If direct-to-consumer testing continues to attract healthcare consumers and financial investors, medical laboratories could have a new source of revenue
Many have tried but few have found the right formula to
offer medical laboratory tests directly to consumers. Direct-to-consumer lab
testing as a robust business model has been an elusive goal. But now one
entrepreneur wants to crack this market and just attracted $50 million in
venture capital to fund her idea!
Outsiders often establish industries. This was the case when Jeff Bezos created Amazon in 1994. The online retailer transformed the way books were sold and, subsequently, established a massive new retail market.
Along the same lines, Julia Taylor Cheek, Founder and CEO of EverlyWell, a well-financed digital health company based in Austin—hopes to build a similarly disruptive business in the clinical laboratory industry.
Cheek is increasing her company’s outreach to consumers by
putting some of the company’s direct-to-consumer (DTC) medical tests on store
shelves at CVS and Target.
A former consultant and Harvard Business School graduate, Cheek raised $50 million in financing to expand EverlyWell’s digital platform. According to a news release, “Just two full years into operation, EverlyWell is reporting 300% year-over-year customer growth and a world-class consumer Net Promoter Score (NPS).”
“I think it’s a representation of sexism in our space. There are 15 other companies that have popped up in blood testing and you don’t hear anyone comparing Theranos to those male-founded startups,” she told Inc.
However, Dark Daily believes Cheek may be missing one
basis for the comparison with Elizabeth Holmes. Holmes intended for Theranos to
serve consumers with lab testing, and let consumers order and purchase their
own medical laboratory tests. Cheek is talking about the same primary business
strategy of letting consumers purchase their own lab tests.
Armed with this additional financing from investors, EverlyWell intends to expand services and develop new partnerships with retail pharmacy chain CVS Health (NYSE:CVS) and for-profit insurance company Humana (NYSE:HUM).
The news release notes, “The company has also expanded its
product line to offer 35 panels, including first-to-market tests in fertility,
vitamins, peri- and post-menopause, and high-risk HPV. In addition, EverlyWell
has launched an end-to-end care model for consumers, now offering an
independent physician consult and prescription, if appropriate, for select STDs
and Lyme Disease testing. All of this is included in an upfront price before
purchase.”
EverlyWell Intent on
Bringing Medical Laboratory Tests to Retail
Earlier this year, EverlyWell made nine lab tests available in more than 1,600 Target store locations, MedCity News reported. This may suggest that retailers are intrigued with direct-to-consumer lab testing.
“We didn’t create new tests or technologies. Instead, we’ve built technology that empowers people to get tests more easily. Our medical director works with the labs to create panels that are already validated and clinically relevant and understandable for consumers,” Julia Taylor Cheek (above), Founder and CEO of EverlyWell told Forbes. (Photo copyright: Arnold Wells/Austin Business Journal.)
Cheek reportedly established EverlyWell after becoming
disenchanted with medical laboratory tests that she felt were not well
explained and too costly under high-deductible health plans.
Just two years on, EverlyWell reports “hundreds of thousands of customers and tens of millions in sales.” The company plans to add additional staff on top of its existing 70 employees in anticipation of the new funding, Austin Business Journal reports.
“We are building a consumer brand, which means we have to be where people shop. We need to be in places like CVS and Target to really allow for broader distribution and name recognition,” Cheek told the Austin American-Statesman.
What Draws People to EverlyWell?
EverlyWell offers home health test kits, priced from $49 to
$400 that people can order without a doctor’s prescription and pay for online. Users
take their samples (saliva, urine, or a pinprick of blood) with provided
lancets and cotton swabs, MedCity News
reported.
EverlyWell’s top selling tests are:
Food sensitivity-$159;
Thyroid function-$159;
Metabolism-$89; and
Vitamin D deficiency-$99.
EverlyWell says it is “first” in direct-to-consumer tests
for:
EverlyWell Test kits come with registration information, instructions, collection tools;
Biological samples are sent by consumers to CLIA (Clinical Laboratory Improvement Amendments)-certified labs that partner with EverlyWell;
Results are generally completed within 10 days depending on type of test and business volume;
A physician reviews the test results;
Reports on test results are electronically accessible through smartphone apps and online web dashboards.
