How Much Are Lab Tests Really Worth?

Wednesday, September 18, 2013

For those waiting for the proverbial LDT shoe to either drop or wander away, the year 2013 has not been without a full measure of other entertainment. With the demise of the stacking code, renewed attention has been directed at what is perhaps the real elephant in the room: which tests should we pay for and how much should we pay?

Perhaps no-one has framed this issue better than Dan Hayes, an oncologist at the University of Michigan. Hayes, along with a dozen other thought leaders, has spent the last several years assessing the current status of tumor-biomarker development, defining the status quo (described as a vicious cycle), and offering an alternative (described as a virtuous cycle).  

The results of this work appeared over the summer as a cleverly illustrated commentary. While the models proffered here have been crafted in the context of the practice of oncology, it is not a far reach to extrapolate the findings of this group to the broader world of all diagnostics.

Up-front Hayes puts dollars on the table noting, "A tumor-biomarker test has two component values:  clinical and financial." Hayes is not afraid to address a fundamental truth: "Capital investments to develop clinically useful tumor-biomarker tests will only be made if there is a reasonable chance of recovering these costs with future revenues." He goes on to pin-point the problem in oncology test development as "The marketplace has recognized the value of advances in cancer care that have resulted from the discovery and development of molecularly targeted therapies but not the value of robust new tumor-biomarker tests to guide patient management." 

Hayes contends that as a result of this misvaluation "stakeholders have not fully recognized the potential value of tumor-biomarker tests; thus, the research, regulatory, clinical-use, and reimbursement standards are not as well defined or as rigorous as those applied to therapeutics." He posits a link between the low levels of evidence afforded most biomarkers and the resulting reduced data certainty, poorly valued marker utility, poor reimbursement, and inadequate funding/investment for tumor-biomarker research. He argues there are two consequences to this vicious cycle: (1) too few tumor-biomarker tests have established clinical utility and (2) tests without clinical utility are being used with unclear consequences in patient management. The alternative world that Hayes imagines is one in which there is a virtuous cycle of test development with a strong ability and incentive to conduct properly designed clinical trials, strong data certainty, highly valued marker utility with commensurate reimbursement, and adequate funding/investment for tumor-biomarker research.  

The move from a vicious to virtuous cycle will not be easy. Consequently he advances more than a dozen proposals to enhance adoption of tumor-biomarker test results into the clinic. These fall into five broad categories including (1) reform of regulatory review of tumor-biomarker tests, (2) increase in reimbursement for tests with established clinical utility, (3) increase in investment for tumor-biomarker research to help demonstrate clinical utility, (4) increase in rigor in peer review and reporting guidelines, and (5) encouragement for guideline bodies to adhere to evidence based recommendations for biomarker test use. Each proposal is advanced in the context of a need for change and carefully and clearly delineated. 

The commentary concludes with the call for a national dialogue among all key stakeholders. This is anything but a modest proposal, perhaps a bit curious because this charge is led by a non-laboratorian. But Hayes is an uncommon man who has been advocating on the national scene for science based use of biomarkers for almost two decades. He offers a message unlikely to go away.

Tags: LDTs, Policy, reimbursement

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