innovators know where they stand relative to the FDA’s regulatory framework. Our interpretation of the Cures Act is creating a bright line to define those areas where we do not require premarket review,” he concluded.
What remains to be seen is how the new FDA regulations will impact clinical laboratories and anatomic pathology groups. With the expanding interest in artificial intelligence (AI) and self-learning software systems, healthcare futurists are predicting a rosy future for informatics products that incorporate these technologies. Hopefully, with these new guidelines in place, innovative clinical laboratories will have the opportunity to develop new digital products for their clients.
—JP Schlingman
Related Information:
FDA Softens Stance on Clinical-decision Support Software
Clinical and Patient Decision Support Software
FDA Issues New Guidance for Clinical and Patient Decision Support Software
Statement from FDA Commissioner Scott Gottlieb, M.D., on Advancing New Digital Health Policies to Encourage Innovation, Bring Efficiency and Modernization to Regulation
FDA Issues Three Guidances, Including Long-awaited CDS Guidelines
The Feds Just Cleared a Major Roadblock for Digital Health
FDA Unveils Clinical Decision Support, Medical Device Guidance
Apr 4, 2018 | Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations
Clinical laboratories may want to offset plunging patient lab specimens by increasing outreach business
Hospital admissions are in decline across the country and the trend is being blamed in part on the rising use of high-deductible health plans (HDHP). The implications for hospital-based clinical laboratories is that lower in-patient totals reduce the flow of patient lab specimens as well. This situation may encourage some hospital and health-system labs to increase their lab outreach business as a way to offset declining inpatient lab test volumes and help keep down overall average test costs.
Healthcare Dive, which named “changing patient admissions” its “Disruptor of the Year,” used data from America’s Health Insurance Plans (AHIP) annual surveys to show the admission rate trend that is causing hospital operators and health systems to rethink how they do business going forward.
“We are really talking about how providers are not taking in as much revenue as they are spending,” Healthcare Dive noted. “Hospitals are largely fixed cost businesses, and rising expenses have been outpacing admissions growth.”
Experts Claim the ‘Hand Writing Is on the Wall’
According to Healthcare Dive’s analysis of US hospital admissions, which used data from the American Hospital Association’s Annual Survey, hospital admissions peaked at 35.4 million in 2013, coinciding with the roll out of the Affordable Care Act. The total fell to 34.9 million in 2014, before rebounding slightly to 35.1 million in 2015. The 2016 survey, published in 2018, showed hospital admissions remaining relatively flat at approximately 35.2 million.
Paul Hughes-Cromwick (above), Co-Director, Sustainable Health Spending Strategies, Altarum in Ann Arbor, Mich., expects hospitals to be challenged by flat admission rates going forward. “Times are still pretty good, but the writing is on the wall for hospital operators,” he told Modern Healthcare. This will impact clinical laboratories owned by hospitals and health systems as well. Photo copyright: Long Beach Business Journal.)
Most experts place the blame for slumping patient admissions on HDHPs. Such plans, which are paired with a tax-advantaged health savings account, have enabled employers to shift initial medical costs to workers in exchange for lower monthly health insurance premiums. Nearly 20.2 million Americans were enrolled in HDHPs in 2016, up from 15.4 million in 2013 and far above the roughly one million plans in existence in 2005, the AHIP surveys revealed. HDHPs were first authorized by Congress in 2003.
Consumers Delaying or Opting Out of Healthcare
Faced with higher out-of-pocket medical costs, consumers are opting to postpone or forgo elective surgeries and procedures, which in turn is placing pressure on healthcare systems’ operating revenues.
According to Healthcare Dive, Community Health Systems experienced a 12% drop in operating revenue in the first nine months of fiscal year 2017, while HCA Healthcare and Tenet Healthcare dropped 6.7% and 3.8%, respectively.
J. Eric Evans, President of Hospital Operations, Tenet Healthcare (NYSE:THC), a 77-hospital chain, told Modern Healthcare, today’s consumers are spending their healthcare dollars differently.
“The more elective procedures, things like orthopedics, we see the softness,” Evans told Modern Healthcare. “So, we think that does play into the story of deductibles rising and changing behaviors.”
The challenges for not-for-profit hospital systems are no different. Modern Healthcare noted that the 14-hospital Indiana University Health system reported a 46% drop in operating income in the third quarter of FY 2017 on a year-over-year admission decline of 2%.
Healthcare Systems Rethinking Their Business Strategies
“Health systems en masse are reacting to shifting dynamics in healthcare utilization by throwing money and resources to lower cost settings, such as urgent care centers and freestanding emergency departments,” Healthcare Dive noted. Dark Daily has reported on this trend. (See, “From Micro-hospitals to Mobile ERs: New Models of Healthcare Create Challenges and Opportunities for Pathologists and Medical Laboratories,” May 26, 2017.) Health systems also are selling unprofitable hospitals and laying off or eliminating positions to cut costs. Tenet Healthcare, for example, is laying off 2,000 workers while selling eight of its US hospitals and all of its nine United Kingdom facilities, Modern Healthcare reported in January.
“We are seeing and are working with health systems to take out pretty significant amounts of cost out of their operations, both clinical and nonclinical, and setting targets like 15-20%, which is a transformative change,” Igor Belokrinitsky, Vice President and Partner at Strategy&, PricewaterhouseCoopers’ strategy consulting group, told Healthcare Dive in a 2017 interview.
Lower hospital in-patient volume means less clinical laboratory test orders. This, in turn, will result in increases in the average cost per inpatient test. Anatomic pathology groups and medical laboratory leaders who work in or service hospitals may wish to take proactive steps to boost test referrals from outpatient and outreach settings as a way to help keep down the lab’s average cost per test.
—Andrea Downing Peck
Related Information:
Disrupter of the Year: Softening Patient Admissions
Hospital Volumes Laid Low by High-Deductible Health Plans
How Hospitals Feel about AHCA’s Death, Future with ACA
2016 Survey of Health Savings Account-High Deductible Health Plans
Fast Facts on U.S. Hospitals, 2018
5 Things to Know about Tenet Healthcare’s Restructuring
From Micro-hospitals to Mobile ERs: New Models of Healthcare Create Challenges and Opportunities for Pathologists and Medical Laboratories
