Experts are skeptical of the value of public price lists based on hospital chargemasters due to complexity and poor reflection of actual costs
In another big step toward helping consumers view prices of medical procedures when selecting providers, the Centers for Medicare and Medicaid Services (CMS) passed the IPPS/LTCH PPS final rule, which requires hospitals to post a full list of hospital pricing information on their websites starting January 1, 2019.
Clinical laboratories, anatomic pathologists, and other diagnosticians doing business with their local health networks will now find their prices for tests and procedures listed on the hospitals’ chargemasters available to the public.
To meet rule requirements, pricing information posted by hospitals
must be:
• Published online in a publicly accessible place;
• Machine-readable;
• Downloadable to a spreadsheet; and,
• Updated at least once per year.
Outside of these requirements, the guidelines are vague. However,
based on coverage of initial pricing lists, additional revisions are expected.
A fact sheet discussing the major provisions of the final rule (CMS-1694-F), can be downloaded from the Federal Register.
Are the Price Lists
Accurate?
One of the biggest issues cited by the media relates to the
accuracy of pricing information. As most hospitals are posting data directly
from their chargemaster listings, the numbers listed for the public are likely
to differ from the actual prices billed. Final charges depend on each patient’s
insurance plan and the network status of the healthcare facility rendering the services.
While hospitals are now required to post their price lists in a machine-readable format, MedCity Newsreports that many facilities use medical codes and terminology in price lists that the average consumer might not understand.
To further compound the issue, many items are listed
individually. This requires consumers to go through thousands of price listings
and combine the listed prices one by one to get an estimate of total costs for
a procedure.
Brenda L. Reetz, CEO of Green County General Hospital in Indiana also spoke with the NYT, saying, “We’ve posted our prices, as required. But I really don’t think the information is what the consumer is actually wanting to see.”
“While many hospitals have said chargemaster information can be confusing for consumers, let me be clear, hospitals don’t have to wait for us to go further in helping their patients understand what care will cost. We look forward to more facilities exceeding our requirements,” Seema Verma (above right), Administrator, Center for Medicare and Medicaid Services (CMS), told Modern Healthcare. (Photo copyright: Fox Business.)
Concerns of Increased
Risk for Both Hospitals and Consumers
“There is no more powerful force than an informed consumer,” said Alex Azar II, Secretary of the US Department of Health and Human Services (HHS) during a speech to the Federation of American Hospitals (FAH). “There is no turning back to an unsustainable system that pays for procedures rather than value. In fact, the only option is to charge forward—for HHS to take bolder action, and for providers and payers to join with us,” he concluded.
But with the higher rates found on most hospital chargemasters,
and the difficulty in finding true costs using the new public pricing lists, some
experts are concerned the lists might cause an adverse reaction.
“We do not want patients to forgo needed care,” Tom Nickels, Executive Vice President for Government Affairs and Public Policy at the American Hospital Association (AHA), told Newsweek. “Especially if the quoted price is for the total cost of the service and not what the patient will be expected to pay out-of-pocket.”
This is a real risk. Hospitals and other healthcare
providers already are experiencing reduced volumes due to patients opting out
of important procedures because of cost worries. Chargemaster lists that do not
reflect the true impact of insurance, charity programs, and other variables could
exacerbate that problem.
And there is specific risk for clinical laboratories, as
they rarely have a public-facing element within hospitals. Physicians order medical
laboratory tests and patients either do or do not comply. There is no
opportunity for laboratories to explain that prices listed on the hospital site
might not reflect actual out-of-pocket costs. Could this be an opportunity for
enterprising clinical laboratory managers?
Future Transparency
Trends
“I think putting those prices out there—even with the acknowledgment that these aren’t the prices anyone pays unless they’re uninsured—may indeed still provoke conversations with hospital administrators,” Michael Abrams, Managing Partner of Healthcare Consultancy at Numerof and Associates, a strategic management consultant for the global healthcare sector, told MedCity News.
While experts might not find much value in the current
iteration of price lists, and the latest attempt to improve pricing
transparency by CMS, it offers medical laboratories and hospitals an
opportunity to assess current pricing models and decide how to best communicate
value to consumers as pricing transparency continues to mature and the US
shifts to value-based healthcare.
