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Australia’s NSW Health Chooses Epic for its Statewide Patient EHR

Five clinical laboratory information systems are part of the transition that will create a single statewide EMR for all New South Wales patients

In a massive project, Australia’s New South Wales Ministry of Health (NSW Health) has selected health information system developer Epic to unify its five pathology laboratory information management systems (LIMS), nine electronic medical record systems (EMR), and six patient administration systems (PAS) into a statewide single digital patient record (SDPR).

According to ITnews, providers in New South Wales currently use LIMS systems by Citadel Health and Integrated Software Solutions OMNI-Lab, EMR systems by Oracle Cerner and Orion Health, and patient administration systems from Oracle Cerner and DXC.

“The SDPR will consolidate geographically fragmented EMR, PAS, and LIMS systems to create a detailed lifelong patient record and deliver cost savings,” NSW Health said in a news release.

NSW Health is the largest public health system in Australia with more than 220 public hospitals, 16 Local Health Districts, and three Specialty Networks. NSW Health Pathology operates more than 60 pathology laboratories (clinical laboratories in the US) and has 150 patient service centers.

Andrew Montague

“While this initiative will provide untold benefits to all the patients of NSW, we are excited about its potential for improving the health outcomes of our regional patients,” said Andrew Montague (above), former Chief Executive, Central Coast Local Health District in a press release. “By enabling greater collaboration across all local health districts and specialty health networks, the Single Digital Patient Record will provide clinicians with even better tools to keep the patient at the center of everything we do.” This project is more market evidence of the trend to bring clinical laboratory test results from multiple lab sites into a single data repository. (Photo copyright: Coast Community News.)

Cloud-based Realtime Access to Patient Records

Australia has a population of about 26 million and New South Wales, a state on the east coast, is home to more than eight million people. Though the scale of healthcare in Australia is much smaller than in the US, this is still a major project to pull patient data together from all the NSW hospitals, physicians’ offices, and other healthcare providers such as clinical laboratories and pathology practices.

With the change, NSW clinicians will benefit from a cloud–based system offering up real-time access to patients’ medical records, NSW Health Pathology Chief Executive Tracey McCosker told ITnews.

“Patients and our busy staff will benefit from clinical insights gained from the capture of important new data. Our work in pathology is vital to the diagnostic process and developing a statewide laboratory information management system will ensure we provide the best possible services,” McCosker told ITnews.

The KLAS Research report, “US Hospital Market Share 2022,” states that Epic, located in Verona, Wisconsin, has the largest US electronic health record (EHR) market share, Healthgrades noted. According to KLAS:

NSW Health’s decision to engage Epic came after a process involving 350 clinicians, scientists, and technical experts, Zoran Bolevich, MD, Chief Executive of eHealth NSW and NSW Health’s Chief Information Officer, told ITnews.  

NSW Health’s Goal for Statewide Digital Patient Record

It was in December 2020 when NSW Health announced its plan to create the SDPR. 

“Our vision is to be able to provide a single, holistic, statewide view of every patient—and for that information to be readily accessible to anyone involved in the patient’s care,” Bolevich said in the news release.

The SDPR, according to NSW Health, will address the following:    

Challenges:

  • Current systems not connected statewide.
  • Inaccessible patient data.
  • Duplicative data collection.
  • Gaps in decision-making.

Goals:

  • Improve health outcomes.
  • Create patient centricity.
  • Leverage insights.

NSW’s government has already invested more than $106 million in the SDPR, Healthcare IT News reported.

Other Large EHR Rollouts

NSW Health is not the only large organization to take on such an ambitious project of creating a large-scale digital patient record. And not always to a successful conclusion.

The US Department of Veterans Affairs (VA)—also intent on EHR modernization—recently announced it is suspending roll-out of the Oracle Cerner EHR at VA centers until June 2023 to address technical issues affecting appointments, referrals, and test results.

Four VA centers in Washington, Oregon, and Ohio already went live with the system in 2022.

