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Laboratory quality and economic necessity: values in collision.

Three true stories illustrate ethical dilemmas faced by laboratory managers. Last of a series.

The white marble entryway leads into a lobby of plush rose-colored carpeting. Conveniently placed chairs sport designer fabrics; coordinating artwork lines the walls. Lush greenery sways in the breeze of roaring air-conditioning units. Are we in the lobby of a luxury hotel? No, we have just entered a hospital of the 1990s.

Having sold our souls for a few potted palms, we face a management dilemma. Today's laboratory manager must maintain a delicate balance between high-quality output and budgetary constraints. Ever-stricter regulations were created in the last decade by an industry swing toward excellence in service and fiscal responsibility.

During the 1980s, U.S. hospitals underwent sweeping changes. Decreasing revenues combined with heightened consumer activism and accountability stirred the competition that now dominates hospital marketing. In many cases, the new competitiveness has taken the form of improvements in consumer appeal regarding the hotel-like amenities that hospital administrators feel compelled to provide. Our shift from care-based service to hospital cosmetics mirrors the current marketing obsession in which the patient is viewed as a consumer. As the concept of the paternal physician was abandoned, a shift toward patient autonomy arose in its place. Patients are now considered consumers of the health care product.

The problem is that the economic necessity of providing highly visible consumer services competes with declining Federal reimbursement dollars. There is no doubt that tight controls placed on the Medicare budget have changed the practice of hospital medicine.

At the same time, new Federal preoccupation with the quality of health care in this country has led to the use of outcome measures to assess patient care. This idea sprang from comparing the hospital to a black box from which patients exit in one of three ways: better, the same, or deceased. As a result, the Health Care Financing Administration (HCFA) broke with long tradition by releasing hospital mortality data to the news media--to the immediate and understandable consternation of hospital administrators.

* Advent of CLIA '88. In this context arose the media expose and recent spate of Congressional activity that culminated in CLIA '88 and promises even more laboratory regulation in the years ahead. Such regulation will undoubtedly add to the already enormous demands placed upon the laboratory work force at a time when internal and external competition are forcing hospitals to reduce their staffs and budgets. Only when CLIA '88 is fully implemented will the laboratory community begin to appreciate what the outcome measures approach to quality assessment will mean in practice. At the least, it will increase the cost of operating a hospital laboratory.

Pulling against each other on the two sides of the tug-of-war between quality and economy are many ethical dilemmas for the laboratory director and manager to resolve. In the current economic climate, for example, hospitals must assume some responsibility for monitoring and managing ancillary services used by the medical staff. Often the clinician acts as the patient's economic agent by adopting an attitude of self-regulation.

For health maintenance organizations (HMOs), laboratory utilization rates may be determined by explicit corporate policy. In either case, the onus of enforcing the regulation of laboratory utilization may fall on the laboratory manager or director.

This situation can present a difficult burden. First, the laboratory manager faces a conflict of interest in being asked to participate in reducing laboratory use. Second, since pathologists do not treat patients directly, they may not always be the best choice for determining standards of test utilization.

The following three situations will illustrate some of the ethical byways into which laboratory management has been led when confronting the problem of overseeing use of their departments.

Experimental investigation remains an essential part of any cancer research and treatment center. Competition for research dollars, however, is fierce. Usually funded by large pharmaceutical firms, experimental protocols are conducted to gather data on the performance of new drugs that may prove to be as lucrative to the company as they are effective in treating disease. Once a plan for treatment has been approved by the hospital's Institutional Review Board, the drug company is free to release the necessary funding to the principal investigator so that testing can begin.

Most of the patients in our cancer treatment center undergo experimental protocols in addition to their standard treatment. These protocols often involve extensive laboratory testing. At that point in the process, cooperation and communication break down; hospital ancillary services, such as the laboratory, are never notified of new drug trials that are about to commence, or to what extent their departments' services will be needed in the course of gathering data.

