Could local and federal prosecutors ask clinical laboratories to disclose information on their client physicians’ test-ordering activities when investigating medical errors?
Are physicians facing greater risk of criminal indictments when one of their patients dies, and investigators find that physician impairment or inappropriate medical treatments contributed to the patient’s death? Could clinical laboratories be drawn into federal investigations of their client physicians?
The healthcare industry is responding to often highly-publicized
accusations of alleged wrongful care with extensive investigations of the
doctors involved. And following suit, local and federal prosecutors increasingly
seem willing to bring criminal charges against those physicians.
Thus, it behooves clinical laboratories to be aware of client physicians who may be over-ordering lab tests or regularly ordering inappropriate tests for their patients. At what point might criminal investigators hold medical laboratories accountable for not notifying authorities about lab test utilization patterns by physicians who could be reasonably understood to be putting their patients at risk of harm?
Doctors Charged in Three Cases Involving Deaths of
Patients
In two separate reports, Fierce Healthcare covered three pending cases in which doctors are being charged in the deaths of their patients: article one covers a case is in Ohio; and article two covers cases in Arkansas and California. Charges were filed against:
William Husel, DO, an Ohio critical care specialist who was indicted for 25 counts of murder for allegedly intentionally ordering fatal drug overdoses, according to a statement by the Franklin County Prosecuting Attorney. He pleaded not guilty, the Associated Press reported.
Robert Levy, MD, an Arkansas pathologist who was indicted by a federal grand jury on “three counts of involuntary manslaughter” in the deaths of three patients, according to a statement by the US Attorney’s Office for the Western District of Arkansas. Levy pleaded not guilty at an arraignment in August, the Washington Post reported.
Thomas Keller, MD, a California neurosurgeon who was indicted in the deaths of five patients, which allegedly resulted from his overprescribing opioids and narcotics, according to a statement from the State of California Department of Justice. Keller pleaded not guilty to second-degree murder charges in Sonoma County Court, according to the Press Democrat.
US Representative Bruce Westerman, R-Ark. (above) told the Washington Post, “Of all the medical professionals, the person you really don’t want messing up is a pathologist. If you have cancer, you want to know about it. If you don’t have it, you don’t want to be treated for it.” (Photo copyright: United States Congress.)
Dark Daily’s sister publication The Dark Report (TDR) covered the year-long investigation of Arkansas Pathologist Robert Levy, MD, by the US Attorney’s Office for the Western District of Arkansas. (See TDR, “Arkansas Pathologist Faces Three Manslaughter Charges,” September 30, 2019.)
Levy served as the Chief of Pathology and Laboratory Medical Services for the Veterans Health Care System of the Ozarks in Fayetteville, Ark., from 2005 through 2018.
In a statement, the US Attorney’s Office Western District of
Arkansas said, “A federal grand jury … indicted Levy on twelve counts of wire
fraud, twelve counts of mail fraud, four counts of making false statements in
certain matters, and three counts of involuntary manslaughter.”
A fact-finding panel interviewed Levy in 2015 after reports
that he was under the influence of alcohol while on duty, stated the US
Attorney Arkansas, adding that Levy denied the allegations.
In addition to other charges, the US Attorney Arkansas
statement said, “The indictment charges Levy with three counts of involuntary manslaughter
for causing the death of three patients through entering incorrect and
misleading diagnoses and, on two occasions, by falsifying entries in the
patients’ medical records to state that a second pathologist concurred with the
diagnosis Levy had made. The indictment alleges that the incorrect and
misleading diagnoses rendered by Levy caused the deaths of three veterans.”
In a news conference covered by the Washington Post, Duane Kees, US Attorney for the Western District of Arkansas, Department of Justice (DOJ), said, “I don’t think anyone would ever have imagined that a pathologist would use his knowledge and expertise to do something like this.”
Clinical laboratory leaders know how important it is to have
quality processes to prevent misdiagnosis, mistakes, and inappropriate test
utilization. Now, lab leaders may want to be aware of the activities of their
client physicians as well.
During investigations involving harm to patients allegedly
at the hands of healthcare providers, information kept by medical laboratories
about the lab test ordering practices of their client physicians may become an
important resource to officials conducting inquiries.
