May 9, 2018 | Compliance, Legal, and Malpractice, Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology
Supreme Court of India ruling may finally ignite a crackdown on illegal medical laboratories that operate without a licensed pathologist
What would happen if 80% of Americans did not trust the medical laboratories that run their diagnostic tests? What impact would that have on this country’s clinical laboratory and anatomic pathology industry? Certainly, a significant one.
Well, that’s exactly what has happened in India. A survey on graft in India’s healthcare system conducted by LocalCircles, a community social media platform, has highlighted citizens’ distrust and disgust with the nation’s pathology laboratories. Only 20% of the 29,000 citizens surveyed said they “fully trusted” the pathology lab they use, while 32% of respondents said they had received one or more incorrect pathology reports in the past three years.
In India, the term “pathology laboratories” describes what are called clinical laboratories in the United States and Canada. Histopathology laboratories in India perform testing on tissue, just as anatomic pathology and surgical pathology laboratories do in North America.
According to the survey results, 91% of respondents believe clinical laboratories should lose their licenses if found to be giving incentives to doctors for prescribing tests. In addition:
- 86% of those surveyed feel doctors’ earnings in hospitals should be unrelated to the value of tests they refer to the hospital’s pathology lab; and,
- 59% believed kickbacks from labs incentivized doctors to prescribe unnecessary tests.
“One of the important cogs in the wheel of the medical system in our country are the pathology labs,” LocalCircles noted in the survey results. “Being a high profit business, thousands of them have mushroomed in different parts of the country. Many people say these pathology labs have a tie up with the doctors and pass on a commission to the doctors for every patient they send to them.”
India’s Medical Laboratories Under Increasing Scrutiny
The LocalCircles survey underscores the ongoing concerns in India over the quality of its medical laboratories, which have come under fire for lack of regulations and accreditation standards.
In India, the term “pathology” describes a laboratory performing standard medical laboratory tests, such as chemistry, hematology, immunoassay, and microbiology. Histopathology is the term used to describe diagnostic testing that utilizes tissue specimens.
Last year we reported on the tens of thousands of lab companies that continue to operate in India without certified pathologists and other trained lab scientists. (See Dark Daily, “Shortage of Registered Pathologists in India Continues to Put Patients at Risk in Illegal Labs that Defy Bombay Court Orders,” April 12, 2017.)
Technicians Cannot Run Pathology Laboratories, Supreme Court of India Rules
There are signs, however, that the tide may be turning against unqualified pathology labs. Last year, The Supreme Court of India upheld a lower court order that directed only a “qualified and registered pathologist, with a postgraduate qualification in pathology” can countersign a patient’s pathology report, the Times of India (TOI) reported.
The TOI quoted an unnamed senior food and drug department official as saying, “Many technicians with [a] diploma in Medical Laboratory Technology and other equivalent qualifications are operating pathology laboratories,” because no laws currently exist requiring a qualification in pathology as a prerequisite for running a private laboratory.
“If unqualified people certify medical reports, it will hamper patient treatment,” Sadhana Kothari, MD, Associate Professor, Department of Pathology at Gujarat Cancer Society Medical College in Gujarat, India, told the TOI. “A doctor’s analysis and patient’s treatment [are] dependent on clinical tests. The Supreme Court judgment will ensure that illegal labs do not operate.”
Local press coverage like that above highlights the severe pressure India’s pathology laboratory industry faces following the Supreme Court of India’s ruling that only qualified and registered pathologist—with a postgraduate qualification in pathology—can run pathology laboratories or sign off on pathology reports. (Image copyright: VAPM Pathologists and Microbiologists Welfare Society.)
Illegal Labs Continue to Operate Despite India Court Rulings
The Supreme Court decision means that PhDs, laboratory technicians, and others without proper medical credentials can no longer sign laboratory reports. The Supreme Court verdict emphasized that labs operating without a qualified pathologist should cease operations until a qualified pathologist can be hired. However, earlier verdicts in the Indian court system have failed to end the proliferation of illegal labs.
According to the TOI, the Association of Practicing Pathologists (India) (APPI) first filed a writ in 1998 to prevent individuals not qualified in pathology and/or registered with the Medical Council of India from running laboratories. In 2010, the Gujarat High Court ruled, “Laboratory technicians are not pathologists and cannot run any laboratory independently.”
