Trends in Laboratory Management and Laboratory Stewardship Effecting the Clinical Laboratory Industry

• Michael Astion, MD, PhD

• Medical Director, Department of Laboratories, Seattle Children’s Hospital

• Clinical Professor, University of Washington, Dept. of Laboratory Medicine

Conclusions

My advice is to avoid extreme thinking at all costs…

• The sky is not falling

• Healthcare is not ending.

• Everything is going to be OK.

• This is a great industry.

Overview

This lecture and Q&A describes trends in: 1. Hospital and Laboratory Management 2. Quality Improvement / Patient Safety 3. Test Utilization Management (aka Laboratory

Stewardship) ….and illustrates how understanding these trends can improve sales and customer relations.

Trends in Hospital and Laboratory Organizations

• Mergers (insurers and retail, insurers and hospitals…)

• Consolidation in hospitals and labs • Horizontal and vertical • ↑ Hospital-employed pathologists • ↓ Contracted pathologists • Contracted pathologists in larger

groups, often owning a lab

• Effect on you: • ↑ in pathologists feeling

responsible for purchase of LIS, instruments, supplies, reagents. Not all pathologists competent in this regard.

$CPT:88305$

Pathologists who are incompetent in purchasing will not know that they are incompetent.

Bottom 2nd 3rd Top

Perc

entil

e

Kruger J, Dunning D. Unskilled and unaware of it…J Personality and Social Psychology. 1999;77:1121-1134. Haun DE, et al. Assessing the competence of specimen-processing personnel. Laboratory Medicine. 2000;31:633-637.

Actual performance

Self-assessment

100

0

Influencing physician behavior

“One useful tactic under this approach is nudging, i.e. steering physicians in the direction that we know is usually right, while still giving them freedom to deviate where appropriate. This requires engineering the information environment in which they act, such that usually correct actions become the default, and deviation requires a conscious choice.” Dr. Brian Jackson, ARUP/Univ Utah

Jackson BR. Nudging our way to more efficient care. Clinical Laboratory News. April 1, 2016. www.aacc.org/publications/cln/articles/2016/april/nudging-our-way-to-more-efficient-care-how-to-win-friends-among-doctors-while-influencing-them

MEMO May 2, 2018 To: Dr. BigEgo Pathologist From: Jo Success, Orchard Re: LIS purchase Dr. Big: Look forward to discussing what LIS your colleagues at your favorite labs are purchasing. They all say hi and think you are super smart and have a great haircut.

Trends in Hospital Management influencing Lab Management

TT

• ↑Administrators and other staff who do not provide healthcare. Administrators –not doctors– dominate.

• Paired or tripod accountability models, favor $$ over science

• Increased use of outside consultants

• Consequences for you: • Better coffee, comfy furniture, valet parking, fountains, Wi-Fi • Purchases require many layers of approval, with most layers

having no lab expertise. • $$$ dominates more than science. More emphasis on costs,

than revenue, especially in context of capitated payments from insurers.

Trends in Quality Improvement: Big Words, High Priced Consultants

“We are going to leverage big data and analytics to produce actionable insights and precision medicine interventions to enhance the patient experience and disrupt the industry. ”

“I have no idea what I am talking about and I have never managed a substantial work unit in my life. Run away from me.”

=

Trends in Quality Improvement

“actionable insights”

“Patient experience”

“catchball”

“Precision Medicine”

“Interventions” ↑Administrators

↑ Meaningless jargon, ↑ complexity

↓domain expertise, ↓ trust

↑ Outside consultants with generic PowerPoints

“Synergy”

“Disruption”

“Cou

nter

mea

sure

s”

Modern Laboratory Quality Improvement: A philosophy is chosen, tools are applied, automation is a favored solution.

TQM

Lean

Six Sigma Process

Map

Fishbone Diagram

CPI

RCA/ FMEA

Checklist

Philosophies

Etc…

Tools

Time/ Motion Studies

Running away

Crying

Various statistical methods

Dear Mike, Thanks for telling us about Lean. We are saving paper by not using any margins. We are all drinking milk directly from our cartons. Even though this is disgusting, we have reduced the number of milk pouring errors dramatically, as well as the wasted time of washing, and sometimes breaking dishes. Also, we are all wearing our pajamas to work and changing our underwear every other day. By increasing our under-wear maintenance interval we are saving lots of time, and we are still well within most people’s smell toler-ance, although on one hot day in the summer, we had a variance and it got very ripe in the laboratory.Thanks for being such a great consultant. Sincerely, The idiots who took a great philosophy like LEAN and ruined it.

