Former CEO also testified that she believed company’s proprietary blood-testing technology could perform ‘any’ clinical laboratory blood test
One relevant question in the federal fraud trial of ex-Theranos CEO Elizabeth Holmes was whether she would testify on her own behalf. That question was answered shortly after the government rested its criminal fraud case against the former Silicon Valley clinical laboratory testing company founder. Holmes took the stand in her own defense, a risk her defense team hopes will pay off in her favor.
During her first three days of testimony leading up to the Thanksgiving holiday break, Holmes—who faces 11 counts of fraud and conspiracy related to her tenure as founder and CEO of Theranos—made headlines by admitting she did personally put the logos of pharmaceutical giants Pfizer and Schering-Plough on reports she sent to Theranos investors and executives at Walgreens and Safeway. She expressed regret for doing so to the jury, but claimed her intent was not to deceive but to give credit to others.
“This work was done in partnership with these companies, and I was trying to convey that,” she testified, according to a trial coverage from Ars Technica.
When asked if she realized that others would assume the pharmaceutical companies—not Theranos—were the authors of the report, Holmes replied, “I’ve heard that testimony in this case, and I wish I’d done it differently.”
If found guilty, Holmes—who once claimed Theranos’ Edison proprietary blood-testing technology would to be able to complete as many as 200 clinical laboratory tests using a single finger-stick of blood—could face maximum penalties of 20 years in prison, a $2.75 million fine, and possible restitution.
Holmes Testifies She Believed the Edison Device Could Perform “Any” Blood Test
In its trail coverage, NPR described Holmes’ first three days of testimony “as having involved deflecting responsibility, pointing to the expertise of the Theranos board of directors, lab staff, and other company employees whom Holmes has suggested were close to how [Theranos’] blood analyzers worked.”
According to Reuters, Holmes’ defense team is arguing that Holmes’ always-rosy forecasts about her company’s technology and finances were based on her belief the proprietary Edison device worked as advertised, which, in turn, was based on feedback from pharmaceutical companies, her own employees, and the military.
During her testimony, Holmes compared a traditional blood-testing device to Theranos’ “3.0” device, which she said would reduce the human-error rate that can occur during blood sampling.
“If we had the ability to automate much of that process, we could reduce the error associated with traditional lab testing,” she told the court.
Reuters reported that Holmes told jurors her confidence in the Theranos device was in part due to how well the unit had performed in studies completed in 2008 and 2009, including those run by drug companies such as Novartis.
The Mercury News described Holmes as speaking with “confidence—and frequently a small smile”—during her opening day of testimony.
Asked by one of her lawyers, “Did you believe that Theranos had developed technology that was capable of performing any blood test?” Holmes responded, “I did.”
Holmes Testifies about Military’s Alleged Use of Edison Device
Prosecutors maintain that Holmes knew Theranos’ proprietary blood-testing technology had serious accuracy issues yet lied about its capabilities and use to lure investors. One of those false claims included allegedly stating the US military was using the Edison device on the battlefield. Earlier in the trial, CNBC reported, prosecution witness Brian Grossman, Chief Investment Officer at PFM Health Sciences, which invested $96 million into Theranos, testified he was told in a 2013 meeting with Holmes and Balwani that Theranos technology was being used in medical-evacuation helicopters.
However, on the witness stand, Holmes described Theranos’ projects with the US military as much more limited in scope than the descriptions outlined by investors testifying for the prosecution.
According to The Wall Street Journal (WSJ), Holmes told jurors a 2010 partnership between Theranos and a US Army Institute of Surgical Research doctor in Texas looked into using the Theranos device to measure blood markers to detect kidney performance. A second project involved the military’s Africa Command, which was determining whether the device could withstand high temperatures. Holmes testified the devices used in Africa “held up well,” though some modifications were needed, and some issues were revealed with the touchscreen.
Should Holmes Have Testified on Her Own Behalf?
Trial experts maintain Holmes’ decision to testify in her own defense could backfire.
“It’s always a risk to put your client on because if they make a mistake they can sink the whole case,” former Santa Clara County prosecutor Steven Clark, JD, told The Mercury News. He added, “what’s at issue here is Elizabeth Holmes’ intent. And the best person to say what Elizabeth Holmes’ intent was is Elizabeth Holmes, and that’s why I think she’s taking the stand. She’s very charismatic. She’s really good on her feet. And I think the jury will like her.
