Though LBM is often considered an issue of importance only to providers, payers, and labs, Avalon Healthcare Solutions has shown that it saves patients money and provides a framework to ensure they receive the proper tests at the right time for the right care. It protects against fraud and abuse that cost patients money. In addition to helping individual patient outcomes, LBM improves member health at a population level.
Below are the four principal ways Avalon’s LBM helps patients.
LBM improves patient care
Providers order lab tests to improve patient care. However, often, they can’t keep up with the explosion of tests, particularly genetic tests, and might be unsure of what to order or how to interpret and apply the results. Avalon works with payers to independently evaluate tests and determine which are clinically useful.
This enhances patient care by eliminating unnecessary tests and integrating results into care decisions.
While preventing unnecessary tests, Avalon helps ensure the correct tests are performed for the benefit of patients, even if they’re more expensive. For example, mutational analysis in cancers with targeted therapies is significantly underused with the result that chemotherapy selection, overall costs, and outcomes may be adversely affected. LBM improves the use of mutational analysis where appropriate and increases the likelihood of a better outcome.
LBM improves population health
While LBM helps individual patients, it also can benefit entire patient populations.
Health plans using LBM systems incorporating analytics and machine learning can identify and stage members with chronic conditions. In a recent pilot program, two regional Blue Cross Blue Shield plans shared claims data and lab result values from multiple tests with Avalon. They identified and stratified thousands of previously unidentified high-risk chronic kidney disease patients across all stages. With this information, the plans could follow up with patients and their providers to get them treatment.
LBM also helps plans and patients with other chronic diseases. For example, it can reduce the incidence of drug mismatches and inappropriate use of marker drugs for cancer patients, in addition to increasing genetic testing to determine the targeted treatment. This will result in patients living longer, healthier lives and reducing costs.
Done on a large scale, this can improve population health, a primary goal of value-based care.
LBM controls patient costs
In response to rising healthcare costs, employers are trimming benefits, meaning even patients with private insurance can pay a significant amount for lab tests. Increasingly, patients are forgoing or delaying medical care because of costs. Patients often have little control over where tests are performed or how much they cost but still must find a way to pay for them. However, if they knew the vast difference in costs by site of service, they would almost certainly push for tests to be done at independent labs.
For example, a complete health panel performed at an independent laboratory cost $27 in 2023. The same test costs $35 at a physician’s office and $157 (475% higher) at hospital outpatient services. Similar disparities exist for other tests, including comprehensive metabolic and lipid panels. Avalon can steer these tests toward trusted independent labs, saving patients and payers money and adding much-needed transparency to a system often opaque to patients.
Avalon saves health plans an estimated 10% to 20% on their outpatient lab spending across lines of business. Approximately 25% of these savings benefit member spending and member out-of-pocket costs.
LBM reduces prior authorization
Prior authorization (PA) can be a barrier to members receiving tests promptly, delaying or preventing patients from receiving critical tests.
Avalon identifies select providers demonstrating consistent policy adherence and high performance based on previous approval rates and greenlights them for reduced or eliminated PA requirements for many tests. This allows tests to be performed more quickly, allowing providers to deliver care on an accelerated schedule.
While health plans and providers benefit from LBM, it’s important to remember that Avalon’s policies also help patients by enabling them to receive the right test and the right care at the right costs.
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Bill Kerr, MD, is CEO of Avalon Healthcare Solutions, the world’s first Lab Insights company.
