Labs Face Powerful and Unwelcome Forces

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OVER THE PAST 25 YEARS, THERE HAS BEEN WIDESPREAD RECOGNITION THAT HEALTHCARE IN THE UNITED STATES is on an unsustainable path. The obvious argument was that year-over-year increases in healthcare costs would eventually overcome the ability of employers (private health plans) and the government (Medicare and Medicaid) to pay the bill. 

Yet, 25 years after HMOs (health management organizations) disrupted the formerly predictable system of fee-for-service, any willing provider, and usual and customary fees, we are still here. Deep and fundamental reforms to the healthcare system have yet to be made. 

My guess is that, with healthcare spending in 2021 totaling $4.3 trillion, the most powerful, richest sectors of healthcare always act to protect their profits. Think: hospitals, physicians, pharma companies, medical device companies, for starters. Each of these segments have major players with plenty of money to influence congressional elections, to hire lobbyists to argue against healthcare reforms that would reduce their share of the profit pie, and to publicize their positions to consumers, patients, and voters. 

One point to be made here is that, when it is recognized that something is broken and it does not get a timely fix, problems inevitably surface. This issue of The Dark Report illustrates that point. In this article, you’ll read about the three powerful market forces that our editorial team describe as the “gale-force” headwinds now confronting both clinical labs and hospitals industry. They include a severe shortage of staff, inflation during a time of decreasing budgets, and the fact that a substantial number of hospitals and major integrated delivery networks (IDNs) are losing buckets of money each month and each quarter. 

It could be argued that the acute shortage of medical technologists (as well as nurses and other key medical professionals) reflects a failure to reform the education system dating back to the 1990s. A problem recognized, but not acted upon. Similarly, our coverage here about the struggles of labs to obtain coverage and reimbursement decisions for new diagnostic tests illustrates the failure of diagnostic companies, payers, and the medical establishment to craft reforms in how new laboratory tests that incorporate brand-new technologies can be evaluated and cleared for clinical use in a timely, cost-effective manner. These are among the reasons why it will be an uphill fight for labs to survive in coming years. 

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