By taking early measures to combat the spread, the country had a medical laboratory test for COVID-19 available as early as Jan. 24, and was able to focus medical laboratory testing on the most at-risk individuals
With the Coronavirus disease 2019 (COVID-19) outbreak dominating headlines and medical laboratories under growing pressure to increase testing capacity, Taiwan’s rapid response to the pandemic could provide a critical model for other countries to follow.
Given its proximity to mainland China—just 81 miles—and the large number of individuals who frequently travel back and forth between the countries, Taiwan was at risk of having the second-highest number of imported COVID-19 cases, according to a model developed by researchers at Johns Hopkins University and the University of New South Wales Sydney. News reports indicate that, each year, about 60,000 flights carry 10 million passengers between Taiwan and China.
Data from Taiwan’s Centers for Disease Control (CDC) and Central Epidemic Command Center (CECC) indicate that the country has managed to contain the outbreak thanks to these aggressive actions.
As of March 19, Taiwan’s CECC reported a total of 108 laboratory-confirmed COVID-19 infections. That compares with 81,155 in China, 41,035 in Italy, and 10,755 in the US, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. When the World Health Organization (WHO) reports on the number of COVID-19 cases by country, it includes the number of COVID-19 cases from Taiwan under the totals for the People’s Republic of China. WHO made this decision several years ago, under pressure by China to not recognize Taiwan as an independent nation.
The World
Population Review website says Taiwan’s population is about 23.8 million.
But its infection rate is low even on a per capita basis: Approximately 45
infections per million population, compared with 6,784 in Italy, 564 in China,
and 326 per million in the US.
The JAMA authors noted that Taiwan was prepared for
an outbreak after its experience with the severe
acute respiratory syndrome (SARS) pandemic in 2003, which also originated
in China.
Timeline of COVID-19 Outbreak at the Earliest Stages
Taiwan apparently learned a lesson about preparedness from
the SARS outbreak the rest of the world did not and that enabled the tiny
nation to respond immediately to the novel Coronavirus threat.
The country’s efforts began on Dec. 31 with inspections of
flight arrivals from Wuhan. “When there were only a very few cases [of
COVID-19] reported in China, [Taiwanese health authorities] already went onto
every airplane that came from Wuhan,” C. Jason Wang,
MD, PhD, an Associate Professor of Pediatrics and Director of the Center for Policy, Outcomes, and
Prevention at Stanford University and lead author of the JAMA
report, told Vox.
“Health officials came on the airplane and checked people for symptoms,” he
added.
Travelers who had recently visited Wuhan and displayed
symptoms of pneumonia were quarantined at home for 14 days. Taiwan’s
CDC reported that quarantined individuals were being tested for the
2019-nCoV coronavirus (later renamed to SARS-CoV-2)
soon after it was identified. The CECC, activated in January to coordinate the
government’s response, reported the first confirmed imported case on Jan. 21.
On Jan. 24, their
CDC announced that testing for the virus was being performed at the CDC and
eight designated hospitals. Testing included samples from physicians around the
country. As of Feb. 17, daily testing capacity was about 1,300 samples, the JAMA
authors reported.
Wang told Vox that aggressive measures to identify
and isolate at-risk individuals at the earliest stages reduced the volume of clinical
laboratory tests that had to be performed. “Here in the US and elsewhere, we’re
now seeing community spread,” he said. “It’s probably been here for a while.
And so now we’re trying to see, ‘Oh, how many people should we test?’ Then, you
really need to have a very large capacity in the beginning.”
“I think the US has enormous capacity that’s currently not being used,” C. Jason Wang, MD, PhD (above), Associate Professor of Pediatrics and Director of the Center for Policy, Outcomes, and Prevention at Stanford University and lead author of the JAMA report, told Vox. “We have big tech companies that really could do a lot, right? We ought to get the big companies together. Get the governors together, get the federal government agencies to work with each other, and try to find innovative ways to think about how to best do this. We’ve got the smartest people here in the US because they come from everywhere. But right now, those are untapped resources. They’re not working together. And the federal government, the agencies, they need to collaborate a little more closely.” (Photo copyright: Stanford University.)
More Actions by Authorities
The JAMA report supplementary materials notes a total of 124 actions taken by Taiwanese authorities between Jan. 20 and Feb. 24 to contain the outbreak. In addition to the border inspections, quarantines and testing, they included integration of data between the country’s National Health Insurance Administration and National Immigration Agency, so authorities, and later hospitals, could identify any patient who had recently traveled to China, Hong Kong, or Macau.
