Inside the Lab Industry: Direct-to-Patient Lab Results: Who Will Benefit?

For decades, it has been a given throughout much of the laboratory industry that test results go directly to the doctor who has ordered them. Only nine states have laws on the books specifically allowing the patient to receive test data. Most states have no law at all, simply defaulting to the federal rules, which require direct transmission to a physician. But much has changed in delivery and financing of health care in recent years. Significant cost-shifting to patients by payers—accompanied by slow but ever-gathering momentum toward price transparency and consumerism—has nudged patients closer to the center of their own health care delivery and the relevant decisionmaking processes. As a result, the U.S. Department of Health and Human Services (HHS) issued a rule earlier this month that essentially upends how laboratories deliver the results of the hundreds of millions of assays they perform every year. In a significant revision of the Clinical Laboratory Improvement Amendments rules that have governed the sector for more than a quarter of a century, labs will soon be required to send test results directly to patients should they request it. The change did not come easily. The rule was originally proposed in 2011, and there was more than two years of back-and-forth between the government and the lab sector as to how its final version should read. Labs had resisted parts of the new rule during the review process, particularly the HHS’s estimation they would have a relatively easy time formulating methods for delivering results to patients. In the end, though, lab groups are supportive of the new rule, although they urge caution. “AACC strongly supports patient empowerment and health literacy and believes that patients should have greater access to their test results so that they can take a more active role in managing their health,” said Janet Kreizman, president of the American Association for Clinical Chemistry. “ACLA applauds HHS and the Centers for Medicare and Medicaid Services (CMS) for making a clear, unequivocal statement that the rule will now pre-empt more restrictive state laws that previously limited patient access,” said Alan Mertz, president of the American Clinical Laboratory Association. But both Kreizman and Mertz warned that patients should not go it alone in interpreting the esoteric names and numbers that comprise a good many tests results, suggesting that to do so would cause unnecessary anxiety. “ACLA encourages patients to work closely with their physicians and health care providers to understand the meaning of what is often very complex medical information,” Mertz said. And now that change has arrived, what does it mean for the laboratory business as it moves forward? Although the rule change should not have a significant impact on laboratory test volumes—those assays will have to be performed no matter what—it could mean changes for some of the sector’s long-held business models. That means potential opportunities for those labs already aiming for a more consumer-oriented audience. It could also prompt many labs having to quickly reconfigure how they deliver test results. But observers say it will be a mixed bag as to whether labs will actually benefit from the new rule or figure out means to exploit it. Chance for Revenue Questioned Susan Dougherty, vice president of operations and outreach services for Chi Solutions, a Michigan-based consulting firm that specializes in laboratories, believes there is little opportunity for traditional labs to take advantage of the new rule. “As far as creating new revenue opportunities, what I mostly see is if there was a charge associated with a delivery of results to patients,” Dougherty said, but added that likely would be offset by the cost of actually delivering that data in a timely manner. “There would have to be some sort of investment in order to do so . . . labs are not set up to effectively and efficiently deliver results to patients.” Current Demand Questionable Even those labs already equipped to deliver test results to patients report little demand from them to do so. PAML, a large regional laboratory based in Spokane, Wash., has experienced that firsthand. Although PAML’s home state specifically bars test sharing with patients, it also has operations in neighboring Oregon, which specifically permits such sharing. Nevertheless, demand from patients in Oregon for their test results has been minimal, according to PAML Chief Executive Officer Francisco Velázquez, M.D. “I don’t think we’re inundated,” said Velázquez, who was unable to provide any specific data on result requests from patients. Under Oregon regulations, patients who want their test results have to appear at a physical site operated by PAML, fill out a request form, and provide identification. But Velázquez believes there will be a bump in demand for test results in the coming years. In particular, cost-shifting is driving more curiosity as to what patients are getting for their money. “We’re also seeing a more educated consumer patient base interested in participating in their care,” he said. One company is definitely looking forward to the implementation of the new data-sharing rule. Theranos, the Silicon Valley startup that has patented a number of ways to draw minute amounts of blood in order to perform scores of assays, has been opening outlets within the Walgreens retail pharmacy chain to deal directly with consumers. The company charges 50 percent of Medicare rates for items on its test menu. “We are excited by this announcement and encouraged by the progress being made at the federal level to encourage individuals to play an active role in their health care,” said Elizabeth Holmes, Theranos’s founder and chief executive officer. “The best solution to our rising health care costs is to empower individuals to play a bigger role in managing their and their families’ health.” When providers do furnish easy patient access for tests, demand tends to follow. The University of Pennsylvania Health System has been delivering test results from routine assays via an electronic patient portal since 2010. Although UPenn Health’s 14 labs perform about 6 million tests each year, results are sent to patients within a couple of days after a physician has reviewed them. “It’s very popular,” said Irving Nachamkin, director of the division of laboratory and pathology medicine at the Hospital of the University of Pennsylvania. The portal also includes some interactive features, such as allowing patients to graph their blood sugar levels over specific periods of time. The online access to records has played some role in UPenn Health patients requesting manual pulls of paper records. Paper records are also provided to hospital lab outreach patients, although that too will soon be shifted over to an electronic process, according to Nachamkin. “I can pretty much bet we’re way ahead of the curve on this,” he said. Both Velázquez and Dougherty believe that if there is mounting demand for tests results, it likely will be split by generation, with younger patients likely more eager to see their data than their elders. And emerging providers such as retail clinics will also likely create many patients who want to get their results transmitted or mailed to their homes. But labs will not only have their work cut out for them in creating a delivery infrastructure, but also by providing interpretative services so when the patients get their tests, they can figure out what it all means. “We have to build a model for consumer interpretations,” Velázquez said. “But it will be good for the lab industry. Most patients don’t understand what we do. This will go a long way in highlighting pathology and labs in the lives of consumers.” Takeaway: Although the change in the test-sharing rules is a major shift for laboratories, it remains to be seen whether it will be a business opportunity or an operational burden.