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Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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UK Researchers Create Conductive Thread That Can Be Woven into Clothing to Monitor Key Health Biomarkers

Meet ‘PECOTEX,’ a newly-invented cotton thread with up to 10 sensors that is washable. Its developers hope it can help doctors diagnosis disease and enable patients to monitor their health conditions

Wearable biosensors continue to be an exciting area of research and product development. The latest development in wearable biosensors comes from a team of scientists led by Imperial College London. This team created a conductive cotton thread that can be woven onto T-shirts, textiles, and face masks and used to monitor key biosignatures like heart rate, respiratory rate, and ammonia levels.

Clinical laboratory managers and pathologists should also take note that this wearable technology also can be used to diagnose and track diseases and improve the monitoring of sleep, exercise, and stress, according to an Imperial College London news release.

Should this technology make it into daily use, it might be an opportunity for clinical laboratories to collect diagnostic and health-monitoring data to add to the patient’s full record of lab test results. In turn, clinical pathologists could use that data to add value when consulting with referring physicians and their patients.

The researchers published their findings in the journal Materials Today titled, “PEDOT:PSS-modified Cotton Conductive Thread for Mass Manufacturing of Textile-Based Electrical Wearable Sensors by Computerized Embroidery.”

“Our research opens up exciting possibilities for wearable sensors in everyday clothing,” said Firat Güder, PhD, Principal Investigator and Chief Engineer at Güder Research Group at Imperial College London, in a news release. “By monitoring breathing, heart rate, and gases, they can already be seamlessly integrated, and might even be able to help diagnose and monitor treatments of disease in the future.” (Photo copyright: Wikipedia.)

Ushering in New Generation of Wearable Health Sensors

The researchers dubbed their new sensor thread PECOTEX. It’s a polystyrene sulfonate-modified cotton conductive thread that can incorporate more than 10 sensors into cloth surfaces, costs a mere 15 cents/meter (slightly over 39 inches), and is machine washable.

“PECOTEX is high-performing, strong, and adaptable to different needs,” stated Firat Güder, PhD, Principal Investigator and Chief Engineer at Güder Research Group, Imperial College London, in the press release.

“It’s readily scalable, meaning we can produce large volumes inexpensively using both domestic and industrial computerized embroidery machines,” he added.

The material is less breakable and more conductive than conventional conductive threads, which allows for more layers to be embroidered on top of each other to develop more complex sensors. The embroidered sensors retain the intrinsic values of the cloth items, such as wearability, breathability, and the feel on the skin. PECOTEX is also compatible with computerized embroidery machines used in the textile industry.

The researchers embroidered the sensors into T-shirts to track heart activity, into a face mask to monitor breathing, and into other textiles to monitor gases in the body like ammonia which could help detect issues with liver and kidney function, according to the news release.

“The flexible medium of clothing means our sensors have a wide range of applications,” said Fahad Alshabouna, a PhD candidate at Imperial College’s Department of Bioengineering and lead author of the study in the news release. “They’re also relatively easy to produce which means we could scale up manufacturing and usher in a new generation of wearables in clothing.”

Uses for PECOTEX Outside of Healthcare

The team plans on exploring new applications for PECOTEX, such as energy storage, energy harvesting, and biochemical testing for personalized medicine. They are also seeking partners for commercialization of the product.

“We demonstrated applications in monitoring cardiac activity and breathing, and sensing gases,” Fahad added. “Future potential applications include diagnosing and monitoring disease and treatment, monitoring the body during exercise, sleep, and stress, and use in batteries, heaters, and anti-static clothing.”

In addition to Imperial College London, the research was funded by the Saudi Ministry of Education, the Engineering and Physical Sciences Research Council (EPSRC), Cytiva Life Sciences, the Bill and Melinda Gates Foundation, and the US Army.

Other Wearable Biometric Sensors

Dark Daily has covered the development of many wearable health sensors in past ebriefings.

