Dozens of Chicago-area schools were reopened with the help of an $11 COVID-19 saliva test, but the qualifications of the clinical laboratory, and whether it complied with federal regulations, were called into question
It was only a matter of time when newly-formed clinical laboratories—taking advantage of the federal government’s loosening of regulations to promote COVID-19 testing—drew the attention of state regulators and the national news media. This is what happened at New Trier High School in Winnetka, Ill.
In March, the New York Times published an article, titled, “Why Virus Tests at One Elite School Ran Afoul of Regulators.” The article highlighted the coronavirus screening program implemented at New Trier High School and suggested that “New Trier may have inadvertently violated federal regulations on testing,” adding that “the Illinois Department of Public Health (IDPH) opened an investigation into the lab.”
SafeGuard Surveillance of Brookfield, Ill., was contracted to perform the routine saliva-based testing. SafeGuard analyzed saliva samples from students, teachers, and school staff to detect the presence of the SARS-CoV-2 coronavirus. New Trier was just one of several school districts that contracted with SafeGuard for the testing, which costs $11 per test. The samples were typically processed the same day.
“This has been a really valuable safety mitigation for our district to make our staff, students, and community feel safer,” Chris McClain, Assistant Superintendent for Finance and Operations at Glenbard High School District 87, told the Chicago Tribune. “We’ve been very pleased with the program.” Glenbard also contracted with SafeGuard for the COVID-19 surveillance screening.
COVID-19 Surveillance or Screening?
Though the surveillance screening testing was working as intended for multiple Chicago areas school systems, the New York Times article called into question whether SafeGuard—which at the time lacked CLIA (Clinical Laboratory Improvement Amendments) certification—was qualified to conduct COVID-19 screening testing.
The article also alleged that SafeGuard was led by a scientist who was not qualified under the federal guidelines to run a diagnostic laboratory, and that the saliva test being used was not authorized for COVID-19 testing by the federal Food and Drug Administration (FDA).
It came down to whether SafeGuard was conducting “surveillance” testing, which does not require CLIA-certification, or “screening” which does.
SafeGuard was founded by Edward Campbell, PhD, Assistant Professor in the Department of Microbiology and Immunology at Loyola University in Chicago. Campbell, a virologist with decades of experience developing tests for HIV, “adapted a saliva-based coronavirus test last summer and first established a [COVID-19] lab for the suburban school district where he serves on the board,” Patch News reported.
Microbiologist Edward M. Campbell, PhD (above), founded SafeGuard Surveillance toward the end of 2020 after demand for COVID-19 screening he had been conducting for various local school systems increased dramatically. In January, the startup clinical laboratory was running about 25,000 tests per week, the Riverside/Brookfield Landmark reported. (Photo copyright: Loyola University.)
SafeGuard Claims It Complied with Federal Regulations
SafeGuard’s COVID-19 screening tool utilizes RT-LAMP (reverse transcription loop-mediated isothermal amplification) to look for the SARS-CoV-2 coronavirus in saliva samples. This test is less sensitive than the more commonly used polymerase chain reaction (PCR) test that uses a nasal swab to detect the virus. However, the RT-LAMP test is considered reliable, particularly in individuals with a high viral load. The RT-LAMP test also is less expensive than the PCR test, which makes it appealing for public school systems.
To use the RT-LAMP test, faculty, staff, and students spit into test tubes at home and then take the sample to their school or other drop-off location. Campbell’s lab then processes the samples.
After the New York Times article came out, both New Trier and SafeGuard denied they had done anything wrong, and that their screening program complied with government regulations for COVID-19 testing. Campbell maintained that he did not need the CLIA certification to operate his lab for testing and that SafeGuard complied with all federal regulations. Nevertheless, in March, SafeGuard applied for and received CLIA-certification to “conduct ‘screening’ testing, instead of just ‘surveillance’ testing,” Patch News reported.
“We’re doing everything we can to operate in good faith under the guidance that clearly exists,” Campbell told The Chicago Tribune.
In a statement, New Trier district officials said, “New Trier has also met with local and state health authorities to review our use of the program and they have not directed us to change our use of it. From the time the program began, New Trier has been clear that the saliva program is non-diagnostic and must be confirmed by a lab test. To suggest otherwise is false,” Patch News reported.
Surveillance Testing versus Screening
In August, the federal Centers for Medicare and Medicaid Services (CMS), which oversees CLIA labs, released guidelines that stated COVID-19 testing could be performed in clinical laboratories that were not CLIA-certified so long as patient-specific results are not reported.
This “surveillance testing” is intended to identify the disease within a population group and not diagnose individuals. If a person tests positive for COVID-19 via SafeGuard’s saliva test, the individual is directed to get an FDA-approved test to confirm the diagnosis.
“We do definitely see the value of surveillance testing and how that can be used to help schools make informed decisions about remote, in-person, or hybrid learning,” Melaney Arnold, State Public Information Officer for the Illinois Department of Public Health (IDPH) told the Chicago Tribune. She added that the IDPH wants to provide schools with the tools they need to navigate the pandemic.
Following the New York Times article about New Trier High School and SafeGuard’s COVID-19 screening program, the Illinois Department of Public Health opened an investigation into the company. However, the investigation has ended, and the state agency is not taking any further action against SafeGuard, Patch News reported.
It’s worth noting that it was the FDA’s relaxing of federal regulations that encouraged the development of startup clinical laboratories like SafeGuard in the first place. There is, apparently, a fine line between surveillance and screening, and clinical laboratories engaged in one or the other should confirm they have the required certifications.
Because air travel volumes are low, experts believe it is timely to develop COVID-19 testing systems and gain insight on which protocols are most effective
As the COVID-19 pandemic surges on, several international airlines now require customers to complete at-home COVID-19 testing before they can travel. This is triggering unusual business practices. For example, one airline allows its passengers to use frequent flier miles to purchase mail-in COVID-19 test kits.
Frequent Flyer Miles for COVID-19 Testing
Across the United States, Hawaii has one of the lowest rates of infection, partly thanks to the state’s strict quarantine regulations. In a state, however, that depends on tourism for its economic health, the pandemic has caused serious financial difficulties. In an effort to prevent spread of the coronavirus while also encouraging tourism, Hawaiian Airlines now offers “Pre-travel COVID-19 Test Options” on its website.
To be allowed to skip the state’s mandatory 14-day self-quarantine before arriving on the islands, flyers can take a pre-travel coronavirus test with the following conditions:
The test must be from a state-approved testing provider.
The test must be administered no more than 72 hours prior to the scheduled departure time of the final leg to Hawaii.
For trans-pacific travel, test results must be received prior to flight departure.
Additionally, the airline accepts frequent flyer miles to pay for mail-in COVID-19 tests. In exchange for 14,000 HawaiianMiles, a passenger receives a test kit in the mail. The kit features a video call during which a healthcare professional guides the consumer on taking a saliva sample. The user then ships the sample to a qualified clinical laboratory. Results are returned electronically within 24 hours of the lab receiving the sample.
Hawaii’s COVID-19 portal states, “The state of Hawaii will ONLY accept Nucleic Acid Amplification Test (NAAT) from a certified Clinical Laboratory Improvement Amendment (CLIA) lab test results from Trusted Testing and Travel Partners” that are participating in the state’s pre-travel testing program. Honolulu and Maui are the only two arrival airports allowed. A negative result must have come from a test performed within 72 hours prior to the final leg of the passenger’s trip to Hawaii, according to the portal.
“A negative pre-travel test is an alternative to two weeks in self-isolation for arrivals to the archipelago,” the UK’s Independent reported.
JetBlue and Vault Health Partner to Offer COVID Testing to Airline Passengers
In another instance of an airline getting involved in at-home testing, JetBlue (NASDAQ:JBLU) is partnering with Vault Health to offer at-home testing. The process is similar to the Hawaiian Airlines program. However, rather than purchasing the test with frequent flyer miles, JetBlue offers polymerase chain reaction (PCR) tests at a discount.
Business Travel News reported that passengers must provide a confirmation code while ordering the $119 test from Vault Health’s webpage. “Vault provides a kit for an at-home saliva test, and users administrate it while on a video chat supervised by Vault to ensure the test is done properly. The user sends it overnight to a clinical laboratory and the results are provided within 72 hours,” Business Travel News stated.
“We continue to hear from health officials that [COVID-19] testing is incredibly important in the fight against the coronavirus, and we want to make sure our customers have options for testing, especially prior to travel,” said Joanna Geraghty, President and Chief Operating Officer, JetBlue, in a press release. “As more and more regions reopen, many are requiring test results to enter. Now with easier testing options, those safety requirements may not be a deterrent for travel, but rather provide greater public health and peace of mind with little inconvenience.” (Photo copyright: Spectrum News NY1.)
In addition to airlines such as Hawaii Airlines and JetBlue instituting programs for coronavirus testing, some airports are as well. Tampa International Airport, for example, test-piloted a voluntary testing program for all arriving and departing passengers from October 1st to October 31st. The airport partnered with BayCare, a 15-hospital Tampa area healthcare network, to provide both rapid antigen and PCR tests.
“Testing services will be offered on a walk-in basis … seven days a week from 8 a.m. until 2 p.m. The pilot will be open to all ticketed passengers who are flying or have flown within three days and can show proof of travel. The PCR COVID-19 test costs $125 and the antigen test costs $57,” a press release stated.
Tampa Airport CEO Joe Lopano told the Washington Post, “This could be—especially if adopted by other airports—another way to instill confidence.”
COVID-19 Testing by Retailers Expanding as Well
Travelers aren’t the only people who need testing. Some employers also are requiring negative tests before employees can return to work.
As with all at-home kits, the consumer collects their own specimen and sends it off to a qualified clinical laboratory for processing. AZOVA, a telehealth company, supplies the kits to Costco for resale and provides a smartphone app where customers can check and display the test results.
P23 Labs’ TaqPath SARS-CoV-2 assay is the test being used, which, according to P23, “has a 98% sensitivity and 99% specificity,” Business Insider reported.
The researchers found that “All seven SARS-CoV-2 genomes were genetically identical, with the exception of a single mutation in one case, and all genomes had five signature mutations seen in only six other genomes from the >155,000 genomes sequenced globally. Four of these six related genome sequences were from Switzerland, the country of origin of the suspected index case.”
They added, “By combining information on disease progression, travel dynamics, and genomic analysis, we conclude that at least four in-flight transmission events of SARS-CoV-2 likely took place.”
At-home test kits for COVID-19 are here to stay. That large businesses in multiple industries are now partnering with COVID-19 test developers and clinical laboratory companies to accomplish testing of customers and employees means independent labs that process coronavirus testing can look forward to increasing COVID-19 testing business.
“We need to be using the time now, when [travel] volumes are relatively low, to test the systems and gain insight on which protocols are most effective,” Mara Aspinall, biomedical diagnostics professor at Arizona State University, President and CEO of the Health Catalysts Group, an investment and advisory firm, and former President/CEO of Ventana Medical Systems (now Roche Tissue Diagnostics), a billion-dollar division of Swiss pharmaceutical and diagnostics manufacturer Roche, told the Washington Post.
Abbott sends the SARS-CoV-2 test results directly to patients’ smartphones, which can be displayed to gain entrance into areas requiring proof of COVID-19 testing
There is no greater example that COVID-19 is a major force for change in the clinical laboratory industry than the fact that—though the US federal government pays 50% of the nation’s total annual healthcare spend of $3.5 trillion—it recently spent $760 million to purchase 150 million COVID-19 tests from Abbott Laboratories (NYSE:ABT), an American multinational medical devices and healthcare company headquartered in Abbott Park, Ill., “to expand strategic, evidence-based testing in the United States,” according to the company’s website.
In August, the federal Food and Drug Administration (FDA) granted an emergency use authorization (EUA) to Abbott for its BinaxNOW portable rapid-response COVID-19 antigen (Ag) test. The credit-card sized test costs $5 and can return clinical laboratory test results in minutes, rather than hours, days, or in some cases, weeks, the Wall Street Journal (WSJ) reported.
The test includes a free smartphone app called NAVICA, which enables those tested to receive their test results directly on their mobile devices—bypassing the patient’s primary care physicians.
According to Abbott’s website, the app “allows people who test negative to get an encrypted temporary digital NAVICA Pass, similar to an airline boarding pass. NAVICA-enabled organizations will be able to verify an individual’s negative COVID-19 test results by scanning the individual’s digital NAVICA Pass to facilitate entry into facilities.”
This feature of Abbott’s new COVID-19 test is a good example of how quickly innovation in the medical laboratory testing profession is bringing new features and new capabilities to the marketplace. By marrying the SARS-CoV-2 test with the NAVICA Pass feature, Abbott hopes to deliver increased value—not just to physicians and their patients—but also to employers with employee screening programs and federal government programs designed to screen federal employees, as well as being used for screening travelers at airports and other transportation hubs.
Abbott appears to be banking that in the future such identification will be required to “enter organizations and other places where people gather,” as the company’s website states.
Testing Limited to CLIA-Certified Clinical Laboratories
An HHS news release announcing the government’s planned distribution of the BinaxNOW tests stated that “Testing will be potentially deployed to schools and to assist with serving other special needs populations.”
In the news release, Alex Azar, HHS Secretary, said, “By strategically distributing 150 million of these tests to where they’re needed most, we can track the virus like never before and protect millions of Americans at risk in especially vulnerable situations.”
The EUA adds that “Testing of nasal swab specimens using [BinaxNOW] … is limited to laboratories certified under CLIA that meet the requirements to perform high, moderate, or waived complexity tests. This test is authorized for use at the [point of care], i.e., in patient care settings operating under a CLIA Certificate of Waiver, Certificate of Compliance, or Certificate of Accreditation.”
The FDA’s EUA describes the BinaxNOW portable rapid-response COVID-19 antigen test (above) as “a lateral flow immunoassay intended for the qualitative detection of nucleocapsid protein antigen from SARS-CoV-2 in direct nasal swabs from individuals suspected of COVID-19 by their healthcare provider within the first seven days of symptom onset.” The test costs $5 and Abbott sends results directly to the patient’s smartphone using the free NAVICA app included with the test. (Photo copyright: Abbott Laboratories.)
IVD Companies See Boom in COVID-19 Test Sales
Demand for COVID-19 testing has created opportunities for in vitro diagnostics (IVD) companies that can develop and bring tests to market quickly.
Recent issues of Dark Daily’s sister print publication—The Dark Report (TDR)—covered IVD companies’ second quarter (Q2) boom in sales of COVID-19 instruments and tests, while also noting a fall-off in routine clinical laboratory testing during the COVID-19 pandemic.
Abbott Laboratories saw molecular diagnostics sales increase 241% in Q2 driven by $283 million in sales of COVID-19 testing, while rapid diagnostic COVID-19 testing rose 11% on $180 million in sales in Q2, TDR reported, based on Abbott data.
“There is huge economic incentive for diagnostic companies to develop technologies that can be used to create rapid tests that are cheap to perform,” said Robert Michel, Publisher and Editor-in-Chief of TDR and Dark Daily. “In this sense, COVID is a major force for change.”
“This new COVID-19 antigen test is an important addition to available tests because the results can be read in minutes, right off the testing card,” said Jeff Shuren, MD, JD (above), Director of the FDA’s Center for Devices and Radiological Health (CDRH), in an FDA news release announcing the federal government’s $760 million purchase of 150 million Abbott BinaxNOW rapid-response antigen COVID-19 tests. “This means people will know if they have the virus in almost real-time. Due to its simpler design and the large number of tests the company anticipates making in the coming months, this new antigen test is an important advancement in our fight against the pandemic.” (Photo copyright: The New York Times.)
Thus, Abbott is determined to ensure this product launch is successful and that the test works as promised. According to a news release, “In data submitted to the FDA from a clinical study conducted by Abbott with several leading US research universities, the BinaxNOW COVID-19 Ag Card demonstrated sensitivity of 97.1% (positive percent agreement) and specificity of 98.5% (negative percent agreement) in patients suspected of COVID-19 by their healthcare provider within the first seven days of symptom onset.”
“The massive scale of this test and app will allow tens of millions of people to have access to rapid and reliable testing,” said Joseph Petrosino, PhD, professor and chairman, Molecular Virology and Microbiology, Baylor College of Medicine, in the Abbott news release. “With lab-based tests, you get excellent sensitivity but might have to wait days or longer to get the results. With a rapid antigen test, you get a result right away, getting infectious people off the streets and into quarantine so they don’t spread the virus.”
Abbott has invested hundreds of millions of dollars in two manufacturing facilities where the tests will be made, John Hackett Jr, PhD, an immunologist and Abbott’s Divisional Vice President Applied Research and Technology, and lead scientist on the BinaxNOW project, told The Atlantic.
“Our nation’s frontline healthcare workers and clinical laboratory personnel have been under siege since the onset of this pandemic,” said Charles Chiu, MD, PhD, professor of Laboratory Medicine at University of California, San Francisco, in the Abbott news release. “The availability of rapid testing for COVID-19 will help support overburdened laboratories, accelerate turnaround times, and greatly expand access to people who need it.”
However, other experts are not so sure. In the Atlantic article, Michael Mina MD, PhD, Assistant Professor Epidemiology at Harvard’s T.H. Chan School of Public Health, voiced the need to test both asymptomatic and pre-symptomatic people. “This is the type of [COVID-19] test we have been waiting for—but may not be the test.”
Nevertheless, the federal government’s investment is significant. Abbott plans to start shipping tens of millions of tests in September and produce 50 million tests per month starting in October, Forbes reported.
Shifting Clinical Laboratory Paradigms
BinaxNOW will be performed without doctors’ orders, in a variety of locations, and results go directly to patients’ smartphone—without a pathologist’s interpretation and medical laboratory report. This is new ground and the impact on non-CLIA labs, and on healthcare in general, is yet to be seen.
Clinical laboratory managers will want to monitor the rise of rapid-response tests that can be easily accessed, conducted, and reported on without physician input.
Limited availability of COVID-19 clinical lab tests is major topic at federal briefings and news stories, yet many of nation’s labs are laying off staff and at point of closing
Cash flow at the nation’s clinical laboratories has crashed, with revenues down by more than $5 billion since early March. This is the biggest financial disaster for the nation’s clinical laboratory industry in its 100-year history and it couldn’t come at a worse time for the American public and the US healthcare system.
At the precise moment when the nation needs clinical laboratories to begin performing millions of tests for SARS-CoV-2, the coronavirus that causes the COVID-19 illness, those same labs are watching their cash flow collapse.
Data from multiple sources gathered by The Dark Report, sister publication of Dark Daily, confirm that—beginning in early March and continuing through last week—clinical laboratories in the United States saw incoming flows of routine specimens decline by between 50% and 60%. During this same time, lab revenue fell by similar amounts.
Clinical Lab Industry Currently Losing $800 to $900 Million Weekly
To give this decline context, the healthcare system spends about $80 billion annually on medical laboratory testing. Thus, labs across the US generated about $1.5 billion in revenue each week during 2019 and into 2020. By April 5, the decline in routine lab specimen volumes reached 55% to 60%. Since then, the clinical lab industry now loses between $800 million and $900 million each week. Total revenue loss from previous levels is already estimated to be $5.2 billion, and it is growing by an additional $800 million to $900 million every week that patients stay away from hospitals and physicians’ offices.
In the eight weeks since the COVID-19 pandemic caused patients to cease coming to hospitals and visiting their doctors, incoming routine specimens and revenue fell by 60%, causing cumulative lost routine revenue of $5.2 billion for the clinical laboratory industry in the United States. Each week that the existing shelter-in-place directives are effective, labs lose another $800 million to $900 million. The Dark Report based these estimates on data provided by multiple companies working with lab billing/claims, middleware analytical solutions, and customer relationship management (CRM) and electronic health record (EHR) products. (Chart copyright: The Dark Intelligence Group, Inc.)
The recent dire financial condition of labs small and large has gone unremarked by federal healthcare officials at the daily White House COVID-19 Task Force briefings. National news sources have yet to report on this development and its implications for successfully expanding the availability and numbers of COVID-19 tests in response to the pandemic.
The rapid and deep decline in specimens and revenue is not limited to clinical laboratories. Biopsy cases referred to anatomic pathology groups have declined by 50% to 60%. Some subspecialty pathology labs saw case referrals drop by 80% or more.
The nation’s two biggest clinical laboratory companies confirmed similar declines in their normal daily flow of routine specimens. Both companies recently reported first-quarter earnings (which included the month of March).
Quest Diagnostics, LabCorp Each Disclose Volume Declines of 50% to 60%
During its Q1 2020 earnings conference call, Chairman, President, and CEO of Quest Diagnostics (NYSE:DGX), Steve Rusckowski, stated, “In April, volume declines continue to intensify as we are seeing signs that volume declines are bottoming out at around 50% to 60%.”
The drop-off in routine lab test referrals was the similar at LabCorp (NYSE:LH). “In our diagnostics business, at the end of the quarter, we experienced reductions in demand for testing of 50% to 55% versus the company’s normal daily levels,” explained Glenn Eisenberg, Executive Vice President and CFO during LabCorp’s Q1 2020 earnings call. “This reduction in demand impacted testing volume broadly but was more heavily weighted towards routine procedures.”
Interviews with independent clinical lab owners and the administrative directors of hospital and health system labs further confirm this rapid and dramatic decline in the number of routine specimens arriving in their labs. Fewer specimens mean fewer claims, which means less revenue to laboratories.
Two Different Financial Futures for ‘Have’ Labs and ‘Have Not’ Labs
What happens next to the clinical laboratory industry in the United States—and to its ability to continue ramping up the availability of adequate numbers of COVID-19 tests in major cities, small towns, and rural areas—will be a story of “haves” and “have nots.”
The “haves” are clinical labs that have access to money. These are publicly-traded lab companies, academic medical center labs, and the sophisticated labs of health networks that operate multiple hospitals. In each case, these organizations have capital reserves and access to loans that will probably enable them to sustain COVID-19 lab testing services at the large volumes required to respond to the pandemic.
clinical labs operated by community hospitals and rural hospitals that were not financially robust before the onset of the pandemic; and,
specialty lab companies that perform a specific number of proprietary diagnostic tests (and for which demand has collapsed as patients stopped seeing their doctors).
Medicare Led Payers in the ‘Lab Test Price Race to the Bottom’
Prior to the onset of the SARS-CoV-2 pandemic, the finances of the “have-not” labs were already shaky, with many on the verge of filing bankruptcy, closing, or selling to a bigger lab company. Much blame for the deteriorating finances at a large proportion of community lab companies, community hospital labs, and rural hospital labs can be attributed to the deep, multi-year price cuts to the Medicare Part B clinical laboratory fee schedule as mandated by the Protecting Access to Medicare Act of 2014 (PAMA).
Medicare’s multi-year cuts to lab test prices were immediately copied by most state Medicaid programs. During this period, private payers followed Medicare’s lead and enacted their own deep cuts to the prices they paid labs for both routine tests and molecular/genetic tests.
That is why—when the pandemic intensified in early March—the 50% to 60% drop in specimens and revenue that hit these labs starved them of essential cash flow. When polled, the owners and directors of these labs acknowledge layoffs of the majority of their staff in all departments. They also reported substantial delays—both in submitted lab test claims and in getting payment for those claims—because claims-processing departments at the labs and private health insurers are understaffed due to shelter-in-place directives.
COVID-19 Test Revenue Helps Only Labs Performing Those Tests
Revenue from COVID-19 testing is helping certain labs offset the revenue loss from fewer routine specimens. XIFIN, Inc., a San Diego company that provides revenue cycle management (RCM) services for clinical laboratories and pathology groups, analyzed the lab test claims for COVID-19 rapid molecular tests. It determined that labs performing these tests are generating enough revenue from these test claims to equal about 20% of their pre-pandemic revenue.
The chart above was prepared by XIFIN, Inc., of San Diego and is based on the changes XIFIN observed in the volume of routine clinical laboratory test claims generated by client labs on a weekly basis. In the first two months of 2020, routine lab test claims ran at expected levels until the first week of March. During the rest of March, routine lab test claims declined by 60%. During April, incoming routine lab test claims remained 55% to 60% below pre-pandemic levels. The shaded area shows the number of COVID-19 test claims coming into clinical labs. XIFIN says COVID-19 test claims make up about 20% of the decline in routine test specimens for those labs performing COVID-19 tests. The Dark Report estimates that the clinical laboratory industry has lost $800 million to $900 million in routine test revenue each week since March 23. Weekly revenue losses will continue at this rate until patients begin visiting their physicians and hospitals again perform elective services. (Chart copyright: XIFIN, Inc.)