The researchers also found unnecessarily confusing policies and procedures for requesting medical records, such as clinical laboratory test results
Clinical laboratories and anatomic pathology groups looking for ways to improve their customers’ experience should give high priority to ensuring patients have easy, accurate access to their own health records. This would, apparently, set them apart from many hospital health networks if a recent study conducted by Yale University School of Medicine is any indication.
Conducting their research from August 1 through December 7, 2017, Yale researchers evaluated the medical records processing policies of 83 top-ranked hospitals located across 29 states. They found that patients attempting to obtain copies of their own medical records from various hospitals often faced unnecessary and confusing hurdles. They also found serious noncompliance issues with regards to the HealthInsurance Portability and Accountability Act of 1996 (HIPAA).
Overwhelming Inconsistencies in Policies
and Procedures
“There were overwhelming inconsistencies in information relayed to patients regarding the personal health information [PHI] they are allowed to request, as well as the formats and costs of release, both within institutions and across institutions,” said Carolyn Lye, a medical student at the Yale School of Medicine and first author of the study, in a Yale News article. “We also found considerable noncompliance with state and federal regulations and recommendations with respect to the costs and processing times associated with providing access to medical records.”
“Stricter enforcement of the patients’ right of access under HIPAA is necessary to ensure that the medical records request process across hospitals is easy to navigate, timely, and affordable,” study first author Carolyn Lye (above), told Yale News. “We are also in an era in which patients are participants in their own healthcare. Inhibiting access for patients to their own medical records with complicated, lengthy, and costly request processes prevents patients from obtaining information that they may need to better understand their medical conditions and communicate with their physicians.” (Photo copyright: Twitter.)
The researchers collected release authorization forms from
the hospitals by calling each hospital’s medical records department. During the
simulated patient experience, they questioned the hospital policies regarding:
Requestable information (including entire
medical records, medical laboratory test results, medical history, discharge
summaries, physician orders, consultation reports);
Available release formats (pick up in person,
mail, fax, e-mail, CD, online patient portal);
Costs associated with obtaining the records;
and,
Processing times.
The team found inconsistencies between information provided
on written authorization forms and the simulated patient telephone calls, as
well as a lack of transparency.
On the paper forms, only 44 hospitals (53%) had an option
for patients to acquire their entire medical record. However, on the telephone
calls, all 83 of the surveyed hospitals provided that option.
The researchers also discovered discrepancies in the
information regarding the formats available for patient records. For example,
69 (83%) of the hospitals stated during the phone calls that patients could
pick up their records in person, while only 40 (48%) of the hospitals said patients
could do so on the written release forms. Fifty-five (66%) of the hospitals
told callers that medical records were available on CD and only 35 (42%) of the
hospitals provided that option on the written forms.
Similar discrepancies between information provided in phone
calls versus paper authorization forms were found relating to other formats
included in the study as well.
Excessive Fees Exceed
Federal Recommendations
Hospitals are allowed to charge a modest fee for the release
of medical records. But the researchers found quoted costs varied widely among
surveyed hospitals.
On the written authorization forms, only 29 (35%) of the
hospitals disclosed the exact costs associated with obtaining medical records.
The costs for a hypothetical 200-page record from these hospitals ranged from
$0.00 to $281.54. During the phone calls, 82 of the hospitals disclosed their
fees, with quotes for obtaining a 200-page record ranging from $0.00 to
$541.50.
The federal government, however, recommends charging
patients a flat fee of $6.50 to obtain electronically maintained medical
records. Forty-eight (59%) of the hospitals surveyed exceeded that charge.
Access Times Also Vary
The time hospitals needed to release patients’ medical
records also varied, ranging from same-day to 60 days—with electronic data
tending to be delivered fastest. Federal regulations require medical records to
be released within 30 days of the initial request, though HIPAA provides for an
additional 30-day extension. However, six of the 81 hospitals that provided
turn-around times to medical records requests were noncompliant with federal processing
time requirements.
