Diagnostics & Imaging Week Washington Editor

WASHINGTON – A new report released last week says "significant access barriers" have a chilling effect on the use of new diagnostics.

Commissioned by the Advanced Medical Technology Association (AdvaMed: Washington), the study was conducted by healthcare consulting firm The Lewin Group (Falls Church, Virginia). Titled "The Value of Diagnostics: Innovation, Adoption & Diffusion into Health Care," it suggests that diagnostics is the disrespected Rodney Dangerfield of healthcare – under-used and slow to be adopted.

The report offers a number of recommendations by which Congress and the Centers for Medicare & Medi-caid Services (CMS; Baltimore) can improve the adoption of new diagnostic technologies.

According to the Lewin Group's findings, the information gathered through diagnostics has an impact on a "much larger proportion of downstream healthcare decision-making" than its 5% share of hospital costs and 1.6% of all healthcare costs. And the information provided results in "improved health outcomes and net cost savings in many instances."

Different ways the diagnostic sector influences patient care, according to the report, include:

Assessing disease risk sooner.

Detecting disease earlier and more accurately before symptoms occur.

Selecting more targeted, effective and often less-invasive treatments.

Closely estimating patient prognosis.

Managing chronic disease effectively.

The lack of respect given diagnostics is suggested by its ranking by the healthcare executives polled, when asked which tools are most necessary to substantially improve quality of care – fourth, after information technology, despite the general need for testing.

Study authors identified more than 1,230 disease guidelines, finding that half recommend specific diagnostic tests. And evidence-based guidelines specify using diagnostics in the standard of care for 12 of the 15 most "clinically and economically burdensome disease/condition categories" in the U.S.

The report cites a study by Rand (Santa Monica, California) showing that many diagnostics recommended as standards of care and supported by clinical evidence are "grossly underused" in practice, roughly 51% of the time.

This underuse has "significant" quality and cost-of-care implications, according to the authors, citing data from the National Committee for Quality Assurance (Washington) showing low compliance with diagnostics-based quality measures for four conditions – diabetes, cardiovascular disease, colorectal cancer and breast cancer. This was linked to more than 56,000 avoidable adverse health events, nearly 34,000 deaths and $899 million in healthcare costs in 2004.

Outdated government payment policies at CMS are one aspect of this slow adoption, according to the report, calling Medicare payment policies for new diagnostics "archaic, impractical and severely flawed." The researchers found that Medicare often pays the same or less for a new test than for an existing test, even though the new test may offer greater benefits to patients and physicians.

"It is time for a fundamental re-examination of the 20-year-old Medicare payment system that was built for the science of yesterday to ensure that the predictive value being added by these tests is being recognized, and that patient's have access to the best treatment roadmap science has to offer," said Stephen Ubl, president of AdvaMed.

The lack of monetary incentives for physicians and laboratories to prescribe and use the newest diagnostic technologies creates patient access barriers that affect far more than the nation's 40 million Medicare beneficiaries, according to the report. And millions of Americans with Medicaid or private insurance are affected because these plans often base diagnostics payments on Medicare policy.

Medicare's Clinical Laboratory Fee Schedule (CLFS) has not been updated for inflation in 13 of the last 15 years and is not slated to be updated again until after 2008, the report points out.

To resolve these issues, The Lewin Group report recommends that:

Congress and the CMS take prompt action to modernize CLFS.

A single national payment schedule with an "open, systematic and accountable process" be created to reduce pricing variations.

New processes and criteria for incorporating new tests into CLFS be created, along with a "value-based" payment system for diagnostics.

On the regulatory front, the report highlights "important" recent changes in the way the FDA evaluates and monitors diagnostics.

The study credits more efficient means by the FDA of regulating diagnostics and other devices, including coordinating diagnostics regulation using a total product life cycle approach and a pilot "turbo 510(k)" process for streamlining 510(k) submissions.

But it says that certain regulatory requirements and guidance for development of diagnostics are "outdated or insufficient for addressing complex and unique considerations of emerging diagnostics," the report's authors found.

The report concludes that the difference in regulation for functionally similar tests could create disincentives for developing tests that would be subject to FDA's more time- and resource-intensive regulatory scrutiny. And there is a lack of explicit policy for the regulation of new and emerging technologies in this area, such as gene- or immunohistochemistry-based ASRs, the report said.

Bill could mean sweeping change for NIH

The National Institutes of Health (NIH; Bethesda) could see a major shake-up if a recent reshuffling proposal moves through Congress. The matter arose last week at a hearing of the House Energy and Commerce Committee, whose chairman, Rep. Joe Barton (R-Texas), said reauthorizing the NIH is a "very high priority for me. We've doubled the agency's budget but have not done anything to improve management."

His proposed legislation – the first NIH reauthorization bill since 1993 – targets better coordination of research and streamlined reporting requirements by way of a biennial report that lays out the agency's plans and research activities. The committee has circulated a draft of the proposal, and NIH Director Elias Zerhouni, at the hearing, indicated that he would be on board with some of the changes. "The landscape has changed over the past 12 years and we need to adapt," he said, also endorsing a provision to give the NIH director more power to fund strategic research initiatives or emergency response needs.

Part of the proposal is greater fiscal flexibility for the director, allowing him to direct funds among the 27 institutes and centers, as opposed to relying on the federal budget process.

The bill also would rearrange the NIH's 27 institutes and centers into two categories – mission-specific institutes and science-enabling institutes, and establish a Division of Program Coordination, Planning and Strategic Initiatives in the Office of the Director.