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Contributor: The Convergence of Value-Based Care and Lab Testing Growth


Today, health plans are shifting dollars to more value-based contracts along with investments in population health management. Digitizing lab results across all care settings and unlocking the potential of lab values can help health plans reach the Triple Aim of improving the patient experience, improving the health of populations, and reducing the per-member cost of health care.

Lab testing is where value-based care starts. It is the gateway for appropriate diagnosis and treatment planning, which ultimately impacts cost, quality, and outcomes. From diagnosis to medications, and from hospital admittance to discharge, 70% of patient treatment decisions are guided by lab results.

Today, health plans are shifting dollars to more value-based contracts along with investments in population health management, because better managed patients have a higher quality of life and incur lower overall costs, including reductions in hospital and emergency room admissions.

Since lab testing is quickly growing and evolving, it is essential for health plans to unlock and utilize lab data to its full potential to support the achievement of the Triple Aim.

Lab Testing Growth

The US clinical laboratory test market is expected to grow at a compounded annual growth rate (CAGR) of about 2% through 2026. The increase in lab testing is the result of several factors, such as:

  • New capabilities: Newer technologies are increasing genetic test options, especially for rare diseases. Data from CMS showed a nearly 50% CAGR for genetic testing from 2015 to 2019, with it making up 17.7% of CMS’ total lab testing spend by 2019.
  • Specialty lab innovation: Specialty labs are leading the way in testing innovation, but their focus often is on scientific breakthroughs, what can be tested vs what should be measured. An example of an advancement that does not yet have broad clinical utility is the emerging use of apolipoproteins, a cholesterol subclass. Although apolipoprotein analysis can be helpful in select adult populations, nearly all patient management can be accomplished with a cholesterol profile that includes total cholesterol, low-density lipoprotein, high-density lipoprotein, and triglycerides. And the cholesterol profile remains the standard of care.
  • Consumerism in health care: The United States’ experience with COVID-19 has shifted the health care industry to more fully address each patient as an individual consumer. This means more access and transparency to the data used to make care decisions and a shift to more individual choice and personalized care. In-home testing is one example, with direct-to-consumer testing allowing patients to order tests directly from labs without going to a health care provider. Also, more health plan members want the transparency of knowing what a test is going to cost them, as out-of-pocket expenses continue to rise.

Health plans pay for broad lab testing for their members, but they are just starting to use lab data to its full potential to broadly inform care and improve outcomes.

Bill Kerr, MD.

Bill Kerr, MD, is the chief executive officer of Avalon Healthcare Solutions.

Digitized Lab Results Accelerate Quality Care

Having a correct and timely diagnosis is the key to the success of value-based care. The most common breakdowns in securing a diagnosis and delivering value-based care are: under-testing; the misinterpretation of data; timing of the test, resulting in lost care/treatment time; and test location, as test result analysis capability varies by lab.

Consider that 90% of people with chronic kidney disease (CKD) are unaware they have it. Today, many patients already have lab results that are consistent with early-stage CKD. Identification and aggressive management of blood pressure, and blood sugar if comorbid with diabetes, has been shown to reduce the progression of advanced kidney disease.

Today, many patients already have lab results indicating that they should be classified as stage 2 to stage 5; however, the International Classification of Diseases, Tenth Revision (ICD-10) that would trigger plan and provider involvement are not coded. Leveraging digitized lab results earlier and using lab values to look across more than one episode of care can improve the early identification of CKD.

Another example of test underutilization (and health care inequity) involves the genetic test to determine whether chemotherapy is necessary for women who underwent a lumpectomy for human epidermal growth factor receptor 2 (HER2)–negative breast cancer. When the results of this genetic test are combined with other meaningful treatment information, the result is lab values that can accelerate care decisions and improve outcomes.

While all plans cover this test, Black women, regardless of their risk level, are less likely than White women to undergo genetic testing for HER2-negative breast cancer with lumpectomy. Unfortunately, Black women have a 42% higher death rate from breast cancer compared with non–Hispanic White women.

Accountable Care Organizations (ACOs), as envisioned by the Affordable Care Act, have the potential to improve access, care quality, and cost for all Americans. Some inventive population health initiatives that grew out of ACOs are for diagnoses such as diabetes and kidney disease. The problem is that these programs are based on ICD-10 codes that assume a correct diagnosis was made—but in making a diagnosis, there may be a data gap from all care settings over time.

So, how do you use data from testing to come to the right diagnosis and improve patient outcomes? It takes a focus on science and data to provide actionable lab-driven insights in real-time at scale.

Instead of implementing process-based measures of quality using administrative claims data, health plans should access lab values to increase the efficacy of these programs by accurately representing patients’ health care trajectories over time. Lab values should be secured from all care setting sources and analyzed at scale in a timely fashion to provide the correct diagnosis.

Lab claims, member and ordering physician information, and digitized lab results from lab partners are used to first confirm the right test is ordered by enforcing evidence-based policies to ensure overutilization (7% to 10% industry average) does not occur. Algorithms are applied to gain meaningful intelligence and deliver actional insights to help inform care. To address underutilization, advanced analytics on individual member profiles helps identify opportunities for appropriate testing.

It's time to start thinking differently about lab testing’s role in advancing value-based care and population health. Digitizing lab results across all care settings and unlocking the potential of lab values is helping health plans reach the Triple Aim of improving the patient experience, improving the health of populations, and reducing the per-member cost of health care. The ability to drive preventive and proactive patient care is moving from promise to practice.

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