Lab testing giant Quest Diagnostics has teamed up with healthcare data analysis company hc1 to try to prevent health systems from ordering too many or too few tests, the organizations announced Wednesday.

The Quest Lab Stewardship service aims to arm providers with the tools to order the right tests, retrieve results quickly, interpret them accurately and ensure reimbursement. The service integrates with the electronic medical record to guide doctors as they order test, creates a systemwide set of tests and analyzes utilization trends.

Although it only counts for 2% to 3% of the $3.5 trillion of total U.S. healthcare spending, lab testing is the most frequently used component, said David Freeman, general manager of information ventures at Quest.

“Given the volume of activity and how critical it is to clinical decisionmaking, it is vital to think about how to drive out variation across the enterprise,” he said.

Ideally, more accurate testing will improve outcomes and lower costs, Freeman said.

Health systems generally don’t have a handle on how much their lab testing varies across their network, said Brad Bostic, chairman and CEO of hc1.

“They usually have a multitude of test compendia in various hospitals that have been acquired and consolidated—to get to a standard one is almost impossible,” he said. “Our technology plugs in to the EMR and utilizes a very highly tuned proprietary machine-learning approach to understanding testing patterns from the highest level across the system to individual doctors and patients.”

Many hospitals and health systems have been focused on reducing clinical variation and synchronizing operations across their growing networks. But efforts are often impeded by a lack of accurate data, disparate information systems, defensive medicine and minimal buy-in from providers and administrators. Meanwhile, data companies, consultants and other stakeholders are all offering their own solution to a traditionally fragmented system.

Rand Corp. researchers estimate that low-value healthcare amounts to $910 billion per year, or 34% of total spending. Wasteful care costs providers time and money, leads to improper or harmful care, and leaves consumers with inflated bills. The latter, along with the proliferation of high-deductible health plans, have accelerated the conversation.

Still, like much of healthcare, legacy testing practices can be hard to change. High-cost, obsolete or unreimbursed tests often remain in order sets. Testing frequency may not be updated to the current best practices and minimal transparency can lead to duplicate orders.

On the front end, the Quest and hc1 service shows doctors the tests that the patient most likely needs based on customized parameters while making the lower-value or less-proven tests harder to order. It alerts physicians if tests are ordered twice and directs them to the results. The system also allows providers to explore order patterns throughout the system as well as for individual doctors.

Weeding out low-value tests and improving transparency will ultimately improve Quest’s relationship with providers, which will vastly outweigh any short-term losses from ordering fewer tests, said Freeman, adding that the base service is currently available at no charge to its reference lab customers.

“There are opportunities to drive out overutilization and underutilization, but it’s really about driving clinical value,” he said. “It is about giving the tools to clinical lab directors to help them figure out where the problems are and what they can do.”

Seattle Children’s Hospital has been drilling down on its genetic testing as part of its broader lab utilization stewardship program. Genetic testing on average across the industry is incorrectly ordered or executed about a third of the time, said Dr. Michael Lee Astion, medical director at the hospital’s department of laboratories.

Patient history may not match the disease, the test may have been previously ordered and buried in the EHR, the test names may have been jumbled or too many panels may have been ordered. To catch these snafus, Seattle Children’s has tasked a genetic test counselor to review each order, which has saved about $200 per case, amounting to several hundred thousand dollars per year, Astion said.

“These are big errors that can harm patients,” he said.

In addition to improper diagnoses that can lead to harmful care, genetic testing can also be financially draining. It is typically poorly reimbursed so there could be a $2,000 bill that insurers won’t cover, a patient is forced to pay for it out of pocket since his or her deductible is $3,000 and there isn’t any useful information, Astion said.

“This is the U.S.—there is an amount of over-ordering in everything,” he said. Underutilization is also an issue if someone doesn’t have the financial means, lives in a remote rural area or lacks health literacy, Astion added.

Hopefully, technology and related efforts will help the broader healthcare system improve, he said.

“The market forces are in place to move things in right direction on over- and underutilization,” Astion said.

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