Medical laboratories and anatomic pathologists may need to squeeze into narrow networks to be paid under value-based schemes, especially where Medicare Advantage is concerned
Pathologists have likely heard the arguments in favor of value-based payment versus fee-for-service (FFS) reimbursement models: FFS encourages providers to order medically unnecessary procedures and lab tests. FFS removes incentives for providers to order patient services more carefully. Fraudsters can generate huge volumes of FFS claims that take payers months/years to recognize and stop.
Studies that favor value-based payment schemes support these claims. But do hospitals and other healthcare providers also accept them? And how is value-based reimbursement really doing?
To find out, Chicago-based thought leadership and advisory company 4Sight Health culled data from various organizations’ reports that suggest value-based reimbursement shows signs of growth as well as signs of stagnation.
Value-Based Payment Has Its Ups and Downs
Healthcare journalist David Burda is News Editor and Columnist at 4Sight Health. In his article, “Is Value-Based Reimbursement Mostly Dead or Slightly Alive?” Burda commented on data from various industry reports that indicated value-based reimbursement shows “signs of life.” For example:
More doctors are accepting pay-for-performance payments: 44.5% in 2020, up from 42.3% in 2018, according to an American Medical Association (AMA) biennial report on physician participation in value-based reimbursement, titled, “Policy Research Perspectives: Payment and Delivery in 2020.”
On the other hand, Burda reported that value-based reimbursement also has these declining indicators:
39.3% of provider payments “flowed” through FFS plans in 2020 with no link to cost or quality. This was unchanged since 2019. (HCPLAN report)
19.8% of FFS payments to providers in 2020 were linked to cost or quality, down from 22.5% in 2019. (HCPLAN report)
88% of doctors reported accepting FFS payments in 2019, an increase from 87% in 2018. (AMA report)
Does Today’s Healthcare Industry Support Value-based Care?
A survey of 680 physicians conducted by the Deloitte Center for Health Solutions suggests the answer could be “not yet.” In “Equipping Physicians for Value-Based Care,” Deloitte reported:
“Physician compensation continues to emphasize volume more than value.
“Availability and use of data-driven tools to support physicians in practicing value-based care continue to lag.
“Existing care models do not support value-based care.”
Deloitte analysts wrote, “Physicians increasingly recognize their role in improving the affordability of care. We repeated a question we asked six years ago and saw a large increase in the proportion of physicians who say they have a prominent role in limiting the use of unnecessary treatments and tests: 76% in 2020 vs. 57% in 2014.
“Physicians also recognize that today’s care models are not geared toward value,” Deloitte continued. “They see many untapped opportunities for improving quality and efficiency. They estimate that even today, sizable portions of their work can be performed by nonphysicians (30%) in nontraditional settings (30%) and/or can be automated (18%), creating opportunities for multidisciplinary care teams and clinicians to work at the top of their license.”
Hospital CFOs Also See Opportunities for Value-based Care
This could be problematic for clinical laboratories, according to Robert Michel, Editor-in-Chief of Dark Daily and our sister publication The Dark Report. According to Guidehouse, “Nearly 60% of health systems plan to advance into risk-based Medicare Advantage models in 2022.”
Medicare Advantage (MA) enrollments have escalated over 10 years: 26.4 million people of the 62.7 million eligible for Medicare chose MA in 2021, noted a Kaiser Family Foundation brief that also noted MA enrollment in 2021 was up by 2.4 million beneficiaries or 10% over 2020.
The graph above is taken from the Kaiser Family Foundation report, “Medicare Advantage in 2021: Enrollment Update and Key Trends.” According to the KFF, “In 2021, more than four in 10 (42%) Medicare beneficiaries—26.4 million people out of 62.7 million Medicare beneficiaries overall—are enrolled in Medicare Advantage plans; this share has steadily increased over time since the early 2000s.” Since MA employs narrow networks for its healthcare providers, it’s likely this trend will continue to affect clinical laboratories that may find it difficult to access these providers. (Graphic copyright: Kaiser Family Foundation.)