In “UC San Diego Engineers Develop Microneedle Wearable Patch That Measures Glucose, Alcohol, Muscle Fatigue in Real Time,” we covered how “lab-on-the-skin” multi-tasking microneedle sensors like the one developed at the University of California San Diego’s (UCSD) Center for Wearable Sensors to track multiple biomarkers in interstitial fluid were finding their way into chronic disease monitoring and sample collecting for clinical laboratory testing.

In “Fitbit Receives FDA Approval for a Wearable Device App That Detects Atrial Fibrillation,” we reported how personal fitness technology company Fitbit had received 510(k) clearance from the US Food and Drug Administration (FDA), as well as Conformité Européenne (CE marking) in the European Union, for its Sense smartwatch electrocardiogram app that monitors wearers’ heart rhythms for atrial fibrillation (AFib).

And in “Researchers in Japan Have Developed a ‘Smart’ Diaper Equipped with a Self-powered Biosensor That Can Monitor Blood Glucose Levels in Adults,” we reported how researchers at Tokyo University of Science (TUS) had created a self-powered, glucose-testing diaper that utilizes a biofuel cell to detect the presence of urine and measure its glucose concentration.

Wearable Sensors in Personalized Healthcare

Wearable healthcare devices have enormous potential to perform monitoring for diagnostic, therapeutic, and rehabilitation purposes and support precision medicine.

Further studies and clinical trials need to occur before PECOTEX will be ready for mass consumer use. Nevertheless, it could lead to new categories of inexpensive, wearable sensors that can be integrated into everyday clothes to provide data about an individual’s health and wellbeing.

If this technology makes it to clinical use, it could provide an opportunity for clinical laboratories to collect diagnostic data for patient records and help healthcare professionals track their patients’ medical conditions. 

—JP Schlingman

Related Information:

Sensors Embedded into T-Shirts and Face Masks Could Monitor Biosignatures

PEDOT:PSS-modified Cotton Conductive Thread for Mass Manufacturing of Textile-based Electrical Wearable Sensors by Computerized Embroidery

Wearable Sensors Styled into T-shirts and Face Masks

Low-Cost Sensor Tracks Vital Signs and Breath to Monitor Diseases

Sensor Thread

Wearable Sensor

UC San Diego Engineers Develop Microneedle Wearable Patch That Measures Glucose, Alcohol, Muscle Fatigue in Real Time

Fitbit Receives FDA Approval for a Wearable Device App That Detects Atrial Fibrillation

Researchers in Japan Have Developed a ‘Smart’ Diaper Equipped with a Self-powered Biosensor That Can Monitor Blood Glucose Levels in Adults

Researchers Develop ‘Smart’ Microneedle Adhesive Bandage System for Monitoring Sodium, Glucose, pH, and More

Platform could be next breakthrough in quest for painless technology to replace in-patient phlebotomy blood draws for many clinical laboratory tests

In a proof-of-concept study, scientists from Israel and China have developed a “smart” microneedle adhesive bandage that measures and monitors in real time three critical biomarkers that currently require invasive blood draws for medical laboratory tests commonly performed on patients in hospitals.

The “smart” microneedle system developed by Israeli scientists from Technion-Israel Institute of Technology working with their Chinese counterparts from the Eighth Affiliated Hospital Sun Yat-Sen University in Shenzhen, Lanzhou University, and Xidian University in Xi’an, continuously monitors patients’ sodium, glucose, and pH levels.

According to a Technion news release, the microneedles are short, thin, and relatively painless because they only extend through the outer layer of skin to reach the interstitial fluid underneath. The needle system attaches to the patient’s skin using an adhesive patch and transfers data wirelessly to both doctor and patient in real time through cloud and Internet of Things (IoT) technologies.

Such a novel technology that allows inpatients to be monitored for key biomarkers without the need for a phlebotomist to collect blood for testing will be attractive and would likely improve the patient’s experience.

It also could reduce the volume of specimen required, potentially eliminating the invasive specimen collection procedure altogether.

The researchers published their findings in the journal Advanced Materials, titled, “A Wearable Microneedle-Based Extended Gate Transistor for Real-Time Detection of Sodium in Interstitial Fluids.”

