Clinical laboratory managers and pathology practice administrators should consider how these trends may affect their business and patients when planning for the future.
The McKinsey graphic above illustrates the “six trends that are likely to shape post-COVID-19 healthcare.” Clinical laboratories that support health networks struggling with any of these challenges should take steps to prepare for anticipated changes to healthcare delivery. (Graphic copyright: McKinsey and Company.)
1: Healthcare Reform
McKinsey identified three areas where the coronavirus pandemic may impact healthcare reform:
“COVID-19-era waivers that could become permanent.
“Actions that may be taken to strengthen the healthcare system to deal with pandemics.
“Reforms to address the COVID-19-induced crisis.”
McKinsey reports that “the Centers for Medicare and Medicaid Services has introduced more than 190 waivers since the beginning of March 2020.” These waivers can affect all aspects of healthcare, from clinical practice to reimbursement. Some of them, according to McKinsey, are “only relevant during the crisis (for example, the waiver of intensive care unit death reporting). A retrospective assessment of others (for example, expansion of telehealth access) could reveal beneficial innovation worth preserving.”
Several areas that McKinsey says are clearly ripe for reform include improving the resiliency of the healthcare system and the way the system is funded.
Public sector budgets are generally kept strictly separate, each with its own rules and policies that dictate operations. But in his article, “After COVID-19—Thinking Differently About Running the Health Care System,” published in JAMA Health Network, Stuart M. Butler, PhD, Senior Fellow in Economic Studies at the Brookings Institution, wrote, “The intensity of the COVID-19 pandemic … is forcing jurisdictions all across the country to find ways to be nimble so that multiple agencies can work together.”
Thus, McKinsey recommends, “Given the substantial shifts in relative market positioning among industry players that prior reforms have created, leaders would do well to plan ahead now.”
2: Better Access to Healthcare Services
Some people who develop COVID-19 are at far greater risk of hospitalization and death than others, including those who have:
Chronic health conditions, including obesity.
Mental and behavioral health challenges, such as substance abuse.
Unmet social needs, such as food or housing insecurity.
Poor access to healthcare.
McKinsey wrote that these “intersecting health and social conditions,” combined with certain races that have higher risk for severe complications, including Black, Indian, and Hispanic/Latino Americans, “correlated with poorer health outcomes.”
Value-based healthcare, telehealth, and greater attention to the social determinants of health may help address some of these issues, McKinsey notes, but the pandemic has shined a spotlight on how lack of care increases risk for certain populations during a public health crisis.
3: Era of Exponential Improvement Unleashed
Some of the trends that appear to be accelerating as a result of the pandemic are good news. McKinsey cites several benefits, including:
Improved understanding of patients.
Delivery of more convenient and individualized care.
$350-$410 billion in annual revenue by 2025.
Through telehealth and other types of virtual care enabled by digital technology, “intuitive healthcare ecosystems” may arise and offer a more integrated experience for patients and their caregivers, McKinsey notes.
“While the pace of change in healthcare has lagged other industries in the past, potential for rapid improvement may accelerate due to COVID-19. An example is the exponential uptake of digitally enabled, virtual care,” McKinsey wrote. “Our analysis … showed that health systems, primary care, and behavioral health practices are reporting increases of more than 50–175 times in telehealth visits, and the potential market size for virtual care could reach around $250 billion.”
The graphic above is taken from the McKinsey and Co. report, which noted, “Proliferation of digitally enabled, virtual care could further contribute to the rise of personalized and intuitive healthcare ecosystems [that] have the potential to deliver an integrated experience to consumers, enhance productivity of providers, engage both formal and informal caregivers, and improve outcomes while lowering cost.” (Graphic copyright: McKinsey and Company.)
4: The Big Squeeze
The pandemic has caused an enormous outflow of cash from the healthcare system, and some experts don’t expect an injection of funding until 2022. “This outflow is expected to be primarily driven by coverage shifts out of employer-sponsored insurance and possible coverage reductions by employers as well as Medicaid rate pressures from states,” McKinsey states.
“We estimate that COVID-19 could depress healthcare industry earnings by between $35 billion and $75 billion compared with baseline expectations,” McKinsey predicted, adding, “Select high-growth segments will remain attractive (for example, virtual care, home health, software and platforms, specialty pharmacy) and will disproportionally drive growth. These high-growth areas are expected to increase more than 10% over the next five years, while other segments may stagnate or decline altogether.”
5: Fragmented, Integrated, Consolidated Care Delivery
McKinsey says, “The shift of care out of hospitals is not new but has been accelerated by COVID-19.” Rather than the hospital being the center of care delivery, patients are increasingly choosing to receive care at a range of sites across many healthcare ecosystems that are connected digitally and through analytics.
Early in the course of the pandemic, visits to ambulatory care facilities dropped nearly 60% by early April. But by mid-May, those visits were beginning to rebound.
In, “The Impact of the COVID-19 Pandemic on Outpatient Visits: A Rebound Emerges,” the Commonwealth Fund reported that “the relative decline in visits remains largest among surgical and procedural specialties and pediatrics” but is “smaller in other specialties, such as adult primary care and behavioral health.”
The McKinsey graphic above shows how “virtual care and outpatient options show more potential revenue growth through 2022.” Clinical laboratories that support those healthcare settings, especially ambulatory surgery, behavioral health, and retail clinics, should experience similar growth. (Graphic copyright: McKinsey and Company.)
6: Adoption of Next-Generation Managed Care Is Accelerating
How will COVID-19 affect the managed care industry? McKinsey says the “next generation” of managed care might use Medicare Advantage as a model.
“Payers pursuing the next generation of managed care model (through deep integration with care delivery) demonstrate better financial performance, capturing an additional 50 basis points of earnings before interest, taxes, depreciation, and amortization above expectation,” McKinsey noted, adding, “Employers and payers could consider fundamentally rethinking how employer-sponsored health coverage is structured. Learning from Medicare Advantage could provide inspiration for such a reimagination.”
What Should Clinical Laboratory Managers Do?
The McKinsey article concludes by stating, “While the challenges are numerous, leaders who seize the mindset that “disruptive change provides an opportunity to separate yourself from the pack” will build organizations meaningfully stronger than the ones they ran going into the crisis.”
The McKinsey article authors recommend that healthcare organizations take several proactive steps, including:
Launch a plan-ahead team.
Question your role and your future business model.
Prepare to transform your business.
Reimagine your organization to make faster decisions.
Take action to drive health equity.
Though the McKinsey and Company article covered healthcare in general, many of the authors’ observations and recommendations can apply to clinical laboratories and pathology groups as well and may be valuable in future planning.
Breakthrough assay a ‘tenfold improvement over any prior assay for TERT mutations in the blood for brain tumors,’ MGH says in an affirmation of a diagnostic technology clinical labs might soon use
In recent years, investors have poured tens of millions of dollars into companies that promised to create non-invasive cancer tests which use liquid biopsy technology. Medical laboratory scientists even watched some of these companies hype their particular liquid biopsy tests before clinical studies generated data demonstrating that these tests produced accurate, reliable, and reproducible results.
For diagnosing cancer, a liquid biopsy test typically uses a blood sample with the goal of finding and identifying circulating tumor cells. Harvard Medical School researchers at Massachusetts General Hospital (MGH) believe they have developed just such a blood test. Their assay utilizes an enhanced form of liquid biopsy to detect and monitor one of the more prevalent types of brain tumor in adults—a glioma—and, according to a Harvard news release, can detect the presence of glioma at a significantly higher “overall sensitivity” than other similar liquid-biopsy tests.
Gliomas start in glia cells contained in the brain or spine. They account for about 30% of all brain and central nervous system tumors and 80% of all malignant brain tumors.
During their study, MGH researchers compared blood samples and tumor biopsy tissues from patients diagnosed with a glioma. They discovered that an assay they developed—a droplet digital polymerase chain reaction (ddPCR) blood test—could detect and monitor two types of telomerase reverse transcriptase (TERT) promoter gene mutations—C228T and C250T. These two gene mutations promote cancer growth and are present in more than 60% of all gliomas. The mutations are also present in 80% of all high-grade gliomas, which are the most aggressive and life-threatening types of the cancer.
In the press release, instructor in Neurosurgery at MGH and one of the study’s authors, Leonora Balaj, PhD, said, “By ‘supercharging’ our ddPCR assay with novel technical improvements, we showed for the first time that the most prevalent mutation in malignant gliomas can be detected in blood, opening a new landscape for detection and monitoring of the tumors.”
