Lab Soft News

Decrease in Healthcare Costs May Persist as Economy Revives

One of the biggest challenges facing our economy is the cost of healthcare which has been rising for years as a percentage of GDP. Recently, however, health spending has been decreasing. There has been much speculation as to whether this slowdown is transient or lasting. A recent article addressed this topic (see: Slowdown in Health Costs’ Rise May Last as Economy Revives). Below is an excerpt from it:

One of the economic mysteries of the last few years has been the bigger-than-expected slowdown in health spending, a trend that promises to bolster wages and help close the wide federal deficit over the long term — but only if it persists. Major new studies...have concurred that at least some of the slowdown is unrelated to the recession, and might persist as the economy recovers. David M. Cutler...estimates that, given the dynamics of the slowdown, economists might be overestimating public health spending over the next decade by as much as $770 billion. Between 2009 and 2011, total health spending grew at the lowest annual pace in the last five decades, at just 3.9 percent a year, although rising out-of-pocket costs have hit millions of families. In contrast, between 2000 and 2007, those annual growth figures ranged between 6.2 and 9.7 percent, according to government figures. Data from the Altarum Institute... suggests that the low pace of growth has continued through 2012 and early 2013.

The studies...shed new light on the precise mix of factors that have led to the flattening-out. Economists concur that the deep recession and sluggish recovery are the main reasons for slowing growth in spending. During the recession, millions of Americans lost their jobs, and thus their insurance coverage; millions more struggling families were reluctant to see a physician or undergo a procedure. But the slowdown in health costs proved steeper than forecast. It also occurred in populations whose health spending was mostly sheltered from the economic gyrations, like Medicare patients. That led economists to surmise that other factors were at play. In new research, the Kaiser Family Foundation estimated that the recession accounted for about three-quarters of the lower spending trajectory, with the rest attributed to other factors not directly related to the economy....

Among other factors [contributing to the decline], the studies found that rising out-of-pocket payments had played a major role in the decline. The proportion of workers with employer-sponsored health insurance enrolled in a plan that required a deductible climbed to about three-quarters in 2012 from about half in 2006...Moreover, those deductibles — the amount a person needs to pay before insurance steps in to cover claims — have risen sharply. That exposes workers to a larger share of their own health costs, and generally forces them to spend less.

For many years, there has been speculation that exposing healthcare consumers to the true cost of care will cause them to be smarter shoppers. Here's the key quote for me from the article above: [Rising insurance deductibles] exposes workers to a larger share of their own health costs, and generally forces them to spend less. If demand for services continues to decline, providers, exposed to more competitive pressures, will theoretically begin to lower their prices for services. All of this is going to hurt healthcare consumers in the U.S. who are generally used to a high quality and abundant services and will squeal when their choices become more limited. However and as noted above, the cost of healthcare in the country is not sustainable in the long run. Here's another article on this same topic: Brakes on U.S. health spending go beyond the recession -studies.

Does Genomic Health Have Another Winner with Oncotype DX Prostate Cancer Test?

Oncotype DX definitely produced a winner with its Breast Cancer Assay. Here are the results of the test according to the company web site:

• 33% [of tested patients] switched from chemotherapy + hormone therapy to hormone therapy alone based on a low Recurrence Score result
• 4% [of tested patients] switched from hormonal therapy only to chemotherapy + hormonal therapy based on a high Recurrence Score result

The company is now introducing a new assay for assessing the risk of biopsied prostate cancer (see: New Test Improves Assessment of Prostate Cancer Risk, Study Says). Here's an excerpt from a recent article discussing this new test:

A new test can help distinguish aggressive prostate cancer from less threatening ones, potentially saving many men from unneeded operations for tumors that would never hurt them, researchers are reporting....Results of a study assessing the test’s performance will be presented...at the annual meeting of the American Urological Association in San Diego....Still, some experts said it was too early to assess how accurate the test [developed by Genomic Health] really was and whether it would make a difference in men’s decisions. Insurers are going to want to know that before deciding to pay for the test...at a list price of $3,820....The new test, which is called the Oncotype DX Prostate Cancer Test, is one of more than a dozen coming to market that use advanced genetic methods to help better manage prostate cancer....[Genomic Health] already sells a similar test for breast cancer, also Oncotype DX, that is widely used to help women decide whether they can forgo chemotherapy after their tumor is surgically removed....

