Avoiding Financial Waste: UM Strategies in the Pre- and Post-Analytic Stages

June 9, 2016

Much has been published over the past few years in journals and other media on the topic of lab test utilization management (UM), and much continues to be published, for some very good reasons. The annual volume for all lab tests in the United States is estimated to be roughly 7 billion, for which roughly $70 billion is expended. A recent study showed that an estimated 30 percent of all laboratory tests run across the healthcare continuum were unnecessary. That means roughly 2.1 billion unnecessary lab tests are performed each year, generating $21 billion in financial waste.

However, the story of waste and added financial cost does not end there. Lab test results are used in an estimated 60–70 percent of all healthcare treatment decisions, and therefore may result in significant additional downstream costs for other tests, procedures, and medical interventions.

Unnecessary lab tests have a multiplier effect on healthcare costs, and lead to diagnostic misadventures and unnecessary procedures, many of which may be quite costly. Although we tend to focus more on overutilization, studies show that in approximately 30 percent of the cases, providers fail to order the appropriate lab test.

“Studies show that laboratory errors occur primarily in the pre-analytic phase, before testing is actually performed. UM focuses primarily on reducing pre-analytic errors in test selection by making it easy to order the right test and hard to order the wrong one.”

Robert Carpenter
Senior Consultant, ARUP Consultative Services

While underutilization seems to save money, it does so only in the short run. In the long run, important diagnoses will be delayed or missed, and critical changes in patient health status will be overlooked. These may actually lead to higher overall downstream costs, as medical interventions in more advanced disease states or in more critical patient conditions often increase costs.  

Most importantly, however, we must remember that there is a real added cost in terms of good will, human suffering, and patient harm from both overutilization and underutilization that may be hard to quantify, but is still very real. As key partners in the provision of healthcare, the laboratory team must help ensure that the view of the patient and their best interest is never obscured solely by financial considerations.

Improving the Pre-Analytic Phase

UM certainly means doing the right test at the right time, but it also means much more than that. Studies show that the largest portion of laboratory errors occur in the pre-analytic phase, before testing is actually performed. UM focuses primarily on reducing pre-analytic errors in test selection by making it easy to order the right test and hard to order the wrong one.

This can be accomplished in many different ways, using interventions that range from the very mild to the highly prescriptive, but first requires constructively engaging with the ordering providers. The most successful UM programs typically employ a combination of milder and more prescriptive interventions, while still preserving the right of the ordering provider to make the final decision about whether the test is to be run or not.

Ensuring that testing is always performed on the right patient is obviously also critically important and is no small task, as all labs struggle to some degree with patient and sample identification, mislabeling, and other patient identification mistakes. Besides patient identification errors, pre-analytic errors include things like failing to collect the right type or quantity of sample in the right container, failing to properly transport or store the sample, and a host of other things. There are countless ways in which things can go wrong before the sample ever reaches the lab.

Aligning with a reference laboratory partner that can support UM efforts will lead to far greater success in reducing pre-analytical errors and adding value to the test selection and ordering process.

Homing in on Errors Occurring During Post-Analytics

The next largest portion of laboratory errors occurs in the post-analytic or reporting phase. A reliable, well-formatted direct computer interface  saves labor required for result transcription and results delivery, and reduces mistakes from transcription errors, misinterpretation of results, and lost reports. An actively engaged reference laboratory partner that can make such an interface readily available and easy to install will make a huge difference in improving performance and efficiency, and minimizing mistakes in the post-analytic phase.

In most labs, the analytic phase of lab testing is highly reliable, and testing errors are relatively rare. Still, the best labs continue to place emphasis on continuous improvement and error reduction through establishing and maintaining good laboratory testing practices, engaging their staff to assist in these efforts, and staying well ahead of changes in regulations. ARUP places significant attention and commits many resources towards this phase through CAP and FDA accreditation readiness, and, most recently, our ISO 15189 certification.

In summary, the greatest value from a UM program comes from a comprehensive approach that addresses both overutilization and underutilization, and pays special attention to processes and interventions in the pre-analytic phase. While many UM tools may be employed, the first step is to prepare the environment by engaging providers in a collegial and supportive manner, which will help establish and maintain relationships of trust, and allow the laboratory to become an expert resource for test selection and interpretation. Implementing UM interventions will then be supported rather than resisted, and success will be much more likely.

ARUP Laboratories Consultative Services Department is well-positioned to offer such help and engage with our clients in this effort, with a team of staff who collectively hold decades of relevant experience in real-world clinical settings, and who have already successfully completed numerous UM and operational improvement projects. When UM is implemented, executed, and supported properly, it becomes a triple win for the patient, the provider, and the client.

By Robert Carpenter, Senior Consultant, ARUP Consultative Services