Bob Carter, MD, PhD (above), is neurosurgical oncologist and Chief of Neurosurgery at MGH, a Professor of Neurosurgery at Harvard Medical School, and one of the study’s authors. In the MGH press release he said, “We envision the future integration of tests like this one into the clinical care of our patients with brain tumors. For example, if a patient has a suspected mass on MRI scanning, we can take a blood sample before the surgery and assess the presence of the tumor signature in the blood and then use this signature as a baseline to monitor as the patient later receives treatment, both to gauge response to the treatment and gain early insight into any potential recurrence.” What Carter describes is precision medicine and could open new diagnostic opportunities for anatomic pathology groups and clinical laboratories. (Photo copyright: Massachusetts General Hospital.)
MGH’s Ten-Fold Improvement over Previous ddPCR Assays
A liquid biopsy is the sampling and analysis of non-solid tissue in the body—primarily blood. MGH’s liquid-biopsy method detects cancer by examining fragments of tumor DNA circulating in the bloodstream. Since the technique is mostly non-invasive, tests can be performed more frequently to track tumors and mutations and monitor treatment progression. Prior to this new method, brain tumors had been difficult to detect using liquid biopsies.
“Liquid biopsy is particularly challenging in brain tumors because mutant DNA is shed into the bloodstream at a much lower level than any other types of tumors,” Balaj said in the press release.
However, MGH’s new ddPCR assay has an overall sensitivity rate of 62.5% and a specificity of 90%, which represents a tenfold improvement over prior assays for TERT mutations in the blood.
And when testing the performance of the ddPCR assay in tumor tissue, the MGH researchers discovered their results were the same as results from a previous independently-performed clinical laboratory assessment of TERT mutations within collected tumor specimens. They also found that their assay could detect TERT mutations when looking at blood plasma samples collected at other facilities.
The researchers believe that their test could be performed in most clinical laboratories and can be utilized to follow the course of disease in cancer patients. The MGH researcher’s goal is to expand and adapt the blood test to diagnose, differentiate, and monitor other types of brain tumors in addition to gliomas.
Of course, more research will be needed before MGH’s new assay can become a vital tool in the fight against disease. However, this type of genetic analysis may soon provide pathologists with new techniques to more accurately diagnose and monitor cancers, and to provide healthcare providers with valuable data regarding which therapies would be the most beneficial for individual patients, a key element of precision medicine.
About 50% of South Asians and 16% of Europeans carry gene cluster associated with respiratory failure after SARS-CoV-2 infection and hospitalization
Clinical pathology laboratories and medical laboratory scientists may be intrigued to learn that scientists from two research institutes in Germany and Sweden have determined that a strand of DNA associated with a higher risk of severe COVID-19 in humans is similar to the corresponding DNA sequences of a roughly 50,000-year-old Neanderthal from Croatia.
The researchers concluded that this gene cluster—passed down from Neanderthals to homo sapiens—triples the risk of developing severe COVID-19 respiratory symptoms for some modern day humans.
In a press release, Pääbo said, “It is striking that the genetic heritage from the Neanderthals has such tragic consequences during the current pandemic. Why this is must now be investigated as quickly as possible.”
Might Useful Biomarkers for Clinical Laboratory Tests Be Identified?
Though it is not immediately clear how these findings may alter current approaches to developing treatments and a vaccine for the SARS-CoV-2 coronavirus, it is another example of how increased knowledge of human DNA leads to new understandings about genetic sequences that can spur development of useful biomarkers for clinical laboratory diagnostics tests.
Swedish geneticist Svante Pääbo, PhD (above right), Director of the Max Planck Institute for Evolutionary Anthropology in Germany, is co-author of a recent study that traced a gene cluster linked to a higher risk of severe COVID-19 to 50,000-year-old Neanderthals from Croatia. “It is striking that the genetic heritage from the Neanderthals has such tragic consequences during the current pandemic,” he said. Nevertheless, such discoveries sometimes lead to new biomarkers for clinical laboratory tests and diagnostics. (Photo copyright: Max Planck Institute for Evolutionary Anthropology.)
This latest research reveals that people who inherit a specific six-gene combination on chromosome 3—called a haplotype—are three times more likely to need artificial ventilation if they are infected by the SARS-CoV-2 coronavirus. Yet, the researchers can only speculate as to why the gene cluster confers a higher risk.
“The genes in this region may well have protected the Neanderthals against some other infectious diseases that are not around today. And now, when we are faced with the [SARS-CoV-2] coronavirus, these Neanderthal genes have these tragic consequences,” Pääbo told the Guardian.
