Laboratory testing as avenue for employer healthcare savings

Did you know that over 14 billion laboratory tests are ordered annually, and that 70% of medical decisions are based on those testing results?1 As an essential part of the healthcare system in the United States for diagnosis and treatment of diseases, it is critical that individuals have access to quality, affordable testing.

Employers can help address gaps in clinical testing by offering a laboratory benefit option to employees. With a laboratory benefit, employers can streamline the employee experience while ensuring their employees receive the highest quality diagnostic testing at an affordable price.

Does it really matter where your employees have their lab testing completed?

As you know, healthcare costs continue to rise. Between 2014 and 2018, per-person healthcare spending rose by 4.3%. Additionally, during that time, out-of-pocket spending increased by 14.5%. Lab testing plays a role in driving these costs.2

In some healthcare systems, physicians’ offices and hospitals charge a premium for in-house lab testing. As a result, self-insured employers end up paying high costs for this testing, and, depending on the benefit plan, costs can be passed down to employees as well. What’s more is in rural settings, individuals often have limited options for laboratory testing, leading to a limited ability to access and receive care.

However, there are strategies that employers can implement to both improve access to care and lower lab testing costs. Offering a lab benefit to employees can help educate them on lower-cost, nationwide options, and therefore provide savings at every level.

How employers save with a lab benefit

A laboratory benefit is a low- to no-cost option for employers who want to curb outpatient lab spending. It provides employees with resources and tools to choose a lower-cost option for their lab testing for routine outpatient visits, such as annual preventive screenings or diagnostic testing. A robust lab benefit covers any diagnostic outpatient laboratory testing ordered by a physician, performed by a specific laboratory, and covered and approved by the employee’s health benefit plan, including blood testing, urine testing, cytology, pathology, and cultures.

Offering a lab benefit is easy to implement and often has no startup or ongoing administrative costs. Plus, the savings employers can see when implementing a laboratory benefit are significant. For example, when compared with other laboratories, employers who leverage Quest Diagnostics, a nationwide laboratory network, could save up to 50% on outpatient lab testing costs without increasing healthcare spending.

Benefits for employees

By offering a lab benefit to your employees, you can provide significant cost savings for them, as well as quality and convenience. Selecting a nationwide laboratory network for your lab benefit partner gives your employees a streamlined testing experience, regardless of location. A nationwide network also offers convenience for employees, with a larger number of collection sites. For example, more than 90% of the US population resides within 20 miles of a Quest Diagnostics Patient Service Center, which is an off-site location where individuals can have samples collected for routine testing. Quest Diagnostics also works with half of the physicians in the United States, increasing the number of collection sites even more.

Implementing a lab benefit strategy most importantly gives your employees, as well as their eligible dependents, the option of sending their lab testing to a specific laboratory that offers lower prices. When national laboratory networks are leveraged, testing is completed at a higher volume and can be provided at a discounted rate, while maintaining the highest levels of quality and service.

A lab benefit is also easy to implement and employee driven. Employees can use the benefit at the time of their service by providing information to the health professional or staff about where to send their lab work. Additionally, it is not tied to a physician network or health plan, so employees can continue to visit their regular physician. Many laboratories will also provide concierge support for employers with laboratory benefits, including communications support and a dedicated service center.

Is a laboratory benefit right for your organization?

For self-insured employers, laboratory testing services typically represent 3-4% of total healthcare spend.3 Based on internal data, a laboratory benefit could help reduce the total cost for employer-sponsored medical benefits by up to 2%. Even though that is only a small percentage of healthcare spending, being able to lower that percentage goes a long way in supporting cost containment efforts.

QuestSelect™, the laboratory benefit from Quest Diagnostics, gives employees choice and savings when it comes to their lab testing, at little to no cost to you. If you’re interested in learning more about QuestSelect, please email PopulationHealth@QuestDiagnostics.com. A Quest representative will help develop a cost-savings analysis for your organization and walk you through the available laboratory benefit plans.

To learn more about the QuestSelect lab benefit and other employer population health solutions from Quest, visit https://www.questdiagnostics.com/business-solutions/employers.

Sources:

  1. Centers for Disease Control and Prevention. 2018. Accessed December 20, 2021. https://www.cdc.gov/csels/dls/strengthening-clinical-labs.html
  2. Health Care Cost Institute 2018 Health Care Cost and Utilization Report
  3. Quest Diagnostics. Strategies for health plans and employers to drive cost effective laboratory testing. 2018. Accessed December 20, 2021. https://www.questdiagnostics.com/content/dam/corporate/documents/business-solutions-education-center/0150-07_Lab%20Spend%20Mgt%20Case%20Study_PODv2.pdf

 

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