Hossam Haick, PhD
“To adapt the technology to daily life, we have developed a unique [adhesive bandage] made of a flexible and soft polymer that stretches and contracts along with the skin and therefore does not interfere with any action whatsoever,” said Hossam Haick, PhD (above), in a Technion news release. “Since it is important for us that the system is available to everyone, we made sure to use relatively inexpensive materials, so the final product will not be expensive. The technology we have developed represents a leap forward in diagnosing diseases and continuous physiological monitoring at home and in the clinic.” Such a real-time monitoring device could eliminate clinical laboratory testing for certain biomarkers that currently require invasive blood draws. (Photo copyright: Technion-Israel Institute of Technology.)

Leap Forward in Diagnostic Testing and Disease Monitoring

As pathologists and medical laboratory scientists are aware, sodium is a prominent prognostic biomarker for assessing certain blood conditions such as dysnatremia, the presence of too much or too little sodium. It’s an essential element found in blood cells and blood fluid that plays a vital role in transmitting signals to the nervous system, as well as in other biological functions.

Currently, a patient’s sodium levels are monitored using a sodium blood test, which may be included in both a basic metabolic panel and a comprehensive metabolic panel.

Led by Hossam Haick, PhD, head of the LNDB (Laboratory for Nanomaterials-based Devices) group and Dean of Certification Studies at Technion, the team of scientists tested their device’s effectiveness at monitoring patients’ blood for both hypernatremia (high concentration of sodium in the blood) as well as hyponatremia (low concentration of sodium in the blood).

Both conditions can affect neurological function and lead to loss of consciousness and coma. Thus, early monitoring is critical.

“As of now, detection and monitoring of sodium levels in the human body is carried out by means of laborious and bulky laboratory equipment, or by offline analysis of various bodily fluids,” the study’s authors explained in the news release. Use of the smart microneedle patch, they added, allows the patient to continue about their day as normal, as well as gives their doctor time to attend to more patients.

The “innovative stretchable, skin-conformal and fast-response microneedle extended-gate FET (field-effect transistor) biosensor [integrated with] a wireless-data transmitter and the Internet-of-Things cloud for real-time monitoring and long-term analysis [could] eventually help [bring] unlimited possibilities for efficient medical care and accurate clinical decision-making,” noted the study’s authors in Advanced Materials.

More research will be needed to determine whether this latest medical technology breakthrough will lead to a viable minimally invasive method for measuring, diagnosing, and monitoring medical conditions, but Technion’s platform appears to be another step toward a long-sought alternative to painful blood draws.

Further, pathologists and clinical laboratory managers should expect more products to hit the market that are designed to collect a lab specimen without the need for a trained phlebotomist. Companies developing these products recognize that recruiting and retaining trained phlebotomist is an ongoing concern for medical labs. Thus, to have a method of collecting a lab specimen that is simple and can be done by anyone—including patients themselves—would be an important benefit.

Andrea Downing Peck

Related Information:

A Wearable Microneedle-Based Extended Gate Transistor for Real-Time Detection of Sodium in Interstitial Fluids

Researchers at the Technion Developed a Flexible Microneedles Platform That Provides Quick, Continuous, and Pain-Free Diagnosis

Microneedle Drug Delivery Systems Market Are Slated to Increase at Healthy 6.6% CAGR Over the Forecast Period

Kaiser Health News and Fortune Investigation into EHRs Finds Medical Errors and Millions of Dollars in Federal Subsidies Inappropriately Released

Lawsuits filed by whistleblowers, doctors, and hospitals allege EHR software used by hospitals, clinical laboratories, and medical offices may ‘pose danger to patients’

Where have all the federal incentives for meaningful use of health information technology (HIT) gone? Pathologists and clinical laboratory leaders caught up in medical error investigations are not the only healthcare providers asking this question.

Since the start of the 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act—which provided billions of dollars in federal incentives to stimulate use of electronic health record (EHR) systems to improve quality of care—about $38 billion in subsidies and incentives have been paid out by the Centers for Medicare and Medicaid Services, Becker’s Hospital Review reported.

