Part 3: Technology innovation and value

Roundtable moderated by Steve Halasey

The clinical laboratory community has long recognized the need to provide payers and policymakers with a clear understanding of the value of diagnostic testing. But moving that task from the ‘to do’ to the ‘done’ column has proven to be more difficult than those outside the community could ever imagine, and experts acknowledge that the need to demonstrate the value of diagnostics is as strong today as it ever was.

To find out more about how their makers and users view the value of diagnostics—and how changing views are affecting the adoption and use of such tests—CLP recently spoke with a number of experts in the field (see sidebar, Roundtable Participants). Below is the third portion of the resulting conversation, in which the participants consider the contribution of advancing technology to increased value for clinical diagnostics.

Visit the CLP Web site to access Part 1 and Part 2 of this roundtable.

CLP: Franz, from the perspective of a large company like Siemens, what aspects of technology innovation do you see as drivers of value?           

Franz Walt, MBA, Siemens Healthcare.

Franz Walt, MBA, Siemens Healthcare.

Franz Walt, MBA: Overall, the IVD industry is challenged when it comes to conducting health economic analyses in order to get paid for introducing innovative products. Pharmaceutical companies have an opportunity, during the clinical trials phase of development, to establish the clinical value and health economic benefits of their product, and to argue for the right price when they launch the product. But when an IVD company takes a product to market, it is either handed a categorical reimbursement price that is already established, or, if the product is an innovation, it has to wait until after product launch to make a case for correct pricing.

As an example, Siemens has introduced an enhanced liver fibrosis test (ELF), which has the clinical advantage of reducing the need for unnecessary, invasive liver biopsies. But only after the test had been launched was it possible to establish evidence to support its adoption and use, because the total market potential of a test places strict limits on the amount of funding that can be justified for conducting the corresponding studies. So that’s just a little bit of the dilemma that IVD manufacturers face.

In the realm of central laboratory optimization, on the other hand, we have some very good case studies and white papers that demonstrate significant performance improvements. At NHS Tayside, for instance, such a project increased the peak load of tubes per hour by 43%, the number of tubes per day by 18%, the number of tests per year by 23%, and so on.

But our value proposition is not intended to rely on such isolated data points; instead it emphasizes the value of total system optimization, and seeks to get the right level of pricing for the total workload. And it’s this message that we want to convey to our primary partners, the laboratory decisionmakers.

Robert D. Jenison: Analysis of diagnostic products from a financial perspective isn’t a mature field yet. There is growing willingness to adopt new diagnostics that have high upfront costs but a real positive impact on a patient’s overall treatment costs. That willingness is being driven by published outcomes studies, whitepapers, and other articles that enable clinicians to see the value of particular tests. As those studies increase in quantity and quality we’re seeing greater acceptance of new tests, but there are still challenges.

While these outcomes studies mostly relate to individual products, healthcare systems are becoming able to view all diagnostic products from the same perspective, and this is helping them to get a better, more intuitive understanding of the value of the testing.

Peter Koerte, SIemens Healthcare.

Peter Koerte, PhD, Siemens Healthcare.

Peter Koerte, PhD: Technology enabled the growth of point-of-care testing in the first place. Today, we see that the technology is advancing to bring about much more decentralized testing, which means that connectivity is also a big trend, because all of those test results need to go into patients’ electronic medical records (EMRs). And by the way, since all those test results are now being recorded, providers have a much richer body of evidence to draw from, and this is certainly a driver of the outcomes studies that were mentioned earlier. So connectivity is a big trend.

Another trend is that devices are becoming smaller while also gaining new capabilities. In the past, for instance, each instrument would have been used to test for a single analyte, like a glucose meter. But today physicians are looking for platforms, where they can run multiple tests on the same instrument. Of course, that increases the instrument’s ease of use.

A third trend that I find interesting, is the fact that nurses and physicians are resistant to taking on roles that they associate with lab technicians, especially since they are not paid to run laboratory tests. The only way we can overcome this is by taking lessons from the consumer electronics industry, and making instruments extremely intuitive, very easy to use, and essentially foolproof. Observing this lesson is important for companies seeking to place instruments in patient care settings, so that existing staff can use the instruments with very little or no training. So these are the three trends I see: connectivity, increased ease of use, and miniaturization of platforms with more testing capabilities. 

Chris Bird, DPhil: Time to result remains a major driver of advanced technologies. Some central laboratory tests are just not ordered today, and they aren’t even on the lab’s menu, because technology issues prevent the lab from providing results fast enough. So if a point-of-care technology exists that can be run by physicians or nurses, rather than by trained laboratory staff, that can sometimes provide access to information that wasn’t previously available.

