As Dave Dexter sees it, laboratories will have to be aggressive in order to assume an appropriate role in accountable care organizations (ACOs). That was the message Dexter, chief executive officer of the Arizona-based Sonora Quest Laboratories, communicated at last month’s G2 Intelligence Lab Institute in Arlington, Va. Dexter noted that while the ACO Sonora Quest participates in via hospital operator Banner Health has been successful—hospital admissions have been reduced 9 percent and average length of stay has been cut 14.4 percent, saving millions of dollars—he believes the cost pressures on labs are out of line relative to the value they deliver. According to Dexter, labs serve as an “enabler” to lower health care costs. “We’re not the cost problem in health care. We’re not even remotely close to it,” he said. He believes that Arizona, one of the few red states to expand its Medicaid program under the Affordable Care Act, will have about 500,000 newly insured residents in the coming years (300,000 Medicaid enrollees and 200,000 who will purchase commercial coverage via the state’s health insurance exchange). Although they could be seen as a new revenue stream, they will be entering a care system that is being reshaped […]
As Dave Dexter sees it, laboratories will have to be aggressive in order to assume an appropriate role in accountable care organizations (ACOs).
That was the message Dexter, chief executive officer of the Arizona-based Sonora Quest Laboratories, communicated at last month’s G2 Intelligence Lab Institute in Arlington, Va.
Dexter noted that while the ACO Sonora Quest participates in via hospital operator Banner Health has been successful—hospital admissions have been reduced 9 percent and average length of stay has been cut 14.4 percent, saving millions of dollars—he believes the cost pressures on labs are out of line relative to the value they deliver.
According to Dexter, labs serve as an “enabler” to lower health care costs. “We’re not the cost problem in health care. We’re not even remotely close to it,” he said.
He believes that Arizona, one of the few red states to expand its Medicaid program under the Affordable Care Act, will have about 500,000 newly insured residents in the coming years (300,000 Medicaid enrollees and 200,000 who will purchase commercial coverage via the state’s health insurance exchange). Although they could be seen as a new revenue stream, they will be entering a care system that is being reshaped by the ACA.
Various components of health care reform will push many other changes in the way health care is delivered, particularly in the greater use of electronic health records (EHRs), chronic disease management, and coordinated, patient-centric care. The fact that most providers now use EHRs is why Dexter believes ACOs will be much more successful than their predecessors from the 1990s, the physician-hospital organization.
Dexter also believes that the nexus of ACOs—the hospitals and medical groups—see laboratories as a data partner as opposed to a testing vendor, primarily due to the transparency and portability of the patient health records. And even if the Affordable Care Act itself does not prove entirely successful, the bundled payments and value-based care that delineates ACO operation are here to stay.
However, since labs are being asked to take reductions in reimbursement out of line to the value they deliver, Dexter believes labs are going to have to fight hard to insert themselves into the ACO equation. That’s primarily because labs have a small footprint in the overall care delivery equation.
“Value is someone’s perception until you make it a reality for them. We’re going to have to do that . . . even though it’s unfortunate we’re going to have to continually fight this battle,” he said.
Takeaway: If laboratories wish to be successful within an ACO environment, they will have to advocate their value to those running such organizations.