Now, an ongoing investigation by Fortune and Kaiser Health News (KHN) indicates some EHR software vendors and healthcare providers were paid hundreds of millions of dollars in federal subsidies that they should not have received. Furthermore, EHRs are apparently associated with thousands of mistakes and medical errors, the Fortune and KHN investigation revealed.

In “Electronic Health Records Creating a ‘New Era’ of Health Care Fraud,” KHN wrote that “The federal government funneled billions in subsidies to software vendors who overstated or deceived the government about what their products could do, according to whistleblowers.”

Was Software Really Certified to Begin With?

As part of the new Merit-Based Incentive Payment System (MIPS), which itself is part the Medicare Access and CHIP Reauthorization Act (MACRA), meaningful use (formerly the Medicare EHR Incentive Program) refers in part to using certified EHR and HIT technology in a “meaningful” manner as defined by the Office of the National Coordinator for Health Information Technology (ONC).

However, MIPS and MACRA are only recent updates to the original federal legislation that launched the drive to incentivize hospitals, physicians and other providers to adopt and use EHR systems that met defined criteria. It was the $787-billion stimulus bill—the American Recovery and Reinvestment Act of 2009 (ARRA)—that actually defined the incentive program and allotted an initial $17 billion specifically to encourage adoption of EHR systems.

Now, more than a decade later, there is growing evidence that many EHR vendors and providers took advantage of the EHR incentives without meeting both the intent and requirements of this federal program. For example, government reviewers found that some providers and vendors collected their federal EHR subsidy payments and then “gamed” the system by programming the software to appear to meet incentive criteria, even though it had not, Becker’s Hospital Review reported.

“The only problem (with software certification) is that it presupposed that the [EHR] product [certified by a] vendor would be the same product it sold. It presupposes that people will go into the certification process and participate in good faith,” John Halamka, MD, a Professor of Medicine at Harvard Medical School, Chief Information Officer at Beth Israel Deaconess Medical Center, and Co-Chairman of the national HIT Standards Committee, told KHN.

According to FortuneKHN study findings:

  • Lawsuits filed by “dozens” of whistleblowers, doctors, and hospitals allege EHR software used by hospitals and medical offices may “pose danger to patients;”
  • Some of the $38 billion in federal EHR subsidies went to companies that “deceived the government about the quality of their products;”
  • Three EHR vendors were part of settlement deals totaling $357 million with the US Department of Justice (DOJ); 
  • 28% of doctors and 5% of hospitals who said they met government standards for EHR adoption and use were later found to have not done so, audits showed;
  • $941 million in inappropriately released EHR subsidies were recovered by federal officials.

Investigation Suggests EHRs Linked to Medical Errors

Fortune-KHN also investigated medical errors and omissions related to software failure and user errors. Fortune published these finds and others in a series of investigative articles beginning with: “Death by a Thousand Clicks: Where Electronic Health Records Went Wrong.”

In one case, a patient had gone to the emergency room with severe headaches and a high fever. During the diagnostic process, a doctor performed a spinal tap to rule out meningitis, an inflammation of the tissue covering the brain and spinal cord. Later, through the hospital’s new EHR system, an infectious disease specialist ordered a clinical laboratory test to check the spinal fluid for viruses, including herpes simplex. Unfortunately, the lab test order did not make it to the lab.  

A lawsuit later filed by the patient stated that the hospital’s EHR didn’t “interface” with the hospital medical laboratory, delaying results of the lab test, resulting in brain damage due to herpes encephalitis, Fortune reported. In the lawsuit, the patient alleges the missed order meant he did not receive an antiviral medication (aciclovir) that could have minimized the brain damage.

The graphic above is based on data from the Kaiser Family Foundation (KFF) study. In the first article of its investigative series, Fortune wrote, “KHN and Fortune examined more than two dozen medical negligence cases that have alleged that EHRs either contributed to injuries, had been improperly altered, or were withheld from patients to conceal substandard care.” Some of these errors involved delayed clinical laboratory test results, resulting in severe patient injury. (Graphic copyright: Kaiser Family Foundation.)