The test looks at the activity level of 17 genes in the biopsy sample and computes a score from 0 to 100 showing the risk that cancer is aggressive.To see how well the test worked, testing was performed on archived biopsy samples from 412 patients who had what was considered low or intermediate-risk cancer but then underwent surgery. In many such cases, the tumor, which can be closely studied after it is surgically removed, turns out to be more aggressive than thought based on the biopsy, which looks at only a tiny sample of the tumor.The researchers found that the Oncotype test predicted such unfavorable pathology more accurately than existing methods, which depend mainly on the Gleason score based on how the biopsy sample looks under the microscope. Genomic Health said that 26 percent of the samples were classified as very low risk by its test, compared to only 5 to 10 percent for the existing methods. In some cases, however, the new test showed the cancer to be more aggressive than the existing methods.

We'll see how all of this works out. The company certainly has momentum and experience on its side with its earlier breast cancer test. These two tests represent the first generation of tests for determining the genetic fingerprints of tumors deemed malignant by pathologists but which may act in varying ways clinically. There will be more of such tests in the future, each of which should be more accurate as the experience increases. The list price for the prostate cancer test is stiff but certainly worth it for the lucky patients who may be able to avoid the more aggressive surgery and chemotherapy regimens.

PAML Invests in CellNetix, a Provider of Esoteric AP Services

PAML has invested in CellNetix, an esoteric anatomic pathology esoteric lab (see: Esoteric Anatomic Pathology Testing Is Goal of New Pact between PAML and CellNetix). Here are more details from this note in the Dark Daily:

[The] agreement calls for both parties to collaborate in offering esoteric and reference anatomic pathology services nationally. It is an effort to align their clinical laboratory and anatomic pathology services to the evolving needs of hospitals, physicians and other providers....The two companies ...stated that they entered into an agreement to work together to form a “jointly owned national Esoteric Anatomic Pathology reference laboratory offering." For anatomic pathologists across the nation, this new agreement is notable. Independent pathology laboratory companies and private pathology group practices are dealing with a series of serious hammer blows to reimbursement for key anatomic pathology procedures that have happened over the past 18 months. Facing significant declines to important sources of revenue, these pathology organizations are looking for effective business strategies they can use to sustain financial viability. As a response to the deterioration in reimbursement for anatomic pathology testing services, many experts predict that there will be a wave of acquisitions, mergers, and consolidation among anatomic pathology organizations. 

Here is a description of the services offered by CellNetix copied from the company web site:

CellNetix is the largest and most comprehensive AP provider in the Pacific NW. Services include cytology, histology, fine needle aspiration (FNA) services, flow cytometry, immunohistochemistry, immunofluorescence, UroVysion, and molecular diagnostics. In our subspecialized case allocation process, cases arrive in the pathology laboratory and staff allocate these by subspecialty; breast cases to breast pathologists, gastroenterology (GI) cases to GI pathologists, genitourinary cases (GU) cases to GU pathologists...

PAML is owned by two health care systems: Providence Health & Services and Catholic Health Initiatives. CellNetix is a privately held laboratory that provides clinical and anatomic pathology services in Washington, Idaho, Oregon and Alaska (see: CellNetix to partner with Spokane's PAML laboratory).

Robert Michel of the Dark Daily is right on target with his observation: As a response to the deterioration in reimbursement for anatomic pathology testing services, many experts predict that there will be a wave of acquisitions, mergers, and consolidation among anatomic pathology organizations. It's logical for surgical pathology reference labs to seek to improve their bottom lines by acquiring labs performing tests such as flow cytometry, immunohistochemistry, immunofluorescence, and molecular diagnostics.

UPenn Medical School Establishes Biomedical Informatics Institute

Medical schools are getting much more interested in developing more expertise in the field of bioinformatics. Here's an excerpt from an article about the development of a new bioinformatics center at the UPenn School of Medicine (see: Big data gets a home at University of Pennsylvania’s medical school):

University of Pennsylvania’s Perelman School of Medicine in Philadelphia has established a dedicated center for biomedical informatics, underscoring the expansion of big data from drug development to population health. The Institute for Biomedical Informatics will focus on improving patient care and the research that goes into personalized medicine, according to a statement from Penn Medicine....The institute will work in partnership with Children’s Hospital of Philadelphia and some schools at the university including the school of engineering and applied sciences, nursing and as well as veterinary medicine....[The] three associate directors [of the institute] are seasoned experts in one or more of the five domains of biomedical informatics: translational bioinformatics, clinical research informatics, clinical informatics, consumer health informatics and public health informatics.....[One of the directors] said some emerging areas of interest within biomedical informatics are personalized medicine, where diagnosis and treatment is linked to the patient’s genome; social and behavioral medicine, with a focus on reducing health disparities through improving access to quality health information; and telemedicine, where the functionality of healthcare practitioners is extended beyond the traditional clinic or hospital.

