Implications of the introduction of laboratory demand management at primary care clinics in South Africa on laboratory expenditure

Background Diagnostic health laboratory services are regarded as an integral part of the national health infrastructure across all countries. Clinical laboratory tests contribute substantially to health system goals of increasing quality of care and improving patient outcomes. Objectives This study aimed to analyse current laboratory expenditures at the primary healthcare (PHC) level in South Africa as processed by the National Health Laboratory Service and to determine the potential cost savings of introducing laboratory demand management. Methods A retrospective cross-sectional analysis of laboratory expenditures for the 2013/2014 financial year across 11 pilot National Health Insurance health districts was conducted. Laboratory expenditure tariff codes were cross-tabulated to the PHC essential laboratory tests list (ELL) to determine inappropriate testing. Data were analysed using a Microsoft Access database and Excel software. Results Approximately R35 million South African Rand (10%) of the estimated R339 million in expenditures was for tests that were not listed within the ELL. Approximately 47% of expenditure was for laboratory tests that were indicated in the algorithmic management of patients on antiretroviral treatment. The other main cost drivers for non-ELL testing included full blood count and urea, as well as electrolyte profiles usually requested to support management of patients on antiretroviral treatment. Conclusions Considerable annual savings of up to 10% in laboratory expenditure are possible at the PHC level by implementing laboratory demand management. In addition, to achieve these savings, a standardised PHC laboratory request form and some form of electronic gatekeeping system that must be supported by an educational component should be implemented.


Introduction
Diagnostic health laboratory services are regarded as an integral part of the national health system across all countries and have an important role in the continuum of care. Laboratory testing provides access to screening of asymptomatic individuals at risk for developing disease, early detection of diseases and diagnostic confirmation; provides information on patients' prognosis; assists with planning appropriate disease management strategies and monitoring patients' response to treatment; and plays a pivotal role in ensuring patient safety by identifying hospital-acquired infections and other potential health related adverse events. 1 The National Health Laboratory Service (NHLS) provides diagnostic laboratory services for the South African public health sector through over 300 laboratories across the nine provinces, thereby achieving 80% population coverage. 2 The NHLS is reimbursed by the Provincial Departments of Health on a fee-for-service billing arrangement. 2 Through this payment mechanism, laboratory tests are itemised as tariff codes on an invoice, for example, tariff code 2210 denotes the haemoglobin test. These funds are obtained from the provincial equitable share portion of the national health budget.
Expenditures for laboratory services have increased by 45% from R3. 1  Objectives: This study aimed to analyse current laboratory expenditures at the primary healthcare (PHC) level in South Africa as processed by the National Health Laboratory Service and to determine the potential cost savings of introducing laboratory demand management.

Methods:
A retrospective cross-sectional analysis of laboratory expenditures for the 2013/2014 financial year across 11 pilot National Health Insurance health districts was conducted. Laboratory expenditure tariff codes were cross-tabulated to the PHC essential laboratory tests list (ELL) to determine inappropriate testing. Data were analysed using a Microsoft Access database and Excel software.
Results: Approximately R35 million South African Rand (10%) of the estimated R339 million in expenditures was for tests that were not listed within the ELL. Approximately 47% of expenditure was for laboratory tests that were indicated in the algorithmic management of patients on antiretroviral treatment. The other main cost drivers for non-ELL testing included full blood count and urea, as well as electrolyte profiles usually requested to support management of patients on antiretroviral treatment.

Conclusions:
Considerable annual savings of up to 10% in laboratory expenditure are possible at the PHC level by implementing laboratory demand management. In addition, to achieve these savings, a standardised PHC laboratory request form and some form of electronic gatekeeping system that must be supported by an educational component should be implemented. The volume of laboratory testing is anticipated to increase with the introduction of general practitioners as care providers for patients at the primary healthcare (PHC) level, because general practitioners are expected to order additional laboratory tests that were not previously requested under nurse-based PHC services. Furthermore, a renewed focus has been placed on integrated clinical services at the PHC level 5 and the introduction of algorithms to appropriately manage patient conditions. 6 This is likely to further increase the volume of tests requested, thereby increasing the total expenditures of the public health system.

Implications of the introduction of laboratory
Demand management aims to improve the requesting of appropriate laboratory tests and results in reductions in public health expenditures without affecting clinical outcomes. 7 The first step to implementing demand management involves defining what constitutes an 'inappropriate' request, based on some form of agreed-upon guidance. 7 For example, this may involve standardising the repertoire of tests that may be requested by level of care, namely, PHC and hospital services. 7 Similarly, evidence-based laboratory medicine involves eliminating laboratory tests with no clinical value and introducing new laboratory tests where evidence proves their efficacy and effectiveness. 8 The implementation of this approach requires a pathologist-driven laboratory service that utilises context-appropriate evidence to guide testing and reduce public health expenditures.
The South African National Department of Health has proposed a demand-management system in the form of an essential laboratory tests list (ELL) to promote appropriate and cost effective usage of laboratory services at PHC facilities without having a negative effect on patient outcomes. The ELL includes the minimum set of tests that should be performed to offer comprehensive services at the PHC level. 9 In determining the ELL for South Africa, the World Health Organization criteria for the usefulness and clinical relevance of tests that influence diagnosis and patient management were considered. 9 Additionally, the ELL requires that a single test be used, rather than multiple tests, if the single test provides adequate diagnostic information. 9 For example, on the ELL, the alanine transaminase test is substituted for the liver function panel test, as the alanine transaminase test provides the same diagnostic value without affecting patient outcomes. Furthermore, the laboratory tests included on the ELL were aligned to the national South African standard treatment guidelines, 10 including the PHC clinical algorithms that were introduced as a clinical supportive management component of the integrated chronic disease management mode. 5 The aims of this study were to analyse current expenditures and the profile of laboratory tests currently requested at the PHC level. In addition, we sought to determine the potential cost savings that could be achieved by the public health sector through the introduction of the demand-managementbased ELL.

