Setting the stage:

  • 1 in 10 diagnoses are incorrect.1
  • Diagnostic error accounts for 40,000-80,000 US deaths annually – somewhere between breast cancer and diabetes.1
  • Chances are we will all experience diagnostic error in our lifetime. 1

Many external environmental factors influence the ability to reduce harm from diagnostic error.  One of which is the Payment and Care Delivery system.  As we consider what the future holds, we should be asking, “Will reformation of the payment and care delivery system provide the desired outcome of improving the diagnostic process”?

Fee for Service (FFS) is the predominantly utilized payment model at the current time.  This model pays for each service at an established payment rate.  The FFS payment model may not incentivize a high-quality, efficient diagnostic process, because the more services the diagnostic process entails, the more remuneration will result.2   Therefore, instead of paying for improvement, this payment model has implemented processes to penalize the system for non-improvement.  Penalizing processes have included:

  • Development of Medical Coverage Policies that allow denial of payment for services determined to be not medically necessary after the service has been ordered and provided.
  • Decreasing reimbursement rates based on methods that have not considered the actual cost required to provide the service.

This payment model has laboratories ‘caught in the middle’ and either not being paid at all, or not being paid at appropriate rates, for services they have provided.  Continuing the use of the FFS payment system has the potential to force laboratory closures due to negative financial outcomes.  Laboratory closures and/or the need to outsource primary diagnostic testing would impact access to quality, timely health care services, especially in rural areas and near-patient service settings.

Several new payment and care delivery reforms aimed at countering the limitations of the FFS system are actively being developed and implemented.  These include capitation/global payment, shared savings, bundled episodes of care, accountable care organizations, patient-centered medical homes and pay for performance.2 At this current time there is limited evidence on the impact these payment and delivery models will have on the diagnostic process and diagnostic accuracy.  As the new models are developed, appropriate assessment mechanisms must be an integral part of the process to ensure improvement to the diagnostic process and that new models do not incentivize clinicians and health organizations to under-utilize evidence-based services resulting in an increase to the rate of diagnostic error.  As an essential diagnostic service, laboratory practitioners must be ‘present at the table’ in the development of these new care delivery models.

In pursuit of improving diagnosis in health care, we must envision the health care delivery system of tomorrow without pre-analytical and post-analytical error; a system that prevents test ordering that results in over- or under-utilization; a system in which payment and care delivery models incentivize improved diagnostic performance.  Reshaping our health care world to accomplish this will not happen overnight, nor will it be easy, but it can and must happen.


  1. US Institute of Medicine 2015, BMJ Quality & Safety 25-Year Summary of US Malpractice Claims, 2013
  2. National Academies of Science, Engineering, and Medicine. 2015.  Improving Diagnosis in Health Care. Washington, D.C.:  The National Academies Press; Retrieved from: diagnosis
  3. S Gittlen Reducing Diagnostic Errors; October 2016; Retrieved from:

About The Author

Lezlee Koch is a member of the American Society for Clinical Laboratory Science (ASCLS) Patient Safety Committee. She is a member of the COLA Board of Directors and is the COLA Resources, Inc. Board of Directors Chair. She has recently retired. Prior to retirement, she served as Outreach and Compliance Clinical Laboratory Manager for Avera Laboratory Network - Sioux Falls, SD and served on the Avera McKennan's Corporate Compliance Committee. She has delivered patient safety, laboratory management and professional motivational presentations at local, state, regional and national meetings. Previously she served as the ASCLS Region V Director, ASCLS-SD President, been a member and chair of multiple ASCLS state, regional and national committees and served as a member of CLIAC.

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