In addition, the clinical laboratory cannot discern which tests are ordered for routine patient treatment from those that are part of an experimental protocol. Consequently, the patient's total lab fees are presented to the hospital's billing department for submission to the appropriate payer, usually the patient's health insurance company. Adhering to the current practice of paying only charges found to be "usual and customary," the insurance carrier often disallows payment for what it calls "questionable testing." As these unpaid bills accumulate, their financial loss raises the cost of laboratory overhead--services rendered, payment denied. They relentlessly cause hospital costs overall to increase.

Since the purpose of test charges made by the laboratory is unidentified from their point of origin, it is not possible for the lab to make a connection between these unpaid expenses and the payment received by the investigator from the drug company to cover research expenses. Ironically, important medical advances are driving the health care system into bankruptcy. We take two steps backward, it seems, for every step we take forward.

* Who really pays? Our dilemma is that insurance companies are being asked to subsidize clinical research that is not related to the customary course of treatment. Meanwhile, the laboratory and other hospital departments absorb the cost of the patient's unpaid bills. The principal investigator maintains control of all funds furnished by the drug company; no connection is ever made.

At a time of escalating health care costs coupled with dwindling reimbursement dollars, the lab director may find it impossible to serve two masters: cost-effective health care and the incessant demand for medical cures.

Ideally, these two priorities should be dealt with separately. At the very least, they should be coordinated in such a way as to keep treatment costs in line with current budget restrictions. With this done, expensive experimental trials that demand substantial resources can continue. Yet cutbacks in health care funding have not altered the carte blanche mentality of research clinicians.

At our hospital, we worked with our research administration in creating a drug trial task force to find a solution. Our primary goal was to install a method of identifying lab tests ordered for research use in experimental protocols. After several months of negotiation, we adopted a three-part, multi-departmental policy as follows:

1. The principal investigator will meet with each ancillary department and discuss specific needs for the proposed trial.

2. A testing budget will be established for each protocol. Only direct costs for services will be charged.

3. All requests for testing related to the protocol will be identified by a red stamp marking the protocol number. None of these charges will be referred to patients or insurance carriers. Requests that are not so identified will be billed as usual.

Our work was in vain. The task force was unable to persuade investigators to identify specimens involved in experimental protocols. This failure thwarted the most important step of our plan. In retrospect, it is probably unrealistic to require this kind of compliance from research clinicians, since asking them to do so creates an apparent conflict of interest. In the future, we will rely upon an impartial third party to make such determinations, case by case.

* Curbing Stat abuse. Among the most common abuses of laboratory service is the overuse of priority testing. At our hospital, we observed a steady increase in Stat requests year after year. This demand for immediate test results consistently remained slightly ahead of our ability to provide it. At the peak of Stat abuse, more than 90% of chemistry and hematology tests ordered were priority requests.

Part of our problem was fueled by our own policy of offering too many modes of priority testing. Making available "life-and-death" Stats, "regular" Stats, and "outpatient" Stats led physicians to believe routine orders received extremely low priority. As a result, hardly any testing was ordered as routine. Ultimately it became impossible for the laboratory to distinguish between genuine emergency test orders and the so-called "administrative" Stats, ordered to rationalize personal expediency cloaked as required for patient care.

How could we continue to provide for the urgent needs of patients who are truly in crisis when we were under a constant barrage of Stat requests? To escape from this ordering nightmare, we tried a variety of solutions including education, reasoning, and an analysis of workflow dynamics. None of our efforts worked; the demand for Stat testing remained chronic and relentless.

* Problem solved. Money helped us solve the problem. We began to assess an automatic Stat fee, attached to every priority order. At the same time, we reduced the number of priority codes offered to two: (1) results within 1.5 hours and (2) life-and-death emergencies; results needed ASAP.

We circulated the new policy via our regularly updated document of service guidelines. We included a list of tests that could be ordered on a Stat basis. Any requests that did not meet our guidelines, we said, would be rejected. Furthermore, we emphasized the shortened turnaround times possible for routine specimens, pointing out that most had been completed almost as quickly as Stats since we had installed state-of-the-art instrumentation. With these simple rules our facility's concept of routine test orders was reborn.

By February 1989, four months after the new policy went into effect, the number of priority orders had been cut in half. They have declined even further since then. Overall service has improved; complaints are minimal. Most important, our laboratory is better prepared to provide for the patient in need.