After interviewing 100 doctors, patients, IT experts, health policy leaders, attorneys and government officials, FortuneKHN found:

  • “Thousands of deaths, serious injuries, and near misses tied to software glitches, user errors, or other flaws;”
  • EHRs enabled “upcoding” or inflating a bill instead of improving billing;
  • A “disconnected patchwork” instead of an electronic superhighway.
“How is it in the public interest for medical records software to have flaws that lead to deaths? These incidents should be fully understood and investigated and not be able to be buried,” said Joshua Sharfstein, MD (above), Former Principal Deputy Commissions of the Food and Drug Administration (FDA) and Vice Dean Public Health Practice at John Hopkins Bloomberg School of Public Health, in, “No Safety Switch: How Lax Oversight of Electronic Health Records Puts Patients at Risk,” the second article in the Fortune-KHN investigative series. (Photo copyright: Baltimore Sun.)

Doctors Give EHRs an ‘F’

Frustrated physicians gave EHRs a grade of “F” for usability, according to an American Medical Association (AMA) study published in Mayo Clinic Proceedings, titled, “The Association Between Perceived Electronic Health Record Usability and Professional Burnout Among US Physicians.”

The researchers found that “The usability of current EHR systems received a grade of F by physician users when evaluated using a standardized metric of technology usability. A strong dose-response relationship between EHR usability and the odds of burnout was observed.”

In their survey of 870 doctors, the researchers asked for a ranking of EHR system usability on a scale of 0 to 100. The mean score of 45.9 was deemed an “F,” Becker’s Hospital Review explained.

The researchers suggested that “Given the association between EHR usability and physician burnout, improving EHR usability may be an important approach to help reduce health care professional burnout.”

That could be the understatement of the decade.

“It is a national imperative to overhaul the design and use of EHRs and reframe the technology to focus primarily on its most critical function—helping physicians care for their patients. Significantly enhancing EHR usability is key,” said Patrice Harris, MD, President of the American Medical Association, in a statement.

All is not well with the EHR segment of healthcare information technology, as attested to by the number of lawsuits, complaints, and news accounts of patient harm due to misperforming EHR systems and user error. Because of the growing number of lawsuits involving the function and use of different EHR products, clinical laboratory leaders would be wise to ensure their EHR interfaces to healthcare providers function correctly and check them often.

—Donna Marie Pocius

Related Information:

Defective EHRs Suffer Little in Fraud Probes: “They’re Almost Too Big to Fail”  

Electronic Health Records Creating a New Era of Healthcare Fraud, Officials Say

Death by a Thousand Clicks: Where Electronic Health Records Went Wrong

No Safety Switch: How Lax Oversight of Electronic Health Records Puts Patients at Risk

The Association Between Perceived Health Record Usability and Professional Burnout Among U.S. Physicians

AMA Study: Physicians Give EHR Usability an ‘F’ Rating

New Research Intensifies AMA’s Call for Improved EHR Usability

In-Home Healthcare Companies Bring High-Acuity Care, Including Clinical Laboratory Testing, to Patients at their Homes and Workplaces

Proven success at providing quality care to patients at home while lowering costs has both investors and health insurance companies intrigued

Some call it “hospital in the home.” Whatever name it is given, the high cost of keeping a patient overnight in a hospital is motivating a range of healthcare players to develop innovative ways to provide care to patients—even patients with acute conditions—in their home. This is a trend that clinical laboratories will want to watch.

With hospital beds costing $1,000 to $2,000 per night, the economics of being treated in the comfort of their homes can be attractive to patients. But it’s also popular with caregivers, investors, and payers, as well. That’s why in-home healthcare services are becoming increasingly common nationwide, and why clinical laboratories may be supplying services to more in-home healthcare companies in the future.

One such company is DispatchHealth of Denver, Colo., which recently brought its “ER-at-Home” in-home healthcare model to cities in Texas, Massachusetts, and Washington State.

Focused primarily on seniors with high-acuity medical conditions, “Patients or caregivers contact DispatchHealth through their smartphone app, website, or phone call line and the company sends over a home care team consisting of a physician assistant or nurse practitioner, along with an [emergency] medical technician. The team has the ability to perform clinical laboratory studies, infusion, EKGs, and some higher-level procedures, such as the repair of complex lacerations,” MedCity News reported.