Sale of respected laboratory information system company may be an early sign that investors believe clinical laboratories and pathology groups are ready to upgrade their LISs and add needed capabilities
In the past 10 years there has been little disruption to the
laboratory
information systems (LIS) market that clinical
laboratories and anatomic
pathology groups use. Yet, over that same 10-year period, almost every
hospital and physician group practice adopted an electronic
health system (EHR), primarily because of federal financial incentives that
encouraged such adoption.
For medical
laboratories and pathology groups, this widespread—nearly
universal—adoption of EHRs by the nation’s hospitals and physicians was
disruptive. Labs were required to expend resources building digital interfaces
to the EHRs of their parent hospitals and client physicians to support
electronic test ordering and test reporting.
However, because that wave of EHR adoption is now over,
clinical labs and pathology groups have an opportunity to assess the current
state of the health
information technology (HIT) that they use daily, primarily in the form of
the classic laboratory information system that handles nearly all the primary
functions needed to support testing and other operational needs.
This opportunity to help medical laboratories enhance and/or
upgrade the capabilities of their laboratory information systems may be one
motivation behind the recent sale of a well-known LIS company.
Private Equity Firm Buys Orchard Software
On Oct. 7, 2019, Orchard Software Corporation of Carmel,
Ind., announced its acquisition by Franciscan Partners, a private equity firm
based in San Francisco.
Orchard Software, founded in 1993, has grown steadily over
the past 20 years, primarily by serving physician office laboratories,
community hospital labs, and independent clinical laboratory companies. With each
stage of growth, Orchard added functionality to its LIS and related software
offerings and moved up-market to serve larger hospitals and larger labs.
The purchase price and the terms of the sale were not
announced. Orchard’s Founder, President and CEO, Rob Bush, will retire. The new
CEO is Billie Whitehurst, who came to Orchard from Netsmart Technologies, where she was Senior
Vice President. The remainder of Orchard’s management team will be kept in
place.
“Francisco Partners will provide capital and expertise to enable Orchard to grow at a faster pace and continue to develop its newer web-based products in an industry that has lagged behind in adoption of cloud-based software,” says Rob Bush (above), Orchard Software’s Founder and exiting CEO, in a press release. (Photo copyright: Twitter.)
Is the LIS Market Heating Up?
What makes the purchase of Orchard by a multi-billion-dollar
private equity company noteworthy is the fact that it is the first significant
transaction in the LIS sector probably since the mid-2000s, which saw several
significant mergers and acquisitions.
Other acquisitions or investments involving LIS companies
need to happen before it would be appropriate to say that investor interest in
the LIS sector is heating up. However, it is accurate to say that many
professional investors will be watching to see whether Franciscan Partners
succeeds with its investment in Orchard Software. If Orchard’s revenue and
operating profits increase substantially in the next few years, that may
encourage other investors to look for LIS companies and products that they can
buy.
If this were to happen, that would be a positive development
for both clinical laboratories and anatomic pathology groups, because these
investors would have a motive to add new functions and capabilities to their
LIS products. It would also wake up a sector of lab information technology that
has been relatively quiet for several years.
Researchers believe new findings about genetic changes in C. difficile are a sign that it is becoming more difficult to eradicate
Hospital infection control teams, microbiologists, and clinical laboratory professionals soon may be battling a strain of Clostridium difficile (C. difficile) that is even more resistant to disinfectants and other forms of infection control.
A WSI news release states the researchers “identified genetic changes in the newly-emerging species that allow it to thrive on the Western sugar-rich diet, evade common hospital disinfectants, and spread easily.”
Microbiologists and infectious disease doctors know full well that this means the battle to control HAIs is far from won.
“C. difficile is currently forming a new species with one group specialized to spread in hospital environments. This emerging species has existed for thousands of years, but this is the first time anyone has studied C. difficile genomics in this way to identify it. This particular [bacterium] was primed to take advantage of modern healthcare practices and human diets,” said Nitin Kumar, PhD (above), in the news release. (Photo copyright: Wellcome Sanger Institute.)
Genomic Study Finds New Species of Bacteria Thrive in
Western Hospitals
In the published paper, Nitin Kumar, PhD, Senior Bioinformatician at the Wellcome Sanger Institute and Joint First Author of the study, described a need to better understand the formation of the new bacterial species. To do so, the researchers first collected and cultured 906 strains of C. difficile from humans, animals, and the environment. Next, they sequenced each DNA strain. Then, they compared and analyzed all genomes.
The researchers found that “about 70% of the strain collected specifically from hospital patients shared many notable characteristics,” the New York Post (NYPost) reported.
