Sponsored By College of American Pathologists

Balancing Costs and Quality in Pathology: 6 Conversation Starters


cover thumbMany hospitals and health systems are putting their laboratories under the microscope to pinpoint ways to lower costs while simultaneously enhancing quality. Both external and internal pressures are driving these value-improvement efforts.

For instance, laboratories are struggling to adjust to lower Medicare payments. In January, the Centers for Medicare and Medicaid Services (CMS) cut Medicare Part B laboratory payments by 10 percent for high-volume outpatient laboratory tests under a revamped clinical laboratory fee schedule. Similar cuts are expected in 2019 and 2020 as part of CMS’s response to the Protecting Access to Medicare Act (PAMA) of 2014. At the same time, hospitals are adapting to developments within the pathology field, from genomic testing to artificial intelligence. While some of these advances are improving diagnostic medicine and patient care, they are also changing the job descriptions and workflows of laboratory staff, which puts additional burden on pathologists.

“There are the pressures within the institution around continuous improvement,” says Ross Reichard, M.D., FCAP, vice chair of quality and associate chair of practice, Department of Laboratory Medicine and Pathology, Mayo Clinic, Rochester, Minn. “How rapidly can we do this? What is the cost to the patient? At the same time, we have to identify capacity to innovate because through innovation, we can advance health care and create better outcomes for patients.”

A group of pathologists and hospital leaders convened in San Diego at the July AHA Leadership Summit to discuss how pathology can successfully manage these competing demands. Bob Kehoe, director, product development and strategy, American Hospital Association (AHA), moderated the discussion with representatives from the City of Hope cancer hospital and four large hospitals and health systems: CHI St. Luke’s Health, Mayo Clinic, University of California Irvine Health and UC San Diego Health. The sponsor of the event, College of American Pathologists (CAP), was represented by Stephen Myers, CEO.

A common theme was the need for hospital executives and pathology leaders to hold regular conversations about balancing costs and quality. “Have discussions at your institution to demonstrate what real value is,” Myers says. “That’s a mantra that we [CAP] preach.”

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