News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Kaufman Hall Report Says Hospitals Saw Less Inpatients and Outpatients during Summer as Bad Debt and Charity Care Rose

As a result, health system-based clinical laboratories likely saw a decline in test orders as well a decrease in outreach revenue

Bad financial news continues in the hospital industry. According to an August 2023 National Hospital Flash Report from consulting firm Kaufman Hall, hospitals’ financial performance deteriorated in July, partly due to declines in inpatient and outpatient volumes and rising bad debt and charity care.

The implication from these findings is that hospital-based clinical laboratories saw a drop in test volume and any lab revenue associated with inpatient testing.

In an analysis of data from more than 1,300 hospitals, Kaufman Hall noted a dip in hospitals’ median calendar year-to-date operating margin from 1.4% in June down to 1.3% in July. The data also showed “a greater pullback in volume on the outpatient side, which may be attributed to patients choosing not to pursue elective procedures during the summer,” a Kaufman Hall news release stated.

Kaufman Hall’s National Hospital Flash Report by Erik Swanson, Senior Vice President, Data and Analytics, and Brian Pisarsky, Senior Vice President, Strategic and Financial Planning, is an analysis of actual and budget data—sampled from Syntellis Performance Solutions—which is representative of hospitals of various sizes and areas in the US.

“It’s clear that today’s challenging financial environment is here to stay, and hospital leaders must be proactive in seeking out opportunities to refine their operations and remain competitive,” said Erik Swanson, Senior Vice President, Data and Analytics, Kaufman Hall, in a news release. Clinical laboratory leaders would be wise to follow the same advice. (Photo copyright: Kaufman Hall.)

Expenses Declined, Bad Debt and Charity Care Rose

Here are other national data Kaufman Hall reported for July 2023 as compared to June 2023:

  • Adjusted discharges per calendar day dropped 7%.
  • Operating room minutes per calendar day declined 13%.
  • Emergency department visits per calendar day fell 1%.
  • Bad debt and charity care as a percentage of hospitals’ gross operating revenue was up 7%.
  • Purchased service expense per adjusted discharge was down 3%.
  • Labor expense per adjusted discharge also fell 3%.

Even though expenses slightly declined during July, patient volume decreases “pulled down” the margins, Healthcare Innovation reported, which called the report “a gloomy one.”

Also, the uptick in bad debt and charity care while volumes decreased created a “difficult situation for hospitals,” Medical Economics observed. 

Here are the report’s “key takeaways,” according to Kaufman Hall:

  • All volume indicators were down, but operating margins were still better than 2022.
  • Outpatient volume decreased more than inpatient, possibly due to patients choosing not to have elective procedures during the summer.
  • The decline in expenses was “not enough to offset revenue losses,” and inflation will continue to take its toll on labor expenses.
  • Medicaid has been “disenrolling” members in 30 states during June and July, and bad debt and charity care have increased.  

The report also called out need for improvement in providers’ discharge of patients to skilled nursing facilities. “Hospitals that prioritize care transitions to skilled nursing facilities are performing better than institutions [that] do not,” Swanson said in the news release.

“Identifying steps that can ensure a smooth transition, such as obtaining pre-authorizations and planning discharge early, will help organizations reduce expenses and improve patients’ experience,” he continued.

For Hospitals, 2023 Not as Bad as 2022

MedCity News pointed out that though July’s operating margin index decline followed four months of growth, hospitals are still way ahead of 2022 performance when median operating margins were -0.98% in July 2022.

Still, it appears hospitals are struggling to secure financial footing after 2022, an overall bad financial year for the hospital industry.

In “Tough Times Ahead for Hospitals and Their Labs,” Dark Daily’s sister publication The Dark Report referenced a Fall 2022 Current State of Hospital Finances Report, prepared by Kaufman Hall for the American Hospital Association. The report noted that “under an optimistic scenario, hospitals would lose $53 billion in revenue [in 2022]. The loss would primarily come from a $27 billion decline in outpatient revenue and $17 billion for inpatient as well as $9 billion in emergency department revenue.”

More recently, a 2023 Becker’s Hospital CFO Report compiled a list of 81 hospitals that had cut jobs since the start of the year in response to “financial and operational challenges.”

Included was Tufts Medicine in Burlington, Massachusetts. In August, the hospital “eliminated hundreds of jobs” in an outsourcing of lab outreach services to Labcorp. The Becker’s report noted that “[Tufts] said it will work with Labcorp to have the majority of affected employees transition to a similar position with Labcorp.”

Tips for Clinical Lab Financial Viability

Medical laboratory leaders need to help ensure financial health of their labs as well as quality and efficiency of services. Advice from Kaufman Hall may be applicable.

The report writers advised providers to secure payer authorizations before a “patient comes in the door.” For clinical labs, this is comparable to the need to secure insurance company authorizations for expensive genetic tests before samples are taken and tests performed.

