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Commentary: The healthcare exchange you havenít heard about
March 2014
by Dr. Doug Moeller, McKesson  |  Email the author
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For some time now, healthcare exchanges have figured prominently in the media. Their central role in the Affordable Care Act, the challenges experienced during initial launch and the intense focus on signup numbers have all received extensive coverage. But what has been less widely reported is the fact that the concept of online exchanges as a mechanism to improve healthcare isn’t new.
 
For the purposes of this discussion, an exchange is an electronic marketplace where each product has a unique ID code. E-commerce sites can be thought of as the prototype of an exchange that had a transformative effect on markets. They build an online catalog of every product (for example, books or computers or CDs) you can purchase online and ship by mail.
 
A similar online exchange was necessary, and created, for the rapidly growing molecular diagnostic (MDx) field. Advanced diagnostics are evolving so quickly that the industry is unable to keep pace. For example, there were 11,667 tests for 3,463 conditions in 239 labs in the Genetic Test Registry as of September 2013,1 and new diagnostics are regularly emerging at a rate of several per month.2 The global market for molecular diagnostics is expected to grow at a CAGR of 11 percent through 2019, generating an estimated $8.7 billion in revenue by 2019.3
 
The exploding number of MDx tests is proving difficult to differentiate because (A) there was no system to uniquely identify each test and (B) few tests have been evaluated with enough clinical evidence to determine their clinical utility. Many are developed and marketed as lab-developed tests, and the protocols and processes can differ significantly. The variations available for a single test can create confusion, collaboration challenges and inefficiencies across the healthcare system.
 
The ability of providers, payers, manufacturers and laboratories to make the best clinical and financial decisions is hampered by the difficulty of effectively collecting, tracking and analyzing data on the impact of each test. Moreover, payers need to have each MDx test specifically identified to help them transparently provide efficient reimbursement and coverage decisions, improve utilization management processes and better support new models of care. In fact, the total clinical laboratory spend has increased so much that payers are now alert to the cost and clinical utility of molecular diagnostics.
 
At McKesson, we saw these emerging problems and recognized there was a need, and an opportunity, to create an exchange for diagnostic testing (i.e., a diagnostic exchange). This solution would need a web-based infrastructure with a shared workflow that laboratories and manufacturers could use to submit information about their specific MDx test, and which providers and payers could use to understand and evaluate those tests.
 
Simply speaking, we needed to build an online catalog, like an online bookstore or travel site. However, we would still need a unique identifier—some mechanism for distinguishing one test from the next during the order and fulfillment process—similar to a SKU, UPC or ISBN code, but uniquely designed for laboratory tests instead of stocking units, products or books.
 
The first challenge we faced was that test-specific, universal codes did not exist for the clinical laboratory industry. Instead, each laboratory had its own proprietary catalog, consisting of CPT codes, HCPCS codes and proprietary internal codes.
 
As a result, we developed a five-character tracking code that starts with the letter Z and is followed by four additional alphanumeric characters. These resembled but didn’t overlap with CMS/HCPCS codes. If all 36 alphanumeric characters are used in positions two through five, more than 1.3 million unique codes for MDx tests can be created. With the unique identifier concept and strategy in place, we then designed and developed the technical implementation online.
 
These Z-Code Identifiers can be obtained by test inventors in approximately three weeks through an open online application process. At the time of this writing, approximately 4,500 identifiers represent commercially available tests that are molecular in nature, such as human gene tests, protein cell surface markers and infectious disease probes.
 
As long as the identifier points to a data set, it doesn’t need to be informative. Data fields for short description, long description or a brief overview of the test methodology can be viewed after selecting search criteria or decision support criteria.
 
Another advantage of the online nature of such a diagnostic exchange is that it does not limit users to the content found in one specific database. In fact, a variety of additional informational resources can be presented simultaneously, permitting the user to learn a great deal about an unfamiliar test in just a few minutes.
 
Additionally, decision support criteria can be added to facilitate the search process, similar to the form fields people use to buy an airline ticket. Search results can then yield the correct test or a small listing of similar tests, permitting users to review and select exactly what they want.
 
During the selection process, a code identifier might not even be necessary in the visual display of this information, allowing additional functions to be added to support clinical documentation, access to evidence-based test selection criteria, payer coverage criteria and—one day, perhaps—direct order entry.
 
Any discussion of a diagnostic exchange, whether McKesson’s or another model, would not be complete without a discussion of interoperability. The concept of an electronic marketplace involves connectivity with everything relevant. For example, a diagnostic exchange should share information with the NIH Genetic Test Registry, which is a voluntary research and educational database that has more than 11,000 individual test entries and is growing rapidly.
 
Ideally, an effective diagnostic exchange needs a user interface that is merged into the existing user experiences of popular electronic medical record systems. Data packets consisting of standard data descriptions, such as test descriptions, methodologies or actual clinical results, should be sharable across interfaces. Lastly, a diagnostic exchange should have an analytic capability that can be linked to claims processing systems to create synergies with provider practice systems or health plan reimbursement systems and criteria.
 
We’re not there yet, but we’re getting there fast. We have reached a new frontier of clinical care, and the ability to unlock the human genome is upon us. The unparalleled view of the human blueprint that is now emerging has breathtaking consequences as we contemplate gene repairs. And while those consequences will surely bring controversy, they will also bring hope. But we need to get organized, now. This is the time to embrace the transformational benefits that a fully functioning, well-integrated diagnostics exchange can deliver.
 
 
1 National Center for Biotechnology Information, U.S. National Library of Medicine, Genetic Test Registry, September 3, 2013
2 UnitedHealth, Working Paper 7, “Personalized Medicine: Trends and prospects for the new science of genetic testing and molecular diagnostics,” March 2012. http://www.unitedhealthgroup.com/hrm/UNH_WorkingPaper7.pdf.
3 Transparency Market Research, Molecular Diagnostics Market (PCR, Next Generation Sequencing, Microarray, Infectious diseases, Genetic disease, Oncology testing, Blood donor screening) - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013-2019
 

Douglas Moeller, M.D., is medical director of McKesson Health Solutions. Dr. Moeller is an expert on clinical coding with a growing focus on advanced diagnostics and episode of care management. He was an internist in private practice before transitioning into medical informatics. For more about Z-Code Identifiers, visit the McKesson website at www.mckesson.com.

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