Every person who has received blood test results or been treated in a hospital has benefited from in vitro diagnostic testing. The prevalence of these tests and their direct influence on the next steps in a patient’s care pathway does not always correlate with lab investment, however. Competing projects may deprioritize investing in new laboratory services and technologies, missing opportunities for workflow efficiency, physician satisfaction and patient experience across the entire health system.
Laboratory diagnostic tests, which play a critical role in detecting, diagnosing and/or monitoring conitions, provide undeniable value to both the patient experience and healthcare system in general. To laboratory leadership, this value is perceived too often go unrecognized among hospital decision makers.1
This article examines laboratory diagnostics from the perspective of physicians, internists and hospital lab directors to determine the value IVD labs deliver in order to emphasize the importance of prioritizing spend on these tools.
The diagnostic laboratory: Barriers to investment
Just as cost impacts the design and production of medical devices, budgetary impact is top-of-mind for decision makers in hospitals and laboratories when purchasing new medical equipment and technologies. Maximizing financial stability is the top priority for a hospital’s c-suite, according to 34 percent of emergency medicine physicians, 29 percent of internists/hospitalists and 22 percent of hospital lab directors that were surveyed.1
Furthermore, hospital lab directors claim that their biggest challenges include financial constraints related to operations, investments in lab technology, and automation.1 In the face of increasing financial pressures it is not surprising that hospitals would prioritize investing in tools that have the greatest impact on patient outcomes and experience. Laboratory technologies frequently are deprioritized over other expenses that are thought to more directly impact patients. When taking a closer look at the direct and indirect impact of laboratory diagnostics, however, it is evident that these technologies play a pivotal role in patient satisfaction, patient outcomes and hospital reputation.
Studies have shown that test results from in vitro labs drive about 70 percent of clinical decision making and comprise less than 5 percent of hospital costs, demonstrating that IVD not only impacts a wide range of patients, but provide tremendous value for relatively small investment.2
Improving the patient experience
In the face of a medical issue, patients often feel scared and overwhelmed. They want to receive answers quickly, and have confidence in their physician’s ability to get them on the road to treatment and recovery as soon as possible.
While physicians cannot control whether patients are affected by a disease or injury, they can help to control the quality of care provided during this uncertain time. Clinical labs provide important tools that help doctors with diagnoses, prognoses and monitoring of diseases.
When asked about the impact of the laboratory on the patient experience, physicians and internists widely agree that investment in these technologies is important. More than three-quarters of doctors and lab directors agreed that labs play a vital role in healthcare systems, and that they are a critical component of informing patient diagnosis and treatment. Additionally, more than half of these physicians and internists noted that investments in lab technology would be very impactful on potentially improving diagnoses, and about half of physicians and internists thought it wcould also be very impactful on improving patient safety and patient outcomes.1
Beyond accuracy, patient and physician satisfaction also is dependent on the time it takes to receive test results, or turnaround time. About three-quarters of emergency medicine physicians and two-thirds of internists/hospitalists agree that the TAT of IVD lab results drive physician and patient satisfaction.1
Swedish Covenant Hospital in Chicago provides a real world example of how investment in IVD technology can impact the lives of patients and physicians. While aiming to reduce TAT, the hospital reported increased satisfaction in the form of fewer blood draws and reduced hospital stay times. Noticing this trend, they decided to increase these efforts and ended up reducing TAT of STAT (emergency) samples by 55 percent and of routine samples by 49 percent from 2001 to 2017.1
Because IVD tests are so closely tied to the majority of clinical decisions, it shouldn’t be surprising that the quality and timing of these results deeply impact both patient and physician satisfaction–an important measure of success when evaluating the efficacy of medical equipment and technology, and other quality criteria for value-based care payment models.
ROI beyond the lab
While patient and physician satisfaction and improved care are direct benefits of investment in labs, there also is evidence that improved laboratory diagnostics can indirectly benefit hospitals by enhancing their reputation and revenue. Test results often help clinicians determine whether a patient is critical and needs to stay for further observation or whether a patient is healthy enough to return home. With the right assays, freeing beds for the next patient becomes more efficient. For a busy ER, this can also translates into also accelerating potential revenue.
Swedish Covenant Hospital invested in its lab to improve profitability and clinical excellence by measures including reducing errors, improving quality, meeting physician needs and improving turnaround time. These efforts paid off. Outpatient procedures increased by almost nine percent over the course of five years at Swedish Covenant, increasing care delivery, revenue and competitiveness.1
Investing in advanced technology can also contribute to financial savings down the road. Hospitals in the US that incorporated innovative medical technologies have Medicare Spending per Beneficiary scores below the national average. Sixty-five percent of top technology hospitals, as defined by US News & World Report, have an average MSPB score below the national average, compared with 56 percent of non-technology hospitals.3,4
This financial value is not lost on hospitals’ experts. The majority of emergency medicine physicians (73 percent), hospital lab director/pathologists (81 percent), and internists/hospitals (60 percent) agreed that increased investment in technology for IVD labs can lead to overall hospital cost savings and increased revenue.1
Highlighting the importance of IVD tests
Despite evidence demonstrating that improved IVD technologies are important, research shows that hospital financial decision makers may still hesitate to invest in these technologies, with emergency medicine physicians (39 percent) and internists/hospitalists (51 percent) admitting they are not sure if their hospital has recently invested in new lab systems.1
Producing test results in a timely manner is increasingly challenging for clinical laboratories. They face a growing volume of tests, the result of an aging patient population, and a shortage of skilled laboratory workers—a crisis decades in the making and the result of a retiring workforce and a shrinking number of accredited training programs to produce skilled laboratorians. The recent advent of integrated testing solutions with sample priority capabilities and built-in automation is helping to address these challenges and modernize operations. The faster the lab can deliver results to physicians, the quicker a physician can execute a patient care plan, potentially improving time-sensitive outcomes such as those for heart attack, stroke and sepsis.
In conclusion, stakeholders can contribute to the success of the diagnostic laboratory by encouraging future investment. Research has shown that top technology hospitals evaluate new technologies and make a decision about whether or not to invest based upon the technology’s ability to improve patient outcomes, create a positive impact on hospital revenue and profitability, the prestige associated with the technology or procedure, and the impact on patient referrals.1 With these criteria in mind, with decision makers can clearly see the benefits IVD labs provide in the treatment of patients, and help advocate for increased investment in IVD as a way to improve patient and physician satisfaction, foster a positive hospital reputation and deliver potential cost savings.
References
1. Siemens Healthineers. (2017). The Diagnostic Lab: The Hidden Jewel in the Health System. Available at: https://www.healthcare.siemens.com/magazine/mso-whitepaper-diagnostic-lab.html
2. Cadogan et al., 2015; Lippi et al., 2016; Plebani, 2015; Rohr et al., 2016; Sarata and Johnson, 2014.
3. U.S. News & World Report. (2015). U.S. News & World Report Best Hospitals 2012-13. Available at: https://health.usnews.com/health-news/best-hospitals/articles/2012/07/16/us-news-ranks-best-hospitals-2012-13.
4. Avalere Health LLC. (2015). The Impact of Medical Technology on Medicare Spending. p.3. Available at: http://avalere.com/expertise/life-sciences/insights/new-study-finds-average-medicare-spending-for-top-technology-hospitals-matc.