Congress
passed HIPAA primarily to modernize the flow of healthcare information. An
important part of the Act was to make it easier for patients to receive their
medical records and clinical data from hospitals, medical offices, clinical
laboratories, etc. The Yale study, however, indicates that obtaining medical
records can still be a cumbersome and perplexing process for patients.
The United States Government has spent upwards of $30 billion since 2010 in incentives to encourage hospitals and physicians to implement and use electronic health record (EHR) systems. One goal of issuing these incentives was to make it easy and inexpensive to move patient data between providers to support improved clinical care, as reported by the Commonwealth Fund.
This
research demonstrates that the internal policies of some hospitals and health
systems are contrary to federal and state laws because patients are often
struggling to gain access to their own medical records. The results of the Yale
study present an opportunity for clinical laboratories and pathology groups to
adopt and offer patient-friendly access to obtain lab test data.
Even more compelling was the discovery of DNA from the Staph bacteria on the stethoscopes even after they were cleaned. Though the tests could not differentiate between live and dead bacteria, the researchers found other non-Staph bacteria as well, including Pseudomonas and Acinetobacter.
Similar conditions could no doubt be found in most
healthcare settings in America, highlighting the critical importance for
rigorous cleaning procedures and protocols.
“The study underscores the importance of adhering to rigorous infection control procedures, including fully adhering to CDC-recommended decontamination procedures between patients, or using single-patient use stethoscopes kept in each patient’s room,” said Ronald Collman, MD (above), the study’s senior author and Professor of Medicine, Pulmonary, Allergy, and Critical Care at UPenn’s Perelman School of Medicine, in a news release. (Photo copyright: Penn Medicine.)
The researchers acknowledged that previous culture-based bacterial
studies looked at stethoscopes, but noted the results fell short of the view
next-generation sequencing technology can offer for identifying bacteria, as
well as determining the effectiveness of cleaning chemicals and regiments.
“Culture-based studies, which focus on individual organisms,
have implicated stethoscopes as potential vectors of nosocomial bacterial
transmission [HAI]. However, the full bacterial communities that contaminate
in-use stethoscopes have not been investigated,” they wrote in Infection Control and Hospital Epidemiology.
• 20 worn by physicians, nurses, and respiratory therapists;
• 20 single patient-use disposable stethoscopes available in ICU patient rooms; and,
• 10 unused single-use disposable stethoscopes to serve as a control.
All stethoscopes worn and/or used in the ICU were found to be contaminated with abundant amounts of Staphylococcus DNA. “Definitive” amounts of Staph was found by researchers on 24 of 40 tested devices, noted MedPage Today.
“Genera relevant to healthcare-associated infections (HAIs)
were common on practitioner stethoscopes, among which Staphylococcus was ubiquitous
and had the highest relative abundance (6.8% to 14% of containment bacterial
sequences),” the researchers noted in their paper.
Cleaning Methods Also
Examined
The researchers also studied the hospital’s cleaning agents
and procedures:
• 10 practitioner stethoscopes were examined before and after a standard 60-second cleaning procedure using hydrogen peroxide wipes;
• 20 additional stethoscopes were assessed before and after cleaning by practitioners using alcohol wipes, hydrogen peroxide wipes, or bleach wipes.
All methods reduced bacteria. But not to the levels of a new
stethoscope, the study showed.
“Stethoscopes used in an ICU carry bacterial DNA reflecting complex microbial communities that include nosocomially important taxa. Commonly used cleaning practices reduce contamination but are only partially successful at modifying or eliminating these communities,” the researchers concluded in their paper.
Prior Studies to Find
and Track Dangerous Bacteria
Studies tracking bacteria where people live, work, and
travel are not new. For years, medical technologists and microbiologists have
roamed the halls of hospitals and other clinical settings to swab and culture
different surfaces and even articles of clothing. These efforts are often
associated with programs to reduce nosocomial infections (HAIs).
This new study by UPenn Perelman School of Medicine researchers—published
in a peer-reviewed medical journal—will hopefully serve as a contemporary
reminder to doctors and other caregivers of how bacteria can be transmitted and
the critical importance of cleanliness, not only of hands, but also
stethoscopes (and neckties).
Hospital-based medical laboratory leaders and microbiology professionals also can help by joining with their infection control colleagues to advocate for CDC-recommended disinfection and sterilization guidelines throughout their healthcare networks.
All labs face the challenge of coping with shrinking budgets and staffing shortages, which is why coaching, management observation, and continuous improvement initiatives are proving helpful to medical laboratories
It’s the biggest generational shift since baby boomers began working in clinical laboratories and anatomic pathology groups. Across the nation, labs are watching their most experienced and knowledgeable medical technologists and other lab scientists retire. The need to train their replacements while maintaining peak productivity and controlling costs is motivating lab leaders to adopt powerful new management methods.
Innovative lab administrators and pathologists recognize that automation and the ability to leverage the increasing amounts of data produced by today’s innovative diagnostic technologies and assays can only go so far in helping to compensate for declining revenues.
This is why one trend is quietly gaining momentum. There are many medical laboratories, pathology groups, and other diagnostics providers working to help their lab staffs create a culture of continuous, meaningful improvement. The stakes are great. Not only is this essential for financial sustainability, it can be the source of competitive advantage with physicians, patients, and payers in today’s increasingly competitive diagnostic market.
This is why many medical laboratories are turning to continuous improvement systems such as Lean to increase personnel skills, reduce waste, and make the most out of shrinking budgets and margins. Yet, without a solid foundation of staff trained in these methods and a framework of processes to encourage improvement, lean laboratory managers often struggle to see consistent, significant improvements.
Optimizing Staff Performance and Developing Improvement Processes with Coaching and Management Observation
Performance Coaching and Management Observation offer powerful tools for laboratory managers to reinforce improvement efforts. They encourage the success of personnel, leverage existing personnel to meet growing demands while maintaining service levels, and establish an effective foundation for Lean execution.
Benefits of effective coaching and management observation sessions for laboratories include:
Enhancement of laboratory manager performance and skills;
Improved retention of skilled labor and consistent improvement of personnel skills through individualized assessment and improved communication;
Establishing a method of creating and maintaining a culture of continuous improvement, while empowering staff across all levels of lab operations; and,
Creating a competitive edge on laboratories struggling to implement Lean processes and other optimizations in response to increased workloads, reduced staff, and tighter budgets.
Stephen Stone (left), Managing Director, Argent Global Services, and, Rita D’Angelo, PhD (right), President and CEO, D’Angelo Advantage, spoke at Lab Quality Confab in 2018 on the benefits of coaching and management observation sessions for clinical laboratories and implementing continuous improvement systems using Lean Production Methods. (Photo copyright: Dark Daily.)
“While many laboratories are familiar with management observation because of competency testing, few laboratories use coaching and management observation as part of their Lean efforts.” Stephen Stone, Managing Director at Argent Global Services told Dark Daily. “Coaching and management observation offers laboratories an effective means to not only increase throughput using existing staffing and encourage sustainable growth, but also increase retention of existing skilled personnel and reduce hiring costs.”
Speaking at Lab Quality Confab in Oct. 2018, Stone highlighted why these later benefits are increasingly important to laboratories. Citing data from LabTestingMatters and the American Society for Clinical Pathology (ASCP), he reported that while the job market for medical technologist and laboratory technician openings should increase by roughly 11,300 openings in 2018, fewer than 5,000 individuals are graduating each year from accredited training programs.
Lab Supervisor Retirements Projected to Exceed Staff Retirements
Of possibly greater concern, he goes on to point out, is that projected retirement rates for supervisors are higher than those of staff. This means laboratories which fail to focus on staff development and retention could face further issues in both leadership and staffing shortages should trends continue.
“Investing in and empowering your staff will improve productivity, improve quality, improve safety, and help laboratories to work toward goals as a cohesive team,” Rita D’Angelo, PhD, President and CEO at D’Angelo Advantage, LLC, told Dark Daily. “As a result, costs and waste drop significantly. Coaching and management observation alongside a culture of continuous improvement can help labs to overcome many of the staffing and budget obstacles faced today.”
The webinar will include essential coaching skills to help laboratory managers pass on the skills to serve as Lean champions to personnel and establish the foundation and structure for a lasting culture of improvement within the laboratory.