“We are delaying all future deployments of the new EHR while we fully assess performance and address every concern. Veterans and clinicians deserve a seamless, modernized health record system, and we will not rest until they get it,” said Deputy Secretary of Veterans Affairs Donald Remy, JD, in a news release.

For its part, Oracle Cerner wrote federal lawmakers noting the importance of continuing the project, which will move the VA away from its former VistA health information system. 

“Modernization requires change and some short-term pain for the long-term benefits of a modern technology infrastructure,” noted Oracle Cerner Executive Vice President Ken Glueck in the letter, Becker’s Health IT reported. “A modernization project of this scale and scope necessarily involves time to untangle the decades of customized processes established in support of VistA, which inevitably involves challenges.”

NSW Health’s goal is to build a single repository of health information—including lab test results from multiple clinical laboratory sites. When finished NSW Health expects that sharing patient data will contribute to producing better healthcare outcomes.

However, the VA’s experience—and several other similar attempts at large-scale electronic patient record installations—suggest the work ahead will not be easy. But for NSW Health, it may be worth the effort.   

—Donna Marie Pocius

Related Information:

NSW Health Taps Epic for Statewide, Single Digital Patient Record

Single Digital Patient Record Set to Deliver Vastly Improved Patient Experience

NSW Health to Partner with Epic in the Next Step Towards its Digital Healthcare System

US Hospital Market Share 2022: Strong Purchasing Energy across Large, Small, and Standalone Hospitals

EHR Market Share 2021: 10 Things to Know About Major Players Epic, Cerner, Meditech and Allscripts

Single Digital Patient Record (SDPR)

New South Wales Invests $106 Million in Single EMR System

Healthcare Experts Say Consumers Are Ready for Self-Test Flu Kits, But Are Physicians and Clinical Laboratories Ready to Let That Cat Out of the Bag?     

Clinical laboratories could play a key role in helping users collect their samples correctly, interpret results, and transfer flu test data to their health records

Clinical laboratories may have another opportunity to provide service to their clients and the physicians who treat them. With the success of at-home COVID-19 testing, consumer demand for self-tests is changing and advances in diagnostic technology now make it feasible to make more influenza (flu) tests available for consumers to buy and use at home.

At-home tests for SARS-CoV-2 can be found at pharmacies all across America. But that’s not the case with tests for influenza.

Should self-test flu kits eventually become available and common, clinical laboratories could offer the service of helping consumers understand:

  • that the test was conducted correctly (specimen collection and analysis),
  • that the result is accurate and reproducible, and
  • how to understand the results.

Clinical laboratories also could collect and input the results into their laboratory information system (LIS), then send those results to the patients’ electronic health record (EHR) at their physician’s clinic.

Christina Yen, MD

“Home flu testing would ensure that those who do need and receive antiviral medication for influenza are the ones who need it the most,” and that “we are making our treatment decisions based on data,” infectious disease specialist Christina Yen, MD (above), University of Texas Southwestern Medical Center, told STAT News. At-home flu self-tests could also bring opportunities for clinical laboratories to provide service to healthcare consumers and the physicians who treat them. (Photo copyright: UT Southwestern Medical Center.)

Pros and Cons of Consumers Doing At-home Influenza Testing

According to the federal Centers for Disease Control and Prevention (CDC), COVID-19 and influenza are both upper respiratory illnesses with similar symptoms. So, why don’t we have more at-home flu tests available? Partly because at-home testing is a relatively new phenomenon in modern healthcare.

“It’s really rare, and it’s really new that people are allowed to know about what’s happening inside their body without a physician in the middle,” Harvard epidemiologist Michael Mina, MD, PhD, told STAT News. The article uses the example of at-home pregnancy tests. Despite a prototype for an at-home pregnancy test being created in 1967, it took another decade before an over-the-counter pregnancy test became available to the public.

“The general thinking was, ‘How could a woman possibly know what to do if she found out she was pregnant on her own without a doctor in the room?’ That is a ridiculous concern because women have been doing that for millions of years,” Mina added.

So, why be cautious when it comes to giving patients the option of at-home flu testing?

There are some cons to at-home influenza tests. Average citizens are not clinical laboratory professionals. They might obtain too little sample for an accurate reading or read the results incorrectly. Then, there is the possibility for false-negatives or false-positives.

An at-home test user is not likely to consider the possibility of a false result, however clinicians look at the situation with more nuance. If the patient was still symptomatic or in a high-risk community, the provider could administer a more sensitive medical laboratory test to confirm the previous test results.

There are other concerns about at-home testing as well. Another STAT News article titled, “Growing Use of Home COVID-19 Tests Leaves Health Agencies in the Dark about Unreported Cases,” reported on a superspreading event that health officials did not know about: a Phish concert on Halloween.

“In a Facebook post from mid-November with hundreds of responses, concertgoers compared symptoms and positive test results, many of those from tests taken at home. But those data weren’t added to state public health tallies of COVID’s spread,” STAT News noted.

The larger concern is that samples obtained by at-home self-test users are not submitted for genomic sequencing. This could lead to incomplete data and delay identifying new variants of the coronavirus in communities.

“If nobody’s reporting the tests, are we really getting the information we need?” Atul Grover, MD, PhD, Executive Director of the Association of American Medical Colleges Research and Action Institute, told STAT News. “We have no idea what the true positivity rate is.”

Another barrier to at-home flu testing is that rapid influenza diagnostic testing can be unreliable. In 2009, the rapid influenza tests could only detect the H1N1 influenza virus in a mere 11% of samples, STAT News reported. Because of this, the FDA now requires manufacturers to test their rapid tests against eight different strains that change every year depending upon which strains are prevalent. This could present a problem if individuals use leftover tests from the previous flu season.

Do Pros of At-home Testing Outweigh the Cons?

At-home testing is convenient and makes testing more accessible to patients who may not be able to get to a clinic. Being able to test at home also encourages individuals to take precautions necessary to stop the spread of whichever illness they may have. Given the similarities in symptoms between influenza and COVID-19, people could benefit from having tools at home that correctly identify their illness.

At-home COVID-19 tests are here to stay, and at-home influenza tests may be on the way soon. Clinical laboratories could play an important role in educating the public on the correct handling of these tests.

Ashley Croce

Related Information:

Why Doesn’t the U.S. Have At-Home Flu Tests?

What Is the Difference between Influenza (Flu) and COVID-19?

We Still Don’t Have At-Home Testing for the Flu—But COVID-19 Has Changed the Stakes

Growing Use of Home COVID-19 Tests Leaves Health Agencies in the Dark about Unreported Cases

Walmart’s Health and Wellness Chief Discusses Retail Giant’s Move to Healthcare/Telehealth Provider, a Step with Implications for Clinical Laboratory Testing

Retail giant now has primary care clinics at stores in five states, but the rollout has not gone smoothly

Healthcare is increasingly being driven by consumerism and one clear sign of this trend is Walmart’s ambitious plan to open health clinics at its retail locations. The retail giant set its plans in motion in 2019 with its first primary care site in a suburban Atlanta store, however, the rollout since then has presented certain challenges.

Nevertheless, the trend of placing nearly full-service primary care clinics in retail locations continues. Clinical laboratories in these areas need strategies to serve customers accessing healthcare through these new channels, particularly as Walmart and the national retail pharmacy chains continue to expand the clinical services offered in their retail stores.

“Consumer engagement is a huge part of healthcare, [yet it is also a] gap for us in healthcare,” cardiologist and Walmart VP of Health and Wellness Cheryl Pegus, MD, told Modern Healthcare. “Healthcare is incredibly complicated,” she added. “And where we are in healthcare today is not in having great treatments. It’s not in having evidence-based medicine. It’s understanding how we engage consumers.”

