Originally Published IVDT June 2009
Final Thoughts
Diagnostics: Key to improving healthcare
Teresa L. Lee and G. Gregory Raab
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Teresa L. Lee, Esq., MPH, is vice president of Payment and Health Care Delivery Policy at AdvaMed (Washington, DC). Her responsibilities include policy development and analysis for Medicare reimbursement issues affecting the medical technology industry, including the Medicare coverage processes and in vitro diagnostic reimbursement. She can be reached at tlee@advamed.org.
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G. Gregory Raab, PhD, is president of Raab & Associates Inc. (North Bethesda, MD), where he provides health policy consulting services. He can be reached at greg.raab@raab-associates.com.
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The Obama administration and the 111th Congress have expressed interest in reforming the health system and providing coverage to the approximately 45 million uninsured persons in the United States. As the debate about reform picks up, many participants have chosen to focus on how we can lower costs to “pay for” coverage of the uninsured. But if policymakers cut costs in the near term at the expense of quality care in the long run, these well-intentioned efforts to reform the system will only exacerbate the problems we currently face—a proposition we cannot afford.
Fortunately, some groups are calling for an increased emphasis on the prevention and management of disease to improve both quality and efficiency. IVDs can and should play a key role in this endeavor.
Diagnostics are an essential component of healthcare efficiency. They provide health professionals with increasingly more precise and timely information to make smarter, customized decisions, and, in doing so, they head off adverse events and reduce costs. Diagnostics aid in early detection of disease, which in turn facilitates early treatment, a key to improved outcomes for many patients. Diagnostics also provide information to guide patient care, with the most advanced of these tests offering the ability to target therapies based on genotype.
Personalized medicine is available for certain conditions today, and it can both improve quality and reduce the wasteful spending that occurs when critical diagnostic information is not available. Trial-and-error treatments can be supplanted with well-informed, targeted assignment of therapy based on advanced diagnostics (pharmacogenomic or otherwise). In this way, diagnostics can help reduce costs while improving the performance of our health system.
Diagnostics can also lead to improved quality and more-effective treatments based on better-informed decision makers. The potential for improvement is particularly great because many diagnostics that serve as quality indicators, such as glycosylated hemoglobin tests for persons with diabetes, are currently grossly underused. Although many diagnostics are recommended as standards of care in clinical practice guidelines, a seminal study conducted by RAND Corp. and published in the New England Journal of Medicine in 2003 indicated that they are not used 51% of the time.
The promise that diagnostics offers has been frustrated by insurer policies that provide inadequate incentives to develop, disseminate, and adopt new tests. The U.S. healthcare system simply does not pay for diagnostics in a manner commensurate with the value that these technologies offer. Numerous government-commissioned blue-ribbon committees have documented the inadequacies of the Medicare clinical laboratory fee schedule, which has an impact on the way every other payer in the United States sets payment rates. Indeed, the IOM warned in 2000 that “[p]roblems with the outdated payment system could threaten beneficiary access to care and the use of enhanced testing methodologies in the future.” The “enhanced testing methodologies” referenced in the IOM report are here today, but the current Medicare payment system for diagnostics continues to be a poor foundation for advanced diagnostics, including genetic tests. Both innovation and patient access are threatened if we do not correct the way new tests are valued and priced.
Our ability to realize the potential of personalized medicine hinges on looking beyond near-term considerations about cost to a fuller understanding of the role that diagnostics play in improving quality and in eliminating wasteful spending. Investments in diagnostics today can yield long-term savings.
The debate over health reform should be the venue for accomplishing long-needed reforms in the way Medicare and other insurers set payment rates for diagnostic tests, given their place in shaping medical decision making. If diagnostics payment reform is not achieved, we risk missing out on critical innovations that present incredible value to patients, improving the overall health system, and securing long-term savings that are realized with earlier diagnosis and treatment.
Copyright ©2009 IVD Technology