A month after the Gujarat High Court decision, pathologists in Gujarat complained the state government had failed to initiate criminal action against people running unauthorized labs. The Indian Express reported the Gujarat Association of Pathologists and Microbiologists was starting a public awareness campaign to stop illegal labs from operating because the state government had not shut down illegal operators.
Number of Qualified Pathologists Decreasing
The ruling by the Supreme Court of India, however, may result in concrete action being taken by the states. On February 6, 2018, the Pune Mirror reported the Maharashtra State Human Rights Commission (MSHRC) ordered the state public health department and the director of medical education and research to identify and take action against labs working without valid licenses.
According to the Pune Mirror, only 2,200 of the state’s 10,000 diagnostic laboratories are headed by certified pathologists. The Maharashtra Association of Practicing Pathologists and Microbiologists (MAPPM), the largest body of certified pathologists in the state, claims as many as 8,000 pathology labs in Maharashtra function without licenses.
“The state government has the mechanism to keep a tab on such labs, but they don’t take action,” Sandeep Yadav, MD, President of MAPPM, told the Pune Mirror. “It has become an easy way to earn money because there is no law yet around registering labs. Many people open laboratories simply by observing pathologists over time, and it could be a threat to a patient’s life, as it has been observed that many labs are illegal or run by technicians. The number of qualified pathologists is decreasing and genuine people don’t want to pick up the profession.”
Also in February 2018, the New India Assurance Company, the country’s largest insurer, instructed its regional offices to not approve medical claims from pathology laboratories if the reports are signed by unlicensed and unqualified staff, the Pune Mirror reported.
The challenges of providing first-line medical laboratory testing services in countries like India demonstrate how expectations of quality and accuracy are driving change in these rapidly-developing nations. It is a reminder to clinical laboratory managers and pathologists in the United States that the trust of patients and government regulators is a valuable asset.
—Andrea Downing Peck
Related Information:
Majority Say a Corrupt Nexus Exists Between Pathology Labs and Doctors
GAPM: Bogus Pathology Labs Playing with People’s Lives
State to Crack Down on Illegal Path Labs
Pathologists Start Awareness Campaign after HC Order
Pathologist Body Launches Campaign Against Rogue Labs
Insurance Major Says No to Illegal Lab Reports
Shortage of Registered Pathologists in India Continues to Put Patients at Risk in Illegal Labs that Defy Bombay Court Orders
May 7, 2018 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory Pathology, Laboratory Testing
Genomic analysis of pipes and sewers leading from the National Institutes of Health Clinical Care Center in Bethesda, Md., reveals the presence of carbapenem-resistant organisms; raises concern about the presence of multi-drug-resistant bacteria previously undetected in hospital settings
If hospitals and medical laboratories are battlegrounds, then microbiologists and clinical laboratory professionals are frontline soldiers in the ongoing fight against hospital-acquired infections (HAIs) and antibiotic resistance. These warriors, armed with advanced testing and diagnostic skills, bring expertise to antimicrobial stewardship programs that help block the spread of infectious disease. In this war, however, microbiologists and medical laboratory scientists (AKA, medical technologists) also often discover and identify new and potential strains of antibiotic resistance.
One such discovery involves a study published in mBio, a journal of the American Society for Microbiology (ASM), conducted by microbiologist Karen Frank, MD, PhD, D(AMBB), Chief of the Microbiology Service Department at the National Institutes of Health (NIH), and past-president of the Academy of Clinical Laboratory Physicians and Scientists (ACLPS). She and her colleagues identified a surprising source of carbapenem-resistant organisms—the plumbing, sewers, and wastewater beneath the National Institutes of Health Center (NIHCC) in Bethesda, Md. And they theorize similar “reservoirs” could exist beneath other healthcare centers as well.
Potential Source of Superbugs and Hospital-Acquired Infections
According to the mBio study, “Carbapenemase-producing organisms (CPOs) are a global concern because of the morbidity and mortality associated with these resistant Gram-negative bacteria. Horizontal plasmid transfer spreads the resistance mechanism to new bacteria, and understanding the plasmid ecology of the hospital environment can assist in the design of control strategies to prevent nosocomial infections.”
Karen Frank, MD, PhD (above), is Chief of the Microbiology Service Department at the National Institutes of Health and past-president of the Academy of Clinical Laboratory Physicians and Scientists. She suggests hospitals begin tracking the spread of the bacteria. “In the big picture, the concern is the spread of these resistant organisms worldwide, and some regions of the world are not tracking the spread of the hospital isolates.” (Photo copyright: National Institutes of Health.)
