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Medicare Laboratory Payment Policy: Now and in the Future 3 Technology Trends in the Clinical Laboratory Industry The laboratory environment has been characterized by ongoing rapid and dramatic innovation since the 1980s. There has been remarkable growth in the range and complexity of available tests and services, which is expected to continue. Laboratory technology is often at the forefront of medical advances. In some cases, testing techniques to diagnose or screen for a particular condition are available before effective treatment. Innovation in laboratory technology, which includes both new tests and advances in equipment and testing techniques, has made testing more efficient and automated. Information technology (IT) has revolutionized the transfer of data by decreasing the time it takes to order and receive test results and by creating opportunities for research on large datasets. Many predict that clinical laboratory technology will play an even more important role in the future delivery of health care (Felder et al., 1999; Wilkinson, 1997). Innovation in health care, particularly when it is more efficient than existing methods (see Box 3.1), is welcomed by payers, providers, and patients; however, the efficient integration of innovation into medical care may be affected by policies related to coverage, coding, and payment. There are wide variations in the types of technology employed by different types of laboratories. The discussion of technology trends below does not mean that these trends are occurring in all settings. For example, certain small laboratories do not have the volume of testing to justify automated or elaborate IT systems. This chapter reviews the three major technological innovations that have radically altered the way samples are collected and analyzed and the way results
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Medicare Laboratory Payment Policy: Now and in the Future BOX 3.1 The Future of Technology Edwina Clark, a 42 year old woman with diabetes, no longer needs to test her blood sugar concentrations every day because she now has a glucose sensor implanted under the skin of her thigh. Her toilet at home provides a double check because it can analyze glucose, protein, and bacteria concentrations in her urine. Instead of giving herself daily injections of insulin, she now relies on an implanted insulin reservoir that automatically adjusts her insulin dose. Her blood sugar concentrations are so well controlled that she is unlikely ever to develop any of the vascular and neurological complications that used to be common. This futuristic case was taken directly from a 1999 editorial in the British Medical Journal (Berger and Smith, 1999). are reported. These innovations include automation, IT, and laboratory measurement or testing technology. The changes that these technological developments produce, especially how and where testing services are delivered and laboratory-staffing needs, are also discussed. AUTOMATION Automation has been, and promises to continue to be, an important force in the changing laboratory marketplace. Laboratory automated (and manual) processes occur in three stages: Preanalytic stage: This includes, choosing the test, placing the order, preparing the patient, collecting the specimen, transporting the specimen, any specimen preparation work, and daily quality controls. Analytic stage: This involves actual testing of the specimen and all routine procedures up to result reporting. Postanalytic stage: This is concerned primarily with forwarding results to the appropriate hospital department or physician and routine daily maintenance and shutdown (Travers and Krochmal, 1988).1 1 The three stages of clinical laboratory testing, specifically within the laboratory, were defined in 1988 by Eleanor Travers and Charles Krochmal. Others categorize the computer entry of demographics, test request review, and specimen preparation, including specimen labeling and centrifugation, as a part of the analytic rather than the preanalytic phase of testing (Cruse, 1998). Still others would include steps that take place in the doctor’s office prior to placing the order and following delivery of the test results within these phases.
