The $1000 Pap smear: A pathologist responds

Dr. Cheryl Bettigole, a New Jersey-based family practitioner and a National Physician’s Alliance board member, has written an interesting editorial in the New England Journal of Medicine in which she states she is no longer surprised when laboratories charge her patients $1000 or more for a Pap smear.

According to Dr. Bettigole, the reason for the exorbitant charges are not the actual Pap smear itself (although she does mention the fact liquid-based preps are more expensive than conventional smears), but the tests that get added on, many of which she feels are unnecessary.

These additional tests include tests for HPV and STDs and “sophisticated laboratory tests for a variety of yeasts.”  She does allow for the fact HPV testing is recommended for women between the ages of 30 and 64 every five years and routine STD testing is recommended for women between the ages of 15 and 25 who have signs/symptoms of infection.

She admits these often unnecessary tests get ordered by “a physician or nurse practitioner or the medical assistant processing the specimen”, but goes on to say laboratories must share in the blame for this problem.  Her rationale for this is that labs have made it too easy for unnecessary tests to be ordered.

What used to require physicians to submit multiple collection vials and check multiple boxes on a requisition form now requires only one vial to be submitted and one box for a number of bundled tests to be checked.  In addition, labs provide nothing “along the way” that alerts the physician or the patient to the tests’ cost or their clinical utility.

She also mentions the “savvy” marketing tactics employed by laboratory salespeople that mirror those in the pharmaceutical industry.

In the end, Dr. Bettigole worries these excessive lab costs may lead some women to forego cervical cancer screening simply because they cannot afford it.

Commentary

I completely agree with Dr. Bettigole that it would be an absolute travesty for any woman to not be screened for cervical cancer because of the expense.

And while I certainly applaud Dr. Bettigole for writing this editorial (and the NEJM for publishing it), I do have some additional thoughts.

I agree the responsibility lies with the clinician

I can do nothing but agree with Dr. Bettigole when she says, “…we physicians and our staff are responsible for ordering these unnecessary tests and hence responsible for the huge bills our patients are receiving.”

An exception to this exists in the world of surgical pathology, where additional immunohistochemistry, molecular tests, etc. may be necessary for final diagnosis, and the pathologist usually performs those sans an order from the clinician.

In my opinion, however, it matters not if a lab sends the slickest, best-dressed, and most knowledgeable and charming salesperson to the physician’s office, or if the lab uses an order form with only one box for all the tests it performs.  The only tests that should be ordered are the ones that are necessary for that particular patient.

Laboratory medicine is in many ways a service industry, and clinicians (should) understand that.  If the lab to which they send specimens regularly provides bad service by performing unnecessary or unwanted tests, or is somehow “tricking” the physician into ordering too many tests, then the physician should change labs.

That being said, there are many, many physicians out there who work for a hospital, or clinic, or some other entity that has a contract with a single lab, and they do not have a choice as to which lab they can use.

But if they do have a choice, then they are indeed responsible if a lab repeatedly provides bad patient care and they do nothing about it.

Now some of you may be wondering whether I believe it is the referring physician’s fault if a lab participates in outright fraudulent and illegal behavior (and unfortunately there are plenty of labs that do).

My answer to that is not the first time it happens, or the second, or even the third.  But if it continues to happen with such frequency that the clinician is “no longer surprised” (to use Dr. Bettigole’s words), then yes, I believe it is.

Why is a medical assistant ordering tests?

As I highlighted above, Dr. Bettigole states some of the blame for this rests on the “medical assistant processing the specimen.”  She further goes on to say (emphasis added):

It seems harmless, even possibly beneficial, to run these additional tests, and for our staff, it eliminates the risk of missing a test the doctor might have wanted to have run.

I guess I am curious as to why a medical assistant in her office is empowered to order tests she may not have even wanted.

Defensive medicine likely plays a role

Dr. Bettigole does not mention defensive medicine in her editorial, but I have to believe it is part of the problem.

It simply stands to reason that a physician’s chances of being sued decline dramatically if they don’t miss something significant.  And the way to not miss something significant is to test for it.

I see this every day around the hospital in specialties other than pathology.

For some physicians, excessive lab charges are a feature, not a bug

And now for the cynical part.

As I have discussed numerous times in the past, 31 states allow physicians to client bill for pathology services.  For those who do not know, this means referring physicians in those states can order an independent pathology lab to perform tests on samples from their patients and pay that lab (usually) far less than the usual and customary fee for those tests.  The physician can then turn around and bill the patient up to and sometimes more than the full usual and customary fee, and pocket the difference as pure profit.

So for those physicians, a $1000 bill for gynecologic tests sounds like a really good idea, because probably at least $500 of that is going straight into their pockets, all for literally doing nothing.

I want to make clear I am in no way accusing Dr. Bettigole of doing this; I am merely mentioning it as a likely motivation for many clinicians out there.

In fact, New Jersey happens to be one of the 19 states that statutorily prohibits client billing for pathology services.  So physicians there could not do this even if they wanted to.  At least not legally.

