Harvard’s study of
high-cost Medicare patients offers insights into how medical laboratories can
help improve early diagnosis, optimize therapies, and monitor chronic disease
Clinical laboratories and anatomic pathology groups supporting Medicare patients understand that a small portion of high-cost patients make up the majority of Medicare spending. Between extended treatment, comorbidities, and the complex nature of disease therapies, chronic illnesses have a major impact on healthcare costs—both in terms of spending and labor reductions.
Thus, a recent Harvard Medical School study published in Health Affairs which attempts to identify the contributing causes of spending on high-cost Medicare patients will be of interest to medical lab managers and stakeholders who can develop innovative diagnostic testing services that help physicians diagnose these diseases earlier and more accurately. They then could guide physicians to select the most appropriate therapies and help physicians monitor disease conditions.
High-Cost Patients
Eligible for Both Medicare and Medicaid
According to Jose Figueroa, MD, co-author of the Harvard study, “28.1% of patients who were high cost in 2012 remained persistently high cost over the subsequent two years. On average, persistently high-cost patients were younger, more likely to be members of racial/ethnic minority groups, eligible for Medicare based on having end-stage renal disease, and dually eligible for Medicaid, compared to transiently and never high-cost patients.”
Studying a 20% sample of Medicare fee-for-service
beneficiaries in a period from 2012 to 2014, Figueroa and researchers from the Harvard T. H. Chan School of Public Health
and Harvard Medical School identified nine chronic conditions most prevalent in
patients identified as persistently high cost.
Out of a sample of 5,507,218 patients, the top conditions
found to contribute to persistent high costs included:
Might these findings represent an opportunity to medical
laboratories, anatomic
pathologists, and other members of the diagnostics industry? As early
detection is key to minimizing the cost of treatment and care, the ability to accurately
and rapidly detect these chronic diseases would be a major boon to clinical labs
and the physicians and healthcare facilities they support. Laboratories also could
find opportunities guiding therapy decisions and monitoring the progress of
treatments.
While improved testing for these chronic conditions could
reduce costs and improve quality of care, they also represent significant
revenue opportunities with one of the largest payers in the nation.
Impact of Chronic Disease
on Medicare’s Battle to Reduce Cost
“Medicare patients in the top 10% of spending each year
accounted for almost 20% of Medicare’s overall spending during the three-year
period covered by the study,” notes Fierce Healthcare.
“We found that 28.1% of Medicare beneficiaries who were high cost in a designated index year remained persistently high cost for all three years,” states Jose Figueroa, MD (above), Instructor of Medicine at Harvard Medical School and co-author of the Harvard study. “Despite being slightly less than 3% of the Medicare population, these persistently high-cost patients accounted for nearly 20% of total Medicare spending across the three–year period we studied.” (Photo copyright: Brazosport Independent School District.)
Across the period, mean yearly spending for never-high-cost
patients was only $5,206 per person. The mean yearly spending per person for persistently
high-cost patients averaged $69,793—an increase of more than 1,240%!
Figueroa told Fierce
Healthcare he believes policy changes are key to reducing costs for
patients with chronic health conditions. He cites inadequate housing, reduced
access to healthy foods, reduced mobility, and ease of transportation to and
from care providers as potential reasons for the racial and ethnic disparities
highlighted in his findings.
The Harvard study notes that few of the expenses incurred by
persistently high-cost patients are preventable through alternate treatment. For
most, outpatient care and drug spending make up a large part of those expenses.
And, as the study points out, younger patients with chronic diseases stay persistently
high cost for longer periods.
Clinical laboratories that help develop and implement
diagnostics aimed at early detection could help reduce long-term spending as
well—particularly in relation to patients with multiple chronic conditions.
Opportunities for
Clinical Labs Covered at 2019 Executive War College
The opportunity for medical labs to help with early
detection and effective treatment of Medicare patients with one or more chronic
conditions was a major topic at this year’s Executive War College on Laboratory
and Pathology Management that took place in New Orleans last week.
There also were presentations on how clinical laboratories
can help physicians and health plans identify undiagnosed patients. For
physicians, this means more revenue as risk adjustment payments are increased
for these newly-diagnosed patients. For health insurers, the ability of labs to
identify undiagnosed patients means that the insurers can close care gaps and
improve the patient outcomes produced by their health plans.
As drug costs are a major source of Medicare expenses in persistently
high-cost patients, helping physicians target therapies with innovative
diagnostics could further lower costs by ensuring the ideal medication is used
alongside inpatient or outpatient services.
