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Medicare 'Fixes' Are Penny-Wise, Pound-Foolish | Commentary

Our leaders in Washington too often rely on short-term “fixes” for long-term problems that have plagued the nation’s Medicare program.

Unfortunately, many of these changes may ultimately increase health care costs and hurt the quality of health care for Medicare beneficiaries.

Clinical laboratory services have been on the chopping block, and may be again as Congress searches for “pay-fors” later this year.

These innovative, vital services have helped drive the emergence of cost-effective, personalized “precision” medicine, and allow physicians to more accurately predict, prevent, diagnose and treat diseases ranging from diabetes to cancer. The more exact and timely a diagnosis of disease, the less probability of unnecessary treatments, longer hospital stays and costly complications that waste precious health care dollars and negatively affect patient care.

Advances in clinical laboratory tests allow the analysis of an individual’s unique biological information so that physicians can more accurately characterize a particular disease and devise the most appropriate course of treatment. The tools we have at our fingertips today would have been mere science fiction even 20 years ago but are now an integral part of high-quality health care.

Yet payments for clinical lab services have been cut by more than 11 percent since 2010, and face double-digit cuts going forward. Clinical lab testing accounts for less than 2 percent of Medicare spending annually. Yet this tiny sliver of spending informs an estimated 70 percent of physicians’ decisions. For Medicare patients relying on test results to determine their treatment, further cuts to lab services will mean limited availability of tests, longer turnaround times or even trips — often by ambulance — to a hospital instead of on-site care at a nursing home.

Simply put, cutting Medicare payments for lab services may only worsen the very problems that contribute to high health care costs in this country.

For example, a $13 blood test for diabetes is not only a key to diagnosing this disease, it can help identify the severity of a patient’s condition so that it can be properly managed. The health care costs of proper management of a person living with diabetes is estimated at $1,852 per year, whereas diabetes unchecked and uncontrolled leads to reduced quality of life and costly complications including kidney failure, heart disease, infection and amputations, potentially costing tens of thousands of dollars.

Lab tests also play a vital role in tackling other challenges in our health care delivery system, such as hospital readmissions, which have contributed mightily to health care costs in the United States.

Hospital readmissions cost the Medicare program $17 billion annually, almost twice the amount Medicare spends on all lab tests, even though 50 percent to 75 percent of those readmissions are considered preventable. Unnecessary hospital readmissions can be avoided when care is precisely targeted to meet the needs of each individual patient, thereby achieving better outcomes.

Research shows that 70 percent of all physician decisions rely on information furnished by lab tests, but in order to be effective, hospitals must get those results in a timely manner. Studies also show that 41 percent of hospital discharge patients have lab results that are still pending, allowing no assurance that a return trip will be avoided.

Despite the enormous value clinical lab tests provide, both to the Medicare program and to patients, it is becoming increasingly more difficult for clinical laboratories to absorb the deterioration of Medicare payment while the costs of providing their critical service, including labor and transportation, continues to climb.

It’s penny-wise and pound-foolish to think that drastic, arbitrary cuts to lab services — which play a vital role in improving patient care and decreasing health care costs — are the answer to our nation’s health spending problems. It is, in fact, a false choice.

Alan Mertz is president of the American Clinical Laboratory Association, which represents the nation’s leading clinical laboratories.

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