The company also entered the telehealth business with last year’s acquisition of multispecialty telehealth provider MeMD.

“Telehealth offers a great opportunity to expand access and reach consumers where they are and complements our brick-and-mortar Walmart Health locations,” said Pegus in a Walmart new release announcing the acquisition. “Today people expect omnichannel access to care and adding telehealth to our Walmart healthcare strategies allows us to provide in-person and digital care across our multiple assets and solutions.”

Currently, Walmart Health centers only operate in Georgia, Florida, Illinois, and Arkansas. But telehealth enables Walmart “to provide virtual healthcare across the country to anyone,” Pegus said. With both offerings, “we’re really attempting to allow people to get healthcare the way they need it without disrupting the rest of their life.” Many users of these services are Walmart “associates,” she added, using the company’s term for its retail employees.

Cheryl Pegus, MD
 
“In this country, about 25% of people don’t have a primary care physician,” cardiologist Cheryl Pegus, MD (above), Walmart’s VP of Health and Wellness, told Medscape. “So, your options for being able to solve in real time something that will help you, they’re quite limited. What we’re trying to do is give those options. We’re not trying to take away emergency rooms, or healthcare systems, or existing primary care. We’re asking, how do we expand that infrastructure so that people get care when they need it?” And this includes clinical laboratory testing, radiology, and telehealth services as well. (Photo copyright: Walmart.)

Large Portfolio of Healthcare Offerings

Pegus joined Walmart (NYSE:WMT) in December 2020 to oversee a portfolio that now includes more than 4,700 pharmacies and 3,400 Vision Centers, in addition to the telehealth operation and the Walmart Health centers. She was previously chief medical officer at Walgreens and Cambia Health Solutions and worked in private practice as a cardiologist.

The retail giant opened its first Walmart Health center in Dallas, Ga., an Atlanta suburb, in September 2019, followed by additional centers in Georgia, Arkansas, and Illinois.

Earlier this year, it opened five new clinics in northern and central Florida with plans for at least four more in the Jacksonville, Orlando, and Tampa areas, according to a press release. Each health center is adjacent to a Walmart retail location.

These centers offer a range of primary care medical services, including:

  • physicals,
  • injury care,
  • immunizations,
  • radiology, and
  • care for chronic health conditions.
One of the first health clinics established by Walmart
Pictured above is one of the first health clinics established by Walmart. This location is in a western Atlanta suburb. Note that the services advertised include more than just primary care. Also offered are “labs and X-ray,” along with dental, hearing, optometry, and counseling. Clinical laboratory managers and pathologists may want to monitor whether consumers embrace primary care delivered from clinics located in retail stores. (Photo copyright: Georgia Health News.)

As Dark Daily reported in May 2020, the Walmart Health centers also offer clinical laboratory testing at cut-rate prices, such as:

  • $10 for a lipid test,
  • $10 for Hemoglobin A1c, and
  • $20 for a strep test.

On the Walmart Health website, patients can enter their Zip code to view a list of Walmart Health clinics in their area, including links to price lists.

Walmart’s Expansion into Healthcare Not Without Problems

In “Walmart to Open 4,000 Healthcare ‘Supercenters’ by 2029 That Include ‘Comprehensive’ Clinical Laboratory Services,” Dark Daily covered how Walmart was poised to become a much bigger healthcare player with an expanded menu of clinical laboratory testing services including EKGs, vision care, dental care, and more for children and adults.

However, the company’s expansion into healthcare has not gone smoothly. In 2018, the Walmart board signed off on a plan to open 4,000 health centers by 2029, Insider reported. By the end of 2021, Walmart expected to have 125 health centers in operation, but as of June 2022, the Walmart Health website listed only 25 locations, mostly in Georgia.

Citing anonymous sources, Insider reported problems that include “leadership changes, competing business priorities brought on by the coronavirus pandemic, and the complexity of scaling a massive healthcare operation.”