Frank’s team used Illumina’s MiSeq next-generation sequencer and single-molecule real-time (SMRT) sequencing paired with genome libraries, genomics viewers, and software to analyze the genomic DNA of more than 700 samples from the plumbing and sewers. They discovered a “potential environmental reservoir of mobile elements that may contribute to the spread of resistance genes, and increase the risk of antibiotic resistant ‘superbugs’ and difficult to treat hospital-acquired infections (HAIs).”
Genomic Sequencing Identifies Silent Threat Lurking in Sewers
Frank’s study was motivated by a 2011 outbreak of antibiotic-resistant Klebsiella pneumoniae bacteria that spread through the NIHCC via plumbing in ICU, ultimately resulting in the deaths of 11 patients. Although the hospital, like many others, had dedicated teams working to reduce environmental spread of infectious materials, overlooked sinks and pipes were eventually determined to be a disease vector.
In an NBC News report on Frank’s study, Amy Mathers, MD, Director of The Sink Lab at the University of Virginia, noted that sinks are often a locus of infection. In a study published in Applied and Environmental Microbiology, another journal of the ASM, Mathers noted that bacteria in drains form a difficult to clean biofilm that spreads to neighboring sinks through pipes. Mathers told NBC News that despite cleaning, “bacteria stayed adherent to the wall of the pipe” and even “splashed out” into the rooms with sink use.
During the 2011-2012 outbreak, David Henderson, MD, Deputy Director for Clinical Care at the NIHCC, told the LA Times of the increased need for surveillance, and predicted that clinical laboratory methods like genome sequencing “will become a critical tool for epidemiology in the future.”
Frank’s research fulfilled Henderson’s prediction and proved the importance of genomic sequencing and analysis in tracking new potential sources of infection. Frank’s team used the latest tools in genomic sequencing to identify and profile microbes found in locations ranging from internal plumbing and floor drains to sink traps and even external manhole covers outside the hospital proper. It is through that analysis that they identified the vast collection of CPOs thriving in hospital wastewater.
In an article, GenomeWeb quoted Frank’s study, noting that “Over two dozen carbapenemase gene-containing plasmids were identified in the samples considered” and CPOs turned up in nearly all 700 surveillance samples, including “all seven of the wastewater samples taken from the hospital’s intensive care unit pipes.” Although the hospital environment, including “high-touch surfaces,” remained free of similar CPOs, Frank’s team noted potential associations between patient and environmental isolates. GenomeWeb noted Frank’s findings that CPO levels were in “contrast to the low positivity rate in both the patient population and the patient-accessible environment” at NIHCC, but still held the potential for transmission to vulnerable patients.
Antibiotic-Resistance: A Global Concern
The Centers for Disease Control and Prevention (CDC) reports that more than two million illnesses and 23,000 deaths in the US are caused each year by antibiotic resistance, with 14,000 deaths alone linked to antibiotic resistance associated with Clostridium difficile infections (CDI). Worldwide those numbers are even higher.
Second only to CDI on the CDC’s categorized list of “18 drug-resistant threats to the United States” are carbapenem-resistant Enterobacteriaceae (CRE).
Since carbapenems are a “last resort” antibiotic for bacteria resistant to other antibiotics, the NIHCC “reservoir” of CPOs is a frightening discovery for physicians, clinical laboratory professionals, and the patients they serve.
The high CPO environment in NIHCC wastewater has the capability to spread resistance to bacteria even without the formal introduction of antibiotics. In an interview with Healthcare Finance News, Frank indicated that lateral gene transfer via plasmids was not only possible, but likely.
“The bacteria fight with each other and plasmids can carry genes that help them survive. As part of a complex bacterial community, they can transfer the plasmids carrying resistance genes to each other,” she noted. “That lateral gene transfer means bacteria can gain resistance, even without exposure to the antibiotics.”
The discovery of this new potential “reservoir” of CPOs may mean new focused genomic work for microbiologists and clinical laboratories. The knowledge gained by the discovery of CPOs in hospital waste water and sinks offers a new target for study and research that, as Frank concludes, will “benefit healthcare facilities worldwide” and “broaden our understanding of antimicrobial resistance genes in multi-drug resistant (MDR) bacteria in the environment and hospital settings.”