Interventions to reduce errors: A guide to intervention strengths (VA National Center for Patient Safety, courtesy Dr. John Gosbee)

• Weaker interventions

• Training

• Call for enhanced vigilance

• Double checks

• Warning labels

• Memos

MEMO 1/7/18 To: All Lab Staff From: Dr. BigEgo, Lab Director Re: Lab errors Stop making errors immediately. Be more careful when performing tests, and when entering data. All of you need to go to keyboard training to learn how to type. For god sakes, do a better job. You all don’t know what you are doing.

Intermediate strength interventions Intervention Example

Reduce distractions

Call center ↓phone distractions

Computerized Reminders •Flagging of critical values

Other intermediate software enhancements

•Autovalidation •Auto fax replaces manual fax

Enhanced inter-personal communication Read back

Workflow adjustments Match work flow to staffing

Checklists Instrument maintenance checklist

Stronger interventions are higher impact but higher cost and risk

Intervention Example(s) Physical plant change Automation zone

Major software enhancement

•LIS upgrade •CPOE •Enhanced CPOE with decision support •Instrument – LIS interfaces •LIS-EMR interface

Eliminate steps •Analyzer consolidation •Direct tube sampling

Automation and Equipment standardization

•Front-end automation •Automated pipetting •New instrument platforms

Intervention strength as applied to data entry errors

• Weaker (useless, feels good) • Retrain the technologists • Tell them to slow down

• Weak but better:

• Retraining followed by frequent, random monitoring by supervisor

Troponin I Date, Time

John Doe

0.1ng/mL 10/2/03, 0452

Jane Doe

250 ng/mL 10/2/03, 0450

Intervention strength as applied to data entry errors (2)

Intermediate: • Redundant data entry* • Redesign of forms and data entry fields

• Stronger: Eliminate data entry • Instrument-LIS interfaces • LIS-EMR interfaces

• Strong interventions are difficult to implement, and sometimes expensive.

*Kawado et al. Controlled Clinical Trials 2003; 24: 560-569.

LIS – EMR interfaces are not easy to do well.

Ova and parasites Value: Schistosomiasis Not Present Lupus Inhibitor

NEG Value: Positive

Confusing EMR display of lab data

• Intervention = more testing. • 3000 tests can be resulted in 30,000 different ways in 1 downstream system! •That’s a lot of testing for only 1 interface.

Case: MD forgets to follow up on ordered test

• A doctor orders a test for C. Difficile, and forgets to retrieve it. By the time the result, which is positive, reaches a provider, the hospitalized patient has had serious complications from their diarrhea.

Astion ML. The laboratory result stopped here. AHRQ Web M&M. June, 2004. www.webmm.ahrq.gov/case.aspx?caseID=65

Intervention strength as applied to MD forgetting to retrieve a test result

Phone M.D. directly and receive read back

MD retrieval from paper chart, LIS or EMR

Phone 3rd party (e.g. nurse), who relays result to MD

Send results to MD’s electronic inbox, with acknowledgement request.

Pull Push

Astion M, Chou D. Notifying physicians …pushing and pulling with the help of a sympathetic laboratory. Lab Err Pat Safety. 2005;1(4):2-5.

LIS “pages” MD’s wide screen pager

Weaker Stronger

Give patients access to their EMR. Tell them no news is NOT good news

Example: Strong Intervention to Reduce Pipetting Errors

• Weak: Retrain techs, tell them to slow down

• Stronger: Automated pipetting

• Strongest: Eliminate pipetting by switching from assays requiring pipetting to automated platforms that don’t.

incorrect correct

Automated Immunoassay Platform

IFA

EIA Western Blot Gel diffusion

Example of a strong intervention: Immunoassay Consolidation ↓steps, ↓motion, ↓specimen requirements, ↓TAT

18th century methods loved by Lab Director

Translation: “The new expensive instrument replaces a bunch of old, slow, lousy, methods”

You say: “The new expensive instrument applies Lean principles to produce turnaround time improvements and reduce manual errors.”

Conclusions regarding selling in the context of jargon-laden, consultant-driven QI …

• Find out what consultants your client is using and what special jargon is being implemented, and practice using it to sell LIS / IT products, instruments, reagents and supplies.