“The shift from Medicare Part B—where any lab can bill Medicare on behalf of patients for doctor visits and outpatient care, including lab tests—to Medicare Advantage is a serious financial threat for smaller and regional labs that do a lot of Medicare Part B testing. The Medicare Advantage plans often have networks that exclude all but a handful of clinical laboratories as contracted providers,” Michel cautioned. “Moving into the future, it’s incumbent on regional and smaller clinical laboratories to develop value-added services that solve health plans’ pain points and encourage insurers to include local labs in their networks.”
Medical laboratories and anatomic pathology groups need to be aware of this trend. Michel says value-based care programs call on clinical laboratories to collaborate with healthcare partners toward goals of closing care gaps.
“Physicians and hospitals in a value-based environment need a different level of service and professional consultation from the lab and pathology group because they are being incented to detect disease earlier and be active in managing patients with chronic conditions to keep them healthy and out of the hospital,” he added.
Value-based reimbursement may eventually replace fee-for-service contracts. The change, however, is slow and clinical laboratories should monitor for opportunities and potential pitfalls the new payment arrangements might bring.
Survey shows more than 50% of hospitals and health systems plan to increase virtual care services within two years, a development that can change how patients access clinical laboratory testing services
If anything positive came out of the COVID-19 pandemic, it’s the growing acceptance by physicians and health payers of telehealth—including telepathology, teleradiology, and other types of virtual doctor visits—as a way for patients to meet with their physicians in place of in-office healthcare.
In earlier coverage about the rapid adoption of telehealth and virtual doctor visits, Dark Daily has observed that this trend creates a unique challenge for clinical laboratories. If the patient has a virtual consultation with his or her physician, how would a clinical laboratory get access to this patient to do a venipuncture and collect the samples necessary to perform the medical laboratory tests ordered by the physician?
Nevertheless, according to multiple reports, healthcare providers are planning to increase investment in telehealth technologies.
Disparate Technologies Led to Technical Difficulties for Virtual Healthcare Providers
The terms telemedicine and telehealth are often used interchangeably. However, according to the American Academy of Family Physicians (AAFP), there are subtle differences worth noting.
Telehealth is a broad term which refers to “electronic and telecommunications technologies and services used to provide care and services at-a-distance [while] telemedicine is the practice of medicine using technology to deliver care at a distance.
“Telehealth is different from telemedicine in that it refers to a broader scope of remote health care services than telemedicine. Telemedicine refers specifically to remote clinical services, while telehealth can refer to remote non-clinical services,” the AAFP notes.
Kelly Lewis, former Vice President of Revenue Strategy and Enablement at telehealth provider Amwell, told Healthcare IT News (HIT News) that “the COVID-19 pandemic caused telehealth adoption to skyrocket.
However, “Because much of this adoption was driven out of an abundance of necessity, there was little time for organizations to think strategically about their technology investments,” she added.
“With urgency at a high, payers, provider organizations and clinicians all turned to the quickest options available so patients could continue to get care. The result, however, was what we are calling platform ‘sprawl’—the use of a number of disparate solutions that are leading to a confusing and frustrating care delivery system and experience.”
Nevertheless, according to a survey conducted by HIT News and HIMSS Analytics, “More than half (56%) of hospital and health system leaders say they are planning to increase their investment in telemedicine during the next two years.” This, “shows that the huge surge in and mainstreaming of telehealth during the ongoing pandemic has caused the C-suite and other healthcare leaders to embrace the technology that has for so long existed on the periphery of medicine,” HIT News noted.
“The clear message is that telehealth is here to stay and will continue to expand,” Lewis told HIT News, adding, “The majority of payers without virtual care offerings also reported planning to add them in the next 24 months.”
“Clinicians agree that moving toward a fully integrated telehealth platform would be beneficial. More than 80% believe investing in a fully integrated virtual or hybrid care system would have a positive impact on clinical outcomes and patient experiences,” Kelly Lewis (above), former VP at telehealth provider Amwell, told Healthcare IT News. Considering the growing demand for telehealth, pathologists and clinical laboratories will need a strategy for supporting virtual healthcare providers. (Photo copyright: Healthcare IT News.)
