Factors Affecting Laboratory Test Use and Prices

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.