Request for money upfront comes at a time when many patients already struggle with medical debt
In its reporting of healthcare trends gathering momentum, a national newspaper caused quite a stir this spring when it published a story documenting how some hospitals now require patients to pay in advance of specified surgeries and procedures. Hospitals are recognizing what clinical laboratories have long known—a larger proportion of Americans do not have the cash to pay a medical bill.
Hospitals and surgery centers are requesting advanced payment for elective procedures such as knee replacements, CT scans, and childbirth procedures, according to an Advisory Board daily briefing.
“In some cases, they may also have a contract with an insurance company. And in that contract are terms that stipulate hospitals need to collect deductibles or co-insurance before a procedure,” Evans added.
According to Bankrate’s 2024 Annual Emergency Savings Report, nearly half of all American’s would be unable to pay cash for an unplanned $1,000 bill. Therefore, one wonders why hospitals would attempt to extract payments from patients in advance of medical visits and clinical laboratory testing. Wouldn’t that just reduce the number of patients electing to undergo needed surgeries and other costly procedures? Nevertheless, it appears that many hospitals struggling financially are doing just that, according to The Wall Street Journal.
Genetic testing laboratories have a similar problem because of high-deductible health plans ($5K/year for individual, $12K/year for family). It means that many patients, even with insurance, struggle to pay a $1,000 to $5,000 bill for a genetic test.
Requesting payment from patients before healthcare visits is not new. However, the practice is on the rise and comes at a time when consumers are already struggling to make ends meet.
“Hospitals collected (in Q1 2024) about 23% of what patients owed them before they set foot in a hospital or doctor’s office. That’s up from about 20% in the same period a year earlier,” said reporter Melanie Evans (above) of The Wall Street Journal, referring to data from 1,850 hospitals analyzed by Kodiak Solutions. Genetic testing laboratories experience similar challenges getting paid due to many people struggling with high deductible health plans. (Photo copyright: LinkedIn.)
Price Transparency Behind Upfront Payments
According to a recent KFF survey of US families, “about half of adults would be unable to pay an unexpected medical bill of $500 in full without going into debt.”
Regardless, asking for payment for nonemergency care has become more common as people increasingly choose health plans with high-deductibles and amid the push for greater price transparency, according to Richard Gundling, Senior Vice President, Content and Professional Practice Guidance at Healthcare Financial Management Association (HFMA), in an interview with Advisory Board.
“It’s very common if not the norm” for hospitals to give patients a cost estimate and ask for advance payment, Gundling stated during the interview.
In fact, healthcare providers and insurers are required to shared charges and estimates as part of newly implemented federal rules. According to the American Hospital Association (AHA) those statutes and rules include:
The Hospital Price Transparency Final Rule (effective January 2021) which requires hospitals to publicly post “standard charges” via machine readable files.
The No Surprises Act which mandates the sharing of “good faith estimates” with uninsured/self-pay patients for most scheduled services and also requires insurers to provide explanation of benefits to enrollees.
According to Consumer Reports, hospitals are finding consumers less reliable payers than insurance companies. “No one would say, ‘Pay up or we won’t treat you.’ But we’re saying that, ‘You have a large out-of-pocket cost, and we want to know how are you going to pay for it,’” explained Jonathan Wiik, Vice President of Health Insights at FinThrive, a revenue cycle management company.
Razor Thin Hospital Margins
For their part, hospitals, health systems, and medical practices wrote off $17.4 billion in bad debt in 2023, Kodiak Solutions, an Indianapolis-based healthcare consulting and software company, reported in a news release.
“With the amounts that health plans require patients to pay continuing to grow, provider organizations need a strategy to avoid intensifying pressure on their already thin margins,” said Colleen Hall, Senior Vice President, Revenue Cycle, Kodiak, in the news release.
“Patient collections have become an increasingly difficult challenge for hospitals due primarily to a shift in payer mix. Because of rising deductibles and increased patient responsibility, the percentage of healthcare provider revenue collected directly from patients increased to more than 30% from less than 10% over 10 years,” the HFMA noted.
Thus, the financial tension being experienced by both patients and providers, and the need for patients to prepay for some treatment, are extreme challenges. The situation may call for clinical laboratory leaders to not only focus on quality testing and efficient workflow, but also affordability and access to services.
At-home genetic test kits face scrutiny for providing information that may provide consumers with an incomplete picture of their genetic health risks and ancestry
Genetic testing for disease risk and heritage are hugely popular. But though clinical laboratory and pathology professionals understand the difference between a doctor-ordered genetic health risk (GHR) test and a direct-to-consumer (DTC) genetic test, the typical genetic test customer may not. And misunderstanding the results of a DTC at-home genetic test can lead to confusion, loss of privacy, and potential harm, according to Consumer Reports.