And, by offering diagnostics monitoring services, clinical labs
could help providers better manage complex treatments of those with multiple
chronic conditions and ensure treatments bring the intended results.
As drug recalls increased over the past 12 months, questions regarding FDA oversight of drug manufacturing are triggering questions involving IVD oversight by the federal agency and potential implications for clinical laboratories
Pathologists and clinical laboratory managers are following the recent recalls of popular blood pressure medications in the past six months. These issues once again placed the spotlight on failures in the US Food and Drug Administration’s (FDA’s) drug safety oversight processes.
With the global supply chain—and a large amount of secrecy—involved with manufacturing modern pharmaceuticals, maintaining standards and enforcing safety requirements appears to be challenging the FDA’s monitoring capacity. In November 2018, Scott Gottlieb, MD, then commissioner of the FDA and current resident fellow at the American Enterprise Institute, told USA Today, “We put out very big guidance on this—it’s a known risk. It’s a place where there’s been a significant increase in focus in recent years.”
Despite the increase in focus, Kaiser Health News(KHN)recently highlighted potential concerns not shown in the headlines of mainstream media outlets—both for the public and for medical laboratories that rely on FDA oversight in other areas, such as in vitro diagnostics (IVD).
“Since the start of 2013, pharmaceutical companies based in
the US or abroad have recalled about 8,000 medicines, comprising billions of
tablets, bottles, and vials that have entered the US drug supply and made their
way to patients ….” KHN reported. “Over
the same period, 65 drug-making facilities recalled nearly 300 products within
12 months of passing [an FDA] inspection ….”
Data published by Stericycle Expert Solutions, a global B2B services company, offers deeper insight into forces driving recalls in Q3 of 2018. “Pharmaceutical recalls increased 19% to 92—the second highest quarter since Q3 2013,” they note. “Failed specifications were the top reason based on recalls for the ninth consecutive quarter.”
Current Good Manufacturing Practices (CGMPs) ranked second, accounting for 23.9% of recalls in their study. The same data shows medical device recalls also increased across 2018 compared to the prior year.
In an e-mail to Kaiser Health News, FDA spokesman Jeremy Kahn said, “While the FDA would prefer that no drug be distributed that later is recalled, we do not think that a recall indicates a failure of FDA inspection and surveillance programs.” He continued, noting that inspectors “may not uncover all issues or practices that may eventually result in a problem leading to a recall” and that “not all recalls are the result of poor manufacturing practice.” (Graphic and caption copyright: Kaiser Health News.)
Issues now presented as “shortcomings” with pharmaceutical oversight could one day present serious concerns for pathology groups, clinical laboratories, and other service providers using IVDs.
In a field requiring precision, quality, and accuracy to provide
reliable results for an ever-growing portion of modern healthcare’s questions, quality
control of testing materials and devices is critical—particularly when dealing
with the increasingly smaller samples and sensitive reagents used today.
Enforcing Standards
Around the World
Despite today’s CGMPs and myriad regulations designed to ensure
pharmaceuticals are safe, KHN notes
that the FDA struggles to stay ahead of manufacturers and suppliers who might
violate regulations. Even when FDA inspectors discover issues, they have little
means of enforcing standards and encouraging change.
“A KHN review of
thousands of FDA documents—inspection records, recalls, warning letters and
lawsuits—offers insight into the ways poorly manufactured or contaminated drugs
reach consumers,” KHN notes. “Inspectors
miss serious hazards. Drug makers fail to meet standards even after the FDA has
taken enforcement action. Hundreds of plants haven’t been inspected for years,
if ever.”
However, no amount of protective regulations or standards can
make a significant impact without proper enforcement. In October 2017, the FDA
announced they would recognize the European drug regulatory authorities of
eight countries to help reduce duplicative inspection. “By partnering with
these countries,” said Gottlieb, “we can create greater efficiencies and better
fulfill our public health goals, relying on the expertise of our colleagues and
refocusing our resources on inspections in higher risk countries.”
Nonetheless, statistics indicate that the FDA’s ability to support
global inspections is still stretched thin. More than 2,500 foreign and
domestic facilities have not received a drug-quality inspection in more than
five years, according to KHN. Additionally,
1,200 domestic facilities and 400 foreign facilities were found to have no
drug-quality inspection records dating back 10 years, KHN reported.
While Gottlieb hopes to “clear the backlog” by the end of
September 2019, the fact that such a backlog exists at all is cause enough for
concern—particularly in light of Gottlieb’s
April 2019 resignation, KHN
noted.