• If your client is impoverished, and not hiring consultants, then use simple language and focus on hard $$$ savings, then ease-of-use/ error reduction, then TAT, in that order.

All payers put downward price pressure on labs, and labs, in turn, put pressure on IT / LIS providers and IVD manufacturers.

Lab

Private Insurance

Federal/State Governments

HMOs

Hospital where lab resides

Employers, patients

*

*

Why are insurance companies and government payers becoming so interested in managing laboratory testing?

Current Landscape: Laboratory Testing1,2

(Slide courtesy Dr. Lon Castle, commercial payer data)

All Healthcare 4-5% trend1

Outpatient Clinical Lab

Molecular/ Genetic

$2.98pmpm spend2

15-20% Trend2

[15% of all Lab]

$16.50pmpm spend2

8-10% trend1

[2/3 trend is higher utilization]

25

20-30% misuse including fraud and quackery

1Burns J. Managed Care Magazine. Oct 2014.

2eviCore internal data analysis, 2015.

8 Insurance Industry Trends Negatively Influencing Sales

1. ↓fee-for-service testing

2. ↑capitation, ↑ value-based payment.

3. ↑ deductibles, ↑ copays for patients

4. Management of genetic tests

5. Downward trends in fee schedules

6. Pushback against fraud, over-bundling.

7. ↑ cumbersome, medical and administrative policies

8. ↑ variation between insurers

Cost = (cost/unit) x (# units)

Insurance policies feel burdensome…

From: Big Blue Insurance Company May 5, 2017 Dear Michael “Mike” Astion: Attached please find an Explanation of Benefits (EOB) that you won’t understand followed by 4 pages in different languages including a useless privacy notice whose purpose is to kill trees. Based on our 2-hour conversation in which you yelled at me --and in which I told you that you can’t talk to anybody with medical policy knowledge--, I am informing you in an extremely nonbinding way that for this particular covered test, the allowed amount is $149 , your deductible is or is not met, and your co-payment is likely to be $30 . Your max out of pocket for the year is $5250 and may or may not matter in this case. We may still determine that you are too sick or too well to have this testing in the future. In summary “screw you”, and a confusing, poorly-numbered, form letter will follow. Your Insurance “Ambassador”, Phyllis G. P.S. It is impossible to find me in a directory or reach me by email or text, and everything you say is on a recorded line. Once again, “screw you”.

Commonly-studied Insurance Claims Databases

• Medicare

• Commercial insurance databases

• Special Databases and Analyses that go beyond conventional claims data

• OptumLabs™

• Geisinger xG Health Solutions

• IBM’s Watson Health

• Univ Washington – eviCore dbases

• OptumLabs:

• Collaboration between Mayo Clinic, Optum (United Health Group), and several other companies and associations.

• > 100 million covered lives

OptumLabs: types of data

8 Problems Revealed by Analyzing Insurance Claims

Tiny bit shocking Shocking

Ordering a “lesser” test when a better one is recommended.

Quackery / Magic

Underused tests Completely obsolete test Suboptimal CPT coding Fraudulent CPT coding

• Unbundling • Purposeful use of code that gets

paid knowing it’s a false code Workups that are a little too large • A few too many CPT codes • A few too many units of 1 CPT

code

Mega-workups • Huge # of CPT codes • Huge # of units of 1 CPT code. • Both

Urine Toxicology (Shocksicology): Drugs of Abuse and Prescription Drugs

• High Frequency: Claims billed daily or weekly for the same patient.

• Megaworkup: • Quantitative-confirmatory testing

after qualitative screen is negative.

• Billing for multiple, unnecessary and unrelated drugs

• Performing unrelated tests • Allergy • Genetics

• Fraud: • Bribing patients to submit urine • Kickbacks to Drs. who order tests

Misuse of Allergen-specific tests, 2015* ( > 21% of spend is on useless tests)

Allergen specific tests CPT Code $ spent (%)

IgE allergy test 86003 $1,979,000 (78.8%)

IgG allergy test 86001 $365,000 (14.5%)

ALCAT 83516 $166,000 (6.6%)

• *2015,unpublished commercial payer data, N=2.4 million members, N >5 payers, >10 states.

