Roulston Research June 27th Clinical Diagnostics Roundtable with former Quest Executives

July 1, 2013

On June 27th, Roulston Research held a roundtable on Clinical Diagnostics with Candice Miller, Principal at Strategic Health, Former CEO at Proven Diagnostics, and Former VP at Quest Diagnostics; and Joe Quill, Principal at Quill Consulting LLC, Former Director – Program Management, Revenue Service Strategy, and Regulatory Affairs at Quest Diagnostics, and Former Chair, Billing and Reimbursement Committee, American Clinical Laboratory Association.  They discussed how the Clinical Diagnostics industry would look moving forward, including the general growth in the healthcare industry, changes in Medicare, decisions that may be driven by the monetary side instead of the scientific side, and changes in the general regulatory environment.

The primary topic discussed was how the changes in the regulatory environment would affect these laboratories.  The Medicare fee schedule has been updated for nearly everything in the past 10 years, with the exception being rates charged to clinical labs.  This is expected to be updated soon, and likely would drive payments from Medicare to these labs down.  Additionally, there could be a 3% reduction in the margins on Medicare billing next year regardless of whether the fee schedule gets updated.  Despite this, however, the presenters do not believe that the industry will be in any serious trouble.  Medicare payments make up only about 25% of labs revenue.  In addition to these pending changes, changes in policy by Blue Cross Blue Shield have had an impact on the industry.  They recently eliminated a program that allowed labs to easily service customers in other states.  This has had a large impact on the industry, since companies like Bio-Reference have begun buying small labs in different states in order to serve customers there.  Small labs such as these often face large risks in their own right, since they often do not have solid contracts with insurance agencies, and often rely on patients to directly pay their bills.  As such, they often welcome their partnerships with larger companies.  Another recent headline involved Myriad’s Supreme Court Case.  They recently lost a case that would have allowed them to patent a specific type of cancer test.  As a result of this decision, other laboratories, such as Quest, will now be able to perform the test that up until this point Myriad had a virtual monopoly on.  There is very little doubt that doctors would trust the results that come from companies other than Myriad, so companies like Quest will be able to capitalize on this and bring the price down almost immediately. Other topics include the trend from volume to value purchasing, point of care trends, and data collection.  If you are interested in listening to the full podcast, or would like to engage in a 1 on 1 discussion with either Candice or Joe, please email info@roulstonresearch.com.

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