Laboratory Pricing – Overcoming the Patient Disincentive

“In this world nothing can be said to be certain, except death and taxes.” With all due respect to Benjamin Franklin, who penned these words in a 1789 letter, regrettably we can add “health care expenses” to this list of certainties.

In the last five years, individuals have taken the biggest brunt of rising health care costs in the form of rising out-of-pocket costs including deductibles; an increased share of employer-sponsored health insurance premiums; increased co-pays and co-insurance percentages; and an increase in non-covered, elective services. Just since 2009, the following shifts in health care have occurred:

  • Patient deductibles have increased 50 percent to an average deductible of $1,217 per individual.
  • Nearly 20 percent of workers overall have to pay at least $2,000 in deductibles or expenses before insurance benefits begin.
  • Employees of small firms are impacted even more, as one-third of employees at smaller firms are paying at least $2,000 per annum in deductibles.
  • In addition to the previous points which are only the first part of the cost shift, employees are covering more of their employer-sponsored insurance costs (37 percent of the overall premium cost) as well as covering higher co-pays for physician office visits.
  • Non-covered services are 100 percent the responsibility of the individual.

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Overcoming Denial About Laboratory Benchmarking: Room for Improvement

I’ll always remember my first consulting project. A senior VP of a community hospital in the mid-Atlantic region asked us to validate a report by the state hospital association that his lab was overstaffed by 33 percent. During my first visit, I knew the report was at least directionally correct without having looked at any data. The lab was not busy. Techs were mulling around. There were the surreptitious glances from the staff and the occasional magazine on the bench. Lab management insisted that they were appropriately staffed.

You know this story does not end well; we confirmed the hospital association report despite fervent claims to the contrary. What was surprising to me was that these folks were not being disingenuous. They truly believed that they were busy, that they were working hard! How could there be such a gap in perception? Continue reading