Another tip from Kaufman Hall is to “collect and use data to inform process improvement” and “make change.”  Along those lines, medical laboratories could leverage patient data to guide launch of new services, entry to markets, workflow improvement, and costs reduction.

—Donna Marie Pocius

Related Information:

National Hospital Flash Report: August 2023

Patient Volume and Revenue Decline in July, Challenging Hospitals’ Performance

Kaufman Hall: Hospital Margins Dented by Falling Patient Volume

Hospital Finances Decline in July

Hospitals’ Operating Margins Fell in July after Four Months of Growth

Clinical Laboratory Trends: Tough Times Ahead for Hospitals and Their Labs81 Hospitals, Health Systems Cutting Jobs

New Life for Idle PCR Instruments Following the Sustained Decline in COVID Testing

How one PCR laboratory optimized workflows, reduced costs, and pivoted operations for improving profitability post-COVID    

As variants of SARS-CoV-2 continue to confront physicians, PCR (polymerase chain reaction) instruments purchased for COVID-19 testing may still stand idle more often than not at reference and hospital laboratories. To make matters worse, clinical laboratory administrators must still deal with fluctuating demand for COVID testing, improving the profitability of COVID testing, and maximizing their investment in PCR instruments.  

Despite the challenges, Birmingham, Alabama-based Streamline Scientific, formerly Assurance Scientific Laboratories, rallied last year to improve profitability of their now limited COVID testing and, at the same time, expanded lab operations instead of cutting back. 

Laboratory Creativity Led to Value-Added Process Improvements for COVID-19 PCR Testing

In a recent interview with Dark Daily, Streamline Scientific’s Chief Scientific Officer Greer Massey, PhD, explained how the lab discovered ways to adjust operations to improve profitability after the drop in COVID-19 testing demand. They started with the testing process. 

Optimizing workflows has been instrumental in the profitability of continued COVID PCR testing, according to Greer Massey, PhD (pictured), of Birmingham, Alabama-based Streamline Scientific, a reference lab that pivoted during the COVID-19 pandemic to make value-added process improvements and expand testing. (Photo copyright: Streamline Scientific.)

“Some COVID testing processes are labor intensive,” Massey said. “They require an initial step to extract and purify RNA from the collected specimen. Once the genetic material is separated from the specimen, it can then be amplified to look for the presence of the virus. The extraction process requires additional materials, time, and advanced training of medical technologists conducting the work.” 

The Streamline team sought to simplify the COVID testing process and, ultimately, adopted an extractionless PCR method that improved efficiency in three ways: 

  1. Shorter turnaround times with faster delivery of test results;  
  1. A reduction in staff time needed for the extractionless COVID testing workflow; and  
  1. Optimized use of consumables, such as buffers, magnetic beads, plastics, and other supplies required for COVID and other testing. 

The process improvements have reduced the cost per test by as much as 25%, reducing supply chain issues and improving overall profitability in the now struggling COVID test category.  

In addition, Massey said, the benefits of the extractionless PCR process have inspired the lab to further optimize its reagent use. Working with its local supplier and their research and development unit, Molecular Designs, the reference lab now keeps an inventory of preplated PCR assays in sealed and barcode-labeled 384-well plates, as well as 96-well plates developed with a “breakaway” feature to accommodate variable testing volumes and support custom test panels. Plates are customizable from one to 94 targets, Massey said. 

The unique breakaway feature of sealed, preplated PCR assays optimizes and customizes test runs not only for COVID-19 but for other infectious disease assays. (Photo copyright: Molecular Designs.) 

“Being able to optimize workflows with items like extractionless and breakaway plates was instrumental in our profitability during COVID peaks and valleys, and it was also instrumental in managing expected TAT,” Massey added. “It also allowed us to release other panels such as COVID/Flu/RSV and larger respiratory panels when the importance of COVID-only diagnosis shifted to other important respiratory infections.” 

Operationalizing a COVID-Pivot Experience: Consulting and Reagent Supply 

Building on its success, Streamline Scientific now provides end-to-end consulting services for reference and hospital laboratories, as well as physician offices that manage in-house PCR testing.  

“Streamline Scientific consults with reference, hospital, and physician office labs throughout the nation to share best practices and help identify the equipment, assays, or processes that improve workflow and profitability,” said Todd Speranzo, the company’s vice president of marketing. 

“What we have learned from our customers is how important it is to understand reagent pricing and how that translates into operational profitability,” Speranza said. “We’re also looking for ways to deliver cost-effective infectious disease PCR assays that laboratories can use to expand their testing services while maintaining profitability. Molecular Designs’ preplated Simplicity Panels provide convenience, reducing the complexity, time, and costs associated.” 

