Automation and Private Labs

I received my first comment on False Positive from an official reviewer. The reader was surprised at the private sectors reluctance to embrace new technologies. I also was interested that this came out so clearly; though since these decisions are primarily related to the funding incentives it should have been expected.

Laboratory services, as with most physician based for-profit medical services, including imaging, surgeries, and primary care chains, are primarily funded by fee-for-service. This would tend to encourage more services rather than the global funding of hospitals which would encourage more efficient testing or the avoidance of tests.

In the case of Ontario’s laboratory services it is more nuanced than just quantity driven by fee-for-service. It was the inability of this kind of payment system to adapt to changes in technology. The fee-for-service structure proved unable to easily incorporate more efficient procedures. The result is a reliance in the private sector on outmoded but financially more rewarding processes.

This history raises significant concerns about recent moves by provincial governments’ to pay acute care hospitals based on how many surgeries or other services they provide. Whether it is called patent focused or activity based funding it is still fee-for-service and it will tend to skew the provision of services to the most highly rewarded and away from improvements in quality or prevention, which is usually the preferred option for a patient.

This in another instance when it is important to visit lessons from history. In 1969 Ontario introduced global budgeting for hospitals, including their laboratory services, with the stated goals of making them more cost-effective and more flexible to meet local health needs. Compared to the behaviour of the for-profit laboratory corporations it worked and there are no new reasons for reversing this policy.

Explore posts in the same categories: Funding-Cost For-profit Delivery, Quality

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