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Medicare Laboratory Payment Policy: Now and in the Future Preanalytic Stage Although some progress has been made in automating the preanalytic phase of testing, much of the work in this phase is still performed manually. In some settings, such as within the hospital, specimens are transferred efficiently using a pneumatic tubing system. In an independent laboratory setting, specimens are often transported manually by courier to the testing site.2 In most settings of care, specimens are collected and labeled with identifying information and are entered into the laboratory computer system manually. In addition, most decisions about the adequacy of the specimen’s volume and whether the specimen is in the correct type of container are made by a laboratory technician, not a machine (McPherson, 1998). There are many opportunities to automate preanalytic processes. For instance, specimen containers can be prelabeled with bar codes that link specimens to identifying electronic information. The container may also contain substances that automatically prepare the sample for processing (Felder et al., 1999). There has been progress with optical character recognition hardware and software that can “read” labels (Burtis, 1996). Test tubes may eventually have computer chips embedded in the stopper (Felder et al., 1999). Technology to automate many of the processes for aliquot3 or specimen preparation, sample quality testing, specimen transport and handling, and automatic accessioning4 exist but are not widely used (McPherson, 1998). Test ordering over the Internet may increase efficiency and reduce administrative errors during specimen collection and processing. Machines eventually may draw blood specimens, and robots may transport specimens from hospitalized patients to the hospital laboratory (Felder et al., 1999; Wilkinson, 1997). Analytic Stage In most laboratory settings, the analytic stage of testing is more automated. Beginning in the 1960s, several rounds of sophisticated automation resulted in multianalyzers, which are multichannel instruments that measure many different analytes.5 Automative technology also allows groups of tests, called “panels” or “profiles,” to be run on the same sample. A similar evolution occurred in the hematology laboratory, where the counting of different types of blood cells is consolidated and expanded to include automated differentials on the same in- 2 While transport is still manual, the development of a global transportation system that facilitates rapid transport of people and goods has enabled independent laboratories to centralize their facilities and reduce costs through economies of scale (Burtis, 1996). 3 An aliquot is the small portion of a specimen taken for an assay or test. 4 Accession is the process of identifying a specimen and entering a unique specimen identifier into laboratory records. 5 An analyte is any substance that is measured. The term is usually applied to a component of blood or other body fluid.
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Medicare Laboratory Payment Policy: Now and in the Future strument (McPherson, 1998). A chemistry, hematology, coagulation, or urinalysis analyzer can now generate highly precise and accurate results in only a few minutes (Cruse, 1998). Consolidation of tests and testing equipment is possible in part because operator activities for each type of test are interchangeable. Running tests is simplified by redesigning equipment (“analyzers”) to look and function similarly on the outside, even though very different operations are done inside. According to Richard McPherson, “The tasks that attendant operators conduct now (sample presentation, result review, and quality control) are quite similar on very different analyzers” (McPherson, 1998). Emerging in the early 1980s, consolidated workstations contain several instruments in one area. Typically, the area is managed by one technical person supervising several nontechnical staff (Cruse, 1998).6 The technical staff member monitors all instruments, and reviews and releases the test results (McPherson, 1998). The workstation approach increases the productivity of the laboratory, reduces personnel costs, and dramatically decreases testing turnaround time (TAT) (Cruse, 1998). Modular laboratory automation was introduced during the 1990s and represents a more sophisticated design than approaches aimed at automating the entire laboratory all at once. This technology permits the laboratory to begin with a basic configuration and add automated modules as needed. Thus, a laboratory can buy only the modular pieces that best meet its needs. It also makes integrating the new technology into existing laboratory architecture easier because the modular units are small and mobile (Sainato, 2000). Only a few vendors of modular automation are in the market at this time (Marietti, 1998). Robots may be part of a facility’s modular laboratory automation system. Although especially beneficial for tasks such as serology, blood grouping, and tissue typing, (Lifshitz and De Cresce, 1989), robots are not used as extensively by the clinical laboratory industry in the United States as they are in Japan.7 Replacing manual steps with automated processes virtually eliminated the risk of mistakes and reduced testing error rates (Howanitz, 1994). Enhancements in automated processing resulted in improved technical precision and accuracy. According to McPherson (1998), “the vast majority of assays demonstrate technical variabilities that are well within medical needs.” 6 When considering the task conducted by individuals who do not have technical skills, it is important to note that many states have licensure laws that preclude the conduct of certain testing procedures by nontechnical staff. In addition, Clinical Laboratory Improvement Amendments of 1988 requirements, as they relate to moderate- and high-complexity tests, do not allow the use of nontechnical staff for certain testing procedures. 7 Japan is more focused on industrial robotics in general and chose to make the investment in laboratory robotics. Laboratories in the United States have been slower to adopt this technology because of its high cost and difficulty integrating it into existing laboratory architecture.