To help educate consumers about the “potential pitfalls” of at-home DTC testing kits offered by companies such as Ancestry and 23andMe, Consumer Reports has published an article, titled, “Read This Before You Buy a Genetic Testing Kit.” The article covers “four common claims from the manufacturers of these products, whether they deliver, and what to know about their potential pitfalls.”
Are Genetic Ancestry Tests Accurate?
Ancestry and 23andMe are the DTC genetic test industry leaders, with databases of genetic information about 18 million individuals and 10 million individuals respectively. According to a Consumer Reports survey, as of October 2020 about one in five Americans had taken a DTC genetic test. Reported reasons for doing so included:
66% of respondents wanted to learn more about their ancestry.
20% wanted to locate relatives.
18% wanted to learn more about their health.
11% wanted to learn if they have or are a carrier for any medical conditions.
3% wanted to get a medical test they could not get through their doctor.
Though DTC genetic tests remain popular, Consumer Reports is now warning consumers to view the genealogical or medical insights gleaned through these tests with caution. “If you go in there thinking that this test is going to tell you who you are, you’re going to be wrong,” Wendy Roth, PhD (above), Associate Professor of Sociology at the University of Pennsylvania, told the publication. (Photo copyright: University of Pennsylvania.)
As Consumer Reports notes, doctor-ordered genetic health risk (GHR) testing typically aims to answer a specific question about a patient’s risk for a certain disease. DTC at-home genetic testing, on the other hand, examines a “whole range of variants that have been linked—sometimes quite loosely—to a number of traits, some not related to your health at all.
“Think of it this way: When your doctor orders genetic testing, it’s akin to fishing for a particular fish, in a part of the ocean where it’s known to live,” Consumer Reports noted, “A DTC test is more like throwing a net into the ocean and seeing what comes back.”
In its article, Consumer Reports addressed four common DTC genetic test claims:
The Tests Can Find Far-Flung Relatives: While the tests can unearth people in its database whom you might be related to, 9% of respondents in the Consumer Reports survey discovered unsettling information about a relative.
Testing Can Uncover Where Your Ancestors Are From: Genetic tests may show the percentage of your DNA that comes from Europe or Asia or Africa, but accuracy depends on how many DNA samples a company has from a particular region. As genetic test manufacturers’ reference databases widen, a customer’s genetic ancestry test results can “change over time.” Also, finding a particular variation in genetic code does not definitively place someone in a specific region, or ethnic or racial group.
Genetic Tests Can Reveal Your Risk for Certain Diseases: Testing companies such as 23andMe are authorized by the Food and Drug Administration (FDA) to offer physician-mediated tests, which are analyzed in a federally-certified clinical laboratory. However, test results may provide a false sense of security because DTC tests look for only select variants known to cause disease.
The Tests Can Tell What Diet Is Best for You: Incorporating genetic information into diet advice has the potential to be transformative, but the science is not yet there to offer personalized nutritional advice.
Consumer Reports pointed to a 2020 study published in the MDPI journal Nutrients, titled, “Direct-to-Consumer Nutrigenetics Testing: An Overview,” which evaluated 45 DTC companies offering nutrigenetics testing and found a need for “specific guidelines” and “minimum quality standards” for the services offered. For example, the study authors noted that more than 900 genetic variants contribute to obesity risk. However, weight-loss advice from DTC test companies was based on a “limited set of genetic markers.”
In the Consumer Reports article, Mwenza Blell, PhD, a biosocial medical anthropologist and Rutherford Fellow and NUAcT Fellow at Newcastle University in the United Kingdom, said “genetic ancestry tests are closer to palm reading than science.”
Seattle Cancer Care Alliance and an Associate Professor of Oncology at the University of Washington, fears consumers “miss important limitations on a test’s scope” or “misunderstand critical nuances in the results.”
Cheng says the ability to use flexible or health savings accounts (HSAs) to cover the cost of 23andMe’s GHR assessments, as well as the FDA’s approval of 23andMe’s Personal Genome Service Pharmacogenetic Reports test on medication metabolism, may have added to the confusion.
“This may further mislead people into thinking these tests are clinically sound. Again, they are not,” Cheng wrote.
As an oncologist, Cheng is particularly concerned about consumer GHR testing for heritable cancer risk, which screen for only a handful of genetic variants.
“The results are inadequate for most people at high risk of cancers associated with inherited mutations in BRCA1 or BRCA2 genes, including families whose members have experienced ovarian cancer, male breast cancer, multiple early breast cancers, pancreatic cancer, or prostate cancer,” Cheng wrote. “Put simply, this recreational test has zero value for the majority of people who may need it for true medical purposes.”
DTC genetic health-risk assessments may one day lead to consumers collecting samples at home for tests that aid in the diagnosis of disease. In the meantime, clinical laboratory professionals can play a role in educating the public about the limitations of current DTC genetic test offerings.
Clinical laboratory professionals and pathologists are part of multi-disciplinary efforts to curb healthcare-associated infections
One interesting fact about a national list of hospitals that rank highest in infection prevention is that they are mostly smaller and non-teaching hospitals. This was one finding from a recent survey conducted by Consumer Reports.