According to the study, the gene risk variant is most common in South Asia where about half of the population carries the Neanderthal risk variant. In comparison, one in six Europeans have inherited the gene sequence and the trait is almost nonexistent in Africa and East Asia.
“About 63% of people in Bangladesh have at least one copy of the disease-associated haplotype, and 13% have two copies (one from their mother and one from their father). For them, the Neandertal DNA might be partially responsible for increased mortality from a coronavirus infection. People of Bangladeshi origin living in the United Kingdom, for instance, are twice as likely to die of COVID-19 as the general population,” Science News reported.
Other Research Connecting Genes to Severe COVID-19 Symptoms
The haplotype on chromosome 3 first made headlines in June when the New England Journal of Medicine (NEJM) published the “Genomewide Association Study of Severe COVID-19 with Respiratory Failure,” which analyzed COVID-19 patients in seven hospitals in Italy and Spain. The researchers found an association between the gene cluster on chromosome 3 and severe symptoms of SARS-CoV-2 after infection and hospitalization. The study also pointed to the potential involvement of chromosome 9, which contains the ABO blood-group system gene, indicating that humans with type A blood may have a 45% higher risk of developing severe COVID-19 infections.
However, Mark Maslin, PhD, Professor of Climatology at University College London, cautions against drawing strong conclusions from the initial research tying disease risk to the genetic legacy of Neanderthals, the Guardian reported. He suggested that, while the Neanderthal-derived variant may contribute to COVID-19 risk in certain populations, genes are more likely to be just one of multiple risk factors for COVID-19 that include age, gender, and pre-existing conditions.
“COVID-19 is a complex disease, the severity of which has been linked to age, gender, ethnicity, obesity, health, virus load among other things,” Maslin told the Guardian. “This paper links genes inherited from Neanderthals with a higher risk of COVID-19 hospitalization and severe complications. But as COVID-19 spreads around the world it is clear that lots of different populations are being severely affected, many of which do not have any Neanderthal genes.
“We must avoid simplifying the causes and impact of COVID-19, as ultimately a person’s response to the disease is about contact and then the body’s immunity response, which is influenced by many environmental, health and genetic factors.”
Andre Franke, PhD, Director of the Institute of Clinical Molecular Biology, Kiel University in Germany, agrees with Maslin, the Associated Press reported. In a statement “ahead of the study’s final publication,” he said these latest findings have no immediate impact on the treatment of COVID-19, and he questioned “why that haplotype—unlike most Neanderthal genes—survived until today,” AP reported.
All of this deepens the mystery of the SARS-CoV-2 coronavirus. Genomics research continues to add new insights into what is known about COVID-19 and may ultimately provide answers on why some people contract the disease and remain asymptomatic—or have mild symptoms—while others become seriously ill or die. Understanding why and how certain genes increase the risk of severe COVID-19 could give rise to targeted clinical laboratory tests and therapies to fight the disease.
Clinical laboratory managers may want to follow the debate that surfaced shortly after publication of the study in a peer-reviewed journal, when editors of the journal issued concerns over the researchers’ claims
Virologists and medical laboratory scientists continue to investigate ways the SARS-CoV-2 coronavirus can be defeated using the body’s own defenses in conjunction with medical treatments and a possible vaccine. Now, researchers at the Boston University School of Medicine have discovered that higher levels of vitamin D in the blood may improve chances of recovering from a COVID-19 infection.
“This study provides direct evidence that Vitamin D sufficiency can reduce the complications, including the cytokine storm (release of too many proteins into the blood too quickly) and ultimately death from COVID-19,” Michael F. Holick, PhD, MD, Professor of Medicine, Physiology and Biophysics at Boston University School of Medicine and one of the authors of the study, told SciTechDaily.
Holick is well-known in the scientific community for his many published studies on Vitamin D. In 2018, Kaiser Health News and The New York Times published a retrospective on Holick and his advocacy on behalf of Vitamin D, titled, “The Man Who Sold America On Vitamin D—and Profited in the Process.” In that story, Holick acknowledged working as a consultant for several organizations, including Quest Diagnostics in a relationship that dates back to 1979. KHN and NYT noted that Quest Diagnostics performs Vitamin D tests.
The Boston University researchers published their study in PLOS ONE, a peer-reviewed open-access scientific journal published by the Public Library of Science (PLOS). The paper’s apparent conclusions, however, invoked an “expression of concern” from the journal’s editors, which, along with direct responses from the Boston University researchers, can be read on PLOS ONE.