* Flaws. The new policy was not without flaws. In one case, an observant patient noticed the Stat surcharge when reviewing his bill. He called the physician and demanded an explanation for the extra charge. He was visiting the hospital only to have blood drawn for tests that would be needed for an appointment the following week. He had inadvertently identified a glitch in the system. The embarrassed physician was not even aware of the Stat order.

In addition, it has been a challenge to help hospital administrators understand that there is one kind of revenue we don't consider real. We instituted it in the hope that it would decline, we tell them, and we don't mind its having continued to do so.

The ethical quandary for us is that while our plan has been successful, we must admit that in implementing it, we have perpetrated a ruse. We have always sought to maintain quality service, not to increase costs. Our surcharge, which constitutes only ostensible revenue, may not be reimbursable. We know this, but apparently the clinicians do not. Do we dare tell them? To do so would destroy the effectiveness of our policy.

As health care providers, we must weigh our need for economy against the critical needs of the patient. Lack of balance in these areas will drive up overall costs while diminishing our ability to provide effective patient care.

* Lab service dilemma. As the health care industry changes, many clinical laboratories are pressured by their physician clients to provide testing service under special conditions and circumstances. Some of these requests are based on a need to increase the speed and quality of laboratory output.

In one instance, a hospital clinical laboratory was asked to provide testing services as an integral part of a new and growing pediatric clinic. The clinic was being constructed at a different location on campus, a considerable distance from the main laboratory. Because the hospital operated in a state that mandates and strictly regulates the licensing of all medical technologists, the new "peds lab" had to be staffed with specially trained, fully licensed personnel.

While these technologists provided excellent service, they were overspecialized for the needs of this small satellite lab. Providing the requested service was expensive. The laboratory manager tried to disband the small lab on several occasions but was always met with tremendous resistance from the medical staff.

Eventually the parent hospital experienced a severe budget crisis. Rather than use this as an excuse to shut down the satellite facility, the laboratory administrator elected to reassign the technologists who worked there to the main laboratory. With the physicians' approval, the smaller lab was converted to a drawing station staffed by unlicensed lab assistants, thus saving on salaries.

The residual facility provided phlebotomy and a few screening tests performed on small automated instruments supervised by a medical technologist from the main laboratory. Since the personnel performing these tests were unlicensed and were supervised only in absentia, the services they provided were not only illegal but nonreimbursable as well.

Taking a position of willful neglect, the laboratory administrator chose to overlook this impropriety. It was not until an overall change in laboratory administration took place that the situation in the peds lab was corrected. Even then, it took at least a year of careful negotiation and planning to correct the deficiency. Finally, all testing at the smaller lab was discontinued and the test orders routed to the parent laboratory.

The perceived need for faster service proved to be an illusion. With some effort, the hospital's central laboratory now provides test results just as quickly as the on-site peds lab did, at lower cost. Placating a few angry physicians had created new problems. Our challenge in the clinical laboratory is to weigh requests for service against legal and economic realities and to limit our compliance with those requests accordingly.

* Fertile ground. The situations described above represent only three examples of conflicts a laboratory manager or director may face. The rapidly changing laws and regulations affecting the health care industry have provided fertile ground for the growth of ethical dilemmas. Our theoretical goal is to preserve the integrity of our profession by giving top priority to the needs of the patient. In the 1990s and beyond, high-quality laboratory service must incorporate a stronger sense of fiscal responsibility than ever before.

Palmer is laboratory manager at City of Hope National Medical Center, Duarte, Calif. Cosman is a medical technologist in the clinical chemistry section of the laboratory at City of Hope. Dr. Bissell is vice president and medical director of Nichols Institute Reference Laboratories, San Juan Capistrano, Calif. Director of clinical pathology at City of Hope when this article was written, Dr. Bissell chaired the hospital's institutional review board for research involving human subjects and vice-chaired the bio-ethics committee. He also drafted the institution's policy on withdrawing or witholding life support therapy.
COPYRIGHT 1991 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Palmer, John; Bissell, Michael; Cosman, Teri
Publication:Medical Laboratory Observer
Date:Sep 1, 1991
Previous Article:Covering the bases with a new QA program.
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