The HIT News/HIMSS Analytics survey findings suggest telehealth will transition as providers aim for “smart-growth” instead of “pandemic-fueled expediency,” Becker’s Hospital Review reported.
Survey respondents expressed positive attitudes about telehealth:
56% of healthcare leaders plan to increase investment in virtual care over the next two years.
80% of respondents noted “very” or “extremely” important telehealth factors are integrating with existing workflows, fast video connections, and reducing administrative burden.
77% called telehealth platform integration with the electronic health record (EHR) “very” or “extremely” important.
80% envision positive clinical outcomes and patient experiences from a fully integrated telemedicine platform.
75% of payers said a single digital platform has potential to streamline member experiences.
“With telehealth visits stabilizing at roughly 10 times pre-pandemic levels, digital transformation initiatives are rising across the field. As a result of the pandemic, 60% of healthcare organizations are adding new digital projects, with telemedicine becoming a higher priority for 75% of executives (vs. 42% in 2019) to improve the patient experience,” the AHA reported.
Medical laboratories and anatomic pathology groups are advised to keep pace with the changing healthcare landscape which increasingly puts a premium on remote and virtual visits. This has become even more critical as healthcare providers and investors infuse more capital into telehealth technology.
As physicians expand telemedicine virtual office visits post-pandemic, a clinical laboratory strategy to reach patients and acquire specimens will be required.
‘Care Studio’ is designed to give physicians a ‘single, centralized view’ of patients’ records that are spread among multiple disparate databases within a healthcare system
Lack of interoperability between electronic health records (EHRs) has been a thorn in the side of healthcare providers—including clinical laboratorians and pathologists—who have to search multiple healthcare organizations’ databases to pull together medical records on individual patients. Google Health claims it may have the answer to the longstanding issue of siloed patient records.
Google Health and St. Louis-based Ascension, one of the largest healthcare systems in the US, have announced the clinical pilot of their new Care Studio platform. The software tool, according to the Care Studio website, “leverages Google’s expertise in organizing information to help clinicians find health record information faster.
“The tool’s Clinical Search feature,” Google Health continues, “enables nurses and doctors to simply type what they’re looking for and quickly find the specific information requested—which might otherwise require significant time and effort to uncover.”
Essentially, Care Studio complements existing EHR systems and enables healthcare providers to quickly search and organize previously siloed patient healthcare data stored on multiple EHRs within a health system. If successful, such a tool would clearly help streamline physicians’ workflows and shave hours off their daily patient research.
According to Google Health, Care Studio is a cross-platform EHR tool that gives clinicians a “single, centralized view that brings forward a patient’s hospital visits, outpatient events, laboratory tests, medications and treatments, and progress notes.”
Gathered data then can be visualized in tables, graphs, and other formats.
“Using Google’s expertise in organizing complex information, Care Studio (above) provides a unified view of patient records, making them more accessible and useful for clinicians,” Peter Clardy, MD, Senior Clinical Specialist at Google Health, said in the launch video. “In Care Studio, you can browse and search through patient information.” Clinical laboratory test results will be included in these screen views. (Photo copyright: YouTube/Ascension.)
According to Medical Device Network, Google and Ascension originally introduced Care Studio to a small number of providers at Ascension’s Nashville and Jacksonville, Fla., locations. They are now expanding the pilot to more nurses and physicians working in clinical settings.
“So, why Google?” David Feinberg, MD (above), VP, Google Health, asked in a video announcement. “Google is really, really good at organizing information, and these electronic health records have amazing amounts of information. But they are unusable. So, we want to bring the functionality of Google—the way to kind of organize information—so doctors can spend more time holding your hand, looking into your eye, and having the difficult conversations with you instead of being data clerks. Part of that is allowing them to find the needle in the haystack in your medical record in seconds, instead of days.” This, of course, would include clinical laboratory test results, which make up 80% of all medical records. (Photo copyright: YouTube/Google Health.)