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Medicare Laboratory Payment Policy: Now and in the Future Postanalytic Stage Over the past 20 years, the postanalytic phase has become more automated. In the 1980s, test results were often transferred by courier or mail. In the 1990s, they were sometimes conveyed over the telephone or via fax. Today, in some laboratories, the completed results are automatically forwarded to the appropriate area of the hospital or physician office electronically through the use of dedicated printers, and billing and utilization report generation is computerized (McPherson, 1998). Use of the Internet to report results would likely reduce costs by eliminating the need for designated fax and telephone lines. In addition, quicker TAT may lead to reduced episode-of-care costs. Many analytic and postanalytic tasks are now automated using process control software (Markin and Whalen, 2000). For instance, repeat, reflex, 8 and add-on9 testing are managed through electronic systems.10 Electronic systems may also manage specimen transportation, storage, and disposal. Finally, these systems monitor consistency of results and ensure that panic values are called to medical staffs attention. Billing and collection processes may become more automated in the future. Laboratories may automatically obtain and transmit all required documentation necessary for payers to process the claim through electronic systems (e.g., patient’s name, address, and primary and secondary insurance information). Additional information required includes referring provider information, the patient’s copay responsibilities, diagnosis codes, and other data that might be necessary to demonstrate medical necessity. Typically this information is transmitted manually each time a test is ordered. Integrating electronic systems that automatically send updated information electronically every time a test is ordered would increase efficiency. There are steps that take place after the laboratory submits its results to the physician including physician interpretation and physician and patient action. After physicians receive the results, they must interpret what those results mean for the patient. Sometimes the physician is assisted in interpreting results by normal ranges included in the laboratory report or a written explanation of the testing results. In some cases, the physician may consult with a laboratorian to better understand the meaning of the test results. The next step is the physician’s course of action. The laboratory tests may indicate that all test results are normal and that no action needs to be taken other than informing the patient of the results. Other courses of action might include additional laboratory testing, hospitalization, changing a medication or the dose of a medication, initiating a new course of treatment, monitoring the patient more closely, or counseling a patient to 8 Reflex tests are tests that are reordered by a physician after an abnormal test result. 9 Add-on tests are tests ordered on the same sample after the initial tests have been conducted. 10 For Medicare payment policy, the Office of the Inspector General (OIG) spells out specific guidelines for reflex and add-on testing.
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Medicare Laboratory Payment Policy: Now and in the Future change certain health-related behaviors. The ultimate outcome for the patient is not simply dependent on obtaining an accurate test value. It also depends on the physician’s interpretation and the action taken by both the physician and patient. INFORMATION TECHNOLOGY Like many other areas of healthcare delivery, laboratory services are experiencing an IT revolution. Laboratory experts that keep pace with emerging IT have found new, more efficient ways to communicate and provide services; educate themselves, their staff, and their clients; market their products; and manage data and information. Because Internet-based communications are inexpensive and not hampered by time differences and geographic distance, experts predict that the Internet will become the primary means of communication in the future (Burtis, 1996; Klatt, 1997). Requests for testing and test results will be communicated electronically. Electronic image transmission will mean that hard-to-diagnose images can be sent quickly and efficiently to national specialty centers (Wilkinson, 1997). Test result reports will be linked to journal articles and other sophisticated multimedia information sources (Friedman, 1998). This capability may become more important with the increased use of genetic testing by general practitioners since physicians often do not understand the meaning of genetic test results (Holtzman, 1999). Streamlining the cost of providing this additional information will also be important since individual consults with a laboratory expert are often not paid for separately and must be worked into the cost of the test. The use of electronic systems creates the opportunity to improve laboratory services. For instance, laboratory results for certain tests can be influenced by drug use. Patient records could include all pharmaceuticals the patient is taking. The computer could then be programmed to identify cases in which the results are likely to be affected, and it may even be able to assist in the interpretation of test results and suggest appropriate actions to be taken. Internet-based reporting creates opportunities to communicate test results directly to patients. In the spring of 2000, Quest Diagnostics, a large national independent laboratory, began offering consumers direct access to test results via an Internet healthcare Web site owned by Caresoft, Inc., called “TheDailyApple.com.” Only patients who are registered with TheDailyApple.com may access their data on-line. Their physicians will have the opportunity to review the results before information is put on-line. Only routine test results are offered, and Caresoft sends personal identification numbers to users via the U.S. mail to ensure confidentiality (Direct-to-consumer test result reporting, 2000).11 11 In some states, providers, and patients may be prohibited from utilizing this type of Internet-based service. Most states have specific laws that address direct access to medical data within the context of a patient’s rights to records. For example, by statute in Tennessee, a patient cannot access medical records directly. Other states’ laws say that pa
