Lab Utilization Is Healthcare’s Ticking Time Bomb

TODAY I WOULD LIKE TO SPEAK TO ONE OF THE ELEPHANTS IN THE LAB INDUSTRY’S ROOM. It is the ticking time bomb of lab utilization. Sometime in the next 36 to 60 months, this time bomb will go off. It will catch both health policy makers and payers unprepared and, the consequences will be corrosive to the laboratory testing profession.

Going forward, three trends will drive utilization of lab testing. One trend is the increased volume of lab tests ordered by physicians who are responding to pressures and financial incentives to provide all the recommended care to 100% of their patients. For example, think of 100% of diabetic patients getting HgA1c tests annually at the same time that doctors diligently work to diagnose more of the tens of millions of undiagnosed diabetics in this country. The increased utilization of lab tests is a result that is desired by the health system.

Second is the natural uptake of lab testing that occurs as baby boomers leave their fifth decade of life and push into their sixth decade. Both payers and laboratories that bid private Medicare contracts know that, on average, an individual 65 years and older, uses more than four times the number of lab tests per year than a commercial life. Again, this increased utilization is a natural consequence of the aging process and the system should ethically be prepared to provide those services, as appropriate.

Third is the ongoing addition of new diagnostic tests to the existing lab test catalogue. As physicians have new diagnostic assays that support more precise and earlier diagnosis for an expanding number of diseases, they will naturally and appropriately order a higher volume of tests. As with the two other trends, this trend underpins higher diagnostic and treatment accuracy—which benefits the healthcare system by reducing the overall cost per episode of care.

However, in THE DARK REPORT’S travels across the United States and a number of other developed countries in Europe and the Pacific Rim, it has been unable to identify any government health system or healthcare policy maker which recognizes and discusses these approaching developments. This lack of perceptive analysis about the essential value of clinical laboratory testing, in the context of the three trends described above, represents a “black hole” for the lab medicine profession. It means that health policy makers are not likely to establish budgets and reimbursement for lab testing based on the most relevant factors. As that happens, further underfunding for lab testing will occur.