Can Vitamin D Save Lives?
To perform their research, the Boston University researchers examined the Vitamin D levels of 235 patients who had been admitted to a hospital with a SARS-CoV-2 infection. The patients were then tracked for clinical outcomes, including:
Blood samples were also analyzed for the number of lymphocytes and inflammatory markers. The researchers compared the collected data between patients who were sufficient to those who were deficient in Vitamin D levels.
They determined that patients over the age of 40 who were Vitamin D sufficient were 51.5% less likely to die from a COVID-19 infection than those who were deficient in the vitamin.
“Because Vitamin D deficiency and insufficiency is so widespread in children and adults in the United States and worldwide, especially in the winter months, it is prudent for everyone to take a vitamin D supplement to reduce risk of being infected and having complications from COVID-19,” Michael F. Holick, PhD, MD (above), told SciTechDaily. The Boston University School of Medicine professor and study author has been praising the health benefits of Vitamin D for years. He played a role in drafting national guidelines for the vitamin and also authored books that tout the advantages of Vitamin D, the importance of UV rays, and the biologic effects of light. (Photo copyright: Boston Herald.)
How Vitamin D Works and Why It’s So Important
In a fact sheet, the National Institutes of Health (NIH) recommend that adults between the ages of 19 and 70 take 15 micrograms (mcg) or 600 International Units (IU) of Vitamin D per day. Adults over the age of 70 should increase that amount to 20 mcg or 800 IUs per day.
According NBC News, Americans spent $936 million on supplements in 2017, which was nine times more than the previous decade. That article also stated that medical laboratory testing for Vitamin D levels have exponentially increased over the years. More than 10 million tests for Vitamin D levels were ordered for Medicare patients in 2016 at a cost of $365 million, which represents an increase of 547% since 2007. Currently, approximately one in four adults over the age of 60 in the US take Vitamin D supplements.
The NIH fact sheet notes that Vitamin D is a nutrient found in cells throughout the body and is needed for good health and to maintain strong bones. Individuals who are deficient in Vitamin D may develop soft, thin, brittle bones, as well as rickets in children and osteomalacia in adults. Vitamin D also helps the immune system fight off invading bacteria and viruses, helps nerves carry messages between the brain and other body parts, and helps muscles move. It can also play a role in warding off osteoporosis in older adults.
Very few foods naturally contain Vitamin D. The best dietary sources for the vitamin are fatty fish such as salmon, tuna, and mackerel, and foods fortified with Vitamin D, such as milks, some breakfast cereals, and yogurt. Being outside on sunny days is another way to obtain Vitamin D, as the body makes the vitamin when skin is directly exposed to the sun.
The Boston University study outlines the advantages of having sufficient Vitamin D levels, as well as how the vitamin may help ward off and possibly lessen the effects of infections like COVID-19, though those conclusions have been called into question.
Nevertheless, individuals who are deficient in the vitamin may want to take a supplement or get plenty of sunshine, just to be on the safe side. And clinical laboratory managers will want to keep in mind that over the years “the steady increase in physician and patient demand for Vitamin D tests has kept most clinical and pathology laboratories scrambling to maintain turnaround times and quality,” which Dark Daily reported in “Why Vitamin D Continues to Be the World’s Fastest-Growing Clinical Laboratory Test.”
CEOs of NorDx Laboratories, Sonora Quest Laboratories, and HealthPartners/Park Nicollet Laboratories expect demand for SARS-CoV-2 tests to only increase in coming months
The short answer is that large volumes of COVID-19 testing will be needed for the remaining weeks of 2020 and substantial COVID-19 testing will occur throughout 2021 and even into 2022. This has major implications for all clinical laboratories in the United States as they plan budgets for 2021 and attempt to manage their supply chain in coming weeks. The additional challenge in coming months is the surge in respiratory virus testing that is typical of an average influenza season.
Stan Schofield (above center), President of NorDx, a regional laboratory corporation that supports an integrated delivery system at MaineHealth in Portland, Maine.
Rick L. Panning (above right), MBA, MLS(ASCP)CM, retired as of Oct. 2 from the position of Senior Administrative Director of Laboratory Services for HealthPartners and Park Nicollet in Minneapolis-St. Paul, Minnesota.