The DispatchHealth team arrives prepared to treat Influenza (Flu), fever, joint or back pain, sprains, strains, eye infections, urinary tract infections, skin rashes, and lacerations. The team also can treat more severe conditions that cause nausea, vomiting, and diarrhea, as well as asthma and other respiratory conditions, and illnesses of the ear, nose, and throat.

In addition, the DispatchHealth team can perform certain clinical laboratory tests onsite, including:

  • blood tests,
  • strep test,
  • flu swab,
  • urinalysis,
  • urine cultures,
  • stool culture,
  • test for blood in stool,
  • pregnancy test,
  • lactate,
  • 12-lead EKG,
  • PT/INR (prothrombin time/international normalized ratio)
  • rapid infectious disease testing and more.

Home Care Can Save Millions in Healthcare Costs

High-acuity home care is a development that clinical laboratory leaders will want to monitor because these services save people trips to medical laboratories, urgent care centers, primary care doctors’ offices, and even emergency rooms.

“We strive to treat conditions between the ER and true emergencies—so COPD (chronic obstructive pulmonary disease) exacerbation, pneumonia, severe migraines, and other issues we can treat with IV (intravenous therapy) medication … and laboratory studies,” Mark Prather, MD, DispatchHealth Chief Executive Officer, told MedCity News, which noted the company’s partnership with Centura Health, Colorado Springs, Colo., among others.

Established in 2013 in Denver, DispatchHealth provides both mobile and virtual healthcare, is in-network with healthcare insurance companies, and has relationships with healthcare systems.

The company expanded this year into new markets and added partnerships with more healthcare systems, including:

Through in-home care teams (such as shown above), DispatchHealth estimates delivery of acute care to about 80,000 patients nationwide in 2019 for a savings of $100 million in medical expenses. “Up to 50% of people who visit the emergency room every day could be treated in a lower cost setting,” said DispatchHealth Chief Executive Officer Mark Prather, MD, in a news release. (Photo copyright: Philips.)

In the Spokane market, the company’s six teams and two vehicles can see about seven patients per day for an average of 45 minutes to an hour per visit, reported the Spokesman-Review. DispatchHealth employs more than 200 people and has raised more than $33 million in growth capital financing, according to a company statement.

Home Care Rewards Healthcare Networks

Dark Daily previously reported on Northwell Health, a nonprofit integrated healthcare network in New York State, which received $1.8 million in incentive payments as part of the Independence at Home Demonstration Project from the Centers for Medicare and Medicaid Services (CMS) Innovation Center. (See, “Medicare’s Independence at Home Program Saves Federal Government Millions While Paying Millions to Health Providers That Meet Quality Benchmarks,” November 20, 2019.)

The project involved and recognized medical practices that effectively and efficiently cared for Medicare beneficiaries with chronic conditions at home. 

More recently, Northwell Health Labs, a division of Northwell Health, launched LabFly, a smartphone app that enables patients to schedule blood draws at home or at work, according to a news release.

“The app is a new way to give our patients access to the quality experience they would receive at one of our patient service centers, but in their living room or place of work,” said Dwayne Breining, MD, Executive Director, Northwell Health Labs, in the news release.

Investors Are Intrigued with In-Home Care

The business of treating people in their homes or offices has some investors excited at the opportunity.

“To us, this feels like we’re investing in Uber in 2010. This is going to revolutionize and change the entire healthcare industry,” Samir Patel, Principal and co-founder of IRA Capital told the New York Times. Patel was commenting on his firm’s investment in Heal, a Los Angeles-based in-home healthcare company that launched in 2014.

In response to being contacted by smartphone app, computer, or phone, Heal sends primary care doctors and medical assistants to treat people in their homes, workplace, or at hotels. 

Heal estimates completion of more than 100,000 house calls in 2019 and savings in healthcare expenses of more than $53 million due to treating people in lower cost ways, a news release stated. The company said it has experienced a 310% growth rate over 12 months and now operates in Atlanta, Georgia, California, New York, North Virginia, and the District of Columbia.