•Asthma and Allergy Foundation of America. 15 unproven methods of food allergy tests. http://www.kidswithfoodallergies.org/page/unproven-methods-food-allergy-tests.aspx

•Guidelines for Diagnosis and Management of Food Allergy. Summary of the NIAID-Sponsored expert panel report. 2010, https://www.niaid.nih.gov/sites/default/files/faguidelinesexecsummary.pdf

•Novitas: Local Coverage Determination. RAST Type Tests. 2014, http://www.myhnl2.healthnetworklabs.com/pdf/25RAST%20Type%20Tests-LCD.pdf

Average # units of Allergen-specific IgE is >> than recommended (2015, commercial insurance data)

• Guidelines for IgE allergen-specific testing suggest judicious use, usually recommending <14 allergen tests1

• 8 allergens account for >90% of food allergies

• Many labs market large IgE panels

• >20 allergens are billed about 37% of time

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

1-10 u 11-20 u 21-30 u 31-40 u >40 u

Number of Allergens Tested per DOS

Number of IgE units billed

1Guidelines for the Diagnosis and Management of Food Allergy in the United States: Report of the NIAID-Sponsored Expert Panel. J Allergy Clin Immunol. 2012;126(6):S1-S58.

Summary of insurance data regarding 9 domains of overutilization and abuse

1. Cardiovascular Disease Risk 2. Pain and Addiction Medicine* 3. Woman’s health (cervicitis, vaginitis) 4. Wellness including nutrition and metals 5. Flow cytometry 6. Allergy 7. Autoantibodies (e.g. celiac test bundles) 8. Genetic testing, especially by non-geneticists 9. Inpatients: Daily labs (not in insurance claims)

Adults

Peds

Problems in test utilization have given rise to the “Laboratory Stewardship” movement. This will be a long-term trend.

• Lab Stewardship is a system for managing tests which increases the likelihood of…

• Ordering the correct test in the correct frequency.

• Retrieving the test result

• Correctly interpreting the test result

• Good 3rd party payment and reasonable patient out-of-pocket expenses.

• Most companies in lab industry are now supporting stewardship. If we get paid, you get paid.

• Incorporating concepts and language of lab stewardship (test utilization management) into sales is a good idea.

Cost = (cost/unit) x (# units)

Within a lab, the elements of a stewardship system are….

1. Governance by a utilization management committee

2. Data and analytics regarding:

1. test use 2. result retrieval 3. result interpretation 4. payment

3. Interventions

4. Cycle of Review and Improvement

0

5

10

15

20

25

30

35

Num

ber o

f Vi

t 1,2

5 D

Ord

ers

CancelledApproved

Intervention=email to docs re “Your 1,25 Vit D order is probably wrong.”

Posting of guidelines on the requisition

Computerized reminders regarding utilization guidelines

Education

Providing cost information

Lab Stewardship– Overview of Interventions Many are implanted in software.

Utilization report cards with peer review

Changes to manual requisition

CPOE templates, CPOE “hiding”

LIS flagging of duplicate orders

EMR soft stops

Privileging Sendouts formulary Forbidding tests EMR hard stops Requirement for

higher level collaboration or approval (e.g. Pathologist or genetic counselor consultation)

Gentle Strong

Gentle Guidance Strong Guidance

Medium

The financial goal of Lab Stewardship is alignment between labs, insurance companies, patients, and IVD / IT companies.

Insurance Lab Manager

A group of payers, labs, patients, and IVD companies working together.

Lab Manager and Insurance company discuss recent denial.

After Before

PLUGS: Patient-Centered Laboratory Utilization Guidance Services is an organization that promotes lab stewardship and alignment.

Basic Member Benefits: Tools for Stewardship

Insurance Advocacy Case Management

National Committee for Laboratory Stewardship

Mission: Improve test ordering, retrieval, interpretation and reimbursement.

Children’s of Alabama Cincinnati Children’s Hospital Cleveland Clinic Cook Children’s Medical Center Dayton Children’s Hospital Dell Children’s Medical Center Fairview Health Services GeneDx Laboratories Health Partners- Regions & Park Nicollet Hospital Intermountain/Primary Children’s Hospital Johns Hopkins All Children’s Hospital John Hopkins University Lancaster General Hospital Le Bonheur Children’s Hospital Legacy Health Lurie Children’s Hospital Chicago Mercy Children’s Hospital – St. Louis Meriter- Unity Point Health MultiCare Tacoma General

