Lab testing a Medicare cost saver
Sen. Ron Wyden (D-Ore.), the new chairman of the Senate Finance Committee and a longtime champion of improving chronic disease care, is in a position to play an important role in reforming Medicare.
Wyden has long advocated a Medicare program that would feature improved care coordination for chronic disease, which would save lives and improve the quality of life for beneficiaries, while saving Medicare resources.
Ineffective management and reimbursement for chronic disease care is a continuing challenge for Medicare. More than 70 percent of Medicare dollars are spent on a mere 14 percent of patients who are living with six or more chronic conditions.
It is an area ripe with potential savings that, with Wyden’s leadership and support, we can soon hope to capture.
One vital component of early chronic disease care that can save precious Medicare dollars is the increased utilization of diagnostic lab services.
Clinical laboratory testing plays a pivotal role in identifying chronic conditions, accurately characterizing a particular disease and helping clinicians devise the most appropriate course of treatment to manage the disease. The value of these services cannot be overstated — in fact, laboratory test results have an immeasurable impact on diagnostic and treatment decisions made by clinicians; however, lab services represented just 1.7% of Medicare spending in 2012.
Kidney disease — a chronic condition diagnosed in thousands of patients every year — is a prime example of where early clinical laboratory tests and effective care coordination can reduce costs and improve outcomes. Many of these patients only learn of their condition when the disease has already progressed to an irreversible state. A routine blood test, done earlier, might have led to a care plan to stop, slow or even reverse the trajectory to kidney failure.
The nation’s obesity and diabetes epidemic (also directly tied to chronic kidney disease and other co-morbidities such as heart disease) presents another area where routine lab testing offers hope for improvement: close monitoring of blood glucose levels can help doctors prescribe and adjust medications as well as educate patients about preventive measures.
Regular lab testing for diabetes can also prevent more costly complications down the road — hospitalization, heart attack, high blood pressure, kidney failure or dialysis, to name a few.
According to the American Diabetes Association, healthcare costs for the Medicare-eligible population is expected to rise from $45 billion to $171 billion by 2034. The Congressional Diabetes Caucus reports Medicare beneficiaries with diabetes account for 32 percent of Medicare spending — nearly one-third of the program’s expenditures.
Consider that the test for diabetes, the Hemoglobin A1C, costs only about $13.
Laboratory data can also dramatically improve patient care with triggered alerts if a chronic condition has been aggravated, signaling the need for physician intervention and ultimately preventing hospitalizations and reducing Medicare spending. Moreover, laboratory claims data can be used to identify appropriate candidates for certain disease management programs that engage both the physicians and the patient in the development of a treatment plan.
Efforts to coordinate lab reports, increase provider-to-provider communication and streamline care are steps in the right direction.
Deficiencies such as lack of early testing and lack of coordination among multiple providers cause disconnects in care, leading to adverse patient outcomes and skyrocketing costs. Cooperatively managing chronic diseases early and often will save the Medicare program billions of dollars.
Despite the clear medical value and cost savings of lab testing, payments for clinical lab services have been cut by more than 11 percent since 2010, and face double-digit cuts going forward. For Medicare patients relying on test results to determine their treatment, further cuts to lab services will mean limited availability of tests and longer turnaround times for results.
If these proposed cuts to clinical laboratory services are put in place, not only will the millions of Medicare patients suffering from chronic diseases experience access problems, delayed lab test results and reduced access to lab services, the cuts will no doubt be a stumbling block on the road toward integrated healthcare.
Wyden’s forward-thinking efforts focusing on chronic disease conditions are encouraging. His proposed reforms have already received bipartisan support in Washington and will likely receive significant consideration from lawmakers in the months ahead. Yet the effort to improve management of chronic disease could be undermined if policymakers take repeated action that dilutes the value of clinical lab services.
The reconfiguration of a more integrated health system must include both inpatient and outreach laboratory-testing services that produce valuable information to appropriately dictate the next step in treatment. It is critical that lawmakers work together on policy that modernizes, synchronizes and coordinates care, giving Medicare patients with chronic conditions the chance to manage their diseases, armed with all the knowledge that state-of-the-art laboratory testing can provide.
Mertz is president of the American Clinical Laboratory Association.