Lack of Effective IVD
Manufacturing Oversight Affects Medical Laboratories
Even with an effective inspection system, the FDA’s options
for bringing manufacturers into compliance are limited. KHN points out that over the past decade, 70 plants in their data
sets received citations for the same violation four or more times. The FDA
cannot issue mandatory
recalls, and while it can seize drug products, it has only exercised that
right 23 times in the past decade. This shows how few options the FDA has for
ensuring contaminated or otherwise defective medications do not reach patients,
hospitals, and other part of the healthcare industry.
For anatomic
pathologists, clinical laboratories, and other diagnosticians relying on the
FDA to be the gatekeeper of quality and safety—as well as ensuring IVDs provide
accurate, reproducible results—these trends in pharmaceutical oversight should be
cause for concern.
Worse still, the lack of effective enforcement options
available to inspectors and oversight committees—alongside the sheer scale of a
global manufacturing chain—offer few easy answers for reversing the trends
making headlines today.
Vague language and last-minute additions to the federal SUPPORT Act of 2018 with its included EKRA provisions mean big changes to how clinical laboratories can legally compensate sales professionals for referrals
Labs that compensate their sales staff for referrals to recovery homes (aka, sober living houses) and clinical treatment facilities are particularly vulnerable and should carefully examine the wording in the legislation, legal experts warn.
“For sales-driven laboratories who have evolved practices to
comply with Anti-Kickback
Statute (AKS) requirements, what are now best practices might soon create
major concerns regarding laboratory
compliance with EKRA [H.R. 6878],”
Marty
Barrack, Senior Vice President and
General Counsel at XIFIN told Dark Daily.
Stiff Penalties Threaten
Clinical Laboratories and Pathology Groups
With fines of up to $200,000, 10 years in jail, or both, the
new EKRA/SUPPORT Act regulations—passed in October 2018—apply separately from existing federal anti-kickback
statute (AKS) regulations. Compliance violations can expose both the
laboratory, pathologists, and other individuals to federal prosecution.
“Because this is a criminal statute, some laboratories
overlook the fact that felony convictions mean zero payments. This is more than
worrying about federal prosecution, it can have a lasting impact on a
laboratory’s financials and its reputation,” noted Barrack. “The provisions
regarding invoicing will raise concerns with how clinical laboratories bill and
write-off co-payments and deductibles in areas previously untouched by AKS
requirements.”
Charles
Dunham, Health Law Attorney, Corporate and Regulatory Practice, Epstein Becker and Green, P.C., outlined
potential payment arrangement concerns at Health Law Advisor, saying, “… one
statutory exemption provides that compensation paid to both W-2 employees and
1099 contractors would not violate EKRA if the payment is not determined by or
does not vary by:
“the number of individuals referred;
“the number of tests or procedures performed; or,
“the amount billed or received.”
The National Law Review warns that “With
the passage of EKRA, laboratories, clinical treatment facilities, and recovery
homes should immediately consider reviewing all financial arrangements with
healthcare providers, contractors, and
employees who are in a position to generate referrals—including marketing
personnel and sales reps.”
They further note, “… Previously compliant payment
methodologies structured under the Anti-Kickback Statute’s employment safe
harbor (such as paying W-2 employees a volume or value-based commission) are now at risk of violating EKRA.”
Vague Wording in Law
Creates Confusion
As covered in the December 3, 2018, issue of The Dark Report, the American Clinical Laboratory Association (ACLA)
questions whether—under the new law—laboratories can continue providing
phlebotomists or specimen collection devices to physicians’ offices under EKRA.
While both scenarios are currently permissible under existing federal AKS
regulations, the SUPPORT Act and EKRA do not include language that covers such
scenarios.
“Primarily, this language was designed to address potential
bad actors working in recovery homes and addiction treatment facilities,” Sharon L. West, Vice
President of the ACLA, told The Dark
Report. “But then language was added to the bill extending that far beyond
treatment facilities to include clinical labs. Now, the new law extends to all
payers and all laboratory testing services provided to patients.”
While revisions to or amendment of existing legislation is possible,
the terms defined in the existing regulations should concern any medical
laboratory offering compensation for the referral
of patients for testing.
“The lab industry has some influence to help drive revisions
of existing statues. The payer industry also has representation,” Barrack
notes. “However, revisions may not proceed as quickly or bring the results some
labs expect.”
Understand EKRA and
Stay Out of Jail!
It’s critical that all clinical laboratories understand the
impact EKRA will have on existing payment agreements, billing practices, and workflows.