The steps also included:
An escalating series of travel restrictions,
eventually including suspension of most passenger flights from Taiwan to China,
as well as a suspension of tours to Hong Kong or Macau.
Use of government-issued cell phones to monitor
quarantined individuals.
Fines for individuals breaking the 14-day home
quarantine.
Fines for incoming travelers who failed to
provide accurate health information.
Fines for disseminating false information or
rumors about the epidemic.
Fines and jail sentences for profiteering on disease-prevention
products.
Designation of military camps and other
government facilities for quarantine.
Nationwide disinfection of universities,
colleges, and public spaces around schools.
The government also took aggressive action to ensure
adequate supplies of surgical masks, including stepped-up manufacturing, export
bans, price limits, and a limit of one to three masks per purchase.
The JAMA authors noted that government officials issued daily press briefings to educate the public about the outbreak. Communication efforts also included public service announcements by Taiwan Vice President Chen Chien-jen, a trained epidemiologist.
A poll taken in Taiwan on Feb. 17 and 18 indicated high approval ratings for officials’ response to the crisis.
The JAMA authors also noted some “challenges” in the
government’s response. For example, most real-time public communication was in
Mandarin Chinese and sign language, leaving out non-Taiwanese citizens in the
country. And the cruise ship Diamond Princess, later found to have infections
on board, was allowed to dock near Taipei and disembark passengers. There are
also questions about whether similar policies can be sustained through the end
of a pandemic.
Still, “well-trained and experienced teams of officials were
quick to recognize the crisis and activated emergency management structures to
address the emerging outbreak,” the JAMA authors wrote. “Taiwan is an
example of how a society can respond quickly to a crisis and protect the
interests of its citizens.”
One noteworthy difference in the speedy response to
recognition of a novel coronavirus in Taiwan, compared to recognition of the
same novel coronavirus in the United States, was the fast availability of
clinical laboratory tests for COVID-19 in Taiwan.
Pathologists and clinical laboratory professionals here in
the US are frustrated that their skills and talents at developing and
validating new assays on an accelerated timeline were not acknowledged and
leveraged by government officials as they decided how to respond to the
emergence of the novel coronavirus now called SARS-CoV-2.
As hospitals are forced to innovate, anatomic pathologists and medical laboratories will need to adapt to new healthcare delivery locations and billing systems
As new challenges threaten the survival of many hospitals worldwide, medical laboratories may be compelled to adapt to the needs of those transforming organizations. Those challenges confronting hospitals are spelled out in a recent report from management consulting firm McKinsey and Company with the provocative title, “The Hospital Is Dead, Long Live the Hospital!”
A team of analysts led by McKinsey senior partner Penny
Dash, MB BS, MSc, looked at nine trends affecting hospitals in North America,
Europe, Asia, and other regions. These trends, the authors contend, will force
hospitals to adopt innovations in how they are structured and how they deliver
healthcare.
Here are nine challenges hospitals face that have
implications for medical laboratories:
1. Aging Patient Populations
“Patient populations are getting older, and their needs are becoming more complex,” McKinsey reports, and this is imposing higher cost burdens. The US Census Bureau projects that by 2030 approximately 20% of the US population will be 65 or older compared with about 15% in 2016.
The federal Centers for Medicare and Medicaid Services (CMS) reports that this age group accounts for a disproportionate share of healthcare costs. In 2014, CMS states, per-capita healthcare spending was $19,098 for people 65 or older compared with $7,153 for younger adults.
The Census Bureau graphic above illustrates how the age of the US population is changing. People are living longer, and as Dark Daily reported in May, this could present opportunities for medical laboratories and anatomic pathologists, as early detection of chronic diseases affecting older patients could ultimately reduce treatment costs. (Photo copyright: US Census Bureau.)
2. Patients Are Behaving More Like Consumers
“Patients—along with their families and caregivers—expect to
receive more information about their conditions and care, access to the newest
treatments, and better amenities,” McKinsey reports.
Clinical advances are increasing the range of treatments that can be performed in outpatient settings, McKinsey reports. The authors point to multiple studies suggesting that patients can receive better outcomes when more care is delivered outside the hospital. Dark Daily has often reported on the impact of this trend, which has reduced demand for in-hospital laboratory testing while increasing opportunities for outpatient services.
4. Move Toward High-Volume Specialist Providers
Compared with general hospitals, specialized, high-volume “centers
of excellence” can deliver better and more cost-effective care in many
specialties, McKinsey suggests. As evidence, the report points to research
published over the past 12 years in specialist journals.