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Medicare Laboratory Payment Policy: Now and in the Future Information technology will change the way laboratorians educate themselves and their staff. Laboratory professionals can interact with one another through e-mail and specialized LISTSERVs (Burtis, 1996). They also have access to technical libraries in electronic format (Burtis, 1996). Experts predict that IT will radically alter the format and role of medical journals. They will be more electronically based with links to multimedia sources of information (Berger and Smith, 1999). Information technology has created new marketing and advertising opportunities for laboratories (Klatt, 1997). Increased consumer empowerment, new testing techniques that are simple enough for home use or home sample collection, and IT have combined to create new direct-to-consumer marketing opportunities for laboratory tests. Laboratories may follow the pharmaceutical industry’s lead by marketing directly to consumers and by making products directly available to consumers over the Internet. For instance, there is a consumer-based market for “drugs-of-abuse” tests, home-based HIV tests, glucose monitoring, pregnancy and ovulation tests, and genetic tests. Consumers may prefer to bypass their personal physician for convenience and to keep test results out of their medical records. Most of these types of tests are paid for by consumers, so they do not have the incentive of insurance coverage to obtain these tests through their health care provider. Collecting and analyzing patient outcome data may become more essential in the marketing of laboratory services as third-party payers increasingly demand evidence that new health care services are cost-effective and positively affect patient outcomes. New hardware and software have increased the laboratory’s ability to store and process data. Currently, Quest Diagnostics maintains the world’s largest private database of clinical laboratory test results. It intends to use these resources to add value to its laboratory services (Where is the lab industry headed, 2000). For example, data may be used to track a patient’s progress, minimize redundant testing, evaluate phlebotomists’ collection technique, and track patient outcomes (McDonald, 1997; Plebani, 1999). Large databases can also be used to track disease outbreaks and conduct other types of public health research (McPherson, 1998). While research opportunities abound, laboratories will be challenged to identify ways to protect confidential patient information and obtain patients’ informed consent to participate in research (Chou, 1996). LABORATORY MEASUREMENT AND TESTING TECHNOLOGY Laboratory testing technology advances through both incremental and breakthrough developments. Incremental changes often make testing processes simpler, more efficient (and often less expensive), and of higher quality. Less tients may access their medical records only with the written permission of the ordering physician or by legal request.
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Medicare Laboratory Payment Policy: Now and in the Future frequently, technology makes major advances that result in totally new tests or testing techniques. Esoteric Tests Esoteric tests are relatively uncommon tests that are dependent on physician interpretation skill. As of the mid-1990s, approximately 1,250 different tests were performed by the clinical laboratory industry, about half of which were classified as “routine” (Smith Barney, 1995). For example, in the late 1980s, polymerase chain reaction (PCR) testing was “cutting-edge” technology. Today, PCR is very common and is used for approximately 165,000–220,000 viral load tests for HIV and hepatitis C each year (Klipp, 2000). Because PCR has become so common, it has lost its esoteric label. The total U.S. market for esoteric testing is roughly $2 billion annually, for 50 million specimens (Klipp, 2000). In 1998, this market consisted of $1.4 billion in reference work for hospitals and $618 million in reference work for independent laboratories (Klipp, 2000).12 The median price of tests sent out by hospitals declined 20 percent, from an estimated $28.73 per test in 1996 to $23.19 in 1998 (Klipp, 2000). With 1.4–1.8 tests performed on the average sample, the average revenue generated per specimen is between $33 and $42 (Klipp, 2000). As esoteric tests become more commonly performed, competition and economies of scale may increase, driving prices down further, even in the esoteric market. Genetic Testing With the mapping of the human genome, the field of molecular diagnostics, which includes genetic testing, is expected to grow rapidly during the next five years.13 Genetic tests are able to detect gene mutations. Early detection may allow clinicians to predict predisposition to disease. This is important because genetics are possibly a significant factor in seven of the top ten causes of death in the United States (Klipp, 2000). In addition to addressing the factors associated with these causes of death, genetic testing is also used for determining HIV and hepatitis viral loads, making prenatal diagnoses, identifying chromosome abnormalities, determining the paternity of a child, ascertaining cancer cytogenetics, and identifying inherited or predisposition to diseases. As of August 2000, an Internet-based directory of genetics laboratories reports that 469 laboratories and 895 genetic clinics in the United States were performing tests for 753 genetic diseases, compared to only 110 laboratories that conducted genetic tests for 111 different diseases in 1993 (Children’s Health 12 Reference work includes testing that is sent to an outside laboratory for completion. Many hospital-based, independent, and physician office laboratories do not have adequate equipment and personnel to conduct their own esoteric testing. 13 Some experts believe that current expectations for genetic testing are overblown (Holtzman and Marteau, 2000; Jones, 2000).
