Blue Cross NC, Avalon partnership leads to $112M in savings on lab tests

North Carolina State Flag flying in the wind at Fort Macon.
Blue Cross NC has released results from its partnership with Avalon Healthcare Solutions. (BSPollard/iStock/Getty Images Plus)

Blue Cross and Blue Shield of Carolina has driven significant savings on lab services in its partnership with Avalon Healthcare Solutions, the insurer announced on Thursday.

Avalon manages lab benefits, and their team-up lead to $112 million in savings last year, Blue Cross NC said. Better managing in these services led to fewer unneeded tests and improved adherence to clinical guidelines.

Lab testing is a common source of cost bloat that often flies under the radar. Such screenings are the most common intervention in U.S. healthcare, Blue Cross NC said, for a projected 13 billion tests annually. Testing has also become increasingly complex, and the number of inappropriate tests is high, the insurer said.

“Our collaboration with Avalon has given us more insight into improving the quality and reducing the cost of lab services for our members,” said Roberta Capp, M.D., chief medical officer at Blue Cross NC, in a statement. “As these results show, Blue Cross NC members benefit from our ongoing efforts to make health care better, simpler and more affordable.”

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The partnership with Avalon launched in 2017 and has led to several key improvements in managing testing services. For one, 99% of tests ordered are now within Blue Cross NC's network, compared to 86% before it signed on with Avalon.

Avalon's platform also allows for greater automation and clarity for providers in adhering to clinical testing guidelines and offers a simple pre-approval system that ensures ordered tests are appropriate and included in the patient's coverage.

“Laboratory testing is a pivotal part of high-quality, cost-effective health care,” said Bill Kerr, M.D., CEO of Avalon Healthcare Solutions, in a statement. “Our close collaboration with Blue Cross NC is a leading example of how insurers and health care companies can work together to improve outcomes and increase value for consumers.”