Each panelist was asked how his parent health system and clinical laboratory was preparing to respond to the COVID-19 pandemic through the end of 2020 and into 2021.
First to answer was Panning, whose laboratory serves the Minneapolis-Saint Paul market.
A distinguishing feature of healthcare in the Twin Cities is that it is at the forefront of operational and clinical integration. Competition among health networks is intense and consumer-focused services are essential if a hospital or physician office is to retain its patients and expand market share.
Panning first explained how the pandemic is intensifying in Minnesota. “Our state has been on a two-week path of rising COVID-19 case numbers,” he said. “That rise is mirrored by increased hospitalizations for COVID-19 and ICU bed utilization is going up dramatically. The number of hospitalized COVID-19 patients has doubled during this time and Minnesota is surrounded by states that are even in worse shape than us.”
These trends are matched by the outpatient/outreach experience. “We are also seeing more patients use virtual visits to our clinics, compared to recent months,” noted Panning. “About 35% of clinical visits are virtual because people do not want to physically go into a clinic or doctor’s office.
“Given these recent developments, we’ve had to expand our network of specimen collection sites because of social distancing requirements,” explained Panning. “Each patient collection requires more space, along with more time to clean and sterilize that space before it can be used for the next patient. Our lab and our parent health system are focused on what we call crisis standards of care.
“For all these reasons, our planning points to an ongoing demand for COVID-19 testing,” he added. “Influenza season is arriving, and the pandemic is accelerating. Given that evidence, and the guidance from state and federal officials, we expect our clinical laboratory will be providing significant numbers of COVID-19 tests for the balance of this year and probably far into 2021.”
COVID-19 Vaccine Could Increase Antibody and Rapid Molecular Testing
Arizona is seeing comparable increases in new daily COVID-19 cases. “There’s been a strong uptick that coincides with the governor’s decision to loosen restrictions that allowed bars and exercise clubs to open,” stated Dexter. “We’ve gone from a 3.8% positivity rate up to 7% as of last night. By the end of this week, we could be a 10% positivity rate.”
Looking at the balance of 2020 and into 2021, Dexter said, “Our lab is in the midst of budget planning. We are budgeting to support an increase in COVID-19 PCR testing in both November and December. Arizona state officials believe that COVID-19 cases will peak at the end of January and we’ll start seeing the downside in February of 2021.”
The possible availability of a SARS-CoV-2 vaccine is another factor in planning at Dexter’s clinical laboratory. “If such a vaccine becomes available, we think there will be a significant increase in antibody testing, probably starting in second quarter and continuing for the balance of 2021. There will also be a need for rapid COVID-19 molecular tests. Today, such tests are simply unavailable. Because of supply chain difficulties, we predict that they won’t be available in sufficient quantities until probably late 2021.”
COVID-19 Testing Supply Shortages Predicted as Demand Increases
At NorDx Laboratories in Portland, Maine, the expectation is that the COVID-19 pandemic will continue even into 2022. “Our team believes that people will be wearing masks for 18 more months and that COVID-19 testing with influenza is going to be the big demand this winter,” observed Schofield. “The demand for both COVID-19 and influenza testing will press all of us up against the wall because there are not enough reagents, plastics, and plates to handle the demand that we see building even now.
“Our hospitals are already preparing for a second surge of COVID-19 cases,” he said.
COVID-19 patients will be concentrated in only three or four hospitals. The other hospitals will handle routine work. Administration does not want to have COVID-19 patients spread out over 12 or 14 hospitals, as happened last March and April.
“Administration of the health system and our clinical laboratory think that the COVID-19 test volume and demand for these tests will be tough on our lab for another 12 months. This will be particularly true for COVID-19 molecular tests.”
As described above, the CEOs of these three major clinical laboratories believe that the demand for COVID-19 testing will continue well into 2021, and possibly also into 2022. A recording of the full session was captured by the virtual Executive War College and, as a public service to the medical laboratory and pathology profession, access to this recording will be provided to any lab professional who contacts info@darkreport.com and provides their email address, name, title, and organization.
Robert L. Michel, Panelist—Publisher, Editor-in-Chief, The Dark Report and Dark Daily, Spicewood, Texas.
Given the importance of sound strategic planning for all clinical laboratories and pathology groups during their fall budget process, the virtual Executive War College is opening this session to all professionals in laboratory medicine, in vitro diagnostics, and lab informatics.