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Medicare Laboratory Payment Policy: Now and in the Future Care System, 1999). Not all genetic tests are FDA approved for clinical use; some may be available only in a research setting.14 A future trend in genetic testing is a focus on prevention. According to Robert Nakamura, the emphasis will “shift from costly intervention and treatment of established diseases to proactive prediction and prevention of disease.” He anticipates that predictive tests will screen for data identifying important population genetic risk factors for diabetes, cancer, and autoimmune diseases (Nakamura, 1999). Early identification of immunologic markers that predict autoimmune diseases may facilitate early intervention with autoantigen-specific therapy, targeted directly at the component of the immune system that causes disease (Nakamura, 1999). According to Nakamura, “This approach will require new information systems that will link large-scale databanks and special programs for data mining and retrieval in bioinformatics, cheminformatics, and population genetics. The clinical laboratory will soon be able to provide powerful new molecular diagnostic tools along with multianalytic assays for expression of genes and proteins in different patterns of diseases, disease progression, and predisposition to disease” (Nakamura, 1999). Pharmacogenomics More than 100,000 Americans die every year from side effects of properly prescribed medicines, and another 2 million are made seriously ill (Weiss, 2000). This occurs because medicines are made and sold on a standardized basis even though people vary substantially in the way they respond to these compounds. However, as scientists uncover more and more genes that control individual responses to medications, physicians should be able to base prescribing decisions on a patient’s individual genetic makeup (Evans and Relling, 1999). The cost implications of this new science, called pharmacogenomics, are unclear. This type of genetic screening will likely increase the front-end cost of providing care. It could, however, result in better health outcomes and long-term cost savings substantial enough to offset the initial expense, particularly if 14 Clinical tests are those in which specimens are examined and results reported to the provider and/or patient for the purpose of diagnosis, prevention, or treatment in the care of individual patients. U.S. laboratories performing clinical tests must be Clinical Laboratory Improvement Amendments (CLIA) approved. Research tests are those in which specimens are examined for the purpose of understanding a condition better or developing a clinical test. Test results are generally not given to patients or their providers. Rarely, a research laboratory will, at the patient’s request, share potentially useful findings with a clinical laboratory so the patient’s test results can be confirmed and a formal report issued. Laboratories performing research testing are not subject to CLIA regulation. The cost of research testing is generally covered by the researcher. Requests for participation in research may be denied, at the laboratory’s discretion, if the laboratory has sufficient samples or the subject does not fit the research project goals.
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Medicare Laboratory Payment Policy: Now and in the Future screening efforts target subpopulations that are more likely to be susceptible to the genetic characteristic. Nanotechnology Nanotechnology, the science of building miniature devices out of very small particles such as individual atoms, molecules, viruses, or cells, merges biological and IT science. Nanotechnology has the potential to exponentially increase computer power through smaller, faster computer processors. Nanotechnology research could continue to expand during the coming years with a boost from President Clinton’s 2001 budget, which proposes to create a National Nanotechnology Initiative. The President’s proposal includes $495 million for research projects, an 83 percent increase over funding for this year. Seventy percent of the money will go to university-based research (Executive Office of the President, 2000; McGee, 2000). Nanotechnology promises to affect the clinical laboratory industry through the development of miniaturized components and devices for chemical processing and measuring sensors (Burtis, 1996). This technology could prove to be extremely useful in the movement toward developing small, versatile point-of-care tests. According to Chad Mirkin, acting director for the Center for Nanofabrication and Molecular Assembly at Northwestern University, nanotechnology is already used in tests for tuberculosis and colon cancer (McGee, 2000). It has improved our ability to see chemical processes and microscopic structures in biological systems (Roco et al., 1999). Another potential application is in drug administration. Some drugs dissolve more easily if they are nanometersize (McGee, 2000). Although the potential of nanotechnology is substantial, a great deal of basic scientific research must be completed before clinical applications will be available. TECHNOLOGY’S EFFECT ON SITE OF SERVICE Some laboratory testing has moved out of the laboratory and is closer to the patient. Point-of-care testing (POCT) provides rapid test results within minutes of taking the sample, and home testing affords the ultimate consumer convenience, testing from the comfort of one’s home. Experts disagree about whether this trend is the beginning of a dramatic shift in site of service for laboratory testing (Maibach et al., 1998; Woo and Henry, 1994). Although trend data show that these markets are growing, concerns about costs, the potential for errors, difficulties in linking test results to other clinical processes and information systems, and coverage restrictions by third-party payers may limit the growth of these two expanding testing markets (Sainato, 1999).