Non- or incorrect compliance could bring hefty fines—and even jail time!
Lab administrators, directors, and compliance managers; and,
Laboratory legal representatives.
Barrack and Dunham’s presentation will offer a concise look
at:
Essential elements required to understand the
impact of this new legislation;
How to best prepare your laboratory to minimize
risk; and,
Methods to avoid whistleblowers looking for
rewards.
A following Q/A session also offers lab professionals an
opportunity to speak directly with Barrack and Dunham, ask questions, and gain
clarification on pressing concerns regarding laboratory compliance programs and
operations.
(To register for this
critical April 24th webinar, click here (or, copy and paste this URL into your browser:
https://www.darkdaily.com/product/are-you-ready-for-ekra-what-your-lab-needs-to-know-now-about-how-this-new-legislation-affects-your-lab/).
As admissions for scarlet fever, whooping cough, scurvy, and other “Dickensian Era” diseases rise, medical laboratories must continue to consider uncommon causes when performing tests and providing data to physicians developing treatment plans
Resurgence in once-rare diseases and conditions in both the United Kingdom and the United States highlight the importance of recognizing the unlikely and unexpected when ordering and performing medical laboratory testing.
While a large portion of tests performed at clinical laboratories and anatomic pathology groups result in relatively common outcomes and diagnoses, recent coverage by CNN reported on increases in instances of “diseases more commonly associated with the Victorian Era.” They include:
CNN’s coverage cites 2017-2018 data from the UK National Health Service (NHS) in which diagnoses of scarlet fever and whooping cough saw a 208% and 59% increase in hospital visits related to the diseases respectively, when compared against data gathered from 2010 to 2011.
The Independent added to the list of older diseases making a comeback. They include:
Though they also noted that tuberculosis admissions appeared to be trending downward, the UK’s Labour Party requested increased NHS funding to suppress the growth of these diseases and provide better healthcare access to impoverished individuals and rural areas.
US Homelessness Is
One Cause of Disease Recurrence
The US is dealing with its own wave of once-rare diseases re-emerging,
thanks in part to growing populations of homeless.
Measles outbreaks continue to make headlines. Washington State declared a state of emergency in January because of increased cases, noted NPR. According to Education Dive, 11 states confirmed more than 200 cases of measles in January/February of this year, despite public health officials declaring the disease eradicated in 2000.
And, The Atlantic reported on struggles California faces managing a range of “medieval diseases” making a comeback in the face of growing homelessness and decreased access to healthcare. They include:
“It’s a public-health disaster,” Jeffrey Duchin, MD, Professor, Medicine: Allergy and Infectious Diseases at the University of Washington told The Atlantic. Duchin is also Adjunct Professor of Epidemiology and a health officer for Seattle and King County, Wash. In an article posted on Public Health Insider, Duchin noted that public homelessness is a factor in the spread of disease. “People who lack permanent housing often also have limited access to medical care, so many people living homeless and with health problems have difficulty getting prompt treatment. Living conditions—like crowding and fewer opportunities for personal hygiene—can contribute to the spread of disease. If someone has an underlying medical condition, alcohol or drug use, or weakened immune system, they are even more susceptible.” (Photo copyright: King County, Wash.)
Medical Labs Key to Diagnosis
and Monitoring as Pathogen Landscape Changes
Clinical pathologists and medical laboratories should
consider causes outside the common scope of today’s modern pathogens and look
to more historical origins when working with diagnosticians.
UK coverage largely blames a lack in NHS funding as reason
for the increase in these “vintage” diseases. However, there also has been
regular news coverage of the staffing shortages of physicians, nurses, and
other medical specialist at the NHS. This is a factor that makes determining the
causes of these disease outbreaks even harder for NHS physicians seeking to
diagnose patients and manage the spread of these uncommon diseases.
Should this trend continue, clinical laboratories and
microbiology laboratories in the US and UK, will serve critical roles in detecting
and preventing the spread of these deadly bacteria and viruses. Until then, all
medical laboratories worldwide should watch for unlikely and unexpected
diseases in patients as these instances continue to occur.
Data-driven proof supports decision-making that optimizes efficiency and boosts bottom lines in the face of shrinking margins and increased competition
Molecular and esoteric
testing developers continue to make advanced assays and diagnostic
technologies available to medical
laboratories. However, some laboratory senior management and stakeholders
may be reluctant to invest in them even though the market for such testing is
poised for significant growth.