Molecular Designs is a team of doctors and scientists working to advance molecular diagnostics, Speranzo pointed out. “Their founding physicians entered the molecular diagnostics market focused on the most common pathogens that impact the population—making products that are cost-effective, reduce waste, and are easy-to-use.” The supplier has grown to offer numerous panels, including combination COVID 19-Flu-RSV and respiratory panels, UTI panels, wound/derm panels, sexually transmitted infection panels, gastrointestinal panels, fungal panels, and vaginitis panels; eight antimicrobial resistance classes are available as panel add-ons; and multiple other panels are in development. 

Laboratory Outlook: Full Utilization of PCR Capacity and Ability to Respond to Changing Testing Needs 

While the implementation of COVID-19 PCR testing has had a positive impact on patient care—and led to growth for reference laboratories and hospital labs—those who invested in PCR molecular testing equipment may face challenges with capacity and meeting changing needs. 

Speranzo offers these tips for lab leaders sourcing PCR instruments. 

  • Compare costs; prices have reduced from COVID peak. 
  • Look beyond COGS for improved profitability; consider preplated options, extractionless, and breakaway plates, amongst other opportunities to improve efficiency and reduce waste. 
  • Plan for the future; seek a partner with a robust research and development division that considers reimbursement and demand beyond COVID. 

As lab leaders have experienced firsthand, nimble and adaptable operations were a critical success factor during the COVID pandemic. With the post-COVID pivot at hand, regional reference and hospital laboratory leaders will benefit from not only scrutinizing their PCR testing menus and costs but deciding what new assays will support opportunities in the year ahead.  

—Liz Carey 

This article was produced in collaboration with Streamline Scientific, a national reference lab and consulting organization. All products are for research use only. For more information, visit

Related Information: 

Post-COVID: Repurposing Excess PCR Instruments  

Molecular Designs 

Three Data Trends Guiding Cost-Saving Laboratory Logistics Strategies and Benchmarks

Negative margins, a shift to nontraditional care sites, and an increasingly complex logistics environment should prompt clinical labs and anatomic pathology groups to quickly evaluate shipping costs and data analysis 

In September, American Hospital Association (AHA) leaders and Kaufman Hall healthcare analysts posted a particularly dismal status update for US hospitals, saying more than half are projected to operate in negative margins for the rest of the year.

As a result, hospital and healthcare leaders are likely facing difficult decisions around traditional operations while actively seeking new partnerships to increase reach and impact of their hospital services, including clinical lab and pathology testing.

Market pressures and revenue opportunities, including nontraditional clinical trial designs, hospital-at-home programs, and innovative care management for patient cohorts, are reshaping healthcare around the US. These and other ensuing shifts will add complexity on top of already burgeoning costs to the physical logistics of clinical laboratory testing and pathology services.

Traditional and Nontraditional: Conduct Assessments of Lab Shipping Costs and Logistics Management

Analyzing data of dynamic logistical inputs will support informed service line decision-making and can ultimately lead to cost savings for clinical labs and health systems, according to Jeff Ledbetter, regional consultant for Cardinal Health OptiFreight Logistics. Ledbetter monitors cost-per-shipment models and trends in service modes for a variety of healthcare providers, networks, and reference laboratories.

“What I’ve seen in the marketplace is that labs have historically built a reliance on physician offices across the country,” Ledbetter explained in an interview with Dark Daily. “What is changing is that labs have diversified their client base and who they now consider customers.” Some of the new inputs include individual consumers, corporations, and schools, in addition to integrated delivery networks (IDNs) and IDN-like entities.

Jeff Ledbetter at Cardinal Health

For Dark Daily, regional consultant for Cardinal Health Jeff Ledbetter explained three data trends guiding cost-saving clinical laboratory logistics strategies and benchmarking. These will be important as labs diversify their client base and who they now consider customers. (Photo copyright: Jeff Ledbetter.)

The problem, Ledbetter said, is that lab executives are not able to see the profitability of their customer types and cannot achieve operational efficiencies because of the more complex and dynamic inbound and outbound shipment flow.

Ledbetter describes three ways to analyze lab costs:

1. Cost-per-pack benchmarking,

2. Ratio of test kit outflow to inflow, and

3. Visibility to shipments for workflow management and staffing availability.

With multiple transportation components for each test performed, “a hidden cost element is wasted test kits,” Ledbetter said. “We look at the ratio of specimens sent out but not returned to the lab. Each lab kit passes through multiple modes of transportation. Kits that are deployed but not returned to the lab become waste, resulting in sunken cost. When I talk to reference lab leaders, they understand this is an issue, but they don’t know how to manage it.” Ledbetter points to OptiFreight Logistics’ robust analytics as a critical element to help manage the waste. To increase profitability, the lab can adjust to whom and how it deploys kits to optimize the number of kits with specimens that return to the lab for testing.