“Lab testing is arguably one of the most important steps in preventing and managing illness but has been largely ignored by digital health companies. EverlyWell is successfully navigating an entrenched industry to offer consumers an opportunity to take charge of their own health,” said Eric Kim, Managing Partner at Goodwater Capital (which led the financing), in the news release.
“We’re building the definitive technology-enabled healthcare platform that consumers deserve and have already come to expect in other areas of their lives,” Cheek told VentureBeat. “As high-deductible plans become the norm, consumers are becoming discerning buyers who look for seamless, digitally enabled experiences.”
Learning from
EverlyWell
Of course, pathologists and medical laboratory professionals
will watch to see if EverlyWell can sustain its rapid rise in popularity with
healthcare consumers. In particular, those consumers who prefer DTC testing
over traditional clinical laboratory visits and who may be on high-deductible
health plans.
The DTC test market represents an opportunity that most
clinical laboratories have yet to take seriously. There are many reasons why
medical lab managers and pathologists would be taking a “wait and see”
attitude. Meanwhile, EverlyWell has $50 million of investors’ money to use to
demonstrate the financial viability of its strategy to encourage consumers to purchase
their own clinical laboratory tests—and even collect their own specimens at
home!
Different clinical labs use different names for the same medical laboratory test, causing confusion among doctors who order and interpret tests and adding risk to patient care
Is there a common name for every unique medical
laboratory test? Patients and consumers generally assume that to be so. But
clinical
pathologists, medical
technologists, and other lab scientists know that different labs use
different names for the same medical lab test and methodology.
The lack of uniformity in how medical laboratory tests are
named by different labs is a problem—not just for physicians and patients, but
also when lab test results are shared across the electronic
health record (EHR) systems of hospitals and doctors’ offices. The
multiplicity of names for the same medical laboratory test can confuse
physicians when they are ordering lab test or interpreting the results of those
tests. All of this adds risk to patient care.
Now, a new national coalition of pathologists, clinicians,
professional organizations, accreditation agencies, large reference labs, and
terminology groups called TRUU-Lab (Test
Renaming for Understanding and Utilization in the Laboratory), is working “to
create a consensus guideline for giving laboratory tests more rational and
consistent names.”
TRUU-Lab aims to create a set of guidelines for the
development of clear and consistent medical laboratory test names, as well as
the launching of easy-to-understand names in online lab test menus.
“It is a bit shocking that it is 2019 and there is no standardization in the US on how to name the lab tests,” Ila Singh, MD, PhD, founder of TRUU-Lab, told Dark Daily. “Sometimes we name the medical laboratory tests based on the analyte—or the patient for which it was first discovered—or we call it after the physician who discovered it. And vendors give names to lab tests that meet their goals. So, it’s kind of a free-for-all,” she admitted.
Singh is Chief of Laboratory Medicine in the Department of
Pathology at Texas Children’s
Hospital and a tenured Professor of Pathology and Immunology at Baylor College of Medicine in Houston. She will
be speaking at the upcoming Executive
War College in New Orleans on TRUU-Lab’s national initiative to “create a
consensus guideline for giving laboratory test more rational and consistent
names.”
Lack of Standard Clinical
Lab Test Names Confuses Ordering Physicians
Some medical
laboratory scientists and pathology leaders say the lack of standardization
in naming medical lab tests not only confuses ordering clinicians, it confuses patients
and insurers as well. It also leads to inappropriate test utilization, high
costs, and safety and quality issues.
“Vitamin D
is a big one,” Singh said. “There are two main tests, but you can find up to a dozen
names for the same test.”
One such blood test is 25-hydroxy vitamin D (Calcifediol)
and another is 1,25-dihydrozy
vitamin D (Calcitriol). Both tests involve vitamin D, however the latter
test is ordered “when kidney disease or abnormalities of the enzyme that
converts 25-hydroxyvitamin D to 1,25-dihydroxyvitamin D is suspected,”
according to Lab Tests Online, a guide to lab
tests coordinated by the American Association
for Clinical Chemistry (AACC), a TRUU-Lab coalition member.
“If physicians cannot distinguish between the two different
vitamin D names, they decide to just order both tests and deal with the issue
later when the results come back. And if results are fine, they know they don’t
have to deal with it at all. So, there is a lot of excessive test ordering and
wrong ordering,” Singh explained.
