A call for a value based approach to laboratory medicine funding

Abstract

All areas of healthcare, including pathology, are being challenged by the reality that the days of ever increasing budgets are over and the key debate is about how to provide value for money. As originally described by Porter and Tiesberg, value-based healthcare is defined as maximising outcomes over cost by moving away from fee for service models to ones that reward providers on the basis of outcomes (1). While production efficiencies will continue to evolve, the opportunities for future stepwise improvements in production costs are likely to have diminished. The focus now is on delivering improved testing outcomes in a relatively cost neutral or at least cost effective way. This brings pathology into line with other health services that focus on value for money for payers, and maximising health outcomes for consumers. This would signal a break from the existing pathology funding model, which does not directly recognise or reward the contribution of pathology towards improved health outcomes, or seek to decommission tests that offer little clinical value. Pathology has a direct impact on clinical and economic outcomes that extend from testing and it is important to garner support for a new approach to funding that incentivises improvements of the overall quality and contribution of the pathology service.

Keywords: Economics; Funding model; Over testing; Value of pathology.