The Laboratory’s Burning Platform

testutilization_960x540Rising health care costs and the direct financial burden of these costs on the average U.S. citizen—left unabated—threaten to collapse the country’s economy by 2028. This sobering conclusion was the thesis of a study that opened the 2014 Utilization Management Conference at Mayo Medical Laboratories. It was delivered by Lee Newcomer, M.D., M.H.A.,—a physician from one of the country’s most respected health insurance providers—to an audience of more than 100 progressive thinkers in laboratory medicine, pathology, and advanced diagnostics. And, throughout the conference, other powerful data were highlighted that pointed to the role of laboratory medicine and pathology, both positive and negative, in influencing this health care economic crisis:

  1. The use of advanced genetic testing is growing at more than 10% with an annual spend of more than $3.3 billion.
  2. More than 30% of laboratory testing is misordered.
  3. Clinically unnecessary panels, bundles, and order sets are inflating health care costs inadvertently. Or worse, they’re being devised specifically to maximize CPT-based reimbursement.
  4. Laboratory testing, pathology, and advanced diagnostics comprise less than 3% of a hospital’s cost, but the results generated from these activities drive more than 75% of objective data in a patient’s medical record.
  5. By 2018, 30% of Medicare payments will transition to a value-based model instead of fee-for-service.

Now, this isn’t breaking news to those with laboratory and pathology tenure. But, it should also send a clear signal that the status quo is not an option.

Laboratory medicine, pathology, and advanced genetics—when delivered aimlessly or with narrow perspective—will drive up the cost of care unnecessarily and compound a growing problem.

But, when it’s delivered in a well-guided, integrated, and altruistic manner, it has the inertia to positively influence every stage of a patient’s care in a more cost-effective way. An undeniable problem and an ambitious call to action have driven Mayo Medical Laboratories to undertake one of the most expansive and comprehensive projects in our history.

Our goal is simple: design a new, sustainable, disruptive delivery model for laboratory medicine and pathology.

The challenges are significant: hospital organizational structure, the role of insurance providers, big data in medical records and claims, health policy, population risk modeling, and disruptive information technology, to name a few. This series of blog posts will chronicle our journey to date, and I aim to share our key mistakes and successes that you, our fellow health care providers, may benefit from as we all confront the changing field of patient care.

Andy Cousin (@acousin)

Andy Cousin

Andrew Cousin, FACHE, is the Director of Product Management and Marketing for Mayo Medical Laboratories. He has worked for Mayo Clinic since 2006.