She added that a study conducted at Texas Children’s
Hospital found that ordering clinicians chose the wrong vitamin D test 30% of
the time.
Ila Singh, MD, PhD (above), is board-certified in Clinical Pathology and Clinical Informatics and is the founder of TRUU-Lab, which she formed “to bring these consistent and easy-to-understand lab test names into electronic health record (EHR) and laboratory information systems (LIS) everywhere.” (Photo copyright: Texas Children’s Hospital.)
Other popular tests have different names for the same test and the redundancies can lead to inefficiencies in test ordering, the TRUU-Lab website notes. It gives the example of hemoglobin A1c, which is also known as glycosylated hemoglobin or HgbA1C.
Problems also arise when doctors cannot find the right lab tests
to order. Take, for instance, viral tests that are named for the virus. Sounds
simple enough. The test for the human
immunodeficiency virus (HIV) is called the HIV test. However, viral test ordering can
get tricky. For example, the test for measles is named after the rubella virus (Rubella, Latin
for “little red,” was first used to describe measles in 1866). “People forget
it is called rubella. Then, it is hard for physicians to find the name of the
test. They end up ordering tests that lead to delays (in diagnosis and care),”
Singh said.
Another example is the test for Syphilis, which is called Rapid Plasma Reagin or RPR. The name does not immediately suggest a Syphilis test.
“There are lots of problems,” Singh noted, adding that people think a Free Prostate-Specific Antigen test is a lab test that is “free-of-charge,” which would be funny if it weren’t so concerning.
Clinical Laboratory
Leaders Can Help!
Though Singh acknowledges past attempts to rename medical laboratory
tests in the US, as well as the work by lab industries in Canada and Australia,
where standard guidelines for lab test names do exist, she stresses that more
work is needed. “The problem is they have not made ease of understanding the
standardization (among clinicians) a priority,” Singh said.
TRUU-Lab has three goals:
Reach consensus on guidelines for naming lab
tests;
Develop easy-to-use names for tests; and,
Implement and adopt use of lab test names as
widely as possible.
Singh’s presentation will inform clinical lab leaders that:
Understanding the lack of lab test name
guidelines is a huge problem affecting utilization management at hospitals;
TRUU-Lab is a way to address the problem nationally;
and,
Opportunities exist for pathologists and lab
leaders to get involved.
“I want this to be the kind of project people want to get
aligned with,” Singh said.
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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.
Media coverage of a recent Orig3n promotion-and intervention from state and federal officials-reveals the level of discomfort public and policymakers have for handling the publics’ protected health information, including genetic test data
Is it appropriate to offer free genetic tests to 70,000 fans attending a professional football game? Apparently not, say federal and state healthcare regulators who took steps to block a planned free genetic test giveaway that the Baltimore Ravens and clinical laboratory company Orig3n planned to conduct on Sunday, September 17.
Genetic testing has become a mainstay of clinical laboratories and pathology groups. And it can’t be denied that the growing popularity of self-administered genetic tests could have an impact on medical laboratories’ revenue. Additionally, there’s the issue of state and federal privacy laws in the handling of protected health information (PHI) as outlined by the Health Insurance Portability and Accountability Act (HIPAA) to consider. Thus, the news that a developer of genetic self-test kits planned to distribute hundreds of free tests at an NFL football game in Baltimore quickly garnered the attention of federal and state officials, as well as the national media.
Instead of handing out t-shirts, Orig3n, a developer of genetic self-tests kits based in Boston, planned to offer free DNA tests at the September home opening game of the Baltimore Ravens. However, the giveaway was not to be. The promotion attracted the attention of the Centers for Medicare and Medicaid Services (CMS), the Maryland Department of Health (MDH), and a range of media outlets. This led to postponing the event just days before it was scheduled to happen.
According to Forbes, the test promotion claimed to provide information on genetic markers related to vitamin D deficiency, skin aging, language ability, and muscle force.
Orig3n told Vice in 2016 that Food and Drug Administration (FDA) approval, and other typical genetic test requirements that apply to medical laboratories, weren’t needed because their tests are non-diagnostic. However, genetic testing often does require physician orders and lab approval in the state of Maryland.
