The spiraling cost of laboratory tests (currently estimated at $60-70 billions/year) has been of major concern to healthcare administrators. A significant increase in testing costs is also anticipated as a consequence of the Affordable Care Act. Several cost- containment plans were initiated during the last decades but with limited success. Two solutions proposed for the cost-containment of the laboratory tests are: a) building of an informatics structure to support utilization management; b) organization of the physician education program starting from the residency level. We believe that this two-pronged effort shall contribute significantly towards controlling the sky- rocketing cost of laboratory tests.

1. Physician Tool for Laboratory Testing
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Kimberly Russell, MBA, SBB(ASCP), Diane Maennle, MD, Zia Uddin, PhD
Department of Pathology, St John Macomb-Oakland Hospital, Warren, MI
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Abstract
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The spiraling cost of laboratory tests (currently estimated at $60-70 billions/year) has
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been of major concern to healthcare administrators. A significant increase in testing
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costs is also anticipated as a consequence of the Affordable Care Act. Several cost-
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containment plans were initiated during the last decades but with limited success.
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Two solutions proposed for the cost-containment of the laboratory tests are: a)
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building of an informatics structure to support utilization management; b) organization
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of the physician education program starting from the residency level. We believe that
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this two-pronged effort shall contribute significantly towards controlling the sky-
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rocketing cost of laboratory tests.
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Keywords: Cost containment, laboratory testing, app software, laboratory
information system, cloud computing, physician education
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Introduction
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Presently, most of the physicians order laboratory tests almost without restriction for
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both in-patients and out-patients. Since the cost of esoteric tests has sky-rocketed, this
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practice has become a topic of conversation in many cost-containment forums. Fifty
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years ago there were approximately 100 commonly requested clinical and anatomic
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pathology tests. Today, the number has grown to >10,000 tests, primarily due to
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extensive research, especially in the molecular and genetic areas. It is estimated that
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the current $60-70 billion cost of laboratory tests in the USA shall grow 100% in the next
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5-6 years. Other factors affecting growth in laboratory testing are the Affordable Care
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Act and population increase.
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We have seen cost-containment directives evolve over the last decades that include
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Diagnosis Related Groups (DRG), education of physicians, practice standards (length-
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of-stay peer review), physician profiling, ordering frequency limits, computerized
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physician order entry (CPOE) system, clinical pathways and guidelines, managed care
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programs, e.g. Health Maintenance Organizations (HMO) and Accountable Care
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Organizations (ACO), order-entry pop-ups for authorization by the pathologist, etc. It is
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anticipated that future restrictions for test ordering will soon be imposed on physicians
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by both hospitals and insurance companies alike1-9.
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Two solutions for cost-containment are:
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a) Building of an informatics structure to support utilization management.
b) Organizing the physician education program starting from the residency level.
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Web sites provided a way for physicians and pathologists to efficiently search and
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select laboratory tests. We aimed to bring down the overall cost of the laboratory by
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only displaying the most effective information to the end users. Once a test is selected
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by the physician or pathologist, a pop-up appears on the screen and the cost of test
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plus the reimbursement schedule shall appear for the hospital, thus enabling the cost-
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containment. Depending upon the policy of the Medical Executive Committee of the
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hospital for a send-out laboratory test to a reference laboratory, a dollar barrier was
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specified (gatekeeper function) for the review and authorization by the medical director
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or the pathologist of the laboratory.
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Methods
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Database Organization:
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Test names, test codes, CPT codes and their respective turn-around times (TAT) were
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selected from the database of four local area hospitals in Michigan. These hospitals
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signed contracts with five reference laboratories for their send out testing. The cost of
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the testing performed by these reference laboratories was obtained from the signed
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contracts with the hospitals. The fictitious names of the laboratories (Laboratory 1-3)
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used in the database for legal reasons shall be replaced by their actual names, once the
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application program is instituted at their facility by the hospital laboratory. The payment
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schedule represents the dollar amount received by the hospital for a specific test either
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from the Blue Cross Blue Shield (BCBS) of Michigan or the Center for Medicare &
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Medicaid Services (CMS). The test is orderable by the physician without the prior
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consent of the medical director or the pathologist of the hospital laboratory if the cost of
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the test is < “Gatekeeper” value, e.g. $200.00. If the cost of the test is >$200.00, then
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the physician must contact the medical director or the pathologist of the hospital
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laboratory for his or her approval before ordering the test. This “Gatekeeper” value is
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determined by the Medical Executive Committee of the hospital and it may vary from
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one hospital to another. Since this database is a demonstration of the expected
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application of the computer program, we have for abbreviating reasons provided the
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cost and payment schedule of only 31 tests. In order to avoid inadvertent selection of an
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incorrect test by the physician, we have also provided the clinical use of each test.