“This is the pitch meeting of her life,” Clark added. “She’s going to be explaining herself to 12 people as to what was in her mind.”
Judge Drops One Count Due to Prosecution Error, Government Rests Its Case
Holmes is now charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud after the government dropped one count of fraud from the indictment. According to WSJ coverage of the trial, US District Judge Edward Davila blocked a patient named in the indictment as “B.B.” from testifying because of a filing error by the prosecution. The judge’s decision resulted in the government dropping one count.
The government rested its case against Holmes on November 19 following testimony from independent journalist Roger Parloff, who wrote a flattering 2014 Fortune magazine story on Holmes. He later redacted his earlier writing in another Fortune article, titled, “How Theranos Misled Me.”
The government alleged Holmes used media publicity as part of her scheme to defraud investors, patients, and physicians. All totaled, 29 witnesses appeared for the prosecution, the WSJ reported.
Former Theranos Chief Operating Officer Ramesh “Sunny” Balwani—Holmes’ one-time boyfriend—faces similar charges of defrauding patients, investors, and physicians. His trial is expected to begin in January 2022.
Clinical laboratory managers and pathologists who have watched the federal court proceedings with keen interest should expect the trial to wrap up at the conclusion of Holmes’ testimony, just in time for the Balwani fraud trial to begin.
Under-resourced British healthcare system faces a record high backlog of care with 5.61 million people in England waiting for hospital-based medical procedures
Healthcare in the United Kingdom (UK) is about to become much more expensive. The UK government has announced plans to substantially increase payroll taxes to fund the surging demand for care due to the COVID-19 pandemic. But that may only be the part of the healthcare-funding iceberg visible above the surface. Below the surface is a healthcare system where wait times for access to many types of care—including cancer diagnoses—are already unacceptable.
Some pathologists and medical laboratory executives in the US who have long questioned healthcare reformers’ desire to introduce an NHS-like single-payer healthcare system in this country will not be surprised to learn that the UK’s notoriously underfunded National Health Service (NHS) is facing a record waitlist for hospital-based medical diagnostic tests and procedures.
Consequently, Reuters reported, the high cost of fighting the COVID-19 pandemic has pushed British Prime Minister Boris Johnson into breaking with election promises and announcing plans to raise payroll taxes to record levels so that more money can be funneled into the struggling government-run healthcare system.
5.6M People on Growing NHS Waiting List for Treatments and Procedures
When the COVID-19 pandemic struck the UK in March 2020, the NHS suspended elective surgeries such as hip or knee replacements and cataract removal and postponed many patients’ medical laboratory diagnostic tests.
In “Record 5.6M People in England Waiting for Hospital Treatment,” The Guardian estimated that 1.4 million patients were added to the waiting lists during the pandemic’s first 18 months. More than one-third of the 5.6 million people waiting for care in July 2021 had been on a waitlist for at least 18 months, the paper noted. Since then, the waiting list has grown by 150,000 people per month, as more people who did not seek or could not access NHS treatments during the pandemic returned to their doctors’ offices.
Johnson’s tax hike formula for fixing the record NHS backlog and improving social care for the elderly created shockwaves in the UK’s Conservative Party, which, like the Republican Party in this country, has championed low taxes. But Johnson maintains the government is out of options.
“It would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it,” Johnson told Parliament. “It would be irresponsible to meet the costs from higher borrowing and higher debt,” he added.
But Johnson’s proposal drew the wrath of some members of his own party and provided the opposition Labor Party with ammunition to denounce the prime minister’s leadership during the pandemic.
In “U.K. Is Among First Western Nations to Increase Taxes to Cover COVID-19 Costs,” The Wall Street Journal (WSJ) reported that Labor Party leader Keir Starmer compared Johnson’s tax increases to putting a bandage “on gaping wounds that his party inflicted,” and questioned why they weren’t levied more directly on the rich. The UK government says the wealthiest 14% will pay about half of the extra tax revenues, the WSJ noted.
“This is a tax rise that breaks a promise that the prime minister made at the last election … Read my lips, the Tories can never again claim to be the party of low tax,” Starmer told Reuters.
Politics versus Hard Facts
According to The Guardian, in 2023-2024, national insurance contributions will be rebranded as a health and social care levy, with more of the money raised going to social care. The added funding will enable the UK government to implement a new cap on total care costs so that no individual will pay more than £86,000 (US$117,142) over their lifetime for social-care programs. Currently, many seniors are forced to sell their homes to meet unexpected care costs, the newspaper noted.