Total expenditures on ELL and non-ELL laboratory tests
Of all laboratory expenditures for FY 2013/2014, 21 tests were responsible for ~92% (R310 million) of the total (Table 2). Laboratory tests for patients living with HIV were responsible for ~47% of all expenditures, of which HIV viral load accounted for ~32% of expenditures, CD4 for ~10% and HIV DNA PCR for infants, ~6%. Laboratory tests for tuberculosis diagnosis accounted for ~21% of the expenditure, including tuberculosis microscopy (~2%), GeneXpert (~18%) and tuberculosis culture (~1%). Non-ELL tests such as the full blood count and the urea and electrolyte tests were responsible for 5% of expenditure (R16 million).

Profile of the non-ELL tests processed
Of all the laboratory tests not included on the ELL, 21 tests accounted for 91% (R31 million) of the total non-ELL laboratory expenditures (R35 million) (Figure 1). Of these tests, the full blood count (28%) and urea and electrolyte (20%) tests were the main cost drivers for non-ELL tests. The third main contributor was the different components of the liver function test, which together accounted for 17% of expenditures for non-ELL tests (aspartate transaminase, 5%; total protein, 2%; albumin, 4%; total bilirubin, 3%; direct bilirubin, 2%; and lactate dehydrogenase, 1%). Rhesus factor laboratory tests accounted for 10% of the non-ELL laboratory expenditures. The remaining non-ELL tests accounted for 9% of non-ELL expenditure.

Discussion
This retrospective analysis of laboratory expenditure data for FY 2013/2014 indicated that facilities within the 11 NHI pilot districts accounted for approximately R339 million of all PHC facility expenditures for diagnostic laboratory tests. The City of Tshwane had the highest proportion for test volume and laboratory expenditure, followed by facilities within the OR Tambo and Umgungundlovu districts. Diagnostic tests for HIV and tuberculosis were the main cost drivers for laboratory expenditure. Of the estimated R339 million total, approximately R35 million (10%) were for non-ELL tests. Full blood count, urea and electrolyte profiles, as well as liver function tests usually done to support the holistic management of patients on ART, were the main cost drivers for non-ELL tests.
Public health expenditures overall are expected to increase by an average of 7.9% between FY 2014/2015 and FY 2016/2017. 6 Laboratory expenditures are expected to increase by an average of 17.7% during the same time period. This is likely to increase budgetary pressures on an already cashstrapped public health sector and, in particular, on the NHLS. However, despite these financial constraints, the NHLS is expected to provide or maintain the same standard of service.
Laboratory, patient, healthcare provider and systemic factors are often cited as potential reasons for 'inappropriate laboratory tests requests'. 7 Laboratory factors include prolonged turn-around-times, inability to access results due to the lack of information systems, laboratory request forms that enable the request of a panel test rather than an individual test and the availability of an open-ended, 'other tests' box. 7

Recommendations
Currently, laboratories are required to perform all tests requested by the clinician and/or nursing staff, resulting in over-utilisation of services. To address inappropriate use of laboratory tests (i.e., non-ELL tests) across South Africa by PHC facilities, three key initiatives are proposed.
The first initiative is the development of a national ELL. This would require the standardisation of typical clinical laboratory tests per level of healthcare, whilst taking into consideration local demographic and epidemiological factors. 9 The second initiative would be to support the ELL by developing a dedicated PHC laboratory request form that lists only tests appropriate for the PHC level. Clinicians and nurses would thus be able to select only from amongst tests on the ELL. An important aspect of the PHC request form design would be to remove the 'other tests' box, which enables clinicians to request any investigation. The first two initiatives should, in turn, be supported by the third: electronic gatekeeping to reject tests that are inappropriately requested (not on the ELL). However, in order to achieve this initiative, all PHC health facilities would be required to use a health information system, including an order entry module with built-in rules to avoid inappropriate ordering.
Whilst the above measures may help to reduce inappropriate laboratory test requests, appropriate education initiatives directed at health service providers would also be required to support these interventions. These educational sessions should provide guidance on appropriate laboratory testing based on clinical guidelines and evidence-based laboratory medicine recommendations to ensure that specimens are collected in the correct manner. 7

Limitations
This study was a retrospective cross-sectional study and used secondary data on expenditures; it was thus dependent on the accuracy of the data entered into the information systems.
It was not possible to differentiate whether tests were coded accurately or combined when multiple individual tests were ordered. In addition, the study was limited to NHI health districts and the results may not be representative of other health districts in South Africa. Finally, the study focused on one aspect for potential savings. Additional studies may be required to investigate other aspects of appropriate utilisation of the diagnostic laboratory services.

Conclusion
This study demonstrated that considerable potential savings of up 10% in laboratory expenditure are possible following the introduction of an ELL at the PHC level, in addition to further laboratory demand management interventions.