Akron Children's Hospital Arkansas Children’s Hospital Baylor Genetics Blood Center of Wisconsin Blueprint Genetics Boston Children’s Hospital Bronson Methodist Hospital Cardinal Glennon, SSMH CentraCare Health Children’s Healthcare of Atlanta Children's Hospital & Clinics of MN Children's Hospital of Colorado Children’s Hospital of Los Angeles Children’s Hospital of Philadelphia Children’s Hospital of Pittsburgh of UPMC Children’s Hospital of Wisconsin Children’s Medical Center of Dallas Children’s Mercy Hospitals and Clinics Children’s National Medical Center

THANK YOU TO OUR SPONSORS & PARTNERS:

Nationwide Children's Hospital Nemours/Alfred I. duPont Hospital for Children Norton Healthcare Oregon Health & Sciences University Phoenix Children’s Hospital Providence Health and Services Providence Sacred Heart Medical Center PWNHealth Quest Diagnostic Laboratory Royal North Shore Hospital Salem Health Care Stanford Health Care Stonybrook University Hospital St. Louis Children’s Hospital Texas Children’s Hospital Tricore Reference Lab UCSF Benioff Children's Hospital Oakland University of Florida -Shands University of Michigan University of Washington Valley Children’s Hospital Wake Forest Baptist Health York Hospital (WellSpan Health System)

The Power of the PLUGS® Network 80 Members Representing Over 150 Institutions!

To improve payment, labs are collaborating with insurance companies by…

1. Building their lab stewardship programs.

2. Supporting voluntary, national standards regarding lab stewardship programs, and pushing to have insurance companies recognize them.

3. Partnering with their insurance processing team and pushing to meet directly with insurance companies.

Case Management

Tools for program

development

National Committee for

Laboratory Stewardship

Insurance Advocacy

https://www.safeco.com/claims/auto-claims/guaranteed-repair-network

Collaborate with insurance companies by…

4. Pushing “gold carding”, which means insurance company accepts and audits your laboratory stewardship system and agrees to eliminate dual systems of preauth and medical policy.

Case Management

Tools for program

development

National Committee for

Laboratory Stewardship

Insurance Advocacy

Exome Gold carding: from Children’s of Pittsburgh

10 cases were approved and 13

were denied

43%

New Horizons – Investing Utilization Management Efforts to Increase 3rd Party Payer Approval and Reimbursement for Exome Sequencing. Jodie M. Vento , Roxanne Acquaro, Andrew McCarty. Children’s Hospital of Pittsburgh UPMC, Pittsburgh PA. Presented at PLUGS Summit 2016, Seattle, WA.

71 cases were approved and only

2 were denied

97%

2013 2015

approval rate approval rate

Labs are collaborating with insurance companies by…

5. Partnering with insurance companies to block fraud and abuse.

6. Sharing success stories about insurance collaboration with other labs.

7. Participating in making consensus policies and advocating for use by payers.

8. Advocating for insurance systems that make coverage decisions faster, more transparent, and closer to the patient.

Case Management

Tools for program

development

National Committee for

Laboratory Stewardship

Insurance Advocacy

Partnering to block fraud and abuse: Example: MTHFR, Choosing Wisely®

http://www.choosingwisely.org/clinician-lists/american-college-medical-genetics-genomics-mthfr-genetic-testing-for-hereditary-thrombophilia/

*

Consensus policies: Multiple PLUGS members partnered with major insurers to develop and implement genetic testing policies.

• It is difficult for payers to develop and maintain a genetic testing policy book and therefore deny genetic tests as “experimental/ investigational”.

• Thru PLUGS, leaders from multiple labs partnered with payers through eviCore healthcare (a 3rd party benefits manager) to create a whole exome sequencing policy.

• This year, the policy will be associated with > 13 million covered lives through multiple payers.

• Other policies are in the works (e.g. mitochondrial testing) using this collaboration, and we hope they will have large national impact.

• When insurers and labs agree on policies, there is a decrease in disconnection, waste, and complexity.

Acknowledgements

• Orchard Software

• Seattle Children’s faculty and staff

• U. Washington faculty and staff

• PLUGS members and sponsors

• eviCore healthcare (Dr. Lon Castle, Melissa Bennett, Denise Needham, Michael Graf)

• Seattle Children’s Charitable Foundation

Conclusions

• We discussed trends in:

1. Hospital and Lab Management, especially the rise of the administrative class and hospital-employed pathologists.

2. Quality Improvement, and using the trends to support sales.

3. Test Utilization Management (Laboratory Stewardship), emphasizing insurance payment trends. IT / LIS vendor and IVD vendor support of lab stewardship initiatives encourages better financing of labs and better payment to companies in the lab industry.

• Thanks!