“One message to voters and investors is that taxes are set to rise for years to come,” the WSJ editorial board wrote, predicting the cost of social care will escalate as the UK’s population ages, and that the planned diversion of future taxes for social care will be presented as a “cut” in NHS funding. They maintained that the danger in Johnson’s decision goes deeper than breaking an election campaign pledge or nationalizing more of the UK’s healthcare economy.
“The larger problem is that national healthcare and other entitlements become ever more unaffordable even as they are politically impossible to reform,” the newspaper stated. “The Tories are becoming tax collectors for the entitlement state, which is deadly for parties of the right.”
Bloomberg noted that the UK Institute for Fiscal Studies predicts the planned April 1 tax increase will “raise the UK tax burden to its highest-ever sustained level since records began in 1955—about 35% of national income.”
But, according to the UK-based The Health Foundation, at £2,646.95 (US$3,648.43) per person in 2019, the United Kingdom spends less on healthcare than many developed countries. Less per person than the:
US (£6,782.80),
Germany (£4,131.21),
France (£3,307.54),
Japan (£2,949.19) and
Canada (£2,823.07).
And when healthcare costs are viewed as a percentage of a country’s gross domestic product (GDP), the UK (8% GDP) lags behind the US (13.9%), Germany (9.9%), Japan (9.3%) and France (9.3%) and exceeds only Canada (7.6%) and Italy (6.4%).
While US hospitals, healthcare systems, and patients continue to struggle with ever-increasing healthcare costs, reformers who promote a single-payer healthcare system as an answer to this nation’s healthcare ills may want to take a hard look at the outcomes of the UK’s model.
Clinical laboratory managers and pathologists interested in how the US healthcare system can be improved might be well-served to study the experience of the National Health Service in the UK, that, like all other health systems in the world, has its own unique methods for how it serves its population.
Sophisticated cyberattacks have already hit hospitals and healthcare networks in Oregon, California, New York, Vermont, and other states
Attention medical laboratory managers and pathology group administrators: It’s time to ramp up your cyberdefenses. The FBI, the federal Department of Health and Human Services (HHS), and the federal Cybersecurity and Infrastructure Security Agency (CISA) issued a joint advisory (AA20-302A) warning US hospitals, clinical laboratories, and other healthcare providers to prepare for impending ransomware attacks, in which cybercriminals use malware, known as ransomware, to encrypt files on victims’ computers and demand payment to restore access.
The joint advisory, titled, “Ransomware Activity Targeting the Healthcare and Public Health Sector,” states, “CISA, FBI, and HHS have credible information of an increased and imminent cybercrime threat to US hospitals and healthcare providers.” It includes technical details about the threat—which uses a type of ransomware known as Ryuk—and suggests best practices for preventing and handling attacks.
In his KrebsOnSecurity blog post, titled, “FBI, DHS, HHS Warn of Imminent, Credible Ransomware Threat Against U.S. Hospitals,” former Washington Post reporter, Brian Krebs, wrote, “On Monday, Oct. 26, KrebsOnSecurity began following up on a tip from a reliable source that an aggressive Russian cybercriminal gang known for deploying ransomware was preparing to disrupt information technology systems at hundreds of hospitals, clinics, and medical care facilities across the United States. Today, officials from the FBI and the US Department of Homeland Security hastily assembled a conference call with healthcare industry executives warning about an ‘imminent cybercrime threat to US hospitals and healthcare providers.’”
Krebs went on to reported that the threat is linked to a notorious cybercriminal gang known as UNC1878, which planned to launch the attacks against 400 healthcare facilities.
Clinical Labs, Pathology Groups at Risk Because of the Patient Data They Keep
Hackers initially gain access to organizations’ computer systems through phishing campaigns, in which users receive emails “that contain either links to malicious websites that host the malware or attachments with the malware,” the advisory states. Krebs noted that the attacks are “often unique to each victim, including everything from the Microsoft Windows executable files that get dropped on the infected hosts to the so-called ‘command and control’ servers used to transmit data between and among compromised systems.”
Charles Carmakal, SVP and Chief Technology Officer of cybersecurity firm Mandiant told Reuters, “UNC1878 is one of the most brazen, heartless, and disruptive threat actors I’ve observed over my career,” adding, “Multiple hospitals have already been significantly impacted by Ryuk ransomware and their networks have been taken offline.”
Multiple Healthcare Provider Networks Under Attack
Hospitals in Oregon, California, and New York have already been hit by the attacks, Reuters reported. “We can still watch vitals and getting imaging done, but all results are being communicated via paper only,” a doctor at one facility told Reuters, which reported that “staff could see historic records but not update those files.”
Some of the hospitals that have reportedly experienced cyberattacks include:
In October, the Associated Press (AP) reported that a recent cyberattack disrupted computer systems at six hospitals in the University of Vermont (UVM) Health Network. The FBI would not comment on whether that attack involved ransomware, however, it forced the UVM Medical Center to shut down its computer system and reschedule elective procedures.
Threat intelligence analyst Allan Liska of US cybersecurity firm Recorded Future told Reuters, “This appears to have been a coordinated attack designed to disrupt hospitals specifically all around the country.”
He added, “While multiple ransomware attacks against healthcare providers each week have been commonplace, this is the first time we have seen six hospitals targeted in the same day by the same ransomware actor.”
An earlier ransomware attack in September targeted 250 healthcare facilities operated by Universal Health Services Inc. (UHS). A clinician at one facility reported “a high-anxiety scramble” where “medical staff could not easily see clinical laboratory results, imaging scans, medication lists, and other critical pieces of information doctors rely on to make decisions,” AP reported.
Outside of the US, a similar ransomware attack in October at a hospital in Düsseldorf, Germany, prompted a homicide investigation by German authorities after the death of a patient being transferred to another facility was linked to the attack, the BBC reported.
CISA, FBI, HHS, Advise Against Paying Ransoms
To deal with the ransomware attacks, CISA, FBI, and HHS advise against paying ransoms. “Payment does not guarantee files will be recovered,” the advisory states. “It may also embolden adversaries to target additional organizations, encourage other criminal actors to engage in the distribution of ransomware, and/or fund illicit activities.” The federal agencies advise organizations to take preventive measures and adopt plans for coping with attacks.
The advisory suggests:
Training programs for employees, including raising awareness about ransomware and phishing scams. Organizations should “ensure that employees know who to contact when they see suspicious activity or when they believe they have been a victim of a cyberattack.”
Regular backups of data and software. These should be “maintained offline or in separated networks as many ransomware variants attempt to find and delete any accessible backups.” Personnel should also test the backups.
Continuity plans in case information systems are not accessible. For example, organizations should maintain “hard copies of digital information that would be required for critical patient healthcare.”
“Without planning, provision, and implementation of continuity principles, organizations may be unable to continue operations,” the advisory states. “Evaluating continuity and capability will help identify continuity gaps. Through identifying and addressing these gaps, organizations can establish a viable continuity program that will help keep them functioning during cyberattacks or other emergencies.”
Dark Daily Publisher and Editor-in-Chief, Robert Michel, suggests that clinical laboratories and anatomic pathology groups should have their cyberdefenses assessed by security experts. “This is particularly true because the technologies and methods used by hackers change rapidly,” he said, “and if their laboratory information systems have not been assessed in the past year, then this proactive assessment could be the best insurance against an expensive ransomware attack a lab can purchase.”
Schwan’s concerns about inaccurate or unreliable COVID-19 serology tests were supported when the FDA issued more restrictive rules for these medical laboratory tests on May 4
During a conference call with investors about the company’s first-quarter results, Schwan said of the recently-launched COVID-19 antibody assays, “These tests are not worth anything, or have very little use,” according to reporting from Reuters and other publications. “Some of these companies, I tell you, this is ethically very questionable to get out with this stuff.”
On May 3, Roche announced that its own Elecsys Anti-SARS-CoV-2 antibody test for SARS-CoV-2, the coronavirus that causes the COVID-19 illness, had obtained an emergency use authorization (EUA) from the federal Food and Drug Administration (FDA). In its news release, Roche stated that “the serology test has a specificity greater than 99.8% and sensitivity of 100% (14 days post-PCR confirmation).”
In a separate interview with Bloomberg, Schwan said about antibody testing, “It is very important to pick the right test and then to validate those tests with enough patients.” He then returned to the issue of poor quality in some antibody tests for the SARS-CoV-2 virus, saying, “Unfortunately, there are a number of tests already out there in the market which are not reliable simply because they haven’t been tested sufficiently.”
A ‘Wild West’ of Unregulated Assays
Prior to issuing tougher rules for how a manufacturer can market a COVID-19 serological test, the FDA had listed about 200 serological tests designed to identify antibodies produced by the human immune system in response to a SARS-CoV-2 infection. This is the process of seroconversion, which is the development of detectable antibodies in a patient’s blood against a pathogen. Detection of IgG antibodies indicates exposure to SARS-CoV-2, according to ARUP Laboratories.
Public health experts have raised questions about the proliferation of such tests for the new coronavirus. Under the FDA’s previous March 16 rules—which were more relaxed than those FDA applied when granting EUAs—the agency was swamped with requests to review more than 200 COVID-19 antibody tests. The looser regulations resulted in nearly no oversight of those tests, reported the Associated Press (AP).
In comments to the AP, Eric Blank, DrPH, Senior Director of Public Health Systems and Programs for the Association for Public Health Laboratories (APHL), said, “Right now it’s a wild west show out there. It really has created a mess that’s going to take a while to clean up.”
“In the meantime,” Blank added, “you’ve got a lot of companies marketing a lot of stuff and nobody has any idea of how good it is.” Blank confirmed to Dark Daily that he made these comments and stands by them.
Calls for Closer Scrutiny of Serological Antibody Tests
In response to the FDA’s March 16 rules for COVID-19 serology tests, APHL requested the federal agency to review its looser approach to reviewing these tests. The impact of the FDA’s much tougher COVID-19 serological testing rules released on May 4 was immediate.
In a press release issued on May 2, the FDA said, “to date, the FDA has authorized 105 tests under EUAs, which include 92 molecular tests, 12 antibody tests, and one antigen test.”
Clinical laboratories in the United States still face difficult challenges if they plan to launch their own COVID-19 serology testing programs. They must select one or more tests from among the antibody and antigen tests that have an FDA EUA. However, data for each of these tests is not as comprehensive as is the data for diagnostic test kits reviewed by the FDA and cleared for market under the pre-market approval process.
This webinar was conducted by James O. Westgard, PhD, and Sten Westgard of Westgard QC, Inc., and the full program is available for free download by clicking here, or by placing this URL in your web browser: https://www.darkdaily.com/webinar/quality-issues-your-clinical-laboratory-should-know-before-you-buy-or-select-covid-19-serology-tests/.
In the webinar recording, the Westgards provide a detailed overview of what elements are required for a clinical lab to have confidence that its COVID-19 serology testing program is producing accurate, reliable results. They explain that labs must understand the unique aspects of the populations they are testing in their communities. All of these factors can then be used by labs to evaluate the different COVID-19 serology tests available for them to purchase, and to select the test that best fits their lab’s capabilities and the characteristics of the patient population that will be tested.
Another important requirement for clinical laboratories to understand is the list of steps necessary to bring up a COVID-19 serological testing program. That starts with validating the test, then bringing it into daily production. As that happens, issues associated with quality control (QC), proficiency testing (PT), and regulatory compliance take center stage, so that the clinical lab has high confidence in the accuracy and reproducibility of the COVID-19 serology test results they are using in patient care or in support of employers who are screening employees for COVID-19.
To register for the June 11 webinar, click here, or place this URL in your web browser: https://www.darkdaily.com/webinar/achieving-high-confidence-levels-in-the-quality-and-accuracy-of-your-clinical-labs-chosen-covid-19-serology-tests/.
New COVID-19 Intelligence from Dark Daily
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One popular feature is the COVID-19 Live! conference calls that happen every Tuesday and Thursday for 30 minutes at 1 PM, EDT. Visit the COVID-19 STAT Intelligence Briefings website and join us for the live calls.
This rural health system has nearly a decade of experience offering cash-only package pricing for medical services including, most recently, inpatient stays
While healthcare networks and hospital organizations nationwide argued over pricing transparency, Pomerene Hospital in Millersburg, Ohio, embraced the concept. The not-for-profit hospital developed packages of care that include “one all-inclusive price for tests, procedures, and episodes of care, rather than a lengthy list of itemized charges that didn’t even include professional fees” for its self-paying customers, Modern Healthcare reported.
A companion proposed rule (CMS‑9915‑P) will, if passed, require health plans and healthcare insurers to disclose covered healthcare costs to customers upon request, including “an estimate of such individual’s cost-sharing liability for covered items or services furnished by a particular provider.”
These rules have created a fire storm of controversy. Hospital systems and healthcare organizations like the American Hospital Association (AHA) argue that revealing payer-negotiated rates will undermine health networks’ negotiating power with insurers and increases hospital prices.
They may be right. But that hasn’t stopped one health
network in rural Ohio from providing a blueprint on price transparency that
could be a model for the rest of the nation—at least for one segment of its
customer base.
Bundled Care Packages Increase Revenues at Pomerene
Pomerene is a not-for-profit healthcare provider established
in 1919. Originally, the tiny hospital had “a six bed women’s ward, a three bed
men’s ward, six private rooms, a three bed OB ward, and a nursery with five
cribs. There were ten physicians on staff,” notes the hospital’s website.
Today, Pomerene has more than 325 employees, 80 physicians, and 55 licensed beds. The hospital has 30 departments on three floors and is one of the largest employers in Holmes County.
Pomerene has developed bundled care packages for more than 300 services—including inpatient care—for Amish and Anabaptist patients, as well as any other self-pay patients who pay their bills in full at the time of service, Modern Healthcare reported.
The initiative came in response to concerns raised by the
area’s Amish and Anabaptist communities, which make up roughly 40% of the
county’s population. They do not use commercial health insurance. Instead, they
pay their medical bills out of pocket, and when they are unable to pay for
medical services, benefit actions and church support fill the financial gaps.
Church members asked Pomerene for guaranteed bundled pricing.
They did not want the uncertainty of hospital bills that might include lists of
itemized charges, but not professional fees and other potential costs.
“We have our own healthcare,” a retired Amish carpenter (who asked that his name not be used) told Reuters. “They (hospitals) give you a bill. If you can’t pay it, your church will.”
Both religious groups also value thriftiness and are known
to be fierce negotiators. In recent years, they lobbied Pomerene Hospital to
include inpatient care in its all-inclusive pricing structure.
“We assume a certain level of risk with this financial arrangement,” Pomerene Hospital CEO Jason Justus, who at the time was Pomerene’s Chief Financial Officer, told Modern Healthcare. “But it’s about saying what we’ll do and doing what we say. That builds a great deal of trust in the community.” Justus took over as CEO in July, 2019, reported The Daily Record.
In total, nearly one-quarter of the hospital’s patient revenue comes from bundled-service packages, with 3,387 packages provided last year, Modern Healthcare reported. In 2018, Pomerene brought in $36,971,931 in operating revenue, according to Modern Healthcare Metrics.
Bundled Payments Drive Innovation
Bundled payments also have forced hospital administrators and staff at Pomerene to find innovative ways to cut costs by shortening patient stays. For example, Modern Healthcare reported that the length of hospital stay for childbirth, which at the time averaged two-to-four days, dropped to 24 hours after the hospital created a 24-hour package for obstetrical deliveries. Within 18 months, 80% of childbirth cases fit the 24-hour model.
“Here is free market economics at work,” said Robert Michel,
Dark Daily’s Editor-in-Chief. “This hospital understands that it must
meet the needs of this unique group of patients with good service and quality
at a fair price. That understanding comes with an incentive for the hospital’s
staff to identify and implement innovations to cut costs while improving
quality.”
However, Pomerene Hospital’s policy of disclosing prices to patients in advance of services remains uncommon in the healthcare industry. “Outside of Medicare, bundled pricing is rare-to-nonexistent among full-service US hospitals, most of which say they don’t know their actual costs for providing care and, therefore, can’t offer such prices,” Modern Healthcare stated.
For competitive reasons, Pomerene does not publicly post its
package prices and only prospective cash-paying patients are provided the cost
breakdowns. That will most likely change following enactment of the CMS final
rule.
Other Health Systems That Bundled Prices
Though Pomerene does not shares its price-packaging methods
with other hospitals, its track record for attracting cash-paying patients made
it an example to other hospitals serving similar religious communities.
The Medical Center at Scottsville in Kentucky followed Pomerene’s lead and discounted cash prices—paid upfront or before discharge—by 25% for 300 medical services, including childbirth and common surgical procedures. This was to attract the area’s Mennonite population, noted Quartz magazine.
“I will tell you they are very conscientious about cost.
They are very business-savvy and will shop around,” Eric Hagan, Regional
Vice President of Operations at Med
Center Health and Administrator of the Medical Center at Scottsville, told Quartz.
Will Americans as a whole be just as eager to shop for
medical services? The answer to that question may determine whether increased
price transparency throughout healthcare, including clinical laboratory testing
and anatomic pathology services, results in lowering their healthcare costs.