New lab test market could open up if research findings lead Consumer Reports and nine medical specialty associates join forces to target the overuse of certain diagnostic procedures, including some medical laboratory tests
For years, pathologists and physicians have spoken out about the overuse of medical laboratory tests and other diagnostic procedures. Now an interesting alliance of a medical specialty association and Consumer Reports has come together with a highly-publicized plan designed to reduce unnecessary or inappropriate testing by encouraging physicians to more deeply involve patients in the process.
It is the American Board of Internal Medicine Foundation (ABIMF) that is working with Consumer Reports. Their common goal is to stanch the overuse of unnecessary healthcare tests and procedures that do not improve patient outcomes and do run up healthcare costs. Experts estimate the wasteful use of healthcare resources accounts for as much as 30% of current healthcare costs in the United States.
The program is called “Choosing Wisely” (CW). According to a story in Modern Healthcare (MH), “Choosing Wisely” is a campaign to get physicians and patients to discuss whether a particular test is likely to improve patient health or outcome.
Pictured above is the press conference conducted by the American Board of Internal Medicine Foundation (ABIMF) to announce the launch of the “Choosing Wisely” campaign. The goal of this campaign is to reduce overutilization or unnecessary ordering of diagnostic procedures. Each of nine medical specialty associations has put forth a list of specific diagnostic procedures that should be part of this campaign and a number of clinical laboratory tests are on these lists. (Photo copyright by American Society of Nephrology.)
Participating in this initiative are about 375,000 physicians in nine specialty societies. Each of these nine medical specialty groups has identified five diagnostic tests or procedures within their specialty area that warrant re-evaluation by physicians and patients as to whether they will provide useful information or lead to a positive outcome. Clinical laboratory managers and pathologists will be interested to learn that a number of these medical specialty associations have included clinical laboratory tests on their respective lists.
“What we’re asking for is for people to have a conversation,” stated Daniel B. Wolfson, M.H.S.A., ABIM Foundation Executive Vice President and Chief Operating Officer, in the MH story. “These are not rules; they are guidelines used to guide most—but not all—cases,” he explained.
“These societies have shown tremendous leadership in starting a long overdue and important conversation between physicians and patients about what care is really needed,” said Christine K. Cassel, M.D., President and Chief Executive Officer of the ABMF. “Physicians, working together with patients, can help ensure the right care is delivered at the right time for the right patient.” She was quoted in a Choosing Wisely press release.
According to the release, Consumer Reports is working with American Association of Retired People (AARP) and other organizations representing the lay public to get the word out about the “Choosing Wisely” campaign.
Specialist Physicians Identify Some Medical Laboratory Tests for Review
Below are listed the recommendations made by the different medical specialty associations that identify a clinical laboratory test:
Don’t perform unproven diagnostic tests, such as immunoglobulin G (IgG) testing or an indiscriminate battery of immunoglobulin E (IgE) tests, in the evaluation of allergy.
Don’t routinely do diagnostic testing in patients with chronic urticaria.
Don’t recommend replacement immunoglobulin therapy for recurrent infections unless impaired antibody responses to vaccines are demonstrated.
In patients with low pretest probability of venous thromboembolism (VTE), obtain a high-sensitive D-dimer measurement as the initial diagnostic test; don’t obtain imaging studies as the initial diagnostic test.
Don’t perform routine cancer screening for dialysis patients with limited life expectancies without signs or symptoms.
Don’t administer erythropoiesis-stimulating agents (ESAs) to chronic kidney disease (CKD) patients with hemoglobin levels greater than or equal to 10g/dL without symptoms or anemia.
In its coverage of the “Choosing Wisely” initiative, Clinical Laboratory News, a publication of the American Association for Clinical Chemistry, (AACC) reported that the utilization changes CW seeks may sound like bad news for the lab,. But sometimes these types of program can end up promoting appropriate clinical laboratory testing over other options, the writer noted.
The “Choosing Wisely” initiative, at a minimum, does provide another opportunity for pathologists and clinical laboratory managers to add value to physicians and their patients by helping clinicians have confidence they they are ordering the right test at the right time, supported by evidence-based medicine (EBM) guidelines.
It’s not just in the United States that Direct-to-Consumer (DTC) medical laboratory tests are coming under criticism, as reported in recent weeks by Dark Daily. Two prominent organizations in the United Kingdom (UK) have issued reports with serious criticisms of what are known as “Do-It-Yourself” (DIY) clinical laboratory tests in that country.
Researchers identified the several ways that DIY test in the UK, often bought over-the-counter in pharmacies, could mislead or harm consumers. In our earlier Dark Daily e-briefing titled “Medical Laboratory Tests for Consumers Under Investigation on Two Continents,” we presented pathologists and clinical laboratory managers with the results of a General Accountability Office (GAO) study that was critical of DTC medical laboratory tests.