—Amanda Warren
Related Information:
Genomic Analysis of Hospital Plumbing Reveals Diverse Reservoir of Bacterial Plasmids Conferring Carbapenem Resistance
Snooping Around in Hospital Pipes, Scientists Find DNA That Fuels the Spread of Superbugs
CSI Bethesda: Sleuths Used Sequenced Genome to Track Down Killer
Antibiotic/Antimicrobial Resistance
Study Tracks How Superbugs Splash Out of Hospital Sink Drains
CDC: Biggest Threats
Antimicrobial Stewardship: How the Microbiology Laboratory Can Right the Ship
Superbugs Breeding in Hospital Plumbing Put Patients at Risk
Microbiologists at Weill Cornell Use Next-Generation Gene Sequencing to Map the Microbiome of New York City Subways
May 2, 2018 | Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing
Despite logistics and test volume concerns for laboratories, hospital-in-the-home services promise to reduce cost and improve quality of care for patients who might be negatively impacted by the noise, stress, and germs of busy hospitals
In April, The Washington Post highlighted the plight of 71-year-old Phyllis Petruzzelli—a patient with a weakened immune system suffering from pneumonia. Instead of admitting her into a noisy ward and exposing her to other germs and infection vectors, doctors at Brigham and Women’s Faulkner Hospital in Boston chose a different approach. They treated her in her home with a remote monitoring patch and in-home visits. Three days later, she was well and referred to her primary care provider for follow-up.
This is an example of the hospital-in-the-home model of clinical care. It is not a new concept and is being developed in a number of countries. In the United States, managers at medical laboratories, hospitals, and integrated health systems will want to stay informed about the ongoing efforts to use the hospital-in-the-home method as a way to improve patient care while lowering the overall cost of a healthcare encounter. One reason is that patients receiving care in their homes will need to be serviced by clinical laboratories.
David Levine, MD, Clinician-Investigator at Brigham and Women’s Hospital, told The Washington Post that despite initial reservations from staff, their testing of hospital-at-home care has been positive. “[Staff] very quickly realize that this is really what patients want and it’s really good care,” he stated.
Hospital-in-the-Home Costs Less, Better Care
Levine is lead author of a study published in the Journal of General Internal Medicine that compared the costs, quality, safety, and patient experience of 20 adult individuals admitted to emergency departments for an infection, exacerbation of heart failure, chronic obstructive pulmonary disease (COPD), or asthma.
“Median direct cost for the acute care plus 30-day post-discharge period for home patients was 67% (IQR, 77%; p < 0.01) lower,” the study authors note, “with trends toward less use of home-care services (22% vs. 55%; p = 0.08) and fewer readmissions (11% vs. 36%; p = 0.32). Patient experience was similar in both groups.”
Though authors acknowledged the need for a larger trial to create definitive results, they concluded that home-hospitalization resulted in reduced cost while allowing improved physical activity.
David M. Levine, MD (above right), Division of General Internal Medicine and Primary Care at Brigham and Women’s Hospital, describes the home hospital, a novel care model that brings hospital services to patients at home. Click on the image above to view the video. (Photo and caption copyright: Brigham and Woman’s Hospital.)
Hospitals caring for patients in their homes is not a new concept. In 2012, Dark Daily reported on a similar trial involving 323 patients across a year at Presbyterian Healthcare Services in Albuquerque, New Mexico. The study found patients of their hospital-based home care (HBHC) program achieved savings of 19% when compared to costs of similar hospital acute care patients.
And a 2011 study conducted by Deloitte Access Economics found that hospital-in-the-home (HITH) care costs an average of 22% less than hospital care for a range of common conditions and uncomplicated diagnosis. (See Dark Daily, “Australia’s ‘Hospital in the Home’ Care Model Demonstrates Major Cost Savings and Comparable Patient Outcomes,” December 5, 2011.)
Hospital-in-the-Home Care Impacts Pathology Groups and Medical Laboratories
One reason for the reduced costs should concern medical laboratories and other service providers—less diagnostic tests ordered. “During the care episode, home patients had fewer laboratory orders (median per admission: six vs. 19; p < 0.01) and less often received consultations (0% vs. 27%; p = 0.04),” noted the authors of the Brigham and Women’s Hospital study.
Another complication of HITH for clinical laboratories is the patient’s location. When tests are required, clinical laboratory personnel must collect samples in patients’ homes. This could prove a logistical challenge for both independent laboratories and hospital-based labs. Adding overhead for transportation and collection to an already shrinking volume of tests could negatively impact laboratory workflow and revenues alike.
Nevertheless, though HITH is still in its early stages, studies continue to show positive results. The biggest hurdle to adoption of HITH is convincing payers to cover it. Should providers find a way to convince payers to support the new approach, rapid growth of HITH programs is likely.