Hospital medical laboratory leaders will be intrigued by the
researchers’ conclusion that C. difficile is dividing into two separate
species. The new type—dubbed C. difficile clade A—seems to be targeting
sugar-laden foods common in Western diets and easily spreads in hospital
environments, the study notes.
“It’s not uncommon for bacteria to evolve, but this time we actually see what factors are responsible for the evolution,” Kumar told Live Science.
New C. Difficile Loves Sugar, Spreads
Researchers found changes in the DNA and ability of the C.
difficile clade A to metabolize
simple sugars. Common hospital fare, such as “the pudding cups and instant
mashed potatoes that define hospital dining are prime targets for these strains”,
the NYPost explained.
Indeed, C. difficile clade A does have a sweet tooth. It was associated with infection in mice that were put on a sugary “Western” diet, according to the Daily Mail, which reported the researchers found that “tougher” spores enabled the bacteria to fight disinfectants and were, therefore, likely to spread in healthcare environments and among patients.
“The new C. difficile produces spores that are more
resistant and have increased sporulation
and host colonization capacity when glucose or fructose is available for
metabolism. Thus, we report the formation of an emerging C. difficile
species, selected for metabolizing simple dietary sugars and producing high
levels or resistant spores, that is adapted for healthcare-mediated
transmission,” the researchers wrote in Nature Genetics.
Bacteria Pose Risk to Patients
The findings about the new strains of C. difficile bacteria
now taking hold in provider settings are important because hospitalized
patients are among those likely to develop life-threatening diarrhea due to
infection. In particular, people being treated with antibiotics are vulnerable
to hospital-acquired infections, because the drugs eliminate normal gut
bacteria that control the spread of C. difficile bacteria, the
researchers explained.
According to the Centers for Disease Control and Prevention (CDC), C. difficile causes about a half-million infections in patients annually and 15,000 of those infections lead to deaths in the US each year.
New Hospital Foods and Disinfectants Needed
The WSI/LSHTM study suggests hospital representatives should
serve low-sugar diets to patients and purchase stronger disinfectants.
“We show that strains of C. difficile bacteria have continued to evolve in response to modern diets and healthcare systems and reveal that focusing on diet and looking for new disinfectants could help in the fight against this bacteria,” said Trevor Lawley, PhD, Senior Author and Group Leader of the Lawley Lab at the Wellcome Sanger Institute, in the news release.
Microbiologists, infectious disease physicians, and their
associates in nutrition and environmental services can help by understanding
and watching development of the new C. difficile species and offering
possible therapies and approaches toward prevention.
Meanwhile, clinical laboratories and microbiology labs will
want to keep up with research into these new forms of C. difficile, so
that they can identify the strains of this bacteria that are more resistant to
disinfectants and other infection control methods.
Journalists, researchers, and a growing number of consumers now recognize the often huge variability in the prices different medical laboratories charge for the same lab tests
One step at a time, the Medicare program, private health insurers, and employers are putting policies in place that require providers—including clinical laboratories and pathology groups—to allow patients and consumers to see the prices they charge for their medical services. Recent studies into test price transparency in hospitals and health networks have garnered the attention of journalists, researchers, and patients. These groups are now aware of enormous variations in pricing among providers within the same regions and even within health networks.
Now that hospitals’ medical laboratory test prices are
required to be easily accessible to patients, researchers are beginning to compile
test prices across different hospitals and in different states to document and
publicize the wide variation in what different hospital labs charge for the
same medical laboratory tests.
Journalists are jumping on the price transparency bandwagon
too. That’s because readers show strong interest in stories that cover the
extreme range of low to high prices providers will charge for the same lab
test. This news coverage provides patients with a bit more clarity than
hospitals and other providers might prefer.
Shocking Variations in Price of Healthcare
Services, including Medical Laboratory Tests
The Health Care Cost Institute (HCCI) in conjunction with the Robert Wood Johnson Foundation (RWJF), examines price levels of various procedures and medical laboratory tests at healthcare institutions across the United States in the first release of a series called Healthy Marketplace Index. According to the HCCI website, “a common blood test in Beaumont, Texas ($443) costs nearly 25 times more than the same test in Toledo, Ohio ($18).”
In April, the New
York Times (NYT) made the wide variation
in how clinical laboratories price their tests the subject of an article titled,
“They Want It to Be Secret: How a Common Blood Test Can Cost $11 or Almost
$1,000.” The article discusses the HCCI findings.