A related issue is understanding the ratio of outflow to inflow for identifying profitability of customers. “Managing customers is now shaped by data points such as productive and profitable pickups,” Ledbetter said. For example, a returned shipment with five specimens is more profitable than a shipment with only one specimen.

“We also look at efficiencies that consider the number of lab employees needed to accession specimens, and how delivery timing can maximize efficiency of the testing operation,” Ledbetter said. “This is based on the mode of service and available delivery time.”

The starting point, Ledbetter said, is to gain continuous data-driven insights into the best possible service modes and specimen pack timing that will improve the lab’s operational efficiency, ease staffing constraints, and correlate with business-critical key performance indicators. Amid an ongoing shift to nontraditional care sites, this level of visibility is critical, he added.

Aggressive Adoption of Decentralized Clinical Trial Services Expected

Following a Clinical Operations Roundtable, global management consulting firm McKinsey and Company explored the acceleration of decentralized clinical trials post-pandemic. Experts there define that model as a clinical trial centered around patient needs that improves the patient experience. By design, decentralized clinical trials will use one or more “decentralization elements” based on suitability for their end points, patient populations, and treatments.

“Clinical-trial sponsors creating hybrid protocols are drawing from the menu of decentralization services and technology interventions, such as remote monitoring of vitals, mobile clinics, and home visits,” wrote Life Sciences Practice leader Gaurav Agrawal and others for the McKinsey and Company report, “No Place Like Home? Stepping Up the Decentralization of Clinical Trials.”

“Traditional site visits will still be needed for complex procedures and specialized assessments, such as screenings and magnetic resonance imaging. So smart, hybrid trial designs will make other touchpoints virtual or closer to the patients—for instance, through mobile clinics and primary-care physicians—whenever possible,” states the McKinsey report. The graphic below shows potential trends that will be of interest to hospital and IDN executives, clinical laboratory leaders, and anatomic pathology group administrators.

According to McKinsey and Company research, clinical trial investigators anticipate a threefold increase in remote patient interactions compared to before the pandemic, although that comfort level is lower than during the peak of the pandemic. (Source: McKinsey and Company and Nature Reviews Drug Discovery.)

Since specific laboratory tests mark key points within the care continuum, decentralization creates a more dynamic environment for specimen logistics, making visibility, data analytics, and predictive technology around lab deliveries essential for maximum profitability.

Hospital at Home and Moving Lab to Home

As the healthcare industry shifts to the home as a site of care, legacy patient-provider relationships and business will face disruption, executives at The Chartis Group wrote in a blog post published in September.

“Health systems would do well to consider how they are positioned to deliver care at home as an integrated part of their care models,” Chartis wrote in its blog. “This may include evaluating legacy home health assets and programs, while also rapidly evaluating the business case for launching a hospital-at-home program as part of their broader strategic and operational plans.”

Although outpatient services have taken to the flavor of innovation, hospital-at-home models may not be easy. “Simply extending the reach of hospitals into patients’ homes is unlikely to allow the promising scale or cost savings stakeholders hope for from home hospitalization programs,” according to a recent Health Affairs piece that simplifies many of the issues, such as top-down and bottom-up payment approaches and transformation challenges of which include diagnostics, monitoring, pharmaceuticals, and nursing services among many.

Regardless, changes to hospital operations in the coming year may be inevitable as a result of cost and payer pressures. In the meantime, patient cohorts appear to be a starting point for moving lab to home and potentially stopping the bleeding.

In Arizona, Sonora Quest Laboratories announced an “exclusive service” that is targeted to those living with chronic conditions and cognitive decline. Collaborating with remote healthcare service provider Getlabs in Los Angeles (for blood sample collection services) and Raleigh, NC-based uMETHOD (a precision medicine care plan provider), the service provides on-demand home lab collection, diagnostics, and individualized assessments to help slow early-stage progression of cognitive decline.

The Sonora Quest-Getlabs-uMethod triad is just one example of mobile and remote clinical laboratory services at work in various parts of the country, as The Dark Report recently explained. In a pilot trial of at-home phlebotomy services, laboratory order completion rates for patients jumped up 22.5%—this is significant because many factors can lead patients to discontinue lab orders, such a driving distances, time wasted sitting in a lab’s waiting room, or the inability to travel.

All of these moves describe strategic actions healthcare providers are taking to make existing and new services more accessible and possibly more efficient. Demand for shifting from traditional to nontraditional sites for care will continue to confront clinical labs and anatomic pathology groups with both opportunities and dilemmas. Forward-looking hospital, health system, and reference lab leaders will leverage logistics technologies.

