By Kristie Ressler

Healthcare reform is happening right now.

It may not always be obvious, but small improvements and advancements are being made across healthcare systems, businesses, labs, and legislative bodies nationwide. Collectively, they are transforming healthcare piece by piece.
Lab benefits management (LBM) exemplifies this incremental but essential progress. A relatively innovative LBM shines a spotlight on a critical but often overlooked area of healthcare that is key to improving care while also controlling costs: lab testing. In 2024 alone, the U.S. spent over $100 billion on testing, which influences up to 70% of clinical decision-making. Yet, many of these tests are redundant, unnecessary, or poorly timed, contributing to high costs and potentially compromising care.

LBM provides much-needed oversight, ensuring tests are used appropriately and effectively. Health plans and providers can improve member care while controlling costs by adhering to appropriate standards and usage policies for routine and genetic lab testing.

Here are six key ways LBM is improving healthcare:
1. Controlling costs and improving transparency – The cost of lab testing is rising fast, fueled by the growth of genetic tests and personalized medicine. The growing number of tests makes it difficult for plans to evaluate their necessity and clinical utility. LBM helps by ensuring tests are clinically appropriate before approval and reduces the number of duplicate or low-value tests.

LBM partners also control costs by steering providers and patients toward in-network or lower-cost, high-quality labs that perform the same tests for much less than hospital labs.

2. Creating greater system transparency – LBMs create open communication among health plans, providers, and labs. This offers transparency into ordering patterns and coverage policies. A management system can eliminate bottlenecks and confusion caused by inconsistent test coding and provider behavior.

3. Promoting evidence-based testing – LBMs work with plans to make coverage decisions based on evidence-based guidelines informed by the latest research. By helping ensure the right patient gets the right test at the right time, LBM reduces the overuse of expensive, unnecessary, low-value tests that drive up costs but do little to improve care. Eliminating unnecessary or misleading test results produces more accurate diagnoses and guides more precise treatments.

4. Improving access and health equity – Managing lab networks and processing prior authorization (PA) requests can strain health plan resources, resulting in PA delays, which impact care and frustrate providers and members. LBM streamlines PA and manages lab networks, accelerating care and improving access to quality lab services, particularly in underserved or rural areas.

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