The coverage by these two well-known entities is increasing the
public’s awareness of the broad variations in pricing at clinical laboratories
around the country.
Aside from the large differences in medical laboratory test
prices in different regions, the HCCI found that there are sometimes huge price
variations within a single metro area for the same lab tests. “In just one
market—Tampa, Fla.—the most expensive blood test costs 40 times as much as the
least expensive one,” the NYT notes.
In other industries, those kinds of price discrepancies are
not common. The NYT made a comparatively outrageous example using
ketchup, saying, “A bottle of Heinz ketchup in the most expensive store in a
given market could cost six times as much as it would in the least expensive
store,” adding, however, that most bottles of ketchup tend to cost about the
same.
The graphic above is taken from the New York Times article on test price discrepancies in healthcare. The range of prices for the medical lab test known as a comprehensive metabolic panel are for metropolitan areas only. The data is sourced from the Health Care Cost Institute study. It’s easy to see why patients would be confused by clinical laboratory pricing that varies so widely. (Graphic copyright. The New York Times.)
The CMS mandate designed to make the prices of medical services accessible to healthcare consumers has, in many ways, made things more confusing. For example, most hospitals simply made their chargemaster available to consumers. Chargemasters can be confusing, even to industry professionals, and are filled with codes that make no sense to the average consumer and patient.
“This policy is a tiny step forward but falls far short of what’s needed. The posted prices are fanciful, inflated, difficult to decode and inconsistent, so it’s hard to see how an average person would find them useful,” Jeanne Pinder, Founder and Chief Executive of Clear Health Costs, a consumer health research organization, told the NYT in an article on how hospitals are complying with the mandate to publish prices.
In addition to the pricing information being difficult for
consumers to parse, it also may lead them to believe they would need to pay
much more for a given procedure than they would actually be billed, resulting
in patients opting to not get care they actually need.
Why Having a Strategy Is Critically
Important for Clinical Laboratories
Clinical laboratories are in a particularly precarious position in all of this pricing confusion. For one thing, most hospital-based medical laboratories don’t have a way to communicate directly with consumers, so they don’t have a way to explain their pricing. Additionally, articles and studies such as those in the NYT and from the HCCI, which describe drastic price variations for the same tests, tend to cast clinical laboratories in a somewhat sinister light.
To prepare for this, medical laboratory personnel should be
trained in how to address customer requests for pricing and how to explain
variations in test prices among labs, before such requests become problematic. Lab
staff should be able to explain how patients can find out the cost of a given
test, and what choices they have regarding specific tests.
In 2016, Dark Daily’s sister-publication, The Dark Report (TDR), dedicated an entire issue to the impact of reference pricing on the clinical laboratory industry. In that issue, TDR reported on how American supermarket chain Safeway helped guide their employees to lower-priced clinical laboratories for lab tests, resulting in $2.7 million savings for the company in just 24 months. Safeway simply implemented reference pricing; the company analyzed lab test prices of 285 tests for all of the labs in its network, and then set the maximum amount it would pay for any given test at the 60th percentile.
If a Safeway employee selected a medical laboratory with prices less than the 60th percentile, the normal benefits and co-pays applied. But if a Safeway employee went to clinical laboratories that charged more than the 60th percentile level, they were required to pay both their deductible and the amount above Safeway’s maximum.
Safeway’s strategy revealed wide variation in testing
prices, just as the HCCI report found. This means that employers can be added
to the list of those who are paying much closer attention to medical laboratory
test pricing than they have in the past. These are developments that should
motivate forward-looking pathologists and clinical laboratory executives to act
sooner rather than later to craft an effective strategy for responding to consumer
and patient requests for lab test price transparency.
Low prices to encourage consumers to order its WGS service is one way Veritas co-founder and genetics pioneer George Church hopes to sequence 150,000 genomes by 2021
By announcing an annotated whole-genome sequencing (WGS) service to consumers for just $599, Veritas Genetics is establishing a new price benchmark for medical laboratories and gene testing companies. Prior to this announcement in July, Veritas priced its standard myGenome service at $999.
“There is no more comprehensive genetic test than your whole genome,” Rodrigo Martinez, Veritas’ Chief Marketing and Design Officer, told CNBC. “So, this is a clear signal that the whole genome is basically going to replace all other genetic tests. And this [price drop] gets it closer and closer and closer.”