—Liz Carey

This article was produced in collaboration with Cardinal Health OptiFreight Logistics. For more information, visit or email

Related Information:

Report: Hospitals Face Worst Year Financially Since Start of COVID-19 Pandemic, Jeopardizing Access to Patient Care

No Place Like Home? Stepping Up the Decentralization of Clinical Trials

CVS Acquisition of Signify Health Highlights the Rapid Move to Healthcare at Home

Hospital At Home Is Not Just For Hospitals

Telemedicine Firms Offer Home Phlebotomy Service

Proven Approaches to Clinical Laboratory Cost-Cutting and Effective Staff Recruitment/Retention to Be Shared at New Workshops in Chicago and Miami

Answers and effective solutions to the lab profession’s most urgent challenges will be front and center at the innovative ‘Lab Management Essentials Workshop’

Three powerful forces are slamming clinical laboratories today. One is the urgent need to cut costs. Second is the struggle to achieve and maintain full lab staffing. Third is the pressure to increase revenue and expand market share.

All of this is happening even as hospitals and health systems must deal with almost identical issues. Cost-cutting, recruiting more staff, and finding ways to increase revenue dominate the thoughts and actions of senior health administrators.

Most Hospitals and Health Systems Report Substantial Financial Losses

News reports about the financial losses at hospitals and health systems tell the story. For example, one report in Becker’s Healthcare described the financial damage at three major, multi-state health systems:

  • AdventHealth, a 48-hospital health system, reported a $417.7 million net loss in the first quarter of 2022. It reported that, because of inflation, costs had increased by 15% over prior year.
  • Kaiser Permanente, with 12.6 million members in seven regions of the United States, reported a net loss of $961 million in the first quarter of 2022. One major factor in these losses was the increase in expenses, which was 9.5%. For second quarter 2022, Kaiser Permanente showed a loss of $1.3 billion, most of that from a decline in the value of its investment portfolio.
  • Ascension Health, with 143 hospitals in 19 states, reported a net loss of $884.7 million in first quarter of 2022. It said its costs increased by 10.6% over the same period last year.

Most hospital-based clinical laboratory managers and pathologist are aware of these staggering financial losses. They also are watching how the shortage of nurses and other skilled personnel has hospitals scrambling to close that gap by paying more overtime, using temporary nurses who are paid at much higher rates, and increasing nurse salaries to prevent existing staff nurses from taking more lucrative offers from other hospitals in the community.

Clinical Laboratories Under Pressure to Cut Costs and Maintain Adequate Staff Levels

Hospital-based laboratories are on the frontline of these hurricane forces. Facing operating losses, hospitals ask their laboratories and other clinical service lines to cut costs below authorized budgets. Meanwhile, the labs themselves must deal with their own shortage of medical technologists (MTs) and clinical laboratory scientists (CLSs)—along with other skilled positions—that are required to provide the full menu of lab testing services.

This “perfect storm” of pressures to cut costs, keep staffing at authorized levels, and generate more revenue (that can offset rising costs of lab supplies and the higher salaries being paid to MTs and CLSs) is without precedent in the past four decades. To provide lab managers with the knowledge to resolve these challenges swiftly and confidently in their own laboratories, the team behind the Executive War College assembled experts to conduct a one-and-a-half-day interactive workshop.

The workshop is titled, Lab Management Essentials Workshop to Effectively Cut Costs, Improve Staff Hiring and Retention, and Generate More New Revenue. The first of these workshops will occur in Chicago on Oct. 20-21. The same instruction will be provided in a workshop in Miami on Nov. 10-11. By design, lab managers will learn in small settings that ensure personal interaction with the experts in lab cost cutting; staff recruiting, hiring, and retention; and generating more lab revenue.

Using Lab Case Studies to Teach Proven Solutions for Reducing Expenses

Each of the three important topics will be addressed in half-day learning modules. Following case study presentations on best practices, attendees at Lab Management Essentials will break out into smaller roundtable groups facilitated by lab industry experts. The groups will brainstorm how to apply these proven methods to cut costs, retain employees, and create revenue. They will then describe their findings to all participants.

Lab Management Essentials Workshop facilitators (clockwise from top left): Tafney Gunderson, Carlton Burgess, Dorothy Martin, Rick VanNess, Jane Hermansen, and Kim Zunker.

On the morning of day one, leaders of the lab cost-cutting module will be:

  • Carlton Burgess, Vice President of Laboratory Services at Prime Healthcare in Ontario, Calif.
  • Tafney Gunderson, Quality Systems Supervisor at Avera McKennan Laboratory in Sioux Falls, S.D.

On the afternoon of day one, leaders of the lab staff recruiting, hiring, and retention module will be:

  • Dorothy Martin, Regional Laboratory Manager at Dartmouth-Hitchcock Health in Lebanon, N.H.
  • Kim Zunker, MBA, MLS(ASCP), CAPM, Consulting Manager at Accumen in Scottsdale, Ariz.