“Ten years from now, we will think of going to the doctor’s office as dated and arbitrary as going to the store to buy diapers compared to buying diapers on Amazon,” Nick Desai, co-founder of Heal, told FierceHealthcare, which reported Heal had raised $71 million from investors.

Payers Are Onboard as Well

High-acuity home care services also seem to align with health insurance company benefits and new federal payment models. Heal’s website states their services are in-network with most Medicare Advantage plans. Heal’s smartphone app also can verify insurance coverage.

DispatchHealth explains on its website that it contracts with major payers, including Medicare and Medicaid, and charges self-pay customers $275.

The economics addressed by high-acuity home care companies make sense. The average hospital stay costs more than $10,000, according to Healthcare Cost and Utilization Project data cited by Business Insider

Medical laboratory leaders should consider developing relationships with high-acuity home healthcare companies and other care providers that deliver care to people in unconventional ways and in non-traditional locations.  

—Donna Marie Pocius

Related Information:

Denver-based DispatchHealth Expands High Acuity Home Care Service

DispatchHealth Furthers Nationwide Expansion and Announces New Health System Partnerships

DispatchHealth Closes $33 Million in Growth Financing Led by Echo Health Ventures

MultiCare Partners with Denver-based Firm to Offer House Call Medical Care in Spokane

Northwell Health Launches LabFly in Manhattan, Queens, First Health System App to Facilitate Blood Draws at Home or Work

When the Waiting Room is Your Living Room

Most Expensive Health Conditions Hospital Costs

Medicare’s Independence at Home Program Saves Federal Government Millions While Paying Millions to Providers That Meet Quality Benchmarks

Excessive $48,329 Charge for California Patient’s Outpatient Clinical Laboratory Testing Calls Attention to Chargemaster Rates and New CMS Price Transparency Rule

Studies show medical laboratories may be particularly hit by adjustments to hospital chargemasters as hospitals prepare to comply with Medicare’s New Transparency Rule

Recently, Kaiser Health News (KHN) published a story about a $48,329 bill for allergy testing that cast a spotlight on hospital chargemaster rates just as healthcare providers are preparing to publish their prices online to comply with a new Centers for Medicare and Medicaid Services (CMS) rule aimed at increasing pricing transparency in healthcare. The rule goes into effect January 1, 2019.

The patient—a Eureka, Calif., resident with a persistent rash—had received an invoice for more than $3000 from her in-network provider.

Though this type of allergy skin-patch testing is usually performed in an outpatient setting by a trained professional, such as an allergist or dermatologist, the patient elected to have the testing performed at Stanford Health Care (Stanford), a respected academic medical system with multiple hospitals, outpatient services, and physician practices.

The patient’s insurance plan, Anthem Blue Cross (Anthem), paid $11,376 of the $48,329 amount billed by Stanford Health Care, which was the rate negotiated between the insurer and Stanford, Becker’s Healthcare reported. The patient ultimately paid $1,561 out-of-pocket.

So, where did that $48,329 in total charges come from? Experts pointed to the provider’s chargemaster. A chargemaster (AKA, charge description master or CDM) lists a hospital’s prices for services, suppliers and procedures, and is used by providers to create a patient’s bill, according to California’s Office of Statewide Health Planning and Development (OSHPD).

Chargemasters note high prices beyond hospitals’ costs and may be considered jumping off points for hospitals to use in invoicing payers and patients, RevCycleIntelligence explained.

Hospital representatives will negotiate with insurance companies, asking them to pay a discounted rate off the chargemaster list. A patient with health insurance accesses care at that negotiated rate and perhaps has responsibility for a share of that amount as well.

However, an out-of-network patient, uninsured person, or cash customer who receives care will likely be billed the full chargemaster rate.

In a statement to KHN, Stanford explained that the California woman’s care was customized and, therefore, costly: “We conducted a comprehensive evaluation of the patient and her environmental exposures and meticulously selected appropriate allergens, which required obtaining and preparing putative allergens on an individual basis.”

