With the interest and demand for personalized medicine under the guise of molecular diagnostics, many institutions and hospitals are starting to take a serious look at costs and reimbursement for molecular testing. Physicians are requesting molecular-based tests on their patients with increasing frequency and justifiably so, but hospital and laboratory budgets have not been adjusted to accommodate molecular diagnostic testing--testing inherently priced much higher than conventional laboratory testing.

Additionally, third-party payers including the federal government have been slow in approving payment for these tests, even though many of them can save money in the long run with faster and more-specific diagnosis.

Most clinical laboratories and hospitals want to accommodate physician request in the interest of modern medicine, but have been cautious in opening up their availability, insisting on absolute clinical need and examining closely the costs involved.

Most laboratories have resorted to sending out these test requests for a limited number of molecular tests, but even with this strategy, this testing has had a huge financial impact on the laboratories' operating budget that is growing as more and more tests are being developed. Whether the institution is a small, medium or large hospital, every laboratory has had to cope with the high cost associated with molecular testing.

There is a perception however that small hospitals with less than 250 beds cannot afford to perform molecular diagnostic testing because of the costs and expertise required to perform this new wave of testing. Recent advances in automated instruments for molecular diagnostics however have now made it possible for even small hospitals to both perform a limited number of molecular tests and also generate sufficient margins to make the testing financially feasible.

Real Example
The following is an exercise on cost analysis using actual figures from a small community hospital currently sending out all its molecular testing to reference laboratories in response to requests from its medical staff. This exercise serves to demonstrate the feasibility of performing molecular diagnostic testing in house even in a small institution and provides reasonable justification for improving the test result turnaround time (TAT) that can be quite lengthy for some molecular tests like tuberculosis.

Hospital X has a rather modest volume and sends out a number of molecular diagnostic tests including testing where the average TAT for the result can take as long as 8 weeks for some infectious disease tests when cell culture is employed. The advantages of bringing this testing in house rather than sending the tests to an outside reference laboratory will become apparent once these figures are analyzed.

These figures are based on a molecular diagnostics automated instrument lease arrangement for the testing and include reagent costs but not labor costs. With the recent availability of instruments that can automate much of the molecular testing process, laboratories need to take a second look at performing this testing in house irrespective of the institution's size.

The benefits associated with in-house testing control and the marked improvement in TAT for molecular test results are important factors that should be considered and could have a significant impact on the financial decision to bring this form of testing in house.

For example, it typically takes about 8 weeks or so for tuberculosis culture testing versus 6-8 hrs for the MDR-TB test with much improved sensitivity and specificity. 

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