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Medicare Laboratory Payment Policy: Now and in the Future BOX 3.2 Point-of-Care Testing “In just a few years, primary care physicians may be able to get a complete-blood count (CBC) for a patient simply by shining a light in the patient’s eye or sticking a probe under the patient’s tongue. This technology provides immediate test results, minimizes patient discomfort, reduces the risk of needle stick injuries, is free from concerns about contamination, eliminates the need to dispose of left-over blood samples, and is likely to be much less costly than traditional laboratory blood tests.” SOURCE: (Uehling, 2000). Point-of-Care Testing New technologies not only have made POCT devices small and portable but also have improved specimen collection techniques so that they are minimally invasive. The relatively small size and user-friendly nature of this technology is due in large part to the advances in microprocessor-based analyzers and disposable test cartridges containing biosensor-laden silicon tests (Klipp, 2000). New laser-based skin perforators permit the collection of just a few microliters of interstitial fluid for testing glucose levels, and infrared sensors are being used to measure glucose and other analytes (e.g., bilirubin) directly through the skin (Felder et al., 1999). Multianalyte, spectroscopy-based, noninvasive sensors will provide a wide range of analytical tests at the bedside in the near future (Felder et al., 1999). Table 3.1 outlines certain POCT applications in 1999 and the estimated expenditures for each category. Sales of POCT devices and tests to hospitals and physicians offices in the United States were roughly $1.1 billion in 1998, and nationwide. POCT expenditures are expected to grow at an average annual rate of 9 percent from 2000 to 2005 (Klipp, 2000). One industry expert suggests that 80 percent of laboratory testing will be available at the patient’s bedside within the next five years at a fraction of the cost of centralized testing (Felder et al., 1999). There is controversy over the cost-effectiveness of POCT versus centralized laboratory testing particularly since cost-effectiveness and patient outcomes data are lacking. Research from the early 1990s found that the cost per test using a POCT analyzer was significantly higher than central laboratory costs (Tsai et al., 1994). Others have found that not all types of POCT decrease the TAT of the entire diagnostic process, save sufficient amounts of money to justify the additional expense (Van Heyningen et al., 1999), or positively affect patient outcomes (Kendall et al., 1998; Parvin et al., 1996; Rose et al., 1997). These findings have led one expert to conclude that POCT will never become the primary mode of testing (Friedman, 1998). Others have found that under certain conditions, however, POCT can be provided at the same or lower cost than centralized services (Felder et al., 1999; Root, 1997). Since cost analysis methods have
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Medicare Laboratory Payment Policy: Now and in the Future TABLE 3.1 Point-of-Care Test Expenditures, 1999 Test Category Expenditures ($ million) Blood glucose 375 Blood gasa 262 Urine Strips, HCG 157 Electrolytes 137 Coagulation 70 Cholesterol 53 Infectious diseases 47 NOTE: HCG = human chorionic gonadotropin. aBlood gas applications include the following five tests: (1) pH, the measurement of alkalinity in the blood; (2) Pco2, the measurement of the partial pressure of carbon dioxide in the blood; (3) Hco−3, the bicarbonate ion, which is a measurement of the metabolic (renal) component of the acid-base equilibrium; (4) Po2, the indirect measurement of the oxygen content of arterial blood; and (5) O2, the saturation of oxygen in the blood. SOURCE: Klipp, 2000. yet to be standardized and most research does not consider the total cost of an episode of care, it is difficult to compare findings that might help laboratory managers choose the most appropriate type of testing (Baer, 1998). It is also difficult to measure the convenience to patients and physicians of POCT. Some experts, however, expect the value of POCT to Medicare beneficiaries to be high, particularly in physicians’ offices. In some cases, there may be a trade-off between the convenience of POCT and quality. Steven Gutman, M.D., director of the Food and Drug Administration’s (FDA’s) division of clinical laboratory devices points out that POCT devices may not have to meet the same quality standards as laboratory-based testing (Uehling, 2000). Some devices, such as a video microscope used to visualize and count blood cells, may even be exempt from FDA review and subject to only minimal oversight under the Clinical Laboratory Improvement Amendments (CLIA) (Uehling, 2000). David Wilkinson, chairman of the Department of Pathology at the Medical College of Virginia, points out that some POCT systems have a high failure rate of disposable cartridges that house the analytical components, and there may be test result bias when compared to central laboratory methods (Wilkinson, 1997).