In Sept. 2021, Insider further reported that the clinics were experiencing operational difficulties including hidden fees and billing problems. One culprit, the story suggested, was the company’s electronic health record (EHR) software. That same month, Walmart announced it would adopt the Epic health records system, beginning with the opening of new clinics in Florida locations.

Pegus’ arrival at Walmart appears to be part of a management shakeup. In January 2022, Insider reported that she had assembled a new executive team, with David Carmouche, MD, Senior VP, Omnichannel Care Offerings, overseeing the health centers and telehealth operations. By then, the original executives leading the rollout of the health centers had all left, Insider reported. Carmouche was previously an executive VP with Ochsner Health in New Orleans.

Partnership with Quest Diagnostics

Meanwhile, in January, Walmart announced a deal with Quest Diagnostics that allows consumers to order more than 50 lab tests through The Wellness Hub on Walmart.com, which is separate from the Walmart Health website. The tests cover “general health, digestive health, allergy, heart health, women’s health, and infectious disease,” according to a press release announcing the partnership.

Consumers can order at-home test kits for certain conditions or set up appointments for tests at Quest Patient Service Centers. The tests on the Walmart/QuestDirect website include:

  • COVID-19 Active Infection ($119+)
  • COVID-19 Antibody Test ($69)
  • Cholesterol Panel ($59)
  • Complete Blood Count ($59)
  • Comprehensive Metabolic Panel ($49)
  • CRP Inflammation Marker ($59)
  • Diabetes Management ($69+)
  • Diabetes Risk ($99+)
  • Food Allergy Test Panel ($209)
  • Chickenpox ($59)

The website also offers a combined Basic Health Profile with CBC, CMP, cholesterol panel, and urinalysis for $149. “Each purchase is reviewed and, if appropriate, ordered by a licensed physician,” the press release states.

What does all this mean for clinical laboratories? “They need to recognize that the Millennials and Gen Zs are driving a consumer revolution in healthcare,” said Robert Michel, Publisher and Editor-in-Chief of Dark Daily and its sister publication The Dark Report.

“Walmart was early to recognize and respond to this, in part because it employs 1.3 million Americans, many of whom are Gen Y and Gen Z and quick to use telehealth and similar virtual health services,” he added.

Clinical laboratory leaders need to understand this trend and develop strategies to attract and serve new patients who are willing to access healthcare virtually, while still needing to provide blood and other specimens for the lab tests ordered by their providers.

Stephen Beale

Related Information:

Q/A with Dr. Cheryl Pegus of Walmart: ‘Consumer Engagement Is a Huge Part of Healthcare’

Nine Numbers That Show How Big Walmart’s Role in Healthcare Is

Walmart Health Opens Two More Locations in Chicago

Change Makers: Dr Cheryl Pegus on How Walmart Is Rethinking Health

Walmart to Open Two Health Clinics in Rogers, Fort Smith

Walmart Deepens Healthcare Offering with Lab Test Partnership

Walmart Tests Leap into Healthcare Business by Opening Second Clinic

Walmart to Open 4,000 Healthcare ‘Supercenters’ by 2029 That Include ‘Comprehensive’ Clinical Laboratory Services

Vanderbilt University Researchers Combine Genetic Data and EHR Records to Identify Undiagnosed Disease in Patients

Multi-university research group discovers that heart arrhythmia genes may be more common than previously thought

For years, big data has been heralded as the key to unlocking the promise of personalized medicine. Now, researchers at Vanderbilt University are bringing that goal a step closer to reality by combining genetic testing data with data stored in electronic health record (EHR) systems to reveal undiagnosed disease in individual patients.

Should their research result in new ways to identify and diagnose disease, doctors and clinical laboratories would do confirmatory testing and then initiate a precision medicine plan.

Vanderbilt University Medical Center (VUMC) led a multi-university team of researchers that used data from the eMERGE (Electronic Medical Records and Genomics) network in two separate studies. eMERGE is a consortium of medical centers funded by the National Human Genome Research Institute (NHGRI) for the advancement of EHR data in genomics research.

