1. Are Laboratory Tests Commodities?
By: Mark S. Birenbaum, Ph.D.
Administrator
National Independent Laboratory Association (NILA)
CCLA Annual Conference
San Diego, California
November 8, 2013 .
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2. Are Laboratory Tests Commodities?
Definition of a Commodity:
A class of goods for which there is demand, but which is supplied without qualitative differentiation across a market
A commodity is fungible, i.e., the market treats instances as equivalent, or nearly so, with no regard to who produced them.
Examples: Wheat
Corn
Oil/Gasoline
Gold
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3. Are Laboratory Tests Commodities?
Laboratory Tests Are Services, Not Goods Actually, Laboratory Test RESULTS Are Services, Not Goods
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4. Are Laboratory Tests Commodities?
The Production of Lab Test Results Is a Process, with All the Variability of Process Delivery:
Specimen collection/storage/processing/labeling
Personnel
Equipment
Materials/reagents
Measurement methods
Recording/reporting of results
Environmental factors
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5. Are Laboratory Tests Commodities?
For an Intangible Service to be a Commodity, It Must:
Be widely available
Be essentially uniform across providers, i.e., indistinguishable from a result provided by another laboratory
Be sold primarily on the basis of price rather than quality
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6. Are Laboratory Tests Commodities?
Question #1
Are clinical laboratory tests widely available?
Answer:
Some are, some aren’t
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7. Are Laboratory Tests Commodities?
Question #2
Are laboratory test results uniform across providers with little to no differentiation in quality?
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8. Are Laboratory Tests Commodities?
CLIA’s Test Categories:
Highly complex
Moderately complex
Provider performed microscopy
Waived*
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9. Are Laboratory Tests Commodities?
Waived Tests
Employ methodologies that are so simple and accurate as to render the likelihood of erroneous results negligible
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10. Are Laboratory Tests Commodities?
Example of a Waived Test:
Blood glucose from a whole blood specimen
Millions performed daily
Widely available
Almost all systems “waived” since 1992
How uniform are blood glucose test results across providers?
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11. Are Laboratory Tests Commodities?
Allowable Error Criteria
American Diabetes Association Total Analytic Error <5% (all values)
College of American Pathologists Greater of 20% or 12 mg/dL Whole Blood Glucose (WGB) Survey
Clinical Laboratory Standards Institute 20% (>75 mg/dL) 15 mg/dL (CLSI) ISO (<75 mg/dL) (95% of Values)
FDA 20% (>100 mg/dL) 12 mg/dL (<100 mg.dL) (95% of Values)
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12. Are Laboratory Tests Commodities?
2003
Table 5. Number (%) of specimens falling outside various criteria for the four meters
Criteria
Meter A
Meter B
Meter C
Meter D
NCCLS (C30-A)53
122 (26%)
11 (2.4%)
7 (1.5%)
28 (6.1%)
ADA (1987)18
247 (54%)
23 (5.0%)
15 (3.3%)
71 (15%)
ADA (1996)54
423 (92%)
233 (51%)
194 (42%)
299 (65%)
FDA (1998)21
116 (25%)
4 (0.9%)
6 (1.3%)
ISO (2001)22
112 (26%)
25 (5.4%)
Table 6. Number (%) of specimens falling into each of the categories of clarke glucose error grid analysis
Zone
Categories
Meter A
Meter B
Meter C
Meter D A
Accurate
339 (74%)
450 (97.6%)
454 (98%)
435 (94%) B
No error in treatment
117 (25%
5 (1.1%)
5 (1%)
22 (5%) C
Overtreat
1 (0%) D
Failure to detect
6 (1.3%)
2 (0%)
4 (1%) E
Wrong treatment
0 (0%)
E Chen, Diab Tech Ther 2003;5:749
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13. Are Laboratory Tests Commodities?
2006
CDC Study of 5 Common Meters
Single Med Tech Operator
93 subjects, 12 samples obtained (2 each meter and for reference method)
“Aged” and “fresh” strips used for total %CV
Total CVs = 6.3 – 11.3%
Difference Between Meters Varied with Concentration and Meter Pairs
1 – 32% average differences observed
Kimberly, Clin Chim Acta 2006;364:292.
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14. Are Laboratory Tests Commodities?
2009
Comparison of Blood Glucose Meter Results at Barnes Jewish Hospital (St. Louis)
One sample performed on 40 meters
Mean value = 167
Range: 153 – 210
%CV = 8.4%
95% C.I. =
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15. Are Laboratory Tests Commodities?
2012
Study by a European Multicenter Healthcare Organization
453 subjects
5 blood glucose meters tested
The Mean Absolute Relative Differences (MARD) ranged from 4.9%-9.7%
Only 3 meters met the ISO requirements
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16. Are Laboratory Tests Commodities?
Other Problems with Blood Glucose Meters
Over 12,000 adverse events reported annually to FDA
Over 12,672 serious injuries reported from
100 deaths due to blood glucose meter errors reported from 1992 to 2009
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17. Are Laboratory Tests Commodities?
Other Problems with Blood Glucose Meters, continued
March 26, 2013, Johnson & Johnson recalls 1.9 million blood glucose meters after a death of a patient in Europe
April 15, 2013, Abbott Laboratories recalls its FreeStyle InsuLinx blood glucose meters after finding they display and store incorrect test results
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18. Are Laboratory Tests Commodities?
Summary
Blood glucose meters differ in
composition
technical methodology
software
styling
instructions on use
Newer blood glucose meters are getting better and more accurate. But results still vary
Results are NOT uniform in quality across providers
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19. Are Laboratory Tests Commodities?
Answer to Question #2:
Blood glucose meter test results are NOT uniform across providers
It is even highly questionable that blood glucose meters meet CLIA’s classical definition of a waived test:
Waived test systems are simple laboratory examinations and procedures that
Employ methodologies that are so simple and accurate as to render the likelihood of erroneous results negligible, or
Pose no reasonable risk of harm to the patient if the test is performed incorrectly
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20. Are Laboratory Tests Commodities?
Answer to Question #2, continued
Blood glucose meters are being used in clinical settings (hospitals and physician offices) for uses that are NOT approved by the FDA
For example:
“Glucose meters are NOT FDA approved for use in tight glycemic control protocols in ICUs. But having said that, people (in ICUs) are using them and they are used very, very, very widely…”
Dr. David Sachs, Associate Professor of Pathology, Harvard University Director, Clinical Chemistry Division, Brigham and Women’s Hospital
FDA Symposium March 2010
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21. Are Laboratory Tests Commodities?
Question #3:
Are laboratory tests sold primarily on the basis of price rather than quality?
Answer
Yes, many healthcare insurers insist that laboratory test results be sold on price, not quality
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22. Are Laboratory Tests Commodities?
Conclusion
Whole Blood Glucose Determination by a Blood Glucose Meter Does NOT Meet the Definition of a Commodity
But Many Payers Treat It as a Commodity
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23. Are Laboratory Tests Commodities?
Final Question
If a Whole Blood Glucose Determination by a Blood Glucose Meter is Not a Commodity, Are the Majority of Other Laboratory Test Results (70-80%) Commodities?
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