Pathologists and clinical laboratory managers will want to watch to see if Veritas’ low-priced, $599 whole-genome sequencing becomes a pricing standard for the genetic testing industry. Meanwhile, the new price includes not only the sequencing, but also an expert analysis of test results that includes information on more than 200 conditions, Veritas says.
“The focus in our industry is shifting from the cost of sequencing genomes to interpretation capabilities and that’s where our secret sauce is,” said Veritas CEO Mirza Cifric in a news release. “We’ve built and deployed a world class platform to deliver clinically-actionable insights at scale.” The company also says it “achieved this milestone primarily by deploying internally-developed machine learning and AI [artificial intelligence] tools as well as external tools—including Google’s DeepVariant—and by improving its in-house lab operations.”
The myGenome service offers 30x WGS, which Veritas touts in company documentation as the “gold standard” for sequencing, compared to the less-precise 0.4x WGS.
The myGenome service is available only in the United States.
Will Whole-Genome Sequencing Replace Other Genetic Tests?
Veritas was co-founded by George Church, PhD, a pioneer of personal genomics through his involvement with the Harvard Personal Genome Project at Harvard Medical School. In a press release announcing the launch of myGenome in 2016, Veritas described its system as “the world’s first whole genome for less than $1,000, including interpretation and genetic counseling.”
Church predicts that WGS will someday replace other genetic tests, such as the genotyping used by personal genomics and biotechnology company 23andMe.
“Companies like 23andMe that are based on genotyping technology basically opened the market over the last decade,” Martinez explained in an interview with WTF Health. “They’ve done an incredible job of getting awareness in the general population.”
However, he goes on to say, “In genotyping technology, you
are looking at very specific points of the genome, less than half of one
percent, a very small amount.”
Martinez says Veritas is sequencing all 6.4 billion letters
of the genome. And, with the new price point, “we’re closer to realizing that
seismic shift,” he said in the news release.
“This is the inflection point,” Martinez told CNBC.
“This is the point where the curve turns upward. You reach a critical mass when
you are able to provide a product that gives value at a specific price point.
This is the beginning of that. That’s why it’s seismic.”
Rodrigo Martinez (above), Veritas’ Chief Marketing and Design Officer, told CNBC, “The only way we’re going to be able to truly extract the value of the genome for a healthier society is going to be analyzing millions of genomes that have been sequenced. And the only way we can get there is by reducing the price so that more consumers can sequence their genome.” Photo copyright: Twitter.)
Payment Models Not Yet Established by Government, Private
Payers
However, tying WGS into personalized medicine that leads to actionable diagnoses may not be easy. Robin Bennett, PhD (hon.), a board certified senior genetic counselor and Professor of Medicine and Medical Genetics at UW School of Medicine, told CNBC, “[Healthcare] may be moving in that direction, but the payment for testing and for services, it hasn’t moved in the preventive direction. So, unless the healthcare system changes, these tests may not be as useful because … the healthcare system hasn’t caught up to say, ‘Yes, we support payment for this.’”
“Insurers are looking for things where, if you get the
information, there’s something you can do with it and that both the provider
and the patient are willing and able to use that information to do things that
improve their health,” Phillips told CNBC. “Insurers are very interested
in using genetic testing for prevention, but we need to . . . demonstrate that
the information will be used and that it’s a good trade-off between the
benefits and the costs.”
Sequencing for Free If You Share Your Data
Church may have an answer for that as well—get biopharmaceutical companies to foot the bill. Though Veritas’ new price for their myGenome service is significantly lower than before, it’s not free. That’s what Nebula Genomics, a start-up genetics company in Massachusetts co-founded by Church, offers people willing to share the data derived from their sequencing. To help biomedical researchers gather data for their studies, Nebula provides free or partially-paid-for whole-genome sequencing to qualified candidates.
“Nebula will enable individuals to get sequenced at much
lower cost through sequencing subsidies paid by the biopharma industry,” Church
told BioSpace.
“We need to bring the costs of personal genome sequencing close to zero to
achieve mass adoption.”
So, will lower-priced whole-genome sequencing catch on?
Perhaps. It’s certainly popular with everyday people who want to learn their
ancestry or predisposition to certain diseases. How it will ultimately affect
clinical laboratories and pathologists remains to be seen, but one thing is
certain—WGS is here to stay.