The first study, published in the journal Circulation, titled, “Arrhythmia Variant Associations and Reclassifications in the eMERGE-III Sequencing Study,” looked at 10 arrhythmia-associated genes in individuals who had no prior indication for cardiac genetic testing.

The second study, published in Jama Oncology, titled, “Association of Pathogenic Variants in Hereditary Cancer Genes with Multiple Diseases,” explored the spectrum of diseases associated with hereditary cancer genes.

Dan Roden, MD, Senior Vice President for Personalized Medicine at VUMC and Senior Author of the Circulation study, said in a VUMC news release that the findings support the growing use of genetic information in clinical care.

“The questions we asked were: How many people who had no previous indication for cardiac genetic testing had pathogenic or likely pathogenic variants, and how many of those people actually had a phenotype in the electronic health records?” he explained.

Arrhythmia More Common than Previously Thought

The VUMC researchers drew data for their reports from the eMERGE Phase III study, which investigated the feasibility of population genomic screening by sequencing 109 genes across the spectrum of Mendelian diseases—genetic diseases that are caused by a mutation in a single gene—in more than 20,000 individuals. The scientists returned variant results to the participants and used EHR and follow-up clinical data to ascertain patient phenotypes, according to a Northwestern University Feinberg School of Medicine news release.

The research team looked specifically at the 120 consortium participants that had disease-associated pathogenic or likely pathogenic (P/LP) variants in the arrhythmia-associated genes. An analysis of the EHR data showed that 0.6% of the studied population had a variant that increases risk for potentially life-threatening arrhythmia, and that there was overrepresentation of arrhythmia phenotypes among patients, the VUMC news release noted.

The research team returned results to 54 participants and, with clinical follow-up, made 19 diagnoses (primarily long-QT syndrome) of inherited arrhythmia syndromes. Twelve of those 19 diagnoses were made only after variant results were returned, the study’s authors wrote.

Carlos G. Vanoye, PhD, Research Associate Professor of Pharmacology at Northwestern University (NU), said the study suggests arrhythmia genes may be more common than previously thought.

“A person can carry a disease-causing gene variant but exhibit no obvious signs or symptoms of the disease,” he said in the NU news release. “Because the genes we studied are associated with sudden death, which may have no warning signs, discovery of a potentially life-threatening arrhythmia gene variant can prompt additional clinical work-up to determine risks and guide preventive therapies.”

Dan Roden, MD

“The take-home message is that 3% of people will carry a pathogenic or likely pathogenic variant in a disease-causing gene and many others will carry variants of uncertain significance,” said Dan Roden, MD (above), Senior Vice President for Personalized Medicine at VUMC and Senior Author of the Circulation study in the VUMC news release. “We can use genetic testing, electronic health record phenotypes, and in vitro technologies to evaluate and find people who have unrecognized genetic disease and save lives by making earlier diagnoses.” Clinical laboratories will play a key role in making those early diagnoses and in managing personalized medical treatment plans. (Photo copyright: Vanderbilt University.)

Variants of Uncertain Significance

According to the NU news release, the scientists determined the functional consequences of the variants of uncertain significance they found and used that data to refine the assessment of pathogenicity. In the end, they reclassified 11 of the variants: three that were likely benign and eight that were likely pathogenic.

In the JAMA Oncology study, the VUMC scientists and other researchers conducted a phenome-wide association study to find EHR phenotypes associated with variants in 23 hereditary cancer genes. According to the VUMC news release, they identified 19 new associations:

The VUMC study findings could improve disease diagnosis and management for cancer patients and help identify high-risk individuals, the researchers noted in their published report.

Other Scientists Urge Caution

Nonetheless, Amsterdam University Medical Centers professors Roddy Walsh, PhD,  Connie Bezzina, PhD, and Arthur A.M. Wilde, PhD, urged caution with coupling large-scale genomic analysis to EHRs.

In an editorial published in Circulation, titled, “First Steps of Population Genomic Medicine in the Arrhythmia World: Pros and Cons,” the professors noted that using genomic information in the case of potentially lethal inherited arrhythmia syndromes could be “lifesaving,” but questioned the benefits of reporting such secondary findings when patients are undergoing genome sequencing for other indications such as cancer.

“The likelihood that these ‘genetic diagnoses’ are translated into clinical diagnoses have not been completely evaluated,” they wrote. “In addition to the challenge of accurately identifying disease-causing genetic variants, defining the penetrance of such variants is critical to this process, i.e., what proportion of individuals in the general population with apparently pathogenic variants will develop the associated phenotype? If penetrance is low for particular gene/phenotype combinations, the costs associated with clinical screening and the psychological effects on individuals informed that they have potentially life-threatening variants may outweigh the benefits of the few new clinical diagnoses.”

These latest studies provide further evidence of the value of big data in healthcare and offer another lesson to clinical laboratories and pathologist about the future role data streaming from clinical laboratories and pathology assays may have in the growth of personalized medicine. 

—Andrea Downing Peck

Related Information:

Studies Combine Genetic Testing, Electronic Health Records to Find Undiagnosed Diseases

Arrhythmia Variant Associations and Reclassifications in the eMERGE-III Sequencing Study

Electronic Medical Records and Genomics (eMERGE) Phase III (eMERGE)

First Steps of Population Genomic Medicine in the Arrhythmia World: Pros and Cons

Association of Pathogenic Variants in Hereditary Cancer Genes with Multiple Diseases

Arrhythmia Genes More Common than Previously Thought

Transition from Fee-for-Service to Value-Based Reimbursement for Hospitals, Physicians, and Clinical Laboratories Continues, Albeit Slowly, Reports Say 

Medical laboratories and anatomic pathologists may need to squeeze into narrow networks to be paid under value-based schemes, especially where Medicare Advantage is concerned

Pathologists have likely heard the arguments in favor of value-based payment versus fee-for-service (FFS) reimbursement models: FFS encourages providers to order medically unnecessary procedures and lab tests. FFS removes incentives for providers to order patient services more carefully. Fraudsters can generate huge volumes of FFS claims that take payers months/years to recognize and stop.

Studies that favor value-based payment schemes support these claims. But do hospitals and other healthcare providers also accept them? And how is value-based reimbursement really doing?

To find out, Chicago-based thought leadership and advisory company 4Sight Health culled data from various organizations’ reports that suggest value-based reimbursement shows signs of growth as well as signs of stagnation.

Value-Based Payment Has Its Ups and Downs

Healthcare journalist David Burda is News Editor and Columnist at 4Sight Health. In his article, “Is Value-Based Reimbursement Mostly Dead or Slightly Alive?” Burda commented on data from various industry reports that indicated value-based reimbursement shows “signs of life.” For example:

On the other hand, Burda reported that value-based reimbursement also has these declining indicators:

  • 39.3% of provider payments “flowed” through FFS plans in 2020 with no link to cost or quality. This was unchanged since 2019. (HCPLAN report)
  • 19.8% of FFS payments to providers in 2020 were linked to cost or quality, down from 22.5% in 2019. (HCPLAN report)
  • 88% of doctors reported accepting FFS payments in 2019, an increase from 87% in 2018. (AMA report)

Does Today’s Healthcare Industry Support Value-based Care?

A survey of 680 physicians conducted by the Deloitte Center for Health Solutions suggests the answer could be “not yet.” In “Equipping Physicians for Value-Based Care,” Deloitte reported:

  • “Physician compensation continues to emphasize volume more than value.
  • “Availability and use of data-driven tools to support physicians in practicing value-based care continue to lag.
  • “Existing care models do not support value-based care.”

Deloitte analysts wrote, “Physicians increasingly recognize their role in improving the affordability of care. We repeated a question we asked six years ago and saw a large increase in the proportion of physicians who say they have a prominent role in limiting the use of unnecessary treatments and tests: 76% in 2020 vs. 57% in 2014.

“Physicians also recognize that today’s care models are not geared toward value,” Deloitte continued. “They see many untapped opportunities for improving quality and efficiency. They estimate that even today, sizable portions of their work can be performed by nonphysicians (30%) in nontraditional settings (30%) and/or can be automated (18%), creating opportunities for multidisciplinary care teams and clinicians to work at the top of their license.”

Hospital CFOs Also See Opportunities for Value-based Care

In his 4sight Health article, Burda reported on data from a “Guidehouse Center for Health Insights’ analysis of a 2021 Healthcare Financial Management Association (HFMA) survey of more than 100 health systems CFOs that found that most said they are still interested in seeking value-based payment arrangements this year.”

According to the HFMA survey, among the arrangement CFOs indicated, 59% expressed interest in Medicare Advantage value-based payment contracts.

This could be problematic for clinical laboratories, according to Robert Michel, Editor-in-Chief of Dark Daily and our sister publication The Dark Report. According to Guidehouse, “Nearly 60% of health systems plan to advance into risk-based Medicare Advantage models in 2022.”

Medicare Advantage (MA) enrollments have escalated over 10 years: 26.4 million people of the 62.7 million eligible for Medicare chose MA in 2021, noted a Kaiser Family Foundation brief that also noted MA enrollment in 2021 was up by 2.4 million beneficiaries or 10% over 2020.

Graph of Medicare Advantage Enrollment
The graph above is taken from the Kaiser Family Foundation report, “Medicare Advantage in 2021: Enrollment Update and Key Trends.” According to the KFF, “In 2021, more than four in 10 (42%) Medicare beneficiaries—26.4 million people out of 62.7 million Medicare beneficiaries overall—are enrolled in Medicare Advantage plans; this share has steadily increased over time since the early 2000s.” Since MA employs narrow networks for its healthcare providers, it’s likely this trend will continue to affect clinical laboratories that may find it difficult to access these providers. (Graphic copyright: Kaiser Family Foundation.)

“The shift from Medicare Part B—where any lab can bill Medicare on behalf of patients for doctor visits and outpatient care, including lab tests—to Medicare Advantage is a serious financial threat for smaller and regional labs that do a lot of Medicare Part B testing. The Medicare Advantage plans often have networks that exclude all but a handful of clinical laboratories as contracted providers,” Michel cautioned. “Moving into the future, it’s incumbent on regional and smaller clinical laboratories to develop value-added services that solve health plans’ pain points and encourage insurers to include local labs in their networks.”

Medical laboratories and anatomic pathology groups need to be aware of this trend. Michel says value-based care programs call on clinical laboratories to collaborate with healthcare partners toward goals of closing care gaps.

“Physicians and hospitals in a value-based environment need a different level of service and professional consultation from the lab and pathology group because they are being incented to detect disease earlier and be active in managing patients with chronic conditions to keep them healthy and out of the hospital,” he added.

Value-based reimbursement may eventually replace fee-for-service contracts. The change, however, is slow and clinical laboratories should monitor for opportunities and potential pitfalls the new payment arrangements might bring.

—Donna Marie Pocius

Related Information:

Is Value-Based Reimbursement Mostly Dead or Slightly Alive?

APM Measurement Progress of Alternative Payment Models: 2020-2021 Methodology and Results Report   

Policy Research Perspectives: Payment and Delivery in 2020

Equipping Physicians for Value-Based Care: What Needs to Change in Care Models, Compensation, and Decision-Making Tools

Nearly 60% of Health Systems Pursuing Risk-Based Medicare Advantage Models in 2022, Guidehouse Analysis Shows

Medicare Advantage in 2021: Enrollment Update and Key Trends

CMS’ Latest Value-Based Reimbursement Model Explores Geographic Direct Contracting for Medicare and Focuses on Costs and Quality

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