Johns Hopkins researchers Ge Bai, PhD, CPA (left), and Gerard Anderson, PhD (right), authored a study published in Health Affairs that shows “Hospitals on average charged more than 20 times their own costs in 2013 in their CT scan and anesthesiology departments.” Hospitals with clinical laboratory outreach programs will want to consider how their patients may respond as new federal price transparency requirements make it easier for patients to see medical laboratory test prices in advance of service. (Photo copyright: Johns Hopkins University.)

Now is a Good Time for Clinical Laboratories to Make Chargemaster Changes

Some organizations, such as the Healthcare Financial Management Association (HFMA), are calling for chargemaster adjustments as part of a comprehensive plan to improve transparency and lower healthcare costs. This falls in line with the new CMS rule requiring hospitals to post prices online starting Jan.1, 2019.

In fact, hospital medical laboratories, which cannot distinguish their services from competitors, may be impacted by the new CMS rule perhaps more than other services, the HFMA analysis warned.

“The initial impact for healthcare organizations, if they have not already experienced it, will be on commoditized services such as [clinical] lab and imaging. Consumers do not differentiate between high and low quality on a commoditized service the same way a physician might, which means cost plays a larger role in consumers’ decision making.” That’s according to Nicholas Malenka, Senior Consultant, GE Healthcare Partners, and author of the HFMA report. He advises providers to do chargemaster adjustments that relate charges to costs of services, competitors’ charges, and national data.

Medical laboratory leaders also may want to take another look at the opportunities and risks for labs suggested in an earlier Dark Daily e-briefing on the Medicare requirement. (See, “Latest Push by CMS for Increased Price Transparency Highlights Opportunities and Risks for Clinical Laboratories, Pathology Groups,” August 8, 2018.)

Are Chargemaster Charges Truly Excessive? Johns Hopkins Researchers Say ‘Yes!’

Most hospitals with 50 beds or more have a charge-to-cost ratio of 4.32. In other words, $432 is charged when the actual cost of a service is $100, according a study conducted by Johns Hopkins University and published in Health Affairs.

The researchers also noted in a news release about their findings titled, “Hospitals Charge More than 20 Times Cost on Some Procedures to Maximize Revenue,” that:

  • Charge-to-cost ratios range from 1.8 for routine inpatient care to 28.5 for a CT scan; and,
  • Hospitals with $100 in CT costs may charge an uninsured patient or out-of-network patient $2,850 for the service.

“Hospitals apparently markup higher in the departments with more complex services because it is more difficult for patients to compare prices in these departments,” lead author Ge Bai, PhD, CPA, Associate Professor at Johns Hopkins Carey Business School, noted in the news release.

“(The bills for high charges) affect uninsured and out-of-network patients, auto insurers, and casualty and workers’ compensation insurers. The high charges have led to personal bankruptcy, avoidance of needed medical services, and much higher insurance premiums,” co-author Gerard Anderson, PhD, Professor of Health Policy and Management at Johns Hopkins Bloomberg School of Public Health, stated in the news release.

Legal Issues Possible for Hospitals, Medical Laboratories, Other Providers

Still another study published in the American Journal of Managed Care (AJMC) explored the legality of “surprising” uninsured and out-of-network patients with bills at the chargemaster rates. It found that contract law supports market-negotiated rates—not chargemaster rates that do not reflect actual costs or the market.

“Patients and payers should know that they are under no obligation to pay surprise bills containing chargemaster rates, and state attorneys generally can use the law to prevent providers from pursing chargemaster-related collection efforts against patients,” the researchers wrote.

Labs Need to Get Involved

Clinical laboratory leaders in hospitals and health systems are advised to reach out to hospital chargemaster coordinators to ensure the chargemaster, as it relates to the lab, is inclusive, accurate, and in sync with competitive market data. Independent medical laboratories may want to similarly check their chargemasters to see how their lab test prices compare to the prices charged by other labs serving the same community.

—Donna Marie Pocius

Related Information:

That’s a Lot of Scratch: The $48,329 Allergy Test

Allergy Tests

Six Things to Know About a Woman’s $48K Allergy Test

The Role of the Hospital Chargemaster in Revenue Cycle Management

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Hospitals Charge More than 20 Times Costs on Some Procedures to Maximize Revenue

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