Another need driving advances is being able to access patient information and test data. As connectivity enables patients to become more informed, they will also become more accountable for their own health. And through connectivity technologies, patients can also start to see the value of diagnostics. That perception by the user also increases patient satisfaction.

The scarcity of lab technicians is also a driving force, giving rise to an increasing number of CLIA-waived tests. Sometimes the obstacle to having a test performed is simply not having the appropriate staff available. The more that new tests and advanced technologies can overcome that hurdle, the more likely it is that patients will be given the right tests at the right times. I see a lot of opportunities for new technologies to add to the value of diagnostics.           

Daniella Cramp: New technologies that can provide better clinical performance (improved sensitivity and specificity, for instance) or operational efficiencies (such as reduced time to result) provide value to the healthcare system by improving outcomes and driving out costs. Enabling data connectivity from diagnostic devices to healthcare IT systems, for example, allows for greater visibility and real-time communication of test results to stakeholders across multiple settings.

Patrick R. Murray, PhD: In order to add value, a new test or technology must satisfy a need. For example, a new test might offer better analytical and clinical performance, reduced time to result, or improved laboratory workflow. Ideally, new tests should help to improve patient outcomes as well as reducing overall lab and hospital costs.

CLP: In terms of overall value, how important do you consider diagnostic advances that lower overall healthcare costs, simplify testing, reduce turnaround time, or make tests available in resource-limited settings?           

Brian R. Jackson, MD, MS, ARUP Laboratories.

Brian R. Jackson, MD, MS, ARUP Laboratories.

Brian R. Jackson, MD, MS: The simple answer is ‘yes’ to all of the above. Labs want to have all of the benefits you mentioned, and more. The more-nuanced answer is that I hope the move toward bundled and value-based payments will lead to greater appreciation of these benefits, and therefore greater willingness of the healthcare system to embrace the new technologies that make them possible.

The problem with the current marketplace is that those who are empowered to determine whether a healthcare system will adopt a new test—a group that is largely made up of physicians—tend to adopt tests that enable them to make more money, rather than adopting tests that would reduce costs to the system. A good example of this is advanced diagnostics that would reduce the number of biopsies required for various conditions. Good research has been done in the areas of testing for liver fibrosis and cardiac transplant rejection, for example, making it possible to perform fewer liver and cardiac biopsies. But those advanced diagnostic technologies have not been embraced as replacements for invasive procedures as rapidly as they should have been, because doctors get to charge for invasive procedures and don’t want to see their reimbursement go down.

So, in order for the healthcare system to embrace the shift toward diagnostic technology advances that can reduce healthcare costs, we’ll need to adopt bundled payment systems and stop doctors from getting paid for doing more procedures. Only then will they appreciate the real value of the advanced alternatives.

Koerte: Technology advances always need to be assessed with reference to the provider’s quality metrics; that’s the journey that our healthcare system has set out to follow. To find the best outcome for a diagnostic advance, there needs to be a very tight integration between the manufacturer of a test, the physician who orders the test, and the laboratorian who actually runs the test.

An example of how the quality discussion is driving the selection and adoption of diagnostics can be seen in the way that point-of-care devices are used in emergency departments (EDs). When an ED has measured its quality of care and its door-to-door turnaround times, that’s when point-of-care specialists can help. The best example is the case of acute myocardial infarction (AMI), for which point-of-care testing offers tremendous value.

But to understand that value, one always has to start with the outcome, and then work backward to look at how the point-of-care test or device helped to bring about that outcome. Very often, what we find is that the devices are being used, but no one has assessed whether they are really contributing to improved outcomes.

Daniella Cramp, Alere.

Daniella Cramp, Alere.

Cramp: In an environment in which the Patient Protection and Affordable Care Act (PPACA) and the Centers for Medicare and Medicaid Services (CMS) are mandating new value-based measures, healthcare organizations are finding it necessary to implement testing procedures that help reduce readmissions and increase productivity throughout their diagnostic networks. The ability of a diagnostic test to improve operational efficiencies, reduce time to diagnosis, and rapidly get patients on the path to appropriate care have become important means for achieving those goals.

Faster test results greatly benefit emergency departments (EDs), operating rooms, and intensive care units (ICUs), where critical decisions need to be made quickly.4 In EDs, the rapid turnaround time of POC testing, for example, may improve the timely delivery of quality patient care by offsetting some of the negative effects of overcrowding.5 In fact, a randomized, controlled study of POC testing versus standard testing for the measurement of B-type natriuretic peptide levels among patients presenting to the ED with heart failure found that POC testing was associated with a significant decrease in the rates of hospitalization and admission to ICUs, reduced length of stay (8 days versus 11 days), and lower costs.6

The speed of test results is also operationally important in outpatient settings. Earlier treatment decisions can help avoid unnecessary follow-up visits and reduce the drain on resources.4 This is particularly helpful in resource-limited geographies where it is difficult for patients to return to their healthcare providers for follow-up visits.