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Additional information about the clinical use of the test (> 4400 tests in the database)
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can be obtained on real-time basis via a Google feature in the application program.
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Applications Software:
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We have developed two independent software applications for building of an informatics
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structure to support utilization management of laboratory tests ordering by the
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physicians.
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I. Native code computer programming
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Web site information:
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The www.lablinked.com was developed on LAMP stack (Linux, Apache, Mysql & PHP).
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We have used Phalcon PHP framework for writing PHP code. The web site front end
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was built on Twitter Bootstrap 2.0 framework. The database for the web site was hosted
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on Mysql. The web site was hosted on www.heroku.com. Heroku is a cloud IaaS
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(Infrastructure as a Service) company, and it provided easy means to deploy and
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maintain web based applications.
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Data storage and retrieval:
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On Heroku: The data was uploaded to Heroku using native Mysql client tools. Data was
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retrieved using PHP Mysql API's. A user name and password is required to upload or
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retrieve the data from the Heroku platform.
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On Parse: The data on parse was uploaded using functionality provided by
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www.parse.com web site. The data retrieval was done by using IOS native data access
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API's. The authentication was done using public keyprivate key mechanism.
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Applications for PC and laptop:
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PC and laptop users can access the application by going to web site
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www.lablinked.com.
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Application for iPhone:
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Lablinked iPhone application was written in Objective C. The application was developed
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using XCODE 5.1 IDE (Integrated Development). The application was developed for
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platforms IOS 7.1 (IOS is a mobile operation system), which means that it can run on
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Apple 6 devices and earlier devices as well. We have used www.parse.com for
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backend services; this means that all the data storage; authentication services;
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notification services were using the Parse platform. Parse is a Baas (Backend as a
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Service) cloud computing technology. Parse provided an API to design loginsignup
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screens with relative ease. Lablinked used Parse API's for authentication; data access
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and data display.
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Application for iPad:
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Lablinked is a universal application which means it can be run on both iPhone and iPad
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devices.
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The iPhone and iPad apps have been approved (and are ready to use) by the Apple
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Computer, Inc. Cupertino, CA (App Apple ID: 913303499). The web site lablinked.com
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is also fully compatible with smart phones and tablets.
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Integration piece with Laboratory Information System (LIS) is under progress. API
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interface to LIS applications for integration shall be provided. It would be RESTful API;
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which means LIS can access the application via Internet. For data exchange JSON
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shall be used.
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Glossary of technical terms:
Mysql – Open source relational database management software
API - Application programming Interface
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6. Git - A source control repository
Heroku Toolbelt - Command line tools to execute Heroku API’s using shell or
command prompt
PHP - Server side programming language
RESTful API - A set of HTTP based service that helps to interact with any
application via Internet
JSON - Used for data exchange between various applications
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II. Web site based application software
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Web site information:
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The www.physicianlabtests.com was hosted on Godaddy. com. The web site has the
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following pages: About, Support, Contact Us and Search. The Search page is used to
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search various frequently used laboratory tests from a list of >4400 laboratory tests.
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The Search results page displays whether the lab is orderable or not, the cost of the lab
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test and the clinical significance of the lab test. In the Search page, the user can also
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contact/message for any questions. The search page also helps the user go to Google
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search page and provides the clinical information for the laboratory test. The web site
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was developed using the following technologies:
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Front End – HTML, Java and JQuery were used to develop the actual pages of the web
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site.
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Back End – The database was hosted using a file system such as XML.