In a blog post, Eduardo Conrado, Executive Vice President, Strategy and Innovation at Ascension, wrote, “In current EHR systems, clinical information too often is buried in siloed records scattered across hospitals, clinics, urgent care centers, pharmacies, physician offices, labs, and other sites of care, making it challenging for physicians and caregivers to efficiently deliver coordinated and precise care.
“When information is finally retrieved from these disparate EHR systems,” he added, “it is usually poorly organized and fragmented. Most clinicians work in an environment where data is incomplete, inaccessible, and delivered in disjointed bursts of information without context.”
COVID-19 Accelerates Need for Improvements in Data Access
Conrado notes that the ability for clinicians to quickly retrieve and organize a patient’s complete clinical history is “the essence of delivering effective and efficient care.” He wrote that the “once-in-a-generation” COVID-19 pandemic has accelerated the need for improvements in public health infrastructure, health technology services, and care delivery models and “reinforced the significant impact that complex and often confusing EHR systems, and the fragmentation of patient health data, have on delivering effective care.”
While the collaboration between Ascension and Google began in 2018, Conrado said “remarkable” progress was made on Care Studio this past year.
Conrado did not state how long the clinical pilot of Care Studio would last but emphasized that the technology will be enhanced with additional features and improvements based on feedback from pilot clinicians. Ultimately, the clinical search tool will be made available to all caregivers across Ascension’s 2,600 sites of care, including 145 hospitals and more than 40 senior living facilities in 19 states and the District of Columbia.
Clinical laboratories should welcome this development. Any software tool or information technology that allows clinical laboratory test data to move across different EHRs will help interoperability.
Media reports in the United Kingdom cite bad timing and centralization of public health laboratories as reasons the UK is struggling to meet testing goals
Clinical pathologists and medical laboratories in UK and the US function within radically different healthcare systems. However, both countries faced similar problems deploying widespread diagnostic testing for SARS-CoV-2, the novel coronavirus that causes COVID-19. And the differences between America’s private healthcare system and the UK’s government-run, single-payer system are exacerbating the UK’s difficulties expanding coronavirus testing to its citizens.
The Dark Daily reported in March that a manufacturing snafu had delayed distribution of a CDC-developed diagnostic test to public health laboratories. This meant virtually all testing had to be performed at the CDC, which further slowed testing. Only later that month was the US able to significantly ramp up its testing capacity, according to data from the COVID Tracking Project.
However, the UK has fared even worse, trailing Germany, the US, and other countries, according to reports in Buzzfeed and other media outlets. On March 11, the UK government established a goal of administering 10,000 COVID-19 tests per day by late March, but fell far short of that mark, The Guardian reported. The UK government now aims to increase this to 25,000 tests per day by late April.
This compares with about 70,000 COVID-19 tests per day in
Germany, the Guardian reported, and about 130,000 per day in the US
(between March 26 and April 14), according to the COVID Tracking Project.
“Ministers need to explain why the NHS [National Health Service] is not testing to capacity, why we are falling behind other countries, and what measures they will put in place to address this situation as a matter of urgency,” MP Keir Starmer (above) said in Parliament in late March, The Guardian reported. (Photo copyright: The Guardian.)
What’s Behind the UK’s Lackluster COVID-19 Testing
Response
In January, when the outbreak first hit, Public Health England (PHE) “began a strict program of contact tracing and testing potential cases,” Buzzfeed reported. But due to limited medical laboratory capacity and low supplies of COVID-19 test kits, the government changed course and de-emphasized testing, instead focusing on increased ICU and ventilator capacity. (Scotland, Wales, and Northern Ireland each have separate public health agencies and national health services.)
Later, when the need for more COVID-19 testing became
apparent, UK pathology laboratories had to contend with global shortages of
testing kits and chemicals, The Guardian reported. At present, COVID-19 testing
is limited to healthcare workers and patients displaying symptoms of pneumonia,
acute
respiratory distress syndrome, or influenza-like illness, PHE stated in “COVID-19:
Investigation and Initial Clinical Management of Possible Cases” guidance.
