Demonstrating Value as Payment Models Shift

Using real-time analytics in the laboratory to support appropriate test utilization.

ASCP defined the goal for the Choosing Wisely Campaign as, “Right Test, Right Patient, Right Time, Right Cost.” There are two challenges in achieving this goal: overutilization and underutilization of testing. Both are pervasive problems in healthcare, and both have serious implications for patient care and financial performance.

Overutilization of Testing

The consequences of unnecessary testing for patient care include iatrogenic anemia, time spent on insignificant abnormal results, incorrect diagnosis and longer length of stay.

There are various strategies that are employed to reduce overutilization of testing. These include requisition redesign, hard and soft stops in the CPOE, test formularies, education and audits. No one strategy is sufficient, and an auditing capability plays a critical role. With the data from a real-time analytics system, laboratory managers will know the most important areas of unnecessary testing so rules can be developed for the EMR providing soft stop guidance to physicians. In the case of expensive genetics testing, users can block a test and have it referred to a specialized genetics counselor for approval.

A real-time analytics system, such as Visiun’s Performance Insight, identifies common categories of unnecessary testing. These common categories range from screening, reflexing and normalcy, such as ordering an FT4 when the TSH is normal; redundant testing, such as troponin and CKMBs ordered together; and excessive frequency of repeat testing (for example, HgbA1c should not be ordered more than once every 21 days).

An analytics system can present a given laboratory’s data in a way that easily identifies these categories of unnecessary testing so that laboratory management can identify where the greatest areas of opportunity resides. From this, laboratory management can identify benchmarks based on tests per inpatient admission, length of stay and length of stay versus tests per admission.

Using this data and benchmarks, laboratories can develop strategies and implement an ongoing test utilization program. Measures can be taken to limit obsolete tests, limit esoteric tests and minimize bundles of tests. Medical directors can work with clinicians to develop test formularies to manage test utilization-as specialists can order from a menu of more expensive, esoteric tests, while general physicians can order from a menu of more common tests. Thus, data from an analytics system can be used as a tool to educate physicians.

Physician report cards provide clear actionable insights on unnecessary testing patterns, identifying areas of opportunities within minutes of going live. These report cards identify heavy test users, outliers and can be used in peer reviews. Laboratories can use these report cards as education and training tools to empower physicians to follow better test ordering practices.


An Opportunity to Improve Financial Performance

As payment models shift in an environment of decreasing reimbursements, test utilization represents one of the greatest opportunities for laboratories to improve financial performance while enhancing patient care. One of the few remaining methods to address this reimbursement decrease is to implement an effective program to improve test utilization. With both medical and financial reasons to focus efforts on test utilization, it is no surprise that an effective test utilization program is a win-win-with better patient outcomes and improved financials.

Yet Visiun’s analysis shows that every one of the dozens of laboratories evaluated still has a huge opportunity in this area. The development and implementation of best practice protocols requires both analytics and medical expertise. While data is available, complex guidelines require robust analytics to evaluate this data. Real-time dashboards play a key role in improving laboratory test utilization.

A real-time analytics system identifies the biggest opportunities to improve lab test utilization, allowing laboratories to focus their efforts and resulting in a tremendous opportunity to improve patient care and the bottom line in hospitals and health systems of all sizes.


Laboratories are increasingly seeing a large amount of overutilization on the inpatient side that is fixed, and as a result, they are not reimbursed for those unnecessary tests. The degree to which laboratories can avoid unnecessary testing will help the financial bottom line of the health system. On average, our studies have shown that amount to be two hundred and fifty thousand dollars per million inpatient billable tests. For a larger health system, that could equate to over a million dollars per year.

A typical range is $170,000-$250,000 per year for inpatient testing alone. Data shows findings scale up and down.

Underutilization of Testing

Underutilization can pose serious consequences to patient care, including morbidity due to missed or delayed diagnosis and longer lengths of stay. Legal liabilities can follow, as appropriate follow-up testing was not ordered.


Studies of closed malpractice claims have shown that cognitive factors account for 48-96% of delayed or missed diagnoses. Cognitive factors include mistakes in judgment, lack of knowledge and lapses in memory. The most common breakdown in the diagnostic process was failure to order the appropriate diagnostic test (55-58% of the cases). Finally, missed or delayed diagnoses resulted in serious harm to patients in 48-59% of the cases and death in 30-39%.

While there are various tactics for controlling unnecessary testing, auditing is the central strategy for addressing underutilization of testing. Without proper auditing, underutilization can go undetected and result in serious lawsuits for health systems. For example, dehydration may be associated in patients with elevated creatinine levels. With an auditing system in place, health systems can enforce standards that require tests on patients with elevated creatinines be repeated. While an elevated creatinine can be a sign of dehydration, it can also be an indicator of renal failure. Without an enforced rule for a repeat test, patients in renal failure may be discharged without proper treatment, resulting in missed or delayed diagnosis for the patient and subsequent malpractice claims for the health system.

Reimbursement changes are increasingly driving attention to the improvement of laboratory test utilization. No single approach is sufficient for managing test utilization, and the development and implementation of best practice protocols requires both analytical and medical expertise. The data is available, but complex guidelines require robust analytics to evaluate this wealth of information in seconds. A laboratory analytics system provides laboratories with the ability to access their data in seconds so that they can easily identify, develop and implement strategies to improve test utilization while also serving in an auditing capacity to ensure these strategies are meeting their intended outcomes.When successful approaches to managing test utilization are in place, the results speak for themselves and laboratories see a tremendous opportunity to improve the bottom line of health systems of all sizes.


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