Though gene sequencing is touted as a key component of precision medicine, the medical value of direct-to-consumer testing has yet to show up in improved health outcomes, nor have clinical laboratories benefitted
In a recent example that the market for genetic genealogy testing may have peaked and the days of spectacular growth in the number of direct-to-consumer (DTC) genetic test orders and revenue is over, private-equity firm Blackstone—in a $4.7 billion deal—announced it will acquire a majority stake in Ancestry, which also does some clinical laboratory genetic testing as well.
Blackstone (NYSE:BX) acquired Ancestry of Lehi, Utah, one of the two largest genealogy testing companies (the other being 23andMe of Sunnyvale, Calif.), from a group of equity holders led by investment firms Silver Lake, GIC, Spectrum Equity, and Permira, noted a press release. GIC will retain a “significant minority stake” in Ancestry.
“We are very excited to partner with Ancestry and its management team. We believe Ancestry has significant runway for further growth as people of all ages and backgrounds become increasingly interested in learning more about their family histories and themselves,” David Kestnbaum, a Senior Managing Director at Blackstone, said in the press release. “We look forward to investing behind further data, functionality, and product development across Ancestry’s market leading platform to continue to provide a differentiated service.”
Is Genetic Testing for Genealogy Still a Growth Industry?
Ancestry is the global leader in digital family history services, operating in more than 30 countries with more than three million paying subscribers across its Ancestry online properties and more than $1 billion in annual revenue.
However, some experts say the road ahead may not be smooth for Ancestry or its major competitor, 23andMe.
“The business landscape fell off a cliff last year,” Laura Hercher, Director of Human Genetics Research at Sarah Lawrence College in New York, told STAT. “Fads pass,” she added.
Hercher points out that Ancestry has “this enormous database, which inherently has a lot of value hidden in it—potential energy. But they have not figured out how to get that information out in the way 23andMe has.”
23andMe’s pivot into medical research gained steam in 2018 when pharmaceutical giant GlaxoSmithKline (NYSE:GSK) purchased a $300 million stake in the company with the aim of using 23andMe’s resources to develop new medicines. That collaboration began bearing fruit earlier this year when GlaxoSmithKline started human trials of the first medicine (a cancer drug) to emerge from the partnership, STAT reported.
The public’s declining interest in at-home genealogy, however, has caused both companies to reduce staffing. 23andMe began the year by laying off about 100 employees—an estimated 14% of its workers—and Ancestry followed suit in February, letting go a similar number of employees, representing roughly 6% of its workforce.
According to MIT Technology Review, direct-to-consumer genetic genealogy testing reached its zenith in 2018 when consumers purchased as many DNA tests in one year as they had in all previous years combined, propelling total sales from Ancestry, 21andMe, and other DTC gene testing companies to roughly $26 million.
In 2019, CNBC reported that, market-wide, roughly 30 million tests had been sold across the globe. However, in recent years, sales have fallen short of expectations as the number of people willing to pay $99 to learn about their ancestry has dwindled. “I suspect those that are curious about this information are thinning out and there’s less people to go around to grow,” Greg Yap (above), Partner at Menlo Ventures, told CNBC. “I think there’s a broader issue, which is that the ultimate medical value is still really unproven,” Yap added. “There’s lots of research being done, but value for mass market consumer isn’t there yet, so it keeps a ceiling on the size of that market.” (Photo copyright: VentureBeat.)
Privacy Still a Concern
Ancestry has begun to insert itself into the genetic testing healthcare arena. In a press release, the company announced the launch of AncestryHealth, a $179 DNA testing kit that uses next generation sequencing (aka, high-throughput or massive parallel sequencing), aimed at providing adult consumers information on their inherited health risks.
However, as MedCity News points out, the sale to Blackstone has increased privacy concerns around the direct-to-consumer DNA testing market. Ancestry’s consumer privacy and data protections remain unchanged under the new ownership, but Alan Butler, Interim Executive Director at Electronic Privacy Information Center (EPIC), told MedCity News, “This is one example of a very troubling trend. It’s something regulatory agencies are not up to date to deal with. It’s one of the reasons we need comprehensive privacy law in the US.”
As genealogy companies such as 23andMe and Ancestry shift their focus from providing genetic histories to improving consumers’ health through genetic testing, clinical laboratories should be mindful of the logical next step, which is predicted to be genetic tests where the consumer collects the sample at home and the test is used to aid in diagnosing and treating patients.