Another factor that has limited widespread COVID-19 testing is the country’s highly-centralized system of public health laboratories, Buzzfeed reported. “This has limited its ability to scale and process results at the same speed as other countries, despite its efforts to ramp up capacity,” Buzzfeed reported. Public Health England, which initially performed COVID-19 testing at one lab, has expanded to 12 labs. NHS laboratories also are testing for the SARS-CoV-2 coronavirus, PHE stated in “COVID-19: How to Arrange Laboratory Testing” guidance.
Sharon Peacock, PhD, PHE’s National Infection Service Interim Director, Professor of Public Health and Microbiology at the University of Cambridge, and honorary consultant microbiologist at the Cambridge clinical and public health laboratory based at Addenbrookes Hospital, defended this approach at a March hearing of the Science and Technology Committee (Commons) in Parliament.
“Laboratories in this country have largely been merged, so we have a smaller number of larger [medical] laboratories,” she said. “The alternative is to have a single large testing site. From my perspective, it is more efficient to have a bigger testing site than dissipating our efforts into a lot of laboratories around the country.”
Writing in The Guardian, Paul Hunter, MB ChB MD, a microbiologist and Professor of Medicine at University of East Anglia, cites historic factors behind the testing issue. The public health labs, he explained, were established in 1946 as part of the National Health Service. At the time, they were part of the country’s defense against bacteriological warfare. They became part of the UK’s Health Protection Agency (now PHE) in 2003. “Many of the laboratories in the old network were shut down, taken over by local hospitals or merged into a smaller number of regional laboratories,” he wrote.
US Facing Different Clinical Laboratory Testing Problems
Meanwhile, a few medical laboratories in the US are now contending with a different problem: Unused testing capacity, Nature reported. For example, the Broad Institute of MIT and Harvard in Cambridge, Mass., can run up to 2,000 tests per day, “but we aren’t doing that many,” Stacey Gabriel, PhD, a human geneticist and Senior Director of the Genomics Platform at the Broad Institute, told Nature. Factors include supply shortages and incompatibility between electronic health record (EHR) systems at hospitals and academic labs, Nature reported.
Politico
cited the CDC’s narrow testing criteria, and a lack of supplies for collecting
and analyzing patient samples—such as swabs and personal protective equipment—as
reasons for the slowdown in testing at some clinical laboratories in the US.
Challenges Deploying Antibody Tests in UK
The UK has also had problems deploying serology tests designed to detect whether people have developed antibodies against the virus. In late March, Peacock told members of Parliament that at-home test kits for COVID-19 would be available to the public through Amazon and retail pharmacy chains, the Independent reported. And, Politico reported that the government had ordered 3.5 million at-home test kits for COVID-19.
However, researchers at the University of Oxford who had been charged with validating the accuracy of the kits, reported on April 5 that the tests had not performed well and did not meet criteria established by the UK Medicines and Healthcare products Regulatory Agency (MHRA). “We see many false negatives (tests where no antibody is detected despite the fact we know it is there), and we also see false positives,” wrote Professor Sir John Bell, GBE, FRS, Professor of Medicine at the university, in a blog post. No test [for COVID-19], he wrote, “has been acclaimed by health authorities as having the necessary characteristics for screening people accurately for protective immunity.”
He added that it would be “at least a month” before suppliers could develop an acceptable COVID-19 test.
In the United States, the Cellex COVID-19 test is intended for use by medical laboratories. As well, many research sites, academic medical centers, clinical laboratories, and in vitro diagnostics (IVD) companies in the US are working to develop and validate serological tests for COVID-19.
Within weeks, it is expected that a growing number of such
tests will qualify for a Food and Drug Administration (FDA) Emergency Use
Authorization (EUA) and become available for use in patient care.
Pathologists and clinical laboratory scientists may find one hospital’s use of a machine-learning platform to help improve utilization of lab tests both an opportunity and a threat
Variation in how individual physicians order, interpret, and act upon clinical laboratory test results is regularly shown by studies in peer-reviewed medical journals to be one reason why some patients get great outcomes and other patients get less-than-desirable outcomes. That is why many healthcare providers are initiating efforts to improve how physicians utilize clinical laboratory tests and other diagnostic procedures.
