CEO SUMMARY: For one primary care physician, treating uninsured and underinsured patients was challenging, since these patients could not afford to pay for the lab tests necessary for their healthcare. This physician enlisted the help of his local county medical society and eventually found an Internet-based lab test company and a physician office laboratory (POL) that would provide lab testing to uninsured and underinsured patients at affordable prices—prices usually just pennies above the Medicare lab test fee schedule.
IN FAIRLAWN, OHIO, A SUBURB OF AKRON, family physician Doug Lefton, M.D., was frustrated and wanted to do more for his patients. Uninsured patients in his practice could not afford to get their lab testing done and that made it more difficult for him to properly manage their care.
That situation worsened as the economic recession of 2008 and 2009 deepened. Lefton decided to solve the problem of making affordable lab tests available to his uninsured and underinsured patients.
This is the starting point for an unusual story that has many implications for the future of clinical laboratory testing in this country. Among other issues blocking his way is the established pricing policies for lab testing and other healthcare services that often cause uninsured patients to pay the highest effective price, compared to government health programs and patients with private health insurance coverage.
A natural ally in this effort was the Summit County Medical Society (SCMS). Together, they began a study of laboratory test prices in the Akron metropolitan market. “Our first step was to speak with local hospitals and laboratories in the Akron area,” Lefton said in an interview with THE DARK REPORT. “We asked how much they charged for various lab tests. This survey was conducted in early 2009.
On April 27, 2009, the Akron Beacon Journal did a Page One story about the high cost of clinical laboratory testing. The headline read “High Lab Costs Plague the Uninsured, Summit County Medical Society Wants Lower Prices for Patients Stuck with Bills.”
No Help From Local Labs
The newspaper called attention to the work of Lefton and the medical society. Reporter Cheryl Powell wrote that “The Summit County Medical Society recently launched an effort to persuade Akron’s three hospital systems and labs in the area to discount bills for uninsured patients.”
Powell detailed how the Summit County Medical Society asked Akron’s three hospital systems and labs in the area to offer discounts to uninsured patients. “By law, medical institutions must charge everyone the same rate for services,” she reported. “But most bills then are steeply discounted for patients covered by government and private health-insurance plans. Medicare, for example, ends up
paying $18.57 in Ohio for a cholesterol test for which labs in this area charge $96 to $147.75 to provide.”
Prices At Medicare Fees
Reporter Powell also noted that Lefton was “leading the medical society’s campaign to get labs in the county to accept payments from uninsured patients that are similar to the amount Medicare pays.”
The Akron Beacon Journal presented the figures it had collected on what six different labs would charge an individual for five basic clinical laboratory tests. The price range for a basic metabolic panel was $22.60 to $175, the paper reported, and the Medicare reimbursement to the lab for this test was $10.71.
“When the Akron Beacon Journal’s page one story showed the incredible disparity in lab rates depending on where you got the lab work done, that story helped our effort,” said Lefton. “That’s when Tom Patton, the CEO of PrePaidLab, LLC, learned of our efforts and called with an offer to help.
Serving Patients In Akron
“Our original goal was to create an affordable lab test price program for the Akron area,” noted Lefton. “But we recognized that PrePaidLab, as an Internet marketer, would allow us to provide this lab test service to other areas around the United States.
“We created a way for patients to go to the Summit County Medical Society’s website and order these affordably-priced laboratory tests,” he added. “The medical society’s website links to PrePaidLab and allows patients to select their lab tests.”
Currently, SCMS’s home page at www.scmsoc.org prominently features this arrangement. “The medical society doesn’t make a dime from this endeavor and PrePaidLab has cut its margin as well,” emphasized Lefton.
“If you’re uninsured, you go onto the medical society website and you choose the test your doctor wants you to get,” he noted. “The link takes you directly to the PrePaidLab website,” explained Lefton, one of four physicians in the Fairlawn Family Practice, in Fairlawn. “You can see how much the test costs, which is very close to Medicare rates.
“The patient makes a payment via credit card and then gets a lab order to take to one of the draw sites,” he added. “PrePaidLab has contracted with Laboratory Corporation of America to use its patient service centers to draw blood and collect specimens.
Reporting Lab Test Results
“After the test is performed by LabCorp, the test results are faxed to the patient’s physician,” said Lefton. “At the same time, the test results are also sent in a secure email to the patient.”
Lefton says the affordable lab test price program has succeeded in helping unin- sured and underinsured patients improve their healthcare. “Previously, these people were not getting any lab work done because they couldn’t afford to pay for the lab tests. In turn, that made it more diffi- cult for me to do my job as a doctor.
“Even for common medical problems, most patients must get blood tests,” Lefton continued. “For high blood pressure, for high cholesterol, for diabetes— each of these conditions requires the patient to get blood work done so that the physician can accurately diagnose and care for the patient.”
Serving The Target Market
Test volumes indicate that the program is probably serving the uninsured and underinsured patients that were the target for this service. When PrePaidLab first offered lab test orders online in January 2009, it did fewer than 100 patients per month. When the medical society program began in February 2010, PrePaidLab was processing orders for fewer than 300 patients per month. After the CNN story was posted online on December 8, 2010, volume rose to more than 600 patients per month. Lefton believes patients in the Akron area represent about 100 of all the pateints who are tested each month.
PrePaidLab Reaches Patients via Website
STARTED AS A WAY FOR PATIENTS to order their own laboratory tests at affordable prices using a website, PrePaidLab, LLC, of Avon Lake, Ohio, also provides some employee benefits through a preferred provider network for self-insured employers.
“In our program with the Summit County Medical Society, these prices barely cover our cost to provide the lab tests,” stated Tom Patton, Founder, President, and CEO of PrePaidLab, LLC. “We recognized the need to make affordable prices available to uninsured and underinsured individuals.
“Akron is a market that has seen job losses as the rubber industry moved out,” he continued. “That means many individuals in this community don’t have health insurance, yet the doctors keep treating them. That is why it is important to give these patients access to lab tests at a price they can afford to pay—and which is about the same price paid by the Medicare program.”
“We did this work for the uninsured in conjunction with the Heinz Family Philanthropies in Washington, DC,” stated Patton. “This charity has done a number of programs for the uninsured. They advised our lab to not charge a price for these lab tests that would be less than the Medicare fees. So we strive to set these prices at a few pennies above the Medicare lab test price schedule.”
Akron Primary Care Group Also Offers Low Test Prices
DURING 2009, ONE GROUP OF PHYSICIANS in Akron, Ohio, offered to use their own physicians office laboratory (POL) to provide affordably-priced lab tests to uninsured patients.
Pioneer Physicians Network (PPN) is comprised of 25 physicians and providers practicing from 10 locations around Akron. It issued a press release stating that “When a patient is given orders for lab work by his doctor, many times those lab orders are ignored because lab fees are, frankly, unaffordable if the patient has no insurance.
“…Pioneer Physicians Network has stepped forward and met the challenge to help those in our community. Beginning August 3, 2009, lab services will be available at PPN Lab Sites at rates which will be much more affordable for those without health insurance.”
The terms are simple. PPN requires the patient to pay at the time of service with cash, check, or credit card. PPN will then collect the specimen, perform the test, and deliver the results to the patient’s physician.
Here are some of the lab test fees charged by the Pioneer Physicians Network: