Very Brief Blog: Rogers (2018) On Hidden Costs of Shipping Hospital Tests Out

People have been talking about drivers of lab testing costs, including hospital lab tests, for decades (see 1984 here and 1993 here and 2001 here.)    Lately, there's been much attention to "higher costs of hospital based testing," for example, arguments that PAMA pricing would be higher if hospital labs reported their payer prices (here).  Dark Report has recently been reporting that labs buy small hospitals just to access their higher price payer contracts (!), and that large reference labs are again working to tighten their relationships with specific payers, and thus, with select populations of patients within a hospital's system.

Into this whirlpool lands an article by Rogers et al. at Children's Healthcare of Atlanta.  (The context above is by me, not the authors).   See Archives of Pathology and Laboratory Medicine, here.  In the abstract, they write that: 

Disruption of outpatient laboratory services by routing the samples to commercial reference laboratories may seem like a cost-saving measure by the payers, but results in hidden costs in quality and resources to support this paradigm...Outpatient testing was sent to 3 different laboratories, specified by the payer.

My internist is affiliated with a famous health system, and I've had lab reports in different years come back with circa $150 test charges (from the health system outreach lab) or circa $50 charges (from a reference lab), so I can see the payers' point of view. 

Here's the new contribution.   Rogers et al. document that turn around times (TAT) to result rise from 1.3 hrs at the hospital lab to 39 hours at the reference lab, and that thousands of delays per annum occurred (such as miswritten date of birth).   They assert there are many hidden costs to forced routing of outpatient lab tests away from the health system lab.

Article was covered by Genomeweb's 360DX website, here.

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The article contains some interesting information on salary costs for different levels of staff, including computer staff (epub p 2), and interest distribution-of-costs of different phases of lab testing (e.g. their p5 color bar chart, epub p 5).