During Becker’s Spring 2024 Payer Issues Roundtable, Labcorp’s Cameron Thomason, vice president for acute care services, hospitals and health systems, and Andrew Wirsul, vice president for payer solutions, moderated a discussion among a diverse group of payer executives about the evolution of lab services. The key themes that emerged are summarized below.
1.) The challenge of rising healthcare costs
As healthcare costs in the U.S. continue to grow at an alarming rate, so too are health insurance premiums. Between 2018 and 2023, the average premium for family coverage increased by 22%—higher than the rate of inflation. Payer organizations, acutely aware of the financial strain impacting employers and individual members, are searching for ways to tame costs.
While labs only contribute to 3% of healthcare costs, they generate 70% of the data used in clinical decision-making and can play an important role in addressing the pervasive cost challenges, such as early detection, screening and cost-effective diagnosis. By improving access to high-quality, cost-effective specialty testing, innovative lab service companies can help payers and providers rein in testing costs.
2.) Shifting the site of service can unlock economic savings
For commercially insured populations, testing costs can vary significantly based on the site of service and the provider referring a patient for testing. For example, costs for routine tests performed in a hospital outpatient setting can be two to six times higher than tests performed at a physician’s office or at an independent lab network, such as Labcorp.
Because providers are the primary decision-makers when it comes to lab ordering, past initiatives have had limited impact on redirecting costs. Several roundtable participants shared how their health plan’s attempts to steer members to lower-cost sites also depended on provider discretion.