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Introduction of Cost Display Reduces Laboratory Test Utilization
Kim Ekblom, MD, PhD, and Annika Petersson, MSc, PhD

Introduction of Cost Display Reduces Laboratory Test Utilization

Kim Ekblom, MD, PhD, and Annika Petersson, MSc, PhD
Cost display and cost charge induce different test ordering behavior depending on the healthcare setting.
ABSTRACT

Objectives: To study the effects on the number of laboratory tests ordered after introduction of cost display (showing the cost in the computerized test ordering system at test ordering and test result delivery) and cost charge (requiring all primary healthcare centers to pay full laboratory costs of the ordered tests).

Study Design: The study included cost display for secondary healthcare centers (inpatient hospitals, emergency departments, and outpatient specialist providers) as well as publicly and privately operated primary healthcare centers (sites of nonemergency, nonspecialist healthcare). After 3 months, cost charge was introduced by management for all primary healthcare centers.

Methods: Information on laboratory test cost was appended to the laboratory test name in the test ordering system, resulting in cost display both at the moment of test ordering and at the presentation of the test result. Numbers of laboratory tests were obtained from the laboratory information system and calculated as tests per physician visit. Cost charge was managed through the established laboratory invoicing system.

Results: In the publicly operated primary healthcare centers, neither of the interventions had any effect on laboratory test volume, nor did cost display have an effect in the privately operated primary healthcare centers. However, introduction of cost charge significantly decreased laboratory test ordering in the privately operated primary healthcare centers. In contrast, secondary healthcare centers lowered test volumes when cost display was introduced.

Conclusions: The results support cost awareness and cost charge as means of reducing laboratory utilization. However, the outcome varies with the setting.

Am J Manag Care. 2018;24(5):e164-e169
Takeaway Points

Cost display (showing the cost in the computerized test ordering system at test ordering and test result delivery) and cost charge (requiring all primary healthcare centers to pay full laboratory costs of the ordered tests) can reduce laboratory test ordering, although the effect is dependent on the healthcare setting.
  • Publicly operated secondary healthcare centers (inpatient hospitals, emergency departments, and outpatient specialist providers) reduced the number of tests ordered after the introduction of cost display.
  • Privately operated primary healthcare centers (sites of nonemergency, nonspecialist healthcare) did not reduce the number of tests ordered after the introduction of cost display, but they significantly decreased the number after the introduction of cost charge.
  • Publicly operated primary healthcare centers did not reduce the number of tests ordered regardless of intervention.
The utilization of laboratory services is increasing both worldwide and in Sweden,1-3 which adds to the strain on the limited resources of the healthcare sector. Laboratory services provide the main data source that supports physicians in most medical decisions,4 and a substantial portion of the costs is generated by clinical chemistry tests.5 However, ordering patterns to the chemical laboratory vary based on clinical practice factors,6 such as experience,7 time pressure,8 and uncertainty.9,10 In addition, geographical variation11 in ordering patterns is reported. Statistics indicate that our county in Sweden, Kronoberg, had the highest per capita utilization of chemical laboratory tests of the compared counties.12,13 Therefore, we hypothesized that tests might be ordered that are not clinically relevant according to standards, guidelines, and experience. These tests have limited or no benefit to the patient, and thus it would be possible to decrease the number of laboratory tests without affecting quality. In fact, excess tests are reported to represent up to 40% of test volume,14 and there is no evidence of a correlation between decreased number of selected tests and impaired clinical outcome.15-17 A variety of interventions have been tested in attempts to control escalating costs and excessive resource utilization,18 including peer management,15 data reports,19 education, audits, reviews,20 and multidimensional techniques.21 Most of these interventions are labor intensive; in a setting with limited resources to address these issues, an alternative approach was requested.

Physicians are poorly informed of laboratory costs22 and they have a tendency to underestimate them23; however, it has been reported that they consider availability of price lists to have an impact on cost generation.2,24 In the county of Kronoberg, cost availability had been requested by resident physicians, because price lists were not published and limited information on cost was available.
Charge display and price lists have successfully been introduced to decrease the number of ordered tests17,25,26; we therefore presented cost information on all available tests at our laboratories through the computerized test ordering system. By doing so, laboratory costs were presented to all staff in the county of Kronoberg with access to the computerized patient record, both in primary and secondary healthcare centers. The cost of each laboratory analysis (cost display) could thus be seen at the moment of test request as well as on the result report.

This is, to our knowledge, the first large-scale intervention on cost awareness using cost display at order entry and on the result report that included both inpatients and outpatients. We also describe the effect of introduction of cost charge (ie, all primary healthcare centers were obliged to pay full laboratory costs) on laboratory testing in different healthcare settings.

METHODS

Study Design and Setting

Laboratory tests in Kronoberg are increasing and show a marked seasonal variation due to multiple factors, such as epidemiologic trends and holidays. This was a longitudinal study assessing the effect on clinical chemistry laboratory test volumes of introducing cost display for all primary and secondary healthcare centers. Cost was defined as the price for each laboratory test, including the costs for equipment, reagents, labor, service contract, and overhead. There are no volume discounts in Kronoberg County, nor are there any insurance company reimbursement policies in Sweden. Test ordering was solely based on the physician’s individual medical assessment for each patient, which can be supported by national or local medical guidelines to assist in decision making.

The cost display intervention started in September 2013 and was followed by introduction of full cost charge for primary healthcare centers, requiring them to pay full laboratory costs, in January 2014. The full cost charge intervention was not initiated by this study, but by a county policy decision. Kronoberg County had a population of 187,156 inhabitants as of December 31, 2013.13 They were served by 22 primary healthcare centers and 2 secondary healthcare centers operated by the County Council, as well as 11 privately operated primary healthcare centers. A primary healthcare center is an open healthcare unit exclusively for outpatients that serves as a first line of healthcare, primarily for medical conditions that are not defined as acute or in need of emergency care. The staff is predominantly nurses and general practitioners. The secondary healthcare centers are hospitals that provide care for patients primarily referred from the primary healthcare centers. The hospitals have emergency departments and provide specialist care within a wide range of medical specialties for both inpatients and outpatients.

There is no difference between privately and publicly operated primary healthcare centers except that the privately operated primary healthcare centers are allowed to make a profit, whereas the publicly operated centers are strictly nonprofit. All primary and secondary healthcare centers are publicly financed by taxes. Prior to the cost charge intervention, primary healthcare centers paid a fixed subscription fee, in addition to 30% of the cost of every test ordered. Secondary healthcare centers paid a fixed annual fee, regardless of the number of ordered laboratory tests.

The laboratory tests were performed by 2 central laboratories operated by the County Council, one at each secondary healthcare center. Point-of-care testing (POCT) was not included in our study. POCT was highly regulated by the central laboratories that restricted both the equipment and the analysis supply; thus, it constituted a very small proportion of the total laboratory tests in the county of Kronoberg. All publicly financed healthcare providers in Kronoberg County were obliged to send all of their test requests to the 2 central laboratories, regardless of private or public operation.


 
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