As more lab-on-a-chip, lab-on-a-fiber, and similar point-of-care diagnostic testing technologies mature and integrate with telehealth solutions and electronic health record (EHR) systems, they also could combine with HITH trends to further impact volumes and margins for clinical laboratories of all sizes.
Healthcare delivery is evolving, and clinical laboratories and pathology groups must remain flexible and support these advances. In adapting to changes and providing flexible services—such as remote collection in HITH care episodes—laboratories can reinforce their value in today’s modern healthcare market and work to compensate for changes in how diagnostic tests and lab results are both utilized and delivered.
—Jon Stone
Related Information:
Hospitals Are Germy, Noisy Places. Some Acutely Ill Patients Are Getting Treated at Home Instead
Hospital-Level Care at Home for Acutely Ill Adults: A Pilot Randomized Controlled Trial
Wagga Base Hospital Program Gives Patients the Option for Treatment at Home
Admission Rates in a General Practitioner-Based versus a Hospital Specialist Based, Hospital-at-Home Model: ACCESS, an Open-Labelled Randomized Clinical Trial of Effectiveness
Impact of Home Health Care on Health Care Resource Utilization Following Hospital Discharge: A Cohort Study
HAI Data and Statistics
From Micro-Hospitals to Mobile ERs: New Models of Healthcare Create Challenges and Opportunities for Pathologists and Medical Laboratories
Australia’s ‘Hospital in the Home’ Care Model Demonstrates Major Cost Savings and Comparable Patient Outcomes
Two US Studies Show Home-Based Hospital Care Lowers Costs While Improving Outcomes and Patient Satisfaction
Apr 27, 2018 | Digital Pathology, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations
Regardless of potential confusion, the bill’s passage is seen as a positive step toward greater transparency by high-level members of the state’s government
In an effort to promote price transparency in healthcare, Colorado legislators passed a new law requiring hospitals in that state to post self-pay prices for the most common procedures and treatments. Their hope is healthcare consumers who lack insurance will find it easier to price shop and, therefore, make informed healthcare decisions.
However, not all providers in that state think the bill is needed and some are concerned it could cause confusion. It remains to be seen how Colorado hospital medical laboratories and outpatient practices, such as anatomic pathology groups, will be impacted by the new transparency requirements.
Potential Confusion a Concern for UCHealth
The Transparency in Health Care Prices Act (SB17-065), which took effect on January 1, 2018, calls for Colorado hospitals to post self-pay prices for their top 50 diagnosis-related-group codes; and self-pay prices for the 25 leading current procedural technology billing codes, according to the Denver Business Journal.
Physicians’ practices and other providers also must post prices for their 15 most popular procedures under the new law, Healthcare Dive reported. In an issues brief, the Colorado Hospital Association (CHA) supported the bill “because it aligns with the Association’s transparency policy principles.”
But some Colorado healthcare providers have expressed concerns about the new requirements.
“Because of the complexity of pricing, it’s possible the self-pay prices we have posted on our website might increase confusion,” Dan Weaver, Senior Director of Public Relations for UCHealth, told Colorado Politics. “Patients who have insurance coverage, Medicaid or Medicare will have very different out-of-pocket responsibilities [from the posted price].” The article was later published in the Durango Herald.
Various points of potential confusion include:
- Prices show what self-pay patients must pay and not what an insured patient would pay under their health plans, which would be much lower;
- Only 7% of Colorado residents are uninsured, according to a Colorado Health Institute report; and,
- Even an “apple-to-apple” comparison by price is not so easy to do, reported Healthcare Finance based on its analysis of some Colorado hospitals’ price lists.
Christine Clark, Associate CFO Revenue Cycle (above), Denver Health, told Healthcare Finance, “We do have concerns that this will make the issue more confusing to patients as there is not a ‘one size fits all’ approach to providing patients estimates due to the wide variability insurance plans bring to the process. Providing a self-pay price for a service is probably the least complicated.” However, she added, “There is always some variability in the price of procedures due to different patient needs.”
Regardless of the potential confusion, however, some see passage of the bill as a step in the right direction.
Senate Republican Kevin Lundberg (above right) shaking hands with Colorado’s governor following signing of SB17-065, which Lundberg sponsored. In a statement, he noted, “Coloradans have a tough enough time navigating the complicated structure of our broken healthcare system without worrying about hidden healthcare costs.” (Photo copyright: Colorado Senate Republicans.)