That’s because lab shareholders might view these tests/services
as high-risk and it might not be immediately clear how—with proper
implementation—these services have the potential to improve lab financials and provide
higher-margin services to offset the shrinking margins of common high-volume
tests.
That’s where analytics can help lab managers, who’ve been tasked
with expanding their lab’s menu to include esoteric or molecular testing, justify
the expansion of services or answer questions regarding the lab’s financial
viability to do so.
Being able to answer those questions—such as whether to perform
anatomic
pathology, cytology,
and other advanced testing in-house or outsource, particularly in terms that c-suite
members, shareholders, and other lab decision makers will understand—is
critical to managing expectations and ensuring successful installation of the
new testing.
The approach Michigan-based Spectrum Health took to implement
analytics in their decision-making chain may be instructive.
Spectrum’s experience—through a partnership with LTS Health based in Chicago, IL., and by making use of PinpointBPS, a laboratory performance management system—showcases how laboratories can leverage analytics to not only increase key lab metrics, but do so with minimal risk. All while generating data that will inform critical members of the decision-making chain.
Data Modelling as
Tool for Laboratory Growth
Global Market Insights predicts an 8.5% compound
annual growth rate (CAGR) in molecular diagnostics alone between 2018 to
2024. Clinical laboratories that see automation and staffing as their primary
means for increasing throughput, reducing turnaround times, and optimizing lab
operations, will find Spectrum’s results useful.
Spectrum Health wanted to improve staff performance and
morale while also insourcing specialist testing without adding to the cost base
in their Advanced
Technology Laboratories (ATLs). These labs include—molecular diagnostics, flow cytometry, and cytogenetics—and require
a significant skilled staff investment. As such, Spectrum had questions about latent
capacity and potential costs in relation to their ability to expand service
offerings while maintaining optimal service levels.
They initially implemented PinpointBPS to reinforce the
ideas under consideration:
Optimizing staff schedules to match typical
order flows; and,
Implementation of automated liquid handlers.
Using
analytics, the lab staff was able to both simulate the proposed changes and
obtain quantitative data on how these changes would impact lab financials,
staff efficiency, latent lab capacity, and other key metrics. They could
accomplish all of this without making a single change to existing operations,
staff levels, or lab technologies.
Using analytics and data modelling, Spectrum discovered that
implementing a new staffing model would allow them to achieve several key
objectives—including:
Accounting for workload increases related to next-generation
sequencing (NGS)—using their existing staff.
More importantly, they were able to do so without the
significant hardware investment which they were previously considering.
“Analytics help to highlight areas of improvement through data comparisons and provide an empirical source of truth for determining the best course of action to reach laboratory goals and achieve sustainable, dependable results,” Kim Collison (above), Directory of Laboratory Services at Spectrum Health in Grand Rapids, Mich., told Dark Daily. “These systems also create a monitoring system to further iterate on or adjust improvements. This is accomplished while also gathering data ideal for presenting to the c-suite, shareholders, and other key members of the decision-making chain.” (Photo copyright: LTS Health.)
Much like modeling or
visualization might help to display complex medical data to aid diagnosis,
these systems can model and simulate data related to laboratory operations, integrate
with laboratory
information management systems (LIMS), and simulate
ideas to create quantified data about a range of important aspects including:
Assessment of staffing needs;
Highlighting potential workflow bottlenecks;
Determining latent laboratory capacity; and,
Assessing the value of advanced technology
laboratory investments.
“Everyone is vying for capital dollars,” Linda Flynn, Executive
Consultant at LS Flynn and Associates told Dark Daily. “Good data collected and
organized through data analytics can generate trust and understanding to help
position your proposals to c-suite members for greater success.”
Opportunity to Gain
Critical Knowledge for Your Clinical Laboratories
The webinar will include essential information for clinical laboratories
looking to increase certainty in the decision-making process using facts and
data and provide a solid understanding
for engagement in investment opportunities, c-suite members, and other senior
management and decision makers.
Attendees will also learn from a case study on how Spectrum
Health implemented PinpointBPS to develop an actionable, effective plan to
improve their operations, reduce turnaround times, and improve the value of
their laboratory operations based on facts and data generated within the lab.
Laboratory management, administrative directors, staff, and business
and financial managers of laboratories will want to attend this webinar and the
following Q/A session to obtain information on the impact BI analytics could
hold for their laboratories and how to best implement these new systems for optimal
results.
(To register for this
critical March 27th webinar, click here. Or, copy and paste this URL into your browser: https://www.darkdaily.com/product/webinar-using-data-analytics-to-optimize-your-investment/.)