On the morning of day two, leaders of the lab staff recruiting, hiring, and retention module will be:

  • Jane Hermansen, MBA, MT(ASCP), Manager of Outreach and Network Development at Mayo Clinic in Rochester, Minn.
  • Rick VanNess, Director of Product Management at Rhodes Group and TriCore Reference Laboratories in Albuquerque, N.M.

Delivering Essential Knowledge to Up-and-Coming Laboratory Managers

This Lab Management Essentials workshop is a first for the clinical laboratory profession. It brings together experienced, effective lab leaders to teach, guide, and coach your lab’s smartest up-and-coming lab managers. It accomplishes this in just one-and-a-half days, to minimize the time they are away from your lab.

To gain maximum benefits from this well-designed program, it is recommended that you send three or four of your front-line lab managers. Together, they will hear and learn at the same time, while working during the intimate sessions to identify the techniques and methods that will work best for your lab. This is important because, upon their return, they will have both enthusiasm and the knowledge to light the right fires under your lab staff and energize them into quickly deploying ways to slash expenses, attract top candidates to fill open positions, and even to tap new sources of revenue—all of which they learned during Lab Management Essentials.

Because the number of attendees to each workshop is limited, you are encouraged to click here to register yourself and your designated lab managers today.

—Robert Michel

Related Information:

Lab Workshop Solutions to Staffing, Cost Cutting, and Revenue Problems

Efficient Data Structure Can Bring in More Reimbursement Dollars and Allow Clinical Laboratories to Sell Aggregated Information

Walmart’s Health and Wellness Chief Discusses Retail Giant’s Move to Healthcare/Telehealth Provider, a Step with Implications for Clinical Laboratory Testing

Retail giant now has primary care clinics at stores in five states, but the rollout has not gone smoothly

Healthcare is increasingly being driven by consumerism and one clear sign of this trend is Walmart’s ambitious plan to open health clinics at its retail locations. The retail giant set its plans in motion in 2019 with its first primary care site in a suburban Atlanta store, however, the rollout since then has presented certain challenges.

Nevertheless, the trend of placing nearly full-service primary care clinics in retail locations continues. Clinical laboratories in these areas need strategies to serve customers accessing healthcare through these new channels, particularly as Walmart and the national retail pharmacy chains continue to expand the clinical services offered in their retail stores.

“Consumer engagement is a huge part of healthcare, [yet it is also a] gap for us in healthcare,” cardiologist and Walmart VP of Health and Wellness Cheryl Pegus, MD, told Modern Healthcare. “Healthcare is incredibly complicated,” she added. “And where we are in healthcare today is not in having great treatments. It’s not in having evidence-based medicine. It’s understanding how we engage consumers.”

The company also entered the telehealth business with last year’s acquisition of multispecialty telehealth provider MeMD.

“Telehealth offers a great opportunity to expand access and reach consumers where they are and complements our brick-and-mortar Walmart Health locations,” said Pegus in a Walmart new release announcing the acquisition. “Today people expect omnichannel access to care and adding telehealth to our Walmart healthcare strategies allows us to provide in-person and digital care across our multiple assets and solutions.”

Currently, Walmart Health centers only operate in Georgia, Florida, Illinois, and Arkansas. But telehealth enables Walmart “to provide virtual healthcare across the country to anyone,” Pegus said. With both offerings, “we’re really attempting to allow people to get healthcare the way they need it without disrupting the rest of their life.” Many users of these services are Walmart “associates,” she added, using the company’s term for its retail employees.

Cheryl Pegus, MD
“In this country, about 25% of people don’t have a primary care physician,” cardiologist Cheryl Pegus, MD (above), Walmart’s VP of Health and Wellness, told Medscape. “So, your options for being able to solve in real time something that will help you, they’re quite limited. What we’re trying to do is give those options. We’re not trying to take away emergency rooms, or healthcare systems, or existing primary care. We’re asking, how do we expand that infrastructure so that people get care when they need it?” And this includes clinical laboratory testing, radiology, and telehealth services as well. (Photo copyright: Walmart.)

Large Portfolio of Healthcare Offerings

Pegus joined Walmart (NYSE:WMT) in December 2020 to oversee a portfolio that now includes more than 4,700 pharmacies and 3,400 Vision Centers, in addition to the telehealth operation and the Walmart Health centers. She was previously chief medical officer at Walgreens and Cambia Health Solutions and worked in private practice as a cardiologist.

The retail giant opened its first Walmart Health center in Dallas, Ga., an Atlanta suburb, in September 2019, followed by additional centers in Georgia, Arkansas, and Illinois.

Earlier this year, it opened five new clinics in northern and central Florida with plans for at least four more in the Jacksonville, Orlando, and Tampa areas, according to a press release. Each health center is adjacent to a Walmart retail location.