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Medicare Laboratory Payment Policy: Now and in the Future TABLE 3.2 Home Testing Market by Sector, 1999 Sector Expenditures ($ million) Blood glucose monitoring 1,590 Pregnancy, ovulation test kits 153 HIV sample collection kits 10 Cholesterol monitoring test kits 3 Drugs-of-abuse kits 3 SOURCE: Klipp, 2000. Home Testing Home testing is another growing market made possible by technological advances in laboratory testing. Unlike POCT, home testing is decentralized and physicians may not receive the test results unless they are provided manually by patients or entered into shared Internet-based data-monitoring systems. This has not limited the growth of the home testing market. In 1999, the total amount spent on home testing was $2.1 billion. Table 3.2 shows the sectors of the home testing market in 1999. These home testing products are relatively inexpensive, over-the-counter diagnostic and monitoring kits and devices. The home test market is consumer driven. Home-based tests are purchased by consumers and are rarely covered by third-party payers. Nevertheless, the demand for these products continues to increase. The $1.7 billion market in 1997 is expected to increase 100 percent by 2004 (Klipp, 2000). Future technologies may enable patients to take a more active role in their own care, integrating home testing into their medical regime. Some experts foresee a time when patients will be able to view, interpret, and add important information to their medical records through Internet-linked, hand-held devices designed for home use. They will also be able to use diagnostic products purchased from a grocery store or pharmacy and automatically upload the results to their electronic medical records in the privacy of their homes (Felder et al., 1999). The home-based test market is unlikely to completely replace sophisticated hospital and independent laboratories, especially in light of the ever-growing number of complex tests. EFFECT ON CLINICAL LABORATORY STAFF REQUIREMENTS Not surprisingly, the recent and ongoing changes in clinical laboratory technology have had an impact on laboratory staff needs. According to Kenneth Cruse, MT American Society of Clinical Pathologists (ASCP), “Traditionally, nontechnical staff collected specimens from patients and gave the specimens to
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Medicare Laboratory Payment Policy: Now and in the Future technicians to perform the tests” (Cruse, 1998). Nontechnical staff members still do many of the repetitive jobs, such as feeding specimen tubes onto highly automated instruments throughout the facility.15 Technical staff members now conduct preventive maintenance on laboratory equipment, run quality control specimens, and correct identified problems. They also evaluate patient results that require a manual review (Cruse, 1998). Highly skilled laboratorians with clinical and analytical knowledge are still essential to perform and interpret many of the more sophisticated tests. The growth in automation and robotics is decreasing the need for nontechnical staff in the laboratory (Wilkinson, 1997). Labor cost savings may be offset somewhat by a need for additional IT staff to monitor and maintain the automated systems (Sainato, 2000). Growth in point-of-care tests, which do not have to be performed by physicians, may mean that more allied health personnel will be needed in hospitals and physicians’ offices. In the future, growth in the number of esoteric tests may increase the demand for highly skilled staff. Some predict that the number of clinical laboratory technologists and technicians is not expected to keep pace with the demand for laboratory services over the next decade, especially in the areas of cytogenetics, tissue typing, genetic testing, and transplantation. Others predict that the same trends that have reduced the need for nontechnical staff will affect the need for skilled staff (Burtis, 1996; Maibach et al., 1998). Perhaps the greatest savings in laboratory costs will come from technology that enables labor reduction (Felder et al., 1999). For example, the move to total laboratory automation could reduce labor costs by 25–50 percent (Jacobs and Simson, 1999). Reducing the need for labor could have profound effects on the cost of performing testing since labor constitutes approximately 60 percent of the total cost of laboratory services (Jacobs and Simson, 1999). Kenneth Cruse argues that other benefits of redistributing work among technical and nontechnical personnel include enhanced productivity, increased testing accuracy and precision, significant reduction of TATs, increased physician satisfaction levels, and the potential to reduce the length of stay for hospitalized patients (Cruse, 1998). SUMMARY Clinical laboratories are in the midst of a technological revolution that is likely to continue during the twenty-first century. Many medical advances will be led by technological innovation in laboratory testing. New technology is positively associated with increased efficiency, reduction in errors, and improved quality in the delivery of health care services. Whether new technologies 15 As noted in footnote 6, when considering the tasks conducted by individuals who do not have technical skills, it is important to note that many states have licensure laws that preclude the conduct of certain testing procedures by nontechnical staff. In addition, CLIA requirements, as they relate to moderate- and high-complexity tests, do not allow the use of nontechnical staff for certain testing procedures.
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Medicare Laboratory Payment Policy: Now and in the Future are implemented may depend on their impact on laboratory costs and, if they are more costly, on payers’ willingness to pay for them. While efforts to automate central laboratories are likely to continue, trends appear to indicate that much routine testing in the future could be delivered through POCT and home-based testing. Centralized laboratories are likely to concentrate more on esoteric testing. Automation and shifts in the sites where laboratory services are delivered will result in major shifts in laboratory staffing needs. Demand for skilled IT professionals, experts to monitor and service robotic equipment, and allied health professionals is likely to grow. Overall decreases in labor costs, however, will likely lead to decreases in the cost per test. REFERENCES Baer, D.M. 1998. Point-of-care testing versus central lab costs. MLO Med Lab Obs 30, No. 9:46–56. Berger, A., and R.Smith. 1999. Editorial: New technologies in medicine and medical journals. BMJ 319. Available at: http://www.bmj.com/cgi/content/full/319/7220/0. Burtis, C.A. 1996. Converging technologies and their impact on the clinical laboratory. Clin Chem 42, No. 11:1735–1749. Children’s Health Care System. 1999. GeneTests. Web page, accessed July 31, 2000. Available at www.genetests.org. Funded by the National Library of Medicine, National Institutes of Health and the Maternal and Child Health Bureau, Health Resources and Services Administration. Chou, D. 1996. Internet: Road to heaven or hell for the clinical laboratory? Clin Chem 42, No. 5:827–830. Cruse, K.L. 1998. Timeliness and best demonstrated practices. Clin Lab Manage Rev 12, No. 3:159–168. Direct-to-consumer test result reporting: Should it be in your lab’s future? 2000. Clinical Laboratory Strategies 5, No. 3. Evans, W.E., and M.V.Relling. 1999. Pharmacogenomics: Translating functional genomics into rational therapeutics. Science 286, No. 5439:487–491. Executive Office of the President of the United States. 2000. The National Nanotechnology Initiative. Web page, accessed September 5, 2000. Available at www.nano.gov. Felder, R.A., S.Graves, and T.Mifflin. 1999. Reading the future: The increased relevance of laboratory medicine in the next century. MLO Med Lab Obs 31, No. 7:20– 21, 24–26. Friedman, B.A. 1998. Integrating laboratory processes into clinical processes, Web-based laboratory reporting, and the emergence of the virtual clinical laboratory. Clin Lab Manage Rev 12, No. 5:333–338. Holtzman, N.A. 1999. Promoting safe and effective genetic tests in the United States: Work of the task force on genetic testing. Clin Chem 45, No. 5:732–738. Holtzman, N.A., and T.Marteau. 2000. Will genetics revolutionize medicine? N Engl J Med 343, No. 2:141–144. Howanitz, P. 1994. From start to finish, how accurate are lab tests? CAP Today, pp. 41– 42. Jacobs, E., and E.Simson. December 1999. Point-of-care testing, and laboratory automation. Clinical Laboratory News, pp. 12–14.
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Representative terms from entire chapter: