The rising cost of health care might be a familiar conversation, and at Quest Diagnostics we believe the where patients choose to get their labs done can help to bend the cost curve. But just don’t take our word for it.
The United States spends more on health care services than any other country at over $2.7 trillion – a number that the Centers for Medicare and Medicaid Services (CMS) estimates could increase to $4.8 trillion by 2021. At Quest we have felt the effects of these costs first-hand, spending 25% of our adjusted operating income on health care costs in 2015.
That’s why we are proud to be acknowledged as an effective solution in this cost-pressurized system.
Earlier this year, the Massachusetts Health Policy Commission published a cost trends report that spotlighted the pricing disparity of 10 common lab tests and highlighted Quest as the most cost-effective option compared to other settings of care including hospitals and physician offices. In fact, tests processed through Quest Diagnostics reduced spending by at least half compared to hospital outpatient departments (HOPD).
While Quest performs most of the freestanding lab services in Massachusetts, two-thirds of common lab tests in Massachusetts are still performed at hospitals. The report concludes that if prices for these lab tests at HOPDs were equal to prices at physician groups or Quest, its estimated commercial spending would be 54% lower.
“This report is evidence that we are making significant strides in our efforts to provide the value we’ve promised to our partners through our services and solutions,” says Quest Diagnostics CEO Steve Rusckowski.
While these numbers are staggering and nationwide, the true impact of the rising cost of health care is perhaps felt most urgently on a smaller scale – in the daily spending of families across the US. According to a Kaiser Foundation survey, the average dollar contributions of workers to single-coverage health premiums have increased nearly 20% in the past five years, and contributions to family coverage have increased 24%. Health care spending consumes more than one out of every six dollars that people earn.
U.S. health care spending is rising at an unsustainable trajectory. Laboratory testing has a significant effect on over 70% of medical decisions, yet the cost of these services can range enormously depending on the location of the testing itself.
As healthcare reform continues to shift towards an emphasis on prevention and early intervention in the face of skyrocketing costs, the role of lab testing will only continue to grow in importance. Developing a synergistic relationship between laboratories and hospitals is an important step towards improving the patient experience and reducing the cost of care.
A breakdown in commercial payments for 10 common lab tests in different care settings, such as basic metabolic panel and a creatine kinase total, can be found in the report. Click here to learn more about how Quest Diagnostics saves on these common lab tests in Massachusetts (see page 44 of the report).