Speaking with TheBaltimore Sun, Kevin Byrne, Senior VP of Public and Community Relations for the Baltimore Ravens, stated, “[We are] working with the Maryland Department of Health. Orig3n is confident it can receive the proper approvals and plans to have a fan giveaway later this season at one of our games.”
Criticism of Direct-to-Consumer (DTC) Genetic Testing
In Forbes, journalist Rita Rubin noted, “I paid $99 for the 23andMe direct-to-consumer genetic testing service several years ago. Turns out 23andMe included at least one of the four genes covered by the test Orig3n plans to give out to Ravens fans.”
23andMe is also familiar with the regulatory hurdles of DTC genetic testing. As we reported in 2013, the company received letters from the FDA demanding they cease sale of their genetic tests. These letters were followed by a $5-million class-action law suit in California claiming the test results were “meaningless.” (See Dark Daily, “23andMe Socked with FDA Warning Letter and Class Action Lawsuit over Company’s Genetic Testing Services,” December 11, 2013.)
These concerns were echoed by Toni I. Pollin, PhD, Associate Professor at the University of Maryland School of Medicine. “There’s nothing in this that I think is a good idea,” she told The Baltimore Sun. “The tests they’re talking about doing are not going to be useful for a particular individual.”
The graph above, which is drawn from a Kalorama report on the current and future market for US Direct-to-Consumer (DTC) genetic testing, illustrates the meteoric increase in value of the DTC tests market. (Image copyright: MedCityNews/Kalorama.)
Modern Healthcare followed up on the 23andme story in 2016. Although the class-action suit eventually failed in the 9th US Circuit Court of Appeals, it took nearly two years for 23andMe to bring a portion of their tests to the market.
However, the coverage surrounding both events illustrate how wary government regulators might be to allow direct-to-consumer genetic testing to become a commonplace service. And how wary the public is to trust these new technologies and services with their protected health information.
Privacy Concerns and Media Backlash Still Common
In a September press release promoting the event, Orig3n states, “Orig3n is on a mission to advance the future of health. We believe that everyone should have direct, affordable access to their genetic information and reaching people with DNA tests on such a large scale is a natural and exciting way for us to demonstrate that.”
While Orig3n claims security is in place to protect sensitive genetic information, Bethesda, Maryland, attorney Bradley Shear and Peter Pitts, President of the Center for Medicine in the Public Interest (CMPI), both cited security concerns in the Baltimore Sun article.
The privacy and security concerns surrounding the collection and pooling of genomic and healthcare big data are not limited to the US. This trend continues to shape how innovative technologies grow and how systems and companies communicate data around the world.
Alexion (NASDAQ:ALXN), a pharmaceutical company specializing in orphan drugs, was shoved into the spotlight by Bloomberg Businessweek for aggressive marketing tactics in several countries around the world using blinded data to target patients and clinicians. The story also brought with it mentions of high-profile clinical laboratories and diagnostics providers—a potential PR nightmare for all involved.
Direct-to-consumer genetic tests offer opportunities for consumers to discover facets of their health and genetic backgrounds. However, the potential risks, security/privacy concerns, and the true value of test results continue to create hurdles for commercial service providers, as well as for pathologists and clinical laboratories.
Until public and regulatory scrutiny decreases, the value of the data gathered by these tests is determined, and standards are in place regarding security of customers’ protected health information, laboratories should remain vigilant and tread carefully when considering DTC testing as a viable opportunity to expand revenues.
The self-monitoring/self-test market is expected to swell to $19 billion by 2019, offering opportunities for pathologists and clinical laboratories to advise patients and ensure the proper use of home tests
Might the future of clinical laboratory tests be sitting on the shelf at your corner pharmacy right now? Patient self-testing and screening kits continue to garner the approvals of Consumer Reports’ medical advisors.
That’s happening because the Food and Drug Administration (FDA) continues to clear many do-it-yourself tests that traditionally were performed in medical laboratories by qualified personnel, much to the chagrin of some doctors.
Empowered healthcare consumers are checking their cholesterol, monitoring their diabetes, and more, using health screening kits that range from $8 to $175, according to a Consumer Reports on Health article, which advised consumers to use self-tests judiciously and share the results with their physicians. (more…)
