Kaiser, SBCL To Automate Pap Smear Screening

NeoPath’s AutoPap screen system chosen in move to improve quality and productivity

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CEO SUMMARY: Two of the country’s largest Pap screen testing organizations are preparing to introduce automated primary screening into their laboratories. NeoPath’s con- tracts with SmithKline Beecham Clinical Laboratories and Kaiser Permanente mark the beginning of a new market cycle. NeoPath is poised to exploit these developments while continuing to enhance AutoPap’s capabilities.

TWO OF HEALTHCARE’S LARGEST players announced their intention to acquire NeoPath, Inc.’s AutoPap® Primary Screener for widespread use in Pap smear screening.

SmithKline Beecham Clinical Laboratories (SBCL) and Kaiser Permanente are each contracting to acquire AutoPap Systems. Both companies intend to move 100% of their Pap smear screening to AutoPap technology during the next 24 to 48 months.

This is a significant development. Of the 55 million Pap smears done annually in the United States, SBCL does about 5.5 million and Kaiser processes over 1.4 million. With these two contracts alone, NeoPath will capture 12.5% of the national Pap smear market.

“From a business viewpoint, each company is acquiring AutoPap Systems for somewhat different reasons,” said NeoPath’s President, CEO and Chairman, Alan Nelson, Ph.D. “For Kaiser, AutoPap primary screening will be incorporated as its standard-of-care for cervical cancer screening. As an integrated healthcare system, Kaiser is keenly interested in improved clinical outcomes which the AutoPap Primary Screening System delivers over the life of their patients.

“SBCL is a commercial laboratory,” he continued. “Unlike Kaiser, it may not get Pap smears from the same patient over a multi-year period. For that reason, the AutoPap’s demonstrated improvement in specificity and sensitivity is an important benefit for them.

“Besides the clinical benefits, both companies are moving to AutoPap primary screening because it also offers operational efficiencies and capacity improvements,” added Dr. Nelson.

Clients of THE DARK REPORT should recognize the significance of these events. Two of the nation’s more respected healthcare organizations are making an unqualified decision to adopt NeoPath’s AutoPap Primary Screening System as the cornerstone of their cytology programs.

Currently everything in cytology and pathology is manual. Practitioners sometimes write on the slide itself with a pencil. Many laboratories work with pen and paper to start the process of producing a report.

Executives at these companies tell THE DARK REPORT that clinical experience with the AutoPap QC System and the AutoPap Primary Screening System provided unambiguous data. The product delivers worthwhile clinical benefits in a cost-effective manner.

With upwards of seven million Pap smears per year funneling through these two companies, NeoPath’s automated cytology technology is about to transform the Pap smear industry. The influence of AutoPap will extend beyond simply a clinical and cost benefit contribution. It will impact information and outcomes studies. This potential for NeoPath’s technology has been over- looked by most pathologists and laboratory executives.

“NeoPath has big plans in the area of information management,” stated Dr. Nelson. “Currently everything in cytology and pathology is manual. Practitioners sometimes write on the slide itself with a pencil. Many laboratories work with pen and paper to start the process of producing a report.

“We designed our technology to act as a data node,” he continued. “For the first time, diagnostic cellular information can be captured and entered into the electronic patient record. Prior to this, the only effective way to retain useful cellular information on a particular patient was to archive the slide itself.

“AutoPap is the only Pap smear screening engine which produces data,” noted Dr. Nelson. “AutoPap is a precise analytical device that measures critical parameters heretofore unobtainable by conventional methods.”

Explicit Measurements

“AutoPap’s software algorithms operate from explicit quantitative measurements. This differs from a neural network software program,” explained Dr. Nelson. “Unlike neural network soft- ware, AutoPap’s algorithms function like a ruler or caliper. This makes it possible to objectively analyze data, then refine the algorithms to give them increased accuracy. It is a process where additional case data can contribute to improvement in the algorithms.”

As clinical practices are moving toward an integrated model, the data capture feature of AutoPap is a distinct advantage. Integrated clinical practices will increasingly demand that individual data sets from lab tests, Pap smears, and clinical observations of the patient be merged into a comprehensive outcomes study. NeoPath’s AutoPap has the capability to produce and deliver that data.

Complementary Product

Another product which NeoPath is developing will support the AutoPap Primary Screen System. It is NeoPath’s Pathfinder Microscope Station.

“Once AutoPap identifies the 25% of the slides which are normal and need no further review, it refers the other 75% of the slides to cytotechs. AutoPap provides the cytotechs with a ranking of those slides by potential for abnormality,” said Dr. Nelson. “Once AutoPap maps the Pap smear, the Pathfinder will ultimately be designed to receive these coordinates and guide the cytotech to the cells needing scrutiny.

“Cytotechnologists will continue to be an integral part of the Pap smear screening process,” said Dr. Nelson. “As a primary screener, AutoPap still requires close attention and involvement by cytotechs and pathologists. The Pathfinder system is designed to increase the accuracy and effectiveness of cytotechs and pathologists by allowing them to use information generated by AutoPap.”

Reimbursement A Challenge

For NeoPath, winning contracts with SBCL and Kaiser Permanente is a major boost for the AutoPap technology. This escalating utilization will help drive reimbursement for automated cytology, which remains a challenge. Until a satisfactory level of reimbursement for automated cytology CPT codes is established, many clinical laboratories might defer a decision on acquiring this technology.

THE DARK REPORT believes this issue will not hinder the acceptance of AutoPap as a primary screener. Use of the AutoPap in real commercial laboratory settings is providing real data about two benefits which address the issue of “added cost.”

First, because AutoPap can screen up to 25% of the slides into a “no review” category, laboratories have two productivity options. Assume that a laboratory is staffed to handle 100,000 Pap smears per year and it acquires AutoPap for primary screening.

In option A, the lab can chose to redirect staffing by 25% (100,000 slides, less 25,000 “no review” slides leaves 75,000 slides to be screened manually).

In option B, the lab can use the existing cytotech staffing to screen additional slides. Assume 133,333 slides per year, less 33,333 (25%) “no review” slides leaves 100,000 slides to be screened manually, consistent with the lab’s current staffing head count.

Combine this increase in laboratory productivity and test volume with improvement in diagnostic accuracy, and the economic and clinical impact to operate AutoPap as a primary screener makes the technology attractive and cost-effective. Both SBCL and Kaiser are investing their money based upon this conclusion.

Reimbursement Still To Be Determined

For 1999, the American Medical Association is adding new CPT codes to address automated primary Pap smear screening.

NeoPath announced that codes 88147 and 878148 will apply to the AutoPap Primary Screening System. Effective January 1, 1999, codes and code descripters become effective for billing and reporting.

NeoPath, recognizing that reimbursement for these procedures is of vital interest to clinical laboratories, recently created a reimbursement SWAT team of six people to work with laboratories and payers throughout the country.

It is still uncertain where reimbursement levels for AutoPap primary screening will settle. There is demonstrated improvement in AutoPap primary screening procedures. However, manual Pap smears have historically been reimbursed at very low rates relative to the true cost of performing the test. Issues involving improved patient access may also favorably affect the eventual reimbursement amount for AutoPap’s primary screening procedures.

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