C-Level laboratory leadership, laboratory directors, managers and supervisors, and key members of continuous improvement teams also can use the interactive Q/A session following the webinar to gain answers to questions and concerns directly facing their laboratories’ efforts to develop continuous improvement processes or implement Lean methodologies.
(To register for this critical Jan. 16th webinar, click here. Or, copy and paste this URL into your browser: https://www.darkdaily.com/webinar/performance-coaching-and-management-observations-to-improve-productivity-and-efficiency-strengthening-the-skills-of-management-to-execute-a-lean-lab-transformation-2-2/.)
Rising cost of prescription drugs tops Becker’s list of ‘headwinds’ facing healthcare industry, but no clinical laboratory issues make the list
Clinical laboratory managers and anatomic pathologists working in hospitals and health network systems will find their employers facing many familiar challenges in the coming year. And a report by Becker’s Hospital Review (Becker’s) predicts the top challenges it expects hospitals and health systems to encounter in 2019.
Topping the list is the rising price of prescription pharmaceuticals, which is a chronic strain on the wallets of hospitals, health networks, and patients. However, other items on Becker’s list may be equally challenging.
Readers of Dark Daily who are pathologists and clinical laboratory managers working in hospitals and health systems will find the list presented by Becker’s in “11 Headwinds Facing Hospitals and Health Systems” to be useful at bringing together the main challenges confronting their parent organizations today.
Drug Prices Spiraling Upward
The top challenges facing hospitals and health networks include:
“Pharmaceutical costs, particularly non-generic;
“Payers expanding into providers and combining with providers;
“Payer market share;
“Health IT and cybersecurity costs;
“Labor costs and a labor-intensive business;
“High costs of bricks and mortar;
“Medicare as a larger percentage of health system revenue and Medicare reimbursement softening now and over time as federal deficits rise;
“Slowing overall healthcare inflation as hospitals rise;
“Siphoning off of better paying commercial patients;
“Siphoning off of profitable ancillaries; and,
“Entry of big technology firms into healthcare.”
Since pharmacy operations consume an estimated 10% to 20% of the average U.S. hospital’s overall operating budget, persistent drug-price increases can be damaging to a hospital’s bottom line. According to PipelineRx, a medication management company, average inpatient drug spending increased 38.7% on a per admission basis (from $714 to $990) from fiscal year 2013-2015.
“Drug prices for both commonly and infrequently used drugs are spiraling up faster than bundled reimbursements can keep up with,” explained PipelineRx.
And the Vizient Drug Price Forecast estimates that in 2019 health systems can expect a 4.92% increase in the price of pharmaceutical purchases. The Vizient forecast for 2018 had projected a 7.61% boost in drug costs.
“While the projected increase for 2019 is less than 2018, it is still growing quickly,” said Dan Kistner, Senior Vice President, Pharmacy Solutions for Vizient, in a news release. “Two key themes we saw were the continued growth of specialty pharmacy products as a share of total spending and the critical importance of ongoing, robust generic and biosimilar competition on restraining overall price growth.”
In spite of pressure from the White House to lower drug prices, Pfizer is one of several large pharma companies that recently announced drug-price increases beginning January 1. The Wall Street Journal (WSJ) reported Pfizer is boosting the prices of 41 prescription drugs—10% of its portfolio. Elliot Wilbur (above), Senior Equity Research Analyst with Raymond James Financial, told the WSJ that drug companies have raised list prices on 263 drugs by an average of 7.8%. (Photo copyright: CNBC.)
While the 2019 increases are below the double-digit averages seen in 2014 and 2015, the American Hospital Association’s “Trends in Hospital Inpatient Drug Costs: Issues and Challenges” report explains the impact of rapidly rising hospital pharmacy costs.
“Hospitals bear a heavy financial burden when the cost of drugs increases and must make tough choices about how to allocate scarce resources. One hospital put the challenge starkly: last year, the price increases for just four common drugs, which ranged between 479% and 1,261%, cost the same amount as the salaries of 55 full-time nurses,” the report noted.