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Data storage and retrieval:
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The data was stored in the cloud system at a central location so that it is easy for
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access and retrieval.
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Application for PC, laptop, iPhone, iPad, other smart phones and Android:
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7. Users having reliable internet connection can access the website using the
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www.physicianlabtests.com weblink.
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The web site Physicianlabtests.com was designed to provide hospital laboratories the
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workflow management features associated with high-end LIS. Physicianlabtests.com
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can accept lab orders from multiple order forms, a dedicated web portal or as HL7
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messages sent by a client.
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Illustration of search display for Galaxy 5:
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In Figures 1-7, we have presented the application of the software for both the
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"orderable" and "non orderable" tests.
Organization of Physician Education Program:
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The basic structure of medical education in America has not changed much over the
last century. The Institute of Medicine in its recent report10 recommended a study of
changes in the structure, content and the modalities of medical education. The Center
for Medicare and Medicaid Services allocates11 approximately $10 billion per year
towards graduate medical education (GME); however a negligible amount is spent to
utilize the evolving capabilities of the health information technology and the Internet in
the GME and continuing medical education (CME). We decided to implement CME via
Internet. Two lectures per year are scheduled at our hospital for the education of the
medical students and residents. Similar lectures shall be scheduled in future for the
practicing physicians.
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Results
A retrospective data analysis for a period of six months of the laboratory send-out tests
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by a 410 bed tertiary care hospital with an active residency program provided the
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following information:
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i) Total cost of all the send-out tests = $671,054.90
ii) Total cost of the send-out tests (when the cost of the each test was > $200.00, i.e.
the "gatekeeper value" utilized for cost containment) = $271,003.54
iii) Total cost of tests (when the send-out test results arrived in the LIS after the
discharge of the patient) = $137,918.13
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Discussion
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All the hospitals contrive to minimize the length-of-stay of the patient in the hospital in
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order to reduce the cost of doing business. However there is no mechanism to control
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the cost of the send-out laboratory tests, when the results arrive after the discharge of
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the patient. This means that the result of the send-out test has no relevance in the
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diagnosis of the disease or the treatment rendered by the physician. We recommend
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that regardless of the cost of the send-out test the physician must consider the TAT time
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of the test result before ordering. Why the hospital should pay when the send-out test
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has no use in the diagnosis or treatment process? This aspect of cost containment can
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be achieved by the education of the physicians starting from the residency level.
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We have no way to know the role of "gatekeeper value of > $200.00" in our
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retrospective data analysis. This question can only be answered after the institution of
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the app software in the LIS, as this involves consultation between the physician and the
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medical director or the pathologist of the laboratory prior to the ordering of the test by
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the physician .
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Conclusion
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The presentation of the “Physician Tool for Laboratory Testing” via the Internet and the
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lecturing programs shall implement a prudent utilization of the laboratory services and
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thus result in cost-containment. We recommend the inclusion of the TAT for all the
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send-out tests in the database of the LIS.
References
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1. http://www.captodayonline.com/sin-of-omissions-when-tests-fly-under-the-
radar-2/
2. http://www.captodayonline.com/taking-aim-at-overuse-daily-labs-high-cost-send-
outs/
3. http://www.captodayonline.com/powering-down-on-excessive-test-use/
4. http://www.captodayonline.com/test-utilization-a-united-front-against-
waste-71372/
5. http://www.captodayonline.com/how-labs-are-taming-test-utilization-6131/
6. Zhi M, Ding EL, Theisen-Toupal J, Whelan J, Arnaout R (2013) The Landscape of
Inappropriate Laboratory Testing: A 15-year Meta-Analysis. PLOS ONE
8(11):e78962. Dol:10.1371/journal.pone.0078962.
7. Ryan AM, Mushlin AI. The Affordable Care Act’s Payment Reforms and the future
of the hospitals. Ann Intern Med 2014; 160(10): 729-730.
8. May TA, Clancy M, Critchfield J, et al. Reducing Unnecessary inpatient laboratory
testing in a teaching hospital. Am J Clin Pathol 2006; 126: 200-206.