These centers offer a range of primary care medical services, including:

  • physicals,
  • injury care,
  • immunizations,
  • radiology, and
  • care for chronic health conditions.
One of the first health clinics established by Walmart
Pictured above is one of the first health clinics established by Walmart. This location is in a western Atlanta suburb. Note that the services advertised include more than just primary care. Also offered are “labs and X-ray,” along with dental, hearing, optometry, and counseling. Clinical laboratory managers and pathologists may want to monitor whether consumers embrace primary care delivered from clinics located in retail stores. (Photo copyright: Georgia Health News.)

As Dark Daily reported in May 2020, the Walmart Health centers also offer clinical laboratory testing at cut-rate prices, such as:

  • $10 for a lipid test,
  • $10 for Hemoglobin A1c, and
  • $20 for a strep test.

On the Walmart Health website, patients can enter their Zip code to view a list of Walmart Health clinics in their area, including links to price lists.

Walmart’s Expansion into Healthcare Not Without Problems

In “Walmart to Open 4,000 Healthcare ‘Supercenters’ by 2029 That Include ‘Comprehensive’ Clinical Laboratory Services,” Dark Daily covered how Walmart was poised to become a much bigger healthcare player with an expanded menu of clinical laboratory testing services including EKGs, vision care, dental care, and more for children and adults.

However, the company’s expansion into healthcare has not gone smoothly. In 2018, the Walmart board signed off on a plan to open 4,000 health centers by 2029, Insider reported. By the end of 2021, Walmart expected to have 125 health centers in operation, but as of June 2022, the Walmart Health website listed only 25 locations, mostly in Georgia.

Citing anonymous sources, Insider reported problems that include “leadership changes, competing business priorities brought on by the coronavirus pandemic, and the complexity of scaling a massive healthcare operation.”

In Sept. 2021, Insider further reported that the clinics were experiencing operational difficulties including hidden fees and billing problems. One culprit, the story suggested, was the company’s electronic health record (EHR) software. That same month, Walmart announced it would adopt the Epic health records system, beginning with the opening of new clinics in Florida locations.

Pegus’ arrival at Walmart appears to be part of a management shakeup. In January 2022, Insider reported that she had assembled a new executive team, with David Carmouche, MD, Senior VP, Omnichannel Care Offerings, overseeing the health centers and telehealth operations. By then, the original executives leading the rollout of the health centers had all left, Insider reported. Carmouche was previously an executive VP with Ochsner Health in New Orleans.

Partnership with Quest Diagnostics

Meanwhile, in January, Walmart announced a deal with Quest Diagnostics that allows consumers to order more than 50 lab tests through The Wellness Hub on, which is separate from the Walmart Health website. The tests cover “general health, digestive health, allergy, heart health, women’s health, and infectious disease,” according to a press release announcing the partnership.

Consumers can order at-home test kits for certain conditions or set up appointments for tests at Quest Patient Service Centers. The tests on the Walmart/QuestDirect website include:

  • COVID-19 Active Infection ($119+)
  • COVID-19 Antibody Test ($69)
  • Cholesterol Panel ($59)
  • Complete Blood Count ($59)
  • Comprehensive Metabolic Panel ($49)
  • CRP Inflammation Marker ($59)
  • Diabetes Management ($69+)
  • Diabetes Risk ($99+)
  • Food Allergy Test Panel ($209)
  • Chickenpox ($59)

The website also offers a combined Basic Health Profile with CBC, CMP, cholesterol panel, and urinalysis for $149. “Each purchase is reviewed and, if appropriate, ordered by a licensed physician,” the press release states.

What does all this mean for clinical laboratories? “They need to recognize that the Millennials and Gen Zs are driving a consumer revolution in healthcare,” said Robert Michel, Publisher and Editor-in-Chief of Dark Daily and its sister publication The Dark Report.

“Walmart was early to recognize and respond to this, in part because it employs 1.3 million Americans, many of whom are Gen Y and Gen Z and quick to use telehealth and similar virtual health services,” he added.

Clinical laboratory leaders need to understand this trend and develop strategies to attract and serve new patients who are willing to access healthcare virtually, while still needing to provide blood and other specimens for the lab tests ordered by their providers.

Stephen Beale

Related Information:

Q/A with Dr. Cheryl Pegus of Walmart: ‘Consumer Engagement Is a Huge Part of Healthcare’

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Clinical Laboratory Conferences Continue to Tackle COVID-19 Protocols to Put Attendees at Ease

Proof of vaccination, masking, and availability of on-site testing will continue to be measures taken at in-person events for pathologists and medical laboratory professionals

Organizers of in-person clinical laboratory conferences face an interesting dilemma as they plan events in 2022: Where do they draw the line with COVID-19 safety protocols?

On one hand, the surge of cases caused by the SARS-CoV-2 Omicron variant seems to be in its waning stages and large swaths of the population are vaccinated. On the other hand, clinical laboratory and anatomic pathology events want potential registrants to have confidence that it is safe to travel and attend the gatherings.

One lab industry conference producer who happens to be knee-deep in preparing for an in-person meeting this spring is Robert Michel, Editor-in-Chief of The Dark Report and Founder of the 27th Annual Executive War College on Laboratory and Pathology Management. This informative event takes place on April 27-28 in New Orleans and includes COVID-19 protocols to protect attendees.

The CDC chart above shows the daily number of new COVID-19 cases in the US for the six-month period ending Feb. 28, 2022. Clinical laboratory managers should note that the number of new cases is at its lowest level since the Omicron variant showed up early this year.

“It’s important for all those planning to attend this year’s Executive War College to know that screening COVID-19 protocols will be in place to ensure the health and safety of all participants,” Michel noted. “We did a large lab conference in the fall of 2021 that included protocols for COVID-19 and the attendees told us they appreciated the protection provided by those protocols.”

After a significant rise in COVID-19 cases in January 2022 due to the Omicron variant, current daily case levels now are lower than they were six months ago before the new variant hit, according to numbers from the federal Centers for Disease Control and Prevention (CDC).

The in-person 2021 Executive War College, which took place in San Antonio on Nov. 2-3, 2021, followed the CDC’s recommendations:

  • COVID-19 protocols included a daily set of questions and a temperature check for all speakers and attendees before they were allowed to enter the conference area.
  • CLIA-complex rapid PCR COVID-19 tests were available for individuals whose temperature and answers to the screening questions indicated the need for such testing.
  • Attendees used an app to answer the daily screening questions and upload proof of vaccination.

“At last fall’s Executive War College, approximately 400 attendees were screened on each of the three days before entering the conference area and not one rapid COVID-19 test was needed,” Michel said. “Not only is that an outstanding outcome, but a number of attendees also told us they appreciated our efforts to keep them safe and protect their health.”

The 2022 Executive War College will follow the CDC’s updated COVID-19 guidelines, along with any state and local directives in effect as of April 27.

Although 300 attendees were expected at the 2021 Executive War College, 400 registered and participated.

Proof of Vaccination Has Been Required at Other Clinical Lab Industry Events

Organizers of other clinical lab conferences also have dealt with COVID-19 safety protocols. For example, the American Clinical Laboratory Association (ACLA) will hold its annual meeting in Washington, D.C., on March 9. COVID-19-related requirements for attendees will include proof of vaccination uploaded to a vaccine verification vendor and proof of a negative PCR test taken within 72 hours prior to the event.

The annual meeting of the American Society of Clinical Pathology (ASCP) occurs later this year in September in Chicago—too early yet to publish protocols. Last year’s ASCP conference in Boston was a hybrid event, offering both in-person and virtual options. Those who attended in person needed to upload proof of vaccination to a third-party vendor and were required to wear masks. On-site COVID-19 testing was available.

Revived Corporate Travel Could Boost Clinical Laboratory Conferences

The path back to live events across all industries has not been easy given various COVID-19 surges, political divisiveness over masking, frozen corporate travel budgets, and corporate policies banning or limiting employee travel.

Conference organizers throughout the United States universally hope those barriers will lower as 2022 progresses.

“With the fast-spreading Omicron triggering another round of setbacks to start 2022, event planners now are betting on spring to finally mark a turning point for the hard-hit industry,” MarketWatch reported on Feb. 4. “Their hopes hinge on American corporations taking a note from the recovery already under way for domestic air travel for leisure purposes, with the linchpin being a robust revival of trade show attendance and other in-person business gatherings.”

For Michel, offering actionable advice through well-thought-out sessions has been a cornerstone of the content offered each year at the Executive War College. He believes that approach will continue to be the strongest drawing point for clinical laboratory and pathology executives now considering attending the event.

“Our reading of the tea leaves is that across the profession of laboratory medicine, a great many managers, administrators, executives, and pathologists want to return to in-person conferences,” Michel noted. “Registrations for our April event are running ahead of 2019, and people tell us that they recognize the changes in healthcare and the lab marketplace because of the pandemic. They want to understand what’s driving current trends, like greater consumer involvement in lab testing and how to get private payers to reimburse claims for COVID-19 and genetic tests, as well as how a growing number of clinical laboratories are incorporating artificial intelligence solutions in both clinical care settings and lab operations.”

Visit the Executive War College website to see the agenda and to register.

—Scott Wallask

Related Information:

Executive War College

New Lab, Pathology Trends at Executive War College 2021

CDC COVID-19 Guidelines

American Clinical Laboratory Association

American Society for Clinical Pathology

Going live: Event Planners Are Shouldering Big Financial Risks as Corporate America Looks to Schmooze Again This Spring