Some US employers are steering patients to top-ranked providers as part of their efforts to reduce healthcare costs. For example, Walmart (NYSE:WMT) pays travel costs for patients to undergo evaluation and treatment at out-of-state hospitals recognized as centers of excellence, which Dark Daily reported on in July.
UnitedHealthcare’s new preferred lab network also appears to be a nod toward this trend. As The Dark Report revealed in April, the insurer has designated seven laboratories to be part of this network. These labs will offer shorter wait times, lower costs, and higher quality of care compared with UnitedHealthcare’s larger network of legacy labs, the insurer says.
5. Impact of Clinical Advances
Better treatments and greater understanding of disease
causes have led to significantly lower mortality rates for many conditions,
McKinsey reports. But the authors add that high costs for new therapies are
forcing payers to contend with questions about whether to fund them.
As Dark Daily has often reported, new genetic therapies often require companion tests to determine whether patients can benefit from the treatments. And these also face scrutiny from payers. For example, in January 2018, Dark Daily reported that some insurers have refused to cover tests associated with larotrectinib (LOXO-101), a new cancer treatment.
6. Impact of Disruptive Digital Technologies
The McKinsey report identifies five ways in which digital
technologies are having an impact on hospitals:
Automation of manual tasks;
More patient interaction with providers;
Real-time management of resources, such as use of hospital beds;
Real-time clinical decision support to enable more consistency and timeliness of care; and
Use of telemedicine applications to enable care for patients in remote locations.
All have potential consequences for medical laboratories, as Dark Daily has reported. For example, telepathology offers opportunities for pathologists to provide remote interpretation of blood tests from a distance.
7. Workforce Challenges
Many countries are contending with shortages of physicians,
nurses, and allied health professionals, McKinsey reports. The authors add that
the situation is likely to get worse in the coming decades because much of the current
healthcare workforce consists of baby boomers.
An investigation published in JAMA in May indicated that, in the US, the number of active pathologists decreased from 15,568 to 12,839 between 2007 and 2017. In January, Dark Daily reported that clinical laboratories are also dealing with a generational shift involving medical technologists and lab managers, as experienced baby boomers who work in clinical laboratories are retiring.
8. Financial Challenges
In the United States and other countries, growth in
healthcare spending will outpace the gross domestic product, the McKinsey
report states, placing pressure on hospitals to operate more efficiently.
9. More Reliance on Quality Metrics
McKinsey cites regulations in Canada, Scandinavia, and the UK that require hospitals to publish quality measurements such as mortality, readmittance, and infection rates. These metrics are sometimes linked to pay-for-performance programs, the report states. In the United States, Medicare regularly uses quality-of-care metrics to determine reimbursement, and as Dark Daily reported in July, a new Humana program for oncology care includes measurements for medical laboratories and anatomic pathology groups.
The McKinsey report reveals that several trends in
healthcare are forcing healthcare leaders to adopt new strategies for success.
The report’s authors state that their “results show that contemporary
healthcare providers around the world are facing several urgent imperatives: to
strengthen clinical quality; increase the delivery of personalized,
patient-centered care; improve the patient experience; and enhance their
efficiency and productivity.”
These pressures on hospitals typically also require
appropriate responses from clinical laboratories and anatomic pathology groups
as well.
Clinical laboratory test claims make up a substantial proportion of all claims filed each year. Thus, any effort to streamline or reform claims adjudication and administration in the US will alter how labs and pathologists conduct business
Clinical laboratory managers and anatomic pathologists know how costly and complex the US healthcare system can be. However, expenses associated with care and treatment are only part of the total picture. Resources devoted to paperwork and administrative costs apparently increase overall expenditures associated with healthcare to a much higher degree than is generally known.
That’s according to several studies The New York Times reported on in July.
US Administrative Costs Higher than All Other Nations
One study conducted by The New England Journal of Medicine (NEJM) in 2003 estimated administrative costs account for approximately 30% of all healthcare expenditures in the US. The researchers examined data from 1999 to reach those conclusions. In today’s economy, those numbers are higher. On average, $5,700 of every $19,000 that US workers and their employers pay for family coverage each year goes towards administrative costs.
A 2014 study published by Health Affairs compared administrative costs for US hospital expenditures to those of seven other countries: Canada, England, France, Germany, the Netherlands, Scotland, and Wales. This study evaluated data from 2010/2011 and found that hospital administrative costs in the US far exceed rates in other nations. According to the study, administrative costs accounted for:
25.3% of total hospital expenditures in the US;
19.8% in the Netherlands;
15.5% in England; and,
12% in Canada and Scotland.
According to the Health Affairs study, more than $150 billion could have been saved in 2011 by reducing per capita spending for administrative costs to the levels observed in Canada and Scotland.
“The extraordinary costs we see are not because of administrative slack or because healthcare leaders don’t try to economize,” Kevin Schulman, MD, Professor, Department of Medicine, Duke University, and co-author of the Health Affairs study told The New York Times. “The high administrative costs are functions of the system’s complexity.” (Photo copyright: Duke University.)
Complexity of Payer System Partly to Blame
One reason for the costliness in the US healthcare system is the myriad of payers that healthcare organizations have to grapple with to receive payment. Private health insurers and public health programs like Medicare and Medicaid, each have their own procedures, regulations, and forms that need to be submitted to receive payments. This translates to more employee time devoted to billing.
Another factor driving costs is the staff time devoted to the collection of debts. A 2017 Health Affairs study examined medical claims data from 88,000 healthcare providers contracted with Athenahealth to determine the percentage of bills paid within one year from the initial service.
The study found that 93.8% of patient bills under $35 were paid within a year. However, that percentage decreased as the patient obligation increased:
90.5% of patients paid bills between $35 and $75 within one year;
83.7% paid bills between $75 and $200 in the same time period; however,
When bills increase to $200 or more, just 66.7% were paid within a year’s time.
Providers wrote off approximately 16% as abandoned or bad debts, with an additional 17% going to collection agencies.
Another study, published in Health Affairs in 2009, surveyed 895 physicians about the time they spent dealing with administrative tasks. On average, physicians reported spending 43 minutes per workday interacting with health plans. This number is the equivalent of three hours/week and almost three weeks/year. Those numbers have reportedly increased since then.
EHRs Do Not Reduce Administrative Costs, Contrary to Belief
Efforts have been made to reduce administrative costs in the US healthcare industry. One such measure involved increased use of certified electronic health record (EHR) systems, which the federal government spent billions of dollars promoting and incentivizing providers to adopt on the claim that EHRs would reduce healthcare costs, in part by removing most of the paperwork.
However, a 2018 study published in the Journal of the American Medical Association (JAMA) reported the adoption of EHRs did not reduce administration costs. Researchers at Duke University and Harvard Business School utilized a cutting-edge accounting method to determine the administrative costs within a large academic healthcare system that was using a certified EHR.
Their study determined the administrative costs for processing a single medical bill ranged from $20 for a doctor visit to $215 for an inpatient surgical procedure. These costs accounted for 3%-25% of total professional revenue for the provided services.
“We need to understand better how complexity is driving these enormous costs within the system, costs that do not add value to patients, employers, or providers,” noted Barak Richman, JD, PhD, Duke University School of Law and Margolis Center for Health Policy, one of the study’s authors.
Clinical Lab Test Claims a Major Portion of Administrative Costs
Nevertheless, administrative costs are a necessary part of doing business and not always as negative as perceived. An article published by Health Affairs in 1992 divided administrative costs in the healthcare industry into four categories:
Transaction-related: claims processing, billing, admissions, and tracking employee hiring/terminations;
Benefits Management: quality assurance, plan design, statistical and internal analyses, and management information systems;
Selling and Marketing: strategic planning, underwriting, and advertising; and,
Regulatory and Compliance: waste management, licensing requirements, and discharge planning.
“We hope that this work is the first step toward informing policy solutions that could reduce these non-value-added costs largely hidden within the healthcare system,” Schulman stated in a Duke University news release.
The issue of costly paperwork and administrative expenditures is significant for the clinical laboratory profession as lab test claims make up a substantial portion of all medical claims filed annually. Efforts to streamline or reform claims adjudication and administration will have an impact on the way clinical labs and anatomic pathology groups conduct business in the future.
Identifying patients who will likely develop prolonged concussion symptoms could lead to new clinical laboratory tests and personalized medicine treatments
Researchers are homing in on a new diagnostic assay for concussion that could potentially generate significant numbers of test referrals to the nation’s clinical laboratories. This innovative work is targeting how concussions are diagnosed and treated.
Each year, thousands of children receive sports-related injuries, including concussions. There are ways for anatomic pathologists and hospital medical laboratories to diagnose concussions; however, testing can be invasive and doesn’t always reveal a complete picture of the injury state.
Additionally, about one third of children with concussions develop prolonged symptoms. However, when prescribing treatment plans, physicians have been unable to predict which patients are likely to recover quickly versus those who will have a longer recovery.
Now, researchers at Penn State College of Medicine (Penn State) believe they have discovered five microRNAs in saliva that could be used to identify patients who will likely experience prolonged concussion symptoms even one month after the initial injury.
The study also found that certain materials in saliva can help diagnose the severity of concussions and could hold the key to more effective clinical laboratory tests and personalized medicine treatments.
The Penn State researchers published their study results in JAMA Pediatrics, a publication of the Journal of the American Medical Association (JAMA).
Concussion Leading Sports-related Brain Injury
There are approximately 3.8 million sports and recreation-related traumatic brain injuries in the United States each year and the majority of those cases are concussions, according to The Concussion Place. Most concussions treated in emergency rooms are due to falls, motor-vehicle related injuries, being struck by an object, assaults, or playing sports.
Also known as mild traumatic brain injuries (mTBI), concussions are caused by blows or jolts to the head or body that cause the brain to move with excessive force inside the skull. The sudden impact damages brain cells and causes chemical changes within the brain that alter normal functioning. Though usually not life threatening, the damage can be serious and linger for months.
Symptoms of concussion include: headaches, fatigue, nausea, vomiting, dizziness, balance problems, confusion, memory problems, sleep disturbances, and double or blurry vision. Symptoms usually occur immediately, but could take days or even weeks to appear.
Identifying Severity/Predicting Prolonged Symptoms of Traumatic Brain Injuries
After a concussion occurs, brain cells release small fragments of genetic material known as microRNAs while they attempt to repair themselves. A portion of these microRNAs appear in the injured person’s blood and saliva.
In order to determine whether these microRNAs could be used to determine the severity of a traumatic brain injury and predict whether prolonged symptoms would occur, the prospective cohort study researchers gathered saliva samples from 52 concussion patients between the ages of seven and 21:
The average age of the subjects was 14;
Twenty-two of the participants were female;
They were all athletes; and,
The majority of the samples were collected one to two weeks after the initial injury.
The researchers examined distinct microRNAs in the samples and identified some that enabled them to predict how long a patient’s concussion symptoms might last. In addition, they found one microRNA in children and young adults that accurately predicted which subjects would experience memory and problem-solving difficulties as part of their symptomatology.
The researchers also evaluated the concussion patients using the Sport Concussion Assessment Tool (SCAT-3), Third Edition. Physicians use this questionnaire to assess the symptoms and severity of concussions. The researchers also asked the parents of the concussed patients for observations about their children’s symptoms.
During follow up visits, which occurred at four- and eight-week increments following the original assessment, the Penn State researchers collected additional saliva samples and re-evaluated the patients using SCAT-3.
New Biomarkers Based on MicroRNAs Instead of Protein
“There’s been a big push recently to find more objective markers that a concussion has occurred, instead of relying simply on patient surveys,” Steven Hicks, MD, PhD, Assistant Professor of Pediatrics, Penn State College of Medicine, Hershey, Pa., one of the study researchers, told Penn State News.
“Previous research has focused on proteins, but this approach is limited because proteins have a hard time crossing the blood-brain barrier. What’s novel about this study is we looked at microRNAs instead of proteins, and we decided to look in saliva rather than blood,” he noted.
According to Steven Hicks, MD, PhD (above), who worked on the Penn State College of Medicine study, microRNAs could be more accurate than the traditional questionnaire when diagnosing and forecasting the effects of concussions. “The microRNAs were able to predict whether symptoms would last beyond four weeks with about 85% accuracy,” he told Penn State News. “In comparison, using the SCAT-3 report of symptoms alone is about 64% accurate. If you just go off the parent’s report of symptoms, it goes down to the mid-50s. In this pilot study, these molecular signatures are outperforming survey tools.” (Photo copyright: MD Magazine.)
The goal of this research was to develop a way to definitively ascertain that a concussion had occurred, predict the length and type of symptoms, and then use that data to improve and personalize care for children and young adults who have had a concussion.
“With that knowledge physicians could make more informed decisions about how long to hold a child out of sports, whether starting more aggressive medication regimens might be warranted, or whether involving a concussion specialist might be appropriate,” Hicks told MD Magazine. “Anytime we can use accurate, objective measures to guide medical care, I think that represents an opportunity to improve concussion treatment.”
Further research and clinical trials will be needed to solidify the effectiveness and accuracy of these new biomarkers. However, a rapid, non-invasive saliva test that can determine the severity of a concussion, and predicted whether prolonged symptoms will likely occur, would be widely used and could be an important assay for clinical laboratories. Particularly those associated with hospital medical laboratories and emergency rooms.
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.
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.
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.