According to the article, the new institute will work with a very broad charter in five IT domains: (1) translational bioinformatics; (2) clinical research informatics; (3) clinical informatics (4) consumer health informatics; and (5) public health informatics. In a sense, the reference to translational bioinformatics is redundant. Translational bioinformatics forms a bridge between clinical research and clinical informatics. By stating that these latter two fields will be addressed, the translational component can probably be assumed. The reference to "big data" in the article headline adds little to the narrative -- the term "big data" has rapidly become a cliche.

For me, the most important terms in this article are "personalized medicine" and "drug development." These areas are where the major payoff will come for biomedical informatics institutes at UPenn and elsewhere. These two areas of interest are tightly linked. Genomic analysis of patients and their malignancies is now yielding new and more effective therapy choices. Precision/personalized medicine these days is all about cancer diagnosis and treatment (see: Bespoke (i.e, Customized) Cancer Treatment; Cancer "Cures" and the Media).

Unstated in the article, but extremely important for these bioinformatics centers, is the role that they will play in the development of the new clinical information systems and software that are required for the storage and analysis of the cancer genomic data and drug selection. There are currently no robust clinical "omics" systems for this purpose. The urgent need for them was described in a previous note (see: Hospital EHRs Inadequate for Big Data; Need for Specialized -Omics Systems).

Research that Transfusion of "Older" Blood May Be Harmful to Patients

There was a time when I, in a previous incarnation as a blood banker, spent a lot of time thinking about the shelf life of blood and how to increase the utilization of blood in blood bank inventory. Hence, a recent article about this topic caught my eye, partly out of a sense of nostalgia (see: The Shelf Life of Donor Blood). Here is an excerpt from it:

For decades, the Food and Drug Administration has limited storage of refrigerated red blood cells to 42 days. But it has been clear for some time that stored blood degrades in various ways long before that six-week limit, and some research suggests that the changes may be harmful to patients who receive older blood. Now a study published in the journal Anesthesia & Analgesia has found that after even 21 days, the membranes of stored blood cells have stiffened, apparently the result of damage over time. That’s a problem because red blood cells are about the same diameter as small capillaries, and they have to change shape to get through.....“What we showed is that the cell membranes lose their flexibility,” said the lead author, Dr. Steven M. Frank....“That makes it more difficult for them to travel through.” The study also found that the older blood cells did not recover their flexibility after being transfused into patients, unlike certain other kinds of changes that blood cells undergo during storage. For example, nitric oxide, essential to keep blood vessels open, is depleted from cells after a few hours of storage, but is restored rapidly after transfusion. Still, researchers do not fully understand the importance of such findings to clinical practice. Even permanent changes in cell structure may not matter, according to [another expert]. “You constantly have blood cells that are getting old in your body, and they’re filtered out,” he said. “It may be that that same system harmlessly filters out these structurally abnormal blood cells.” Two large randomized clinical trials have been undertaken to clear up some of the uncertainties about stored red blood cells.....Dr. Richard J. Benjamin, chief medical officer at the Red Cross, said the two trials would provide important information. If older blood turns out to be less effective, he said, “there are a couple of ways we can respond.” “There are already better storage solutions in development that show drastically improved biochemistry parameters,” he said. “Is the next step to restrict the age of blood for vulnerable populations? ....” As the system works now, the newest blood goes to hospitals that do transfusions infrequently. This gives them time to store the blood safely until it is needed. But it leaves hospitals that use the most blood — trauma hospitals and academic medical centers — with the older blood. 

Some highly esteemed hospitals now hold the view that most blood transfusions should be avoided. In short, they view blood transfusion with a jaundiced eye (see: Avoiding Blood Transfusion as a Hospital Quality and Cost-Savings Measure; The Value of a Restrictive Blood Transfusion Strategy for Hospitalized Patients). These hospitals are establishing policies to discourage transfusions on the basis of both cost and quality concerns. Such policies extend beyond the risk of transmitting infectious disease with the blood. I personally don't think that there will be a rapid drop in demand for blood regardless of the results of the two randomized clinical trials referred to in the excerpt above. It's often hard to get older physicians to accept new policies. Rather, I suspect that demand for blood may gradually level off and perhaps even go down slightly in the near future as these anti-transfusion policies extend beyond the few places where they have been already implemented.