“The Pathology Blawg” is a pathologist who blogs at his self-titled site, The Pathology Blawg.

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  • ninguem

    What would the cost of an ordinary conventional PAP smear have been, say, in 2000 or 1990?

    I did the smears then, but really, I did not know the cost. That was the patient and the laboratory. I just did the procedure and physical exam, and whatever other “by the way” problems came up in the office visit.

    Were these PAP smears the equivalent of $1000 in the year 1990 or 2000? Did the price recently jump up?

    • ninguem

      Oh, I think I see it now:

      http://www.nejm.org/doi/full/10.1056/NEJMp1307295

      Was a PAP really $20-$30 in recent years?

      When did the cost explosion start?

      I think that may well be part of the problem, the front-line clinicians were brought up thinking this was a fairly inexpensive test, and had not been made aware of the steep increase in cost.

      • Jess

        The cost a doctor will quote you for DOING a PAP test is less than a hundred dollars.

        Go through this cost calculator from Dartmouth-Hitchcock:

        http://patients.dartmouth-hitchcock.org/billing_questions/out_of_pocket_estimator_dhmc.html

        Choose “Diagnostic Test” in Step 1, choose “Lab Tests” then “Pap Test” in Step 1a, choose “No Insurance” in Step 2, and calculate.

        “Estimate of how much you will owe: $61. Please note: This estimate includes a discount provided by DHMC for patients who do not have insurance.”

        BUT, what it doesn’t make clear, is that that’s just for the doctor’s services. You’ll get a bill from the lab a few weeks later, for anywhere from $800 to $1500.

        More than one self-payor has gotten caught in that trap. There’s just no transparency – it may be the lab’s “fault”, but patients will tend to take their anger out on the doctor who they feel led them to believe it would only be $61.

  • Tiredoc

    Why as practitioners do you put up with flagrant price gouging by the laboratories? For the record, all of the tests that you described for the liquid PAP are immunologic assays. Virtually all of the immunologic assays are less than $2 per test in reagent cost. The actual laboratory cost (equipment, space, power, personnel, shipping, etc.) for the liquid PAP is under $20.

    As for the “client bill” tirade, I use client bill primarily for my cash pay patients, to insulate them from the rapacious laboratory companies and local hospitals. I order a metabolic evaluation for all my patients, including a CMP, CBC with differential and several metabolic markers. This exact panel is billed at $600-$1100 directly to the patients by the various stand-alone laboratory companies and hospitals in town. I buy the labs myself and charge my patients $100.

    You are correct in that I could buy the labs and bill the cash pay patients whatever I wanted to. I seriously doubt that I could charge $700 for the labs and keep any patients. As for insurance companies, client billing is not allowed for Medicaid or Medicare in any state.

    The insurance companies pay me according to their fee schedule, which is about 30% more than the cost of the labs. Every insurance company that I contract with has a “medically necessary” clause that would make ordering of laboratories for no reason a bad business decision.

    Client bill benefits everyone. The insurance company benefits because they have direct economic leverage over the physician responsible for ordering the test. The patient benefits because they can argue the bill with the physician responsible for ordering the test. And the lab benefits because they get paid without annoying the physician for incomplete paperwork, arguing with an insurance company, or dealing with irate patients.

    Preventing doctors from profiting on the services that they order does not save money. It never has. Two generations of double digit medical inflation in the midst of ever more intrusive and onerous Stark laws should at least have disabused every doctor of that notion.

    What lowers costs is the patient paying for the service.

    • ninguem

      For the most part, with the labs, in my office, it’s been “they do their thing, I do my thing” and I just send the sample to the lab for billing.

      The only consideration I ever got from the lab, was to keep me well supplied with the materials needed to draw blood and urine and tissue samples, and microbiology. Which, of course, was going right back to them, anyway.

      But yes, every so often I get a patient complaint of simply outrageous laboratory billing. Sometimes it was a national lab company. A lot of times, it was the hospital lab.

      I’d use the hospital’s lab as….I don’t know, loyalty, ..whatever you want to call it……to the hospital where I was on staff. But every so often they would hit a patient with a bill that was orders of magnitude out of line with the regional or national laboratories.

      I’ve had to stop using the hospital’s lab altogether.

      • Tiredoc

        I used to do that, too. I ended up firing the hospital lab and going with an independent supplier. It is shocking just how much the hospitals get away with. Once you start doing some labs yourself you realize what a scam the excessive lab charges are. I just want to get the word out to all the “quit doing so many labs” docs out there that there are ways to get what you need quite cheaply.

  • Jess

    Doing a quick Google shows that the $1000 PAP test is no anomaly. I stumbled upon this forum where women were comparing costs, and found several comments along these lines:

    “Office visit, we paid up front and were told we wouldn’t have any other
    bills… was $168.10. I was so shocked it was cheap compared to my last
    visit years ago. Then a month later get a bill in for $2045.00 from
    [Redacted] Laboratories. Apparently my Doctor thought I needed every
    single yeast culture test under the sun even though I was not at risk,
    nor did I request anything but a basic pap smear. My husband is refusing to pay and I am waiting for Monday so I can call up both offices and give them a taste of my mind. This is down right con-ing patients out ofmoney. Oh I’d love to give the media this news…if this isn’t
    fixed. Maybe people will see the problem with health care is prices are
    not listed upfront and the consumer/patient isn’t given a choice.”

    That was from a cash patient, here’s one from someone with insurance: “So that $1145.00 is just for the lab work. The insurance also paid for a
    $118.00 office visit. When I called to asked why the lab work cost so
    much the lady said don’t worry your insurance will cover it at 100%. No
    wonder my premium is so expensive.”

    It doesn’t sound like anyone, insured or self-pay, feels that their medical provider was honest with them up front about what this test would cost.

    Link here: http://health.costhelper.com/pap-test.html comments towards bottom of page.

    • GT

      “When I called to asked why the lab work cost so much the lady said don’t worry your insurance will cover it at 100%.”

      This is why I don’t understand how Obamacare is going to lower the amount of money America spends on health care. It’s just going to make MORE Americans MORE disconnected from the actual costs of the services they’re receiving.

      • Guest

        Now that all pap smears will be “free” for all women, and there will be no price signalling at all, don’t expect labs to moderate their prices any time soon.

        As long as it’s all “free”, no one will care about the actual price.

  • Deceased MD

    The very basic bread and butter lab tests or older generic medications are far more than the doctors visit. Goes right along with the sky rocketing cost of certain generic medications.
    If Obamacare does not address these costs for the most basic tests, then we’re headed for real trouble.

  • Tiredoc

    Yes, it’s 30% IF I get paid. As there is substantial risk of non-payment and later recoupment, that 30% profit is less than what I would normally accept for providing a service that has a cost other than my labor. As such, I generally only use the client bill with worker’s compensation and similar insurance companies that tend to deny payment to the laboratory companies. That way, my patients don’t get stuck with the jaw-dropping laboratory bill of 10,000% profit. On average, I barely break even on the metabolic labs using client bill.

    My rule of thumb is that wholesale cost is 1/3 of retail price. If I’m going to retail a product and actually profit at the end of the day, my cost excluding my labor must be less than that amount. Otherwise, it isn’t worth doing for the money. As I outlined above, there are reasons other than profit to provide a service that just breaks even. Client bill as such isn’t worth doing for every patient. It is, however, worth keeping as leverage.

    • GT

      A lot of people don’t realize that just as retail outlets have to mark up prices to cover for “shrinkage” (i.e. shoplifters), so do doctors.

      If no person ever took something from a shop without paying for it, retailers wouldn’t need such a big mark-up to cover for it. And if no patient ever took services from a doctor without paying for them, doctors wouldn’t need to mark up the labs that they buy.

      It’s okay for Whole Foods to make a profit, it’s just not okay for doctors to do so.

  • Tiredoc

    I think one other point needs to be added to this thread. There is a specific exclusion to the CLIA complexity rule for PAPs. Normally a physician would have to hire a pathologist as medical director for a high complexity laboratory, which the histology portion of the PAP is. (The liquid portion immunochemistry is actually moderate complexity.) For PAPs, however, the treating physician, if they have the appropriate training, can do the test themselves. (Literally themselves, not a tech.)

    The point is, if you really want to spare your patients from excessive laboratory charges, you can always do it yourself. With the projected 40% drop in revenue over the next couple of years, it’s probably something that will look more and more attractive to the independent practitioner.

    • ninguem

      Is there any place that trains primary care docs to interpret PAP smears?

      Not that I have any strong desire to do that, I had just never even heard of such a thing.

      I’d have thought the only place to get such training would be a pathology residency.

      • Tiredoc

        As far as I know, the only other residency that sometimes provides training in reading PAP smears is OB/GYN. The CLIA exception for PAPs was intended specifically for OB/GYNs who read their own PAPs.

        I suspect the appropriate training would materialize if the economics made sense.

        • ninguem

          Izzat so? I had no idea that **any**. OB/GYN’s read their own PAP’s.

          Don’t think I’d ever heard of that.

          Assuming the training even existed and it could be done with equal quality, I’d find it hard to imagine the economics would work out in a primary care practice. But hey, things can change.

          • Tiredoc

            I knew of one, and only one solo OB/GYN that read his own PAP’s. He was in his 70s 20 years ago and had been doing so since he started practice in the 1960s. Like most “grandfather” clauses, it’s for oddball cases.

            The economics are that the doctor doesn’t have to pay for a cytotechnologist for the histology or a pathologist to act as medical director. It would have to be a tiny lab, probably no more than 10-20 samples/week, done not for profit but for cash paying patients to avoid the lab overcharge.

            It doesn’t really even qualify as a “plan B,” more like a “plan D.” I do think a lot of “plan D” options are going to get dusted off next year, though.