Patrick R. Murray, PhD, BD Life Sciences.

Patrick R. Murray, PhD, BD Life Sciences.

Murray: Diagnostic advances that lower overall healthcare costs, simplify testing, or reduce turnaround times all contribute to the overall value of diagnostics. However, the primary value is realized when a diagnostic addresses or satisfies a need.

If a particular test is already inexpensive, for instance, a cheaper version of the same test may offer only marginal additional value. If a test is designed for a resource-limited setting where it isn’t needed (which can sometimes be a problem with market development rather than a problem with the test or its design), the availability of the test will be of limited value. Ultimately, tests must be valuable for patient management—and valuable to the degree that test results will influence management decisions and not simply confirm clinical impressions.

Overall, the value of a diagnostic test is measured by its impact on the management of patients and patient-care outcomes, which is influenced by both its analytical performance and time to produce actionable results. Point-of-care tests for instance, avoid the inherent delays associated with transporting specimens to a remote centralized lab. Similarly, innovations in assay technologies, such as digital immunoassays, have improved the accuracy and workflow of diagnostics. In the case of detecting influenza, for instance, the BD Veritor flu A&B test provides an objective, digital result, is CLIA-waived, and returns results in less than 11 minutes.

CLP: On a global scale, what are the most pressing healthcare issues that require diagnostics to play a central role? 

Robert Jenison, Great Basin Scientific.

Robert Jenison, Great Basin Scientific.

Jenison: In the developing world, there’s a lot of unnecessary morbidity and mortality associated with highly treatable infectious disease pathogens. Tuberculosis (TB)—and particularly drug-resistant TB—remains near the top of that list. There are about 10 million cases of TB diagnosed every year, and they are nearly all located somewhere in the developing world. Between 5% and 50% of those TB infections are of a drug-resistant variety.

Treating TB—and even drug-resistant TB—is actually a fairly straightforward process. So the problem today lies less with the therapeutic regimens than with the diagnostics that are currently in use, many of which are very slow and have very poor accuracy. In the absence of good diagnostics, patients are not being treated quickly and appropriately, and this leads to increased morbidity in a way that is relatively straightforward to understand.

Perhaps less intuitively, that same failure leads to another problem, which is that undiagnosed patients may transmit the disease to family members—even while awaiting the results of testing that has already been performed. Until recently, the state of the art was a several-day test that only had 60% clinical sensitivity. So coming in with diagnostics that are faster and more accurate is an important step.

But TB is often contracted by people living in very rural, resource-poor communities, so the next step has to be about getting test results nearer to the patient. In the developing world, TB and malaria are both good examples of this need.

Walt: One clear trend is the increasing affluence of emerging markets. As a global IVD company, Siemens is working to meet the needs of emerging markets, which are growing exponentially. Another trend is the aging of populations. There are some projections indicating that the number of people more than 60 years of age will reach two billion by 2050. That’s an increase of 2.6x over the corresponding number from 2010. And along with these trends come other important healthcare challenges: the growth of emerging markets drives increases in the rates of infectious diseases, while aging populations give rise to corresponding increases in comorbidities and chronic diseases. Taken together, increases in aging populations, chronic disease, and infectious disease represent a huge healthcare challenge.

Across the globe, we are also witnessing tremendous cost pressures. In 2014, for instance, certain areas of China reduced their reimbursement rates between 20% and 30%. And in mature markets, there are not enough qualified laboratory practitioners: 76% percent of the labs in the United States are understaffed, while 56% fewer laboratory practitioners are available than 20 years ago. Those leaving universities with an education corresponding to the needs of labs are not enough to fill the number of openings expected in the near future, so that’s also a ticking time bomb.

All around the world, in effect, labs are having to cope with increased workloads and a need for higher capacity, while also managing with shrinking budgets. That’s why we have to be able to achieve both clinical excellence and workflow excellence.

Jenison: At Great Basin, one of our objectives is to drive high-value diagnostic testing into small- and medium-sized hospitals. But just as tuberculosis testing in the developing world suffers from rurality and a dearth of skilled laboratory professionals, the same is true in small- and medium-sized hospitals in the industrialized world. Every day, it seems, there are fewer and fewer skilled professionals who are qualified to perform the sort of tests needed in those hospital laboratories.

In this context, point-of-care solutions play a vital role in giving patients access to valuable tests that they might not be able to obtain through a local lab. To make the most of this opportunity, we should also seek to make the tests available in settings even further downstream, through treating physicians in small clinics or even through physicians’ offices. The tests should be available wherever the patients are.