Meanwhile, many of the other items on Becker’s 2019 “headwinds” list will not surprise healthcare administrators, such as:
High cost of stand-alone hospitals;
Impact of softening Medicare reimbursements;
Health insurers’ changing business model; and,
The entry of Apple, Google, and other giant technology companies into the healthcare space.
Becker’s list could be a harbinger of tough times ahead. It should make pathologists and clinical laboratory mangers who work within health networks and hospitals mindful of the importance of adding value to their parent organizations while providing their patients with excellent service.
Different model for medical laboratory testing has customers receiving compensation for the use of their genetic data while maintaining control over who receives it and how it is used
Founded by George Church, PhD, Harvard Medical School/MIT professor of genetics, health sciences and technology, and Harvard graduates Dennis Grishin, PhD, and Kamal Obbad, Nebula aims to connect customers with scientists to advance biomedical research, according to a news release.
Interested customers answer questions about their health history, physical activities, medications, and more. The information helps them earn Nebula credits toward free genetic information. Researchers then can review this biographic information and elect to subsidize the cost of sequencing specific customers in exchange for access to the resulting genomic data, which they use to develop pharmaceutical drugs and treatments.
Customers wishing to avoid answering questions can pay Nebula $99 for a personal genome sequencing, which delivers a basic analysis of their ancestry and inherited traits.
“Ninety-nine bucks will get you a little bit of genetic information. But to get the full thing, companies or researchers will have to be interested in either your traits or your genome or both,” Church told National Public Radio (NPR).
The “full thing,” as Church put it, is a full genome sequence using next-generation sequencing technology, which costs about $1,000. Nebula uses 30-times genetic coverage during the sequencing, BioSpace explained.
“We are using next-generation sequencing technology. This enables us to generate thousands of times more data from a genome than most of our competitors,” Dennis Grishin, PhD, Nebula’s co-founder and Chief Scientific Officer told Digital Trends.
Kamal Obbad (left), George Church, PhD (center), and Dennis Grishin, PhD (right) created Nebula Genomics “to bring the costs of personal genome sequencing down to zero and to address the issues of genomic data ownership and privacy,” Grishin told Digital Trends. “Our mission is to achieve mass adoption of personal genome sequencing, which would lead to a genomic revolution that would transform biomedical research and healthcare.” (Photo copyright: Nebula Genomics.)
Transparency, Blockchain, and Consumer Control of Data
Nebula says its process enables participants to control what genetic data researchers can access and how it is used. According to NPR, the process may begin with a researcher or pharmaceutical firm contacting Nebula expressing interest in studying a group of patients with a specific disease—such as diabetes—adding that Nebula follows up the request with an encrypted search of participants.
“Nebula will enable individuals to get sequenced at much lower cost through sequencing subsidies paid by the biopharma industry,” Church told BioSpace. “We need to bring the costs of personal genome sequencing close to zero to achieve mass adoption.”
According to a Ledger Insights (Enterprise Blockchain News) report, a blockchain platform enables customers to choose how they want their data used and by whom and be compensated for it. But the customers’ actual genomic data is stored on an Arvados storage platform at Veritas Genetics, a genome sequencing company Church also co-founded.
“I’m hopeful that this model (financial reward and control over data) will actually attract people where historically people have been very disinterested in participation in research,” Church told NPR.
Putting DNA Sequences Up for Sale
Nebula Genomics is not the only start-up attempting to match customers with DNA buyers. EncrypGen, a peer-to-peer genomic data marketplace founded in 2016, says that it enables DNA data to be bought and sold with DNA tokens.
EncrypGen’s Chief Executive Officer and co-founder David Koepsell, PhD, told The Scientist that the company has plans to soon offer whole genomic testing through a partner and users may be able to subsidize the $1,500 cost with tokens earned through the platform.
“We are the world’s first blockchain genomic marketplace serving as a benefit to science and the public,” EncrypGen claims on its Website.
Medical laboratory leaders may wonder what impact Nebula’s offer for free whole genome sequencing will have. It may result in many more people participating in whole genome sequencing and having a master blueprint for managing their health, which is a good thing. It’s also possible more studies about drugs to precisely prevent and treat disease will go forward as researchers and customers connect and act.