9. http://www.captodayonline.com/slashing-send-out-costs-with-lab-formularies/
10.Institute of Medicine, Committee on the Governance and Financing of Graduate
Medical Education. Graduate medical education that meets the nation’s health
needs. Washington, DC: National Academies Press, 2014.
11.Asch DA, Weinstein DF. Innovation in Medical Education. N Engl J Med 2014;
371(9): 794-795.
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Physician Tool for Laboratory Testing (PTLT)
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List of tests for which the following information is provided in the data base
for the applications software of PTLT.
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Clinical use
Cost of Tests for Laboratories 1-3
Approximate payment by Blue Cross Blue Shield of Michigan
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The "gatekeeper" value for orderable test is <= $200.00.
If the cost of the test is > $200.00, then the test is not orderable, and then
requires consultation with the pathologist/medical director of the laboratory.
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(1,3)-Beta-D-Glucan [Fungitell] orderable
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17-hydroxycorticosteroids, Urine orderable
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Acetylcholine Receptor Binding Antibody orderable
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Acetylcholine Receptor Blocking Antibody orderable
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Acetylcholine Receptor Modulating Antibody orderable
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Acute Lymphocytic Leukemia (ALL) Panel not orderable
by FISH, Adult
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Acyclovir, plasma orderable
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Acyclovir, Urine orderable
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ALK Gene Rearrangements in NSCLC by not orderable
FISH (anaplastic lymphoma receptor tyrosine
kinase; a protein coding gene)
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Baclofen, Quantitation, Fluid orderable
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Baclofen, Quantitation, Serum or plasma orderable
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Bladder Tumor Associated Antigen (human orderable
complement factor H related protein)
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11. Carbohydrate Deficient Transferrin for orderable
Alcohol Use
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Celiac Disease (HLA-DQA1*05, HLA- not orderable
DQB1*02, and HLA-DQB1*03-02) Genotyping
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Chromosome FISH, Prenatal not orderable
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Cystatin C, Serum orderable
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D-Dimer, Quantitative, Serum orderable
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EGFR Gene Amplification by FISH not orderable
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Endomysial Antibody, IgG orderable
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Factor XIII, Activity orderable
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Galactose-1-Phosphate Uridyltransferase orderable
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Hemoglobin F, Quantitative, HPLC orderable
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Hemoglobin, Unstable orderable
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Hepatitis B Virus DNA Quantitative, Real-Time orderable
PCR
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Hepatitis C Virus RNA Quantitative, Real-Time orderable
PCR
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Her-2/neu, Quantitative, ELISA (Mayo) not orderable
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Interleukin 2 orderable
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JAK2 EXON 12 Mutation Analysis by PCR not orderable
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Kell Antigen Typing-Patient orderable
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Kleihauer-Betke Stain for Fetal Hemoglobin orderable
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KRAS Mutation Detection orderable
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Leukocyte Alkaline Phosphate orderable
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Lung Cancer Assessment and Early Detection orderable
(Early CDT)
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Methylmalonic Acid (MMA) Quantitative, Urine orderable
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Operating with the WWW.physicianlabtests.com
The following steps are applicable to:
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a) iPhone, b) iPad, c) Galaxy 5, d) PC, e) Laptop
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1. Open safari web browser.
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2. In the web site address bar, type www.physicianlabtests.com
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3. Once on the web site, notice the following on the toolbar:
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Home Search About Support Contact
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4. Click on "Search" This opens the search page with options to follow:
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5. Enter the test name in the block. If similarly named tests are included in the
database, those names shall also appear on screen, e.g.
Acyclovir, Zovirax, Serum or Plasma
Acyclovir, Zovirax, Urine
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Note: The clinical significance of each tests is also displayed under its name.
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Select the test that is desired and then click on it.
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The following results shall be displayed on the screen:
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Test name
Clinical use of the test
Cost
Lab Name
TAT (turn around time)
Catalog number
If orderable in green color.
If not orderable in red color.
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The test is orderable if the cost is <= $200.00. If the cost is >$200.00 the test is
not orderable by the physician and in this case the physician should consult the
pathologist / medical director of the laboratory for his or her authorization.
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6. Click on the highlighted hyperlink to go to Google Search Results screen, that
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13. displays the search results for the test.
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