Factors Affecting Laboratory Test Use and Prices

Executive Summary

by Patricia Munch Danzon, Willard G. Manning, M. Susan Marquis


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The research summarized (four studies) investigated the effects of reimbursement policies on the use of, and charges for, laboratory tests. The principal findings were: (1) the percentage of the bill that the patient's insurance coverage pays does not influence the number of tests ordered during an outpatient visit; (2) laboratory use is lower in a Health Maintenance Organization than in the fee-for-service system; (3) physicians who control test billing appear to order more tests per visit than other physicians; (4) fee ceilings on inputs other than laboratory tests, such as physician time, appear to be offset, at least partially, by higher test prices; and (5) cost-based reimbursement for hospital services appears to increase cost and charges in hospital laboratories; the larger the share of laboratory services attributable to cost-paying patients, the higher are hospital laboratory costs and charges.

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