This effort came about after clinical and administrative leadership at Flagler Hospital realized that only about one-third of its physicians regularly followed certain medical decision-making guidelines or clinical order sets. Armed with these insights, staff members decided to find a solution that reduced or removed variability from their healthcare delivery.
Reducing Variability Improves Care, Lowers Cost
Variability in physician care has been linked to increased healthcare costs and lower quality outcomes, as studies published in JAMA and JAMA Internal Medicine indicate. Such results do not bode well for healthcare providers in today’s value-based reimbursement system, which rewards increased performance and lowered costs.
Clinical order sets are designed to be used as part of clinical decision support systems (CDSS) installed by hospitals for physicians to standardize care and support sound clinical decision making and patient safety.
However, when doctors don’t adhere to those pre-defined standards, the results can be disadvantageous, ranging from unnecessary services and tests being performed to preventable complications for patients, which may increase treatment costs.
“Over the past few decades we’ve come to realize clinical variation plays an important part in the overuse of medical care and the waste that occurs in healthcare, making it more expensive than it should be,” Michael Sanders, MD (above) Flagler’s Chief Medical Information Officer, told Modern Healthcare. “Every time we’re adding something that adds cost, we have to make sure that we’re adding value.” (Photo copyright: Modern Healthcare.)
Flagler’s AI project involved uploading clinical,
demographic, billing, and surgical information to the AyasdiAI platform, which then
employed machine learning to analyze the data and identify trends. Flagler’s
physicians are now provided with a fuller picture of their patients’ conditions,
which helps identify patients at highest risk, ensuring timely interventions that
produce positive outcomes and lower costs.
How Symphony AyasdiAI Works
The AyasdiAI application utilizes a category of mathematics called topological data analysis (TDA) to cluster similar patients together and locate parallels between those groups. “We then have the AI tools generate a carepath from this group, showing all events which should occur in the emergency department, at admission, and throughout the hospital stay,” Sanders told Healthcare IT News. “These events include all medications, diagnostic tests, vital signs, IVs, procedures and meals, and the ideal timing for the occurrence of each so as to replicate the results of this group.”
Caregivers then examine the data to determine the optimal
plan of care for each patient. Cost savings are figured into the overall
equation when choosing a treatment plan.
Flagler first used the AI program to examine trends among their pneumonia patients. They determined that nebulizer treatments should be started as soon as possible with pneumonia patients who also have chronic obstructive pulmonary disease (COPD).
“Once we have the data loaded, we use [an] unsupervised
learning AI algorithm to generate treatment groups,” Sanders told Healthcare
IT News. “In the case of our pneumonia patient data, Ayasdi produced nine
treatments groups. Each group was treated similarly, and statistics were given
to us to understand that group and how it differed from the other groups.”
Armed with this information, the hospital achieved an 80% greater physician adherence to order sets for pneumonia patients. This resulted in a savings of $1,350 per patient and reduced the readmission rates for pneumonia patients from 2.9% to 0.4%, reported Modern Healthcare.
The development of a machine-learning platform designed to
reduce variation in care (by helping physicians become more consistent at
following accepted clinical care guidelines) can be considered a warning shot
across the bow of the pathology profession.
This is a system that has the potential to become interposed
between the pathologist in the medical laboratory and the physicians who refer
specimens to the lab. Were that to happen, the deep experience and knowledge
that have long made pathologists the “doctor’s doctor” will be bypassed.
Physicians will stop making that first call to their pathologists, clinical
chemists, and laboratory scientists to discuss a patient’s condition and
consult on which test to order, how to interpret the results, and get guidance
on selecting therapies and monitoring the patient’s progress.
Instead, a “smart software solution” will be inserted into
the clinical workflow of physicians. This solution will automatically guide the
physician to follow the established care protocol. In turn, this will give the
medical laboratory the simple role of accepting a lab test order, performing
the analysis, and reporting the results.
If this were true, then it could be argued that a laboratory
test is a commodity and hospitals, physicians, and payers would argue that they
should buy these commodity lab tests at the cheapest price.