Studies Show Consumers Not Highly Motivated to Shop for Healthcare
Ironically, consumers do not appear to be rushing to compare hospital prices, as they do for other products and services. And those who do shop around do not like the price data tools or understand the data, state and national studies found.
“Even with pricing data available, patients tend to rely more on their physician’s advice about where and from whom to seek medical care,” noted the Health Policy Institute of Ohio (HPIO). According the HPIO report, consumers say healthcare price data tools are not user-friendly.
And a national study, published in Health Affairs, that explored American’s views and habits when shopping for healthcare, noted:
- Only 13% of 3,000 survey respondents who had out-of-pocket responsibilities sought cost information before their healthcare encounters; and,
- Just 3% compared costs across possible providers before accessing care.
The researchers acknowledged the existence of price transparency tools, such as those offered by Colorado, Ohio, and on other state websites. Nevertheless, survey respondents still reported:
- Lack of awareness about available price information;
- Unwillingness to switch providers; and,
- Network constraints and lack of providers available to patients.
“Simply passing price transparency laws or regulations appears insufficient to facilitate price shopping. Price information must be more accessible and comprehensible,” the study authors wrote in Health Affairs. “Even if information was more accessible, patients’ preference to maintain provider relationships and efforts to coordinate care would limit overall rates of shopping.”
Keeping it Simple Could Be the Key
Researchers suggested non-urgent services in quantity, such as a package of physical therapy visits, may best suit comparison price shopping.
“Price is not being presented in a simplified enough way for consumers to make informed decisions,” Elena Prager, PhD, Assistant Professor, Kellogg School of Management, Northwestern University, told Healthcare Finance.
Ultimately, it’s not enough that healthcare price data is simply made available to consumers, it also must be easily found and understood. Though transparency laws might not be directly aimed at clinical laboratories; lab leaders are nonetheless encouraged to ensure self-pay prices for procedures and diagnostic tests are accessible to the public.
—Donna Marie Pocius
Related Information:
Colorado Hospitals Must Begin Posting Prices for Most Common Procedures on Jan. 1
Colorado Law Requires Hospitals Post Prices for Common Procedures
Issue Brief, Senate Bill 17-065 Price Transparency
Colorado Sings Law Mandating Hospitals Post Self-Pay Prices
New Colorado Law Gives Patients More Transparency on Medical Fees
Colorado Health Access Survey
Healthcare Data Transparency Basics-2016
Americans Support Price Shopping for Health Care, But Few Actually Seek Out Price Information
Vitals Study Shows Consumers Using Cost Transparency Tools Select Clinical Laboratories with Low Test Prices
Apr 25, 2018 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations
Direct-to-consumer medical laboratory testing company gets a major shot in the arm as developers find ready investors and increasing consumer demand
Clinical laboratory tests, usually performed without fanfare, were thrust into the limelight during a recent episode of Shark Tank, an American reality TV show on which aspiring entrepreneurs compete for the attention and partnership funds of various investors.
EverlyWell, a direct-to-consumer (DTC) company that offers at-home lab tests without lab visits or doctor referrals, obtained a $1-million line of credit from Lori Greiner, one of Shark Tank’s participating entrepreneurs, according to MobiHealthNews. EverlyWell has consumers collect their own specimens at home, which are then sent to a medical laboratory testing facility.
Based in Austin, Texas, EverlyWell was founded in 2015 by Julia Taylor Cheek, CEO, with an aim to “make lab tests accessible, simple, and meaningful,” according to a news release. Cheek is also a Venture Partner with NextGen Venture Partners and formerly the Director of Strategy and Operations with the George W. Bush Institute.
“It’s incredible for the industry that we were selected and aired on a show like Shark Tank. It really shows the intersection of what’s happening in consumer healthcare and the high cost in healthcare and that people are really responding to new solutions,” Cheek told MobiHealthNews.
“I think the product is brilliantly crafted,” Greiner stated during the episode’s taping, according to MobiHealthNews. “It’s really nice; it’s really easy. It’s super clear. I think the state of healthcare in our country now is so precarious. I think this gives people an empowered way … to know whether or not they have to go find a doctor,” she concluded.
Greiner offered the $1 million line of credit (with 8% interest) in exchange for a 5% equity stake in EverlyWell, explained Austin360. According to SiliconHillsNews, she did so after reviewing certain EverlyWell financial indicators, including:
- $2.5 million in revenue in 2016;
- $5 million expected revenue in 2017; and
- 20% monthly growth rate.
Julia Cheek, CEO and Founder of EverlyWell (above), in a news release following her success on reality show Shark Tank, said, “We’re leading a major shift in the consumer health marketplace by bringing the lab to consumers’ doorsteps, and we are moving quickly to expand our channels, launch innovative tests, and deliver a world-class customer experience.” (Photo copyright: Forbes/Whitney Martin.)
Physician Review Still Part of Home-testing Process
EverlyWell lists 22 home lab tests on its website and a market share that encompasses 46 states. Shoppers can search for specific tests based on symptoms or by test categories that include:
- General Wellness;
- Men’s Health;
- Women’s Health;
- Energy and Weight; and
- Genomic Test (through a partnership with Helix, a personal genomics company).
The most popular test panels include:
- Food sensitivity;
- Thyroid;
- Metabolism;
- Vitamin D; and,
- Inflammation.
Prices range from $59 for a glycated hemoglobin (HbA1c) test (found under the general wellness category) to $399 for a women’s health testing kit. EverlyWell explains that it has no insurance contracts for these diagnostic tests, which do not require office or lab visits.
The testing process, according to EverlyWell’s website, proceeds as follows:
- After ordering and paying online, kits arrive at the customer’s home;
- The consumer self-collects a sample (such as blood spots, dried urine, or saliva) and returns it by prepaid mail to a medical laboratory that partners with EverlyWell. The company notes that it works with CLIA (Clinical Laboratory Improvement Amendment)-certified laboratories;
- A board-certified doctor reviews the lab results; and,
- A report is available online in a few days.
“Our goal is not to remove the importance of physician review. It’s to make the experience easier for the consumer,” Cheek told Texas CEO Magazine. “We designed a platform that is all about access and empowering consumers to have access to and monitor their own health information,” she continued.
Texas CEO Magazine explained that Cheek was inspired to create the company following “a bad personal experience with health and wellness testing that sent her to seven different specialists, cost $2,000 out of pocket, and left her with pages of unreadable results.”
Since then, the three-year old start-up company has garnered more than $5 million in venture capital, noted the news release.
Many Choices in Direct-to-Consumer Lab Company Market
EverlyWell is not the only player in the DTC clinical laboratory test space. According to MedCityNews, there are at least 20 other DTC lab test companies in the market including:
- 23andMe;
- Laboratory Corporation of America (LabCorp);
- Mapmygenome;
- Pathway Genomics;
- Quest Diagnostics (Quest);
- Sonora Quest Labs;
- Theranos; and others.
The direct-to-consumer lab test market grew from $15 million to about $150 million in 2015 and includes both large and small clinical laboratory test developers, noted Kalorama Information.
Clearly, the DTC testing market is expanding and garnering the attention of major developers and investors alike. This growing demand for home-testing diagnostics could impact anatomic pathology groups and smaller clinical laboratories in the form of reduced order testing and decreased revenue.
—Donna Marie Pocius
Related Information:
Mail-Order Lab Test Startup EverlyWell Makes Million Dollar Deal on ABC’s Shark Tank
EverlyWell Raises Additional Capital, Bringing Total to $5 Million
This Austin Entrepreneur Scored Historic Deal on Shark Tank
Austin-based EverlyWell Lands Deal on Shark Tank
Innovative Texas Businesses: Empowering Consumers; Julia Cheek’s EverlyWell’s Health and Wellness Testing
Meet the Start-up Revolutionizing the Lab Testing Industry
20 Key Payers in the Direct-to-Consumer Lab Testing Market
Direct-to-Consumer Services Put Down Roots in US Lab Testing Market
Clinical Pathology Laboratories Should Expect More Direct-to-Consumer Testing
Sales of Direct-to-Consumer Clinical Laboratory Genetic Tests Soar, as Members of Congress Debate How Patient Data Should be Handled, Secured, and Kept Private
Apr 23, 2018 | Compliance, Legal, and Malpractice, Laboratory Hiring & Human Resources, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations
Critics are quick to note that this creates a disparity in how patients access healthcare services
Independent concierge care (AKA concierge medicine) is available to anyone willing to pay the additional costs, which are over and above any health insurance. In a concierge care medical practice, patients pay an annual retainer fee to gain increased access to doctors, specialists, and services, such as faster TATs on clinical laboratory testing.
