Even as some states lift stay-at-home orders, clinical laboratories and pathology groups face uncertainty about how quickly routine daily test referrals will return to normal, pre-pandemic levels
Although strokes and heart attacks do not take vacations, a large and growing number of patients with serious health issues who—in normal times—would require immediate attention are not contacting providers to get needed care. Instead, they are avoiding hospital emergency rooms and clinical laboratories for fear they’ll contract the COVID-19 coronavirus.
Starting in early March, hospitals nationwide suspended elective surgeries and procedures and reduced non-COVID-19 inpatient care to make beds available for the predicted on-rush of COVID-19 patients. However, in parts of the country, the predicted high demand for hospital beds and ventilators failed to materialize. Additionally, due to shelter-in-place orders, patients in many states postponed routine office visits with their primary care physicians.
The collective collapse in the number of elective services provided by hospitals, and the fall-off in patients visiting their doctors, is crushing the financial stability of the nation’s clinical laboratory industry.
In, “From Mid-March, Labs Saw Big Drop in Revenue,” Dark Daily’s sister publication, The Dark Report (TDR) reported on the revenue challenges facing clinical pathology groups and clinical laboratories. Kyle Fetter, Executive Vice President and General Manager of Diagnostic Services at XIFIN, a revenue cycle management company, told TDR that starting in the third week of March, labs suffered a steep decline in routine testing. By the end of March, that fall-off in revenue ranged from 44% for some AP specimens to 70% to 80% for some specialty AP work. During these same weeks, XIFIN’s data showed clinical labs experienced a drop in routine testing volume of 58%, hospital outreach testing declined by 61%, and molecular lab volume went down by 52%.
Using data from multiple sources, The Dark Report estimates that—compared to pre-pandemic levels—the clinical laboratory profession lost almost $900 million in revenue each week—or about $5.2 billion as of April 26. (See Dark Daily, “COVID-19 Triggers a Cash Flow Crash at Clinical Labs Totaling US $5.2 Billion in Past Seven Weeks; Many Labs Are at Brink of Financial Collapse,” May 4, 2020.)
Can Clinical Laboratories Hang on Financially Until COVID-19 Goes Away?
Though most states have not met the nonbinding criteria recommended by the Trump administration for reopening, nearly 40 governors in early May began loosening stay-at-home orders, reported CNN, including allowing elective medical procedures to resume.
Patients may make up for lost time by returning to doctors’ offices for medical laboratory tests and other COVID-19-delayed procedures, and as this happens, clinical laboratories may experience a surge in routine test orders from doctors’ offices and hospital admissions once stay-at-home orders are lifted and fear of COVID-19 has passed.
According to an article published on Axios, a survey of 163 physicians conducted by SVB Leerink—an investment firm that specializes in healthcare and life sciences—found that “roughly three out of four doctors believe patient appointments will resume to normal, pre-coronavirus levels, no earlier than July, and 45% expect a rebound to occur sometime between July and September.” If so, the financial squeeze facing clinical laboratories, pathology groups, and other medical and dental professionals may continue to loosen.
Hospital Finances Are Being Particularly Stressed by Loss of Patients
The impact of stay-at-home orders on hospital systems, in particular, has been dramatic. CNBC reported that RWJBarnabas Health, an 1l-hospital 22-laboratory health system in New Jersey that has 11 emergency departments, totaled just 180 emergency room visits per day during a mid-April weekend, a sharp decline from their 280-per-day-average.
A recent Washington Post article paints an even bleaker picture. Clinicians in the United States, Spain, United Kingdom, and China anecdotally report a “silent sub-epidemic of people who need care at hospitals but dare not come in,” the article states, noting people with symptoms of appendicitis, heart attacks, stroke, infected gall bladders, and bowel obstructions are avoiding hospital emergency rooms.
“Everybody is frightened to come to the ER,” Mount Sinai Health System cardiovascular surgeon John Puskas, MD, told the Post. Though his 60-bed cardiac unit had been repurposed to care for COVID-19 patients, Puskas said the New York hospital system was seeing “dramatically fewer” cardiac patients.
Concerned that patients may be ignoring signs of heart attack or stroke rather than go to a hospital, the American College of Cardiology launched the “CardioSmart” campaign, which urges anyone experiencing heart symptoms to get prompt treatment and to continue routine appointments, using telehealth technology when available.
“Hospitals have safety measures to protect you from infection,” the CardioSmart website states. “Getting care quickly is critical. You’ll get better faster, and you’ll limit damage to your health.”
However, David Brown, MD, Chief of Emergency Medicine at Massachusetts General Hospital in Boston, argues the number of people having heart-related issues is unlikely to have dropped during the pandemic.
“Strokes and heart attacks don’t take a vacation just because there’s a pandemic,” Brown told The Boston Globe. “They’re still happening. They just aren’t happening as much inside the hospital, which is a major concern to me.”
Many healthcare professionals are worried about the long-term effect from pandemic-delayed preventative and elective procedures.
“The big question is are we going to see a lot more people that have bad outcomes from heart disease, from stroke, from cancer because they’ve put off what they should have had done, but were too afraid to come to the hospital?” Providence St. Joseph Health CEO Rod Hochman, MD, told CNBC.
Hochman, who is Chair-elect of the American Hospital Association (AHA), maintains the aftereffects of people putting off elective surgeries and screening procedures like colonoscopies and mammograms may be felt for years to come.
“We’re possibly going to see a blip in other disease entities as a consequence of doubling down on COVID-19,” he told CNBC.
In clinical laboratories, COVID-19 testing may have somewhat helped offset the drop in routine testing volume. However, the pandemic’s overall financial costs to labs and pathology groups will likely be felt for months to years, as patients slowly return to healthcare providers’ offices and hospitals.
—Andrea Downing Peck