Lâle White, MBA, Xifin.

Lâle White, MBA, Xifin.

Lâle White: There are certainly cost pressures throughout the world as well as in the United States, which until now has been leading the way in diagnostics research and development. But unless we are able to reduce some of these costs, we’re not going to continue developing as quickly as we have in the past. Used properly, diagnostics can identify opportunities for quickly reducing healthcare costs better than any other method in healthcare.

From my perspective, such cost compression on a global scale demands that diagnostics play a much bigger role in how medicine is practiced. Because of its reliance on molecular diagnostics and genetic testing, personalized medicine will make it increasingly possible to deliver therapies directly to the targeted patient. In short, the old model of generalized testing is no longer the norm for guiding how patients are treated.

Consumer-driven healthcare is a big part of this as well. Consumers are much more involved in their healthcare than they used to be. Because of the Internet, they know and understand a lot more about their treatment. With a focus on the needs of consumers and an ability to overcome cost pressures, diagnostics are key to improving quality of care while at the same time reducing healthcare costs.

Chris Bird, DPhil, Roche Diagnostics Corp.

Chris Bird, DPhil, Roche Diagnostics Corp.

Bird: Healthcare issues differ significantly from region to region, but a patient’s care should not be limited by proximity to good physicians or good healthcare practice. Management of a patient’s health or disease should not be affected by the fact that they live far away from the best hospitals. But how do we level the playing field for all patients around the world, and not just for those who happen to live in Boston and have top-notch hospitals down the street from them?

Diagnostics can help with this goal by replacing subjectivity with standardized, objective measures. Certainly diagnostics are just one piece of how healthcare is managed. But overall, if we’ve got really good diagnostics out there in the marketplace, they should help to elevate the way that we manage a patient’s care—whether that patient is in China, sub-Saharan Africa, or the United States.

 Jackson: From the perspective of specific diseases, I would say the greatest global issues would be those relating to infectious diseases. In particular, there is a significant need to develop better diagnostics for malaria and tuberculosis (TB), including antibiotic-resistant TB. Those are problematic diseases with devastating global impact.

 Koerte: In emerging markets and the poorer nations of Africa and elsewhere, developing decentralized solutions to the problem of infectious diseases is key. Providing access to diagnostic testing is the biggest single contribution we can make.

In more advanced and industrialized nations the problem is different. There, the challenge is to find ways of dealing with what is essentially an epidemic of chronic diseases. We need diagnostics that can catch the emerging markers of these diseases earlier, before clinical symptoms appear, so that steps can be taken to prevent their further development. We need to give patients the tools they need so that they never become critically ill. And this need also leads in the direction of more decentralized testing, because we want to catch people who are at risk for critical illnesses before they show up at the hospital, when it may be too late to reverse the course of their disease. Taking this approach benefits patients, of course, but it also benefits the larger healthcare system by reducing resource utilization as well as costs.

Cramp: Diagnostic tests will play an increasingly important role in addressing epidemic and chronic diseases. Cardiovascular disease is the leading global cause of death, accounting for 17.3 million deaths per year, and this figure is expected to grow to over 23.6 million by 2030.7,8 Consequently, the prevention and diagnosis of cardiovascular disease is today, and will remain, one of the most challenging issues healthcare systems face—especially as the overall life expectancy of populations increases. In addition, large populations are plagued with a variety of such life-threatening infectious diseases as E. coli, HIV, and malaria, as well as many other burdensome diseases caused by bacteria, viruses, fungi, and parasites that can be effectively addressed with early diagnosis and treatment.

Murray: Diagnostics can play a central role in addressing several healthcare issues. At present, the greatest attention is being directed at major parasitic (eg, malaria), bacterial (eg, tuberculosis), and viral (eg, AIDS) infections, and efforts against these diseases are heavily supported by both lab-based and point-of-care diagnostics. By way of contrast, early detection and management of sepsis is a challenging area for which diagnostics are still very limited.

Additionally, diagnostics could play a central role in helping to distinguish between bacterial and viral infections—an effort that would have a major impact on patient management. When healthcare providers and laboratorians obtain accurate results to identify infections, they can make appropriate and targeted treatment decisions—potentially reducing ancillary testing and the use of unnecessary antibiotics. Although group A strep is the most common cause of bacterial pharyngitis, for example, most patients with pharyngitis have a viral infection. Distinguishing between bacterial and viral pharyngitis by using a highly accurate POC strep test supports appropriate use of antibiotics and is consistent with the global emphasis on antibiotic stewardship.

Steve Halasey is chief editor of CLP.


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