Depending on the program, concierge care also can offer patients a range of “improved” healthcare benefits, including same-day appointments, extended appointment times, around-the-clock telehealth services, and the experience of receiving care from a physician with a smaller patient roster and in a more personalized manner.
Clinical laboratories and anatomic pathology groups might also find benefit from the concierge care model. Though some concierge providers bill insurance, most work on a cash basis with payment due upfront for services. This ensures prompt payment for any medical laboratory testing provided, reduces administrative overhead, and eliminates the need to deal with payers.
Concierge Medicine Is Not Just for the Wealthy Anymore
Since its inception, concierge care has been considered a luxury available to only financially well-off patients. However, that may soon change. Several major health systems and hospitals are piloting scaled-back versions of concierge care aimed at both middle- and upper-class consumers. However, the programs are not without critics and have elicited both positive and negative responses from healthcare providers.
According to Modern Healthcare, hospitals and health systems currently testing concierge care programs include:
Patients with busy schedules or chronic conditions may see the biggest gains from investing in concierge care. The added flexibility and increased access might allow them to take advantage of care options more frequently. Physicians being able to take their time during consultations and more closely focus on specific concerns is also seen as a benefit to patients.
However, Modern Healthcare points out that patients are not the only ones to see benefits from this arrangement.
“Doctors who have switched to concierge-style medicine sing its praises, claiming the smaller patient panel allows the doctor to build relationships with patients and spend more time on preventive medicine,” Modern Healthcare noted.
In 2016, Dark Daily reported on similar findings from the American Academy of Private Physicians (AAPP). They noted that the average primary care physician in the US maintained between 2,000 and 4,000 patients using the traditional care model. In contrast, the AAPP found concierge physicians maintained on average only 600 patients. (See, “Concierge Medicine Increases in Popularity as More Consumers Opt for This Care Model; Will Clinical Laboratories Exploit This Business Opportunity?” May 6, 2016.)
Paul Huang, MD, PhD (above right), a concierge doctor at Massachusetts General Hospital, told Modern Healthcare, “We are not doing this just to make more money—we are doing this to make money to put back into the mission of the hospital and to support programs that otherwise would be difficult to support.” (Photo copyright: Modern Healthcare.)
Concierge Care: Controversial Approach or Major Boon to Hospitals?
Since its debut in the 1990s, concierge care has faced scrutiny and opposition from those who feel it discriminates against those who cannot afford retainer premiums and out-of-pocket expenses.
One health system that has drawn such criticism is Michigan Medicine (MM), which is owned by the University of Michigan. As reported by the Detroit Free Press, in a letter to hospital administration, 200 of MM’s own doctors and staff expressed their feelings about the concierge care program, stating, “Victors Care purports to offer ‘better’ healthcare to those with enough money to pay a large access fee. The University of Michigan is a public institution and our commitment is to serve the public, not a private few. We do not feel this is the role of a state university and are unable to justify this to the patients and families we serve.”
Tom Cassels, a consulting partner with the Advisory Board Company, told Modern Healthcare, “It’s a cultural learning curve, because most not-for-profit health systems are geared toward providing the same level of service to everyone in their community. The fundamental model of concierge medicine is to price-discriminate.”
However, media coverage also highlights how the hospitals creating concierge care services are using the financial benefits to help offset the cost of low-margin services or provide care to low-income patients who wouldn’t otherwise have access to care.
Misty Hathaway, Senior Director of the Center for Specialized Services at Mass General, explained to Modern Healthcare that since their physicians are salaried, margins from concierge services can help support “things like our substance abuse program, or other parts of primary care where the margin is a little bit harder to achieve.”
Despite the ethical debates, use of concierge care services continues to gain momentum as middle and upper-class patients find the increased quality of care a worthy value proposition. As more options emerge at major healthcare centers, medical laboratories and other service providers might find that this trend also offers an opportunity to increase revenue with a minimal impact on administrative and billing costs.
—Jon Stone
Related Information:
Concierge Care Taking Hold at Some Large, Urban Hospitals
No Appointment? No Problem … For a Price
Exclusive U-M Medical Plan Buys You ‘Better’ Care, Special Access
The Future of Healthcare Could Be in Concierge Medicine
The Doctor Won’t See You Now
Concierge Medicine Increases in Popularity as More Consumers Opt for This Care Model; Will Clinical Laboratories Exploit This Business Opportunity?
More Doctors Consider Concierge Medicine as Healthcare Reform Looms
Concierge Medicine Trend Continues and Creates New Clients for Clinical Pathology Laboratories