Many CLIA-certified community laboratories and hospital labs have the diagnostic instruments and experience to perform rapid molecular tests for COVID-19. But when contacted, they tell us that their suppliers do not ship them even minimal quantities of the COVID-19 kits, the reagents, and the consumables. Thus, they cannot meet the needs of their client physicians. Instead, they watch as these physicians refer COVID-19 tests to the nation’s largest labs. The supply shortage prevents these smaller labs from doing larger numbers of COVID-19 test for the patients in the communities they serve. It also prevents them from earning the revenues from COVID-19 testing that currently helps the nation’s “have” labs offset the decline in revenue from routine testing.
Congress, national healthcare policymakers, and state governors need to immediately address this situation. Each week that passes during the COVID-19 pandemic and the shelter-in-place directives drains another $800 million to $900 million in revenue from routine lab testing that previously flowed into the nation’s clinical laboratories.
‘Have-not’ Clinical Labs in Small Towns Will Quietly Shrink and Disappear
Without timely intervention and financial support, the nation’s network of ‘have not’ labs, which have so capably served towns away from big metropolitan centers and rural areas, will quietly begin shrinking. One at a time, labs in small towns will close or sell. Local lab facilities will be shuttered and specimens from small-town patients will be transported to big labs hundreds or thousands of miles away.
It is also true that the financial disaster besetting the nation’s clinical laboratory industry will have comparable dramatic consequences for the in vitro diagnostics (IVD) manufacturers that sell them automation, analyzers, reagents, and other supplies. Since early March, IVD manufacturers watched as the pandemic caused orders for new instruments to collapse. During these same weeks, their clinical lab customers ceased ordering routine test kits at pre-pandemic levels. Dark Daily will cover the challenges confronting the IVD and other diagnostics industries in future e-briefings.
Announcing Free COVID-19 STAT Intelligence Briefings for Clinical Labs
With the COVID-19 pandemic creating chaos in nearly every aspect of healthcare, business, and society, clinical labs and their suppliers need timely intelligence and analysis about the innovations and successes achieved by their peers. This week, Dark Daily and The Dark Report are launching COVID-19 STAT Intelligence Briefings (Copy and paste this URL into your browser: https://www.covid19briefings.com). This comprehensive service is free and will cover four basic areas of needs for clinical laboratories as they ramp up COVID-19 testing:
Daily and weekly COVID-19 testing dashboards to guide every lab’s short-term planning;
Proven steps for labs to introduce and validate COVID-19 tests (both rapid molecular tests and serology tests);
Getting paid for COVID-19 testing to ensure every lab’s financial stability and clinical quality; and
Legal and regulatory updates for labs doing COVID19 tests to ensure full compliance.
Also, to help clinical laboratory leaders deal with the coming wave of COVID-19 serology tests, we are producing a free webinar led by James O. Westgard, PhD, FACB, and Sten Westgard, Director of Client Services and Technology, of Westgard QC, Inc.
Each week that the SARS-CoV-2 pandemic continues, and strict shelter-in-place directives are in place, the clinical laboratory industry loses another almost $900 million in revenue from lower volumes of routine testing. No industry can survive when its incoming revenue collapses by 50% to 60% for sustained periods of time.
Will Congress Recognize the Need for a Financial Rescue of ‘Have-not’ Labs?
Thus, it is incumbent on Congress, elected officials, and healthcare policymakers to recognize the financial consequences of the pandemic to the nation’s clinical laboratories. That is particularly true of the ‘have-not’ clinical labs. They do not have the same access to decisionmakers in government as billion-dollar lab companies.
And yet, these labs located in small communities and rural areas often are the only local labs that can do STAT testing in a couple of hours, and where clinical pathologists are personally familiar with local physicians and patients.
These “have-not” labs are vital healthcare resources. They should receive the help they need to get through this unprecedented crisis that is the COVID-19 pandemic.
Facing a backlog, the state’s public health laboratory turned to the medical laboratory at Dartmouth Hitchcock Medical Center
Much of the attention surrounding the COVID-19
outbreak—the illness caused by the SARS-CoV-2
coronavirus—has focused on large urban areas such as New York City and Los
Angeles. However, the virus is impacting many rural areas as well. This is true
in New Hampshire, where the diagnostic response required close cooperation
between the state’s public health
laboratory and the clinical
laboratory at its lone academic medical center. Their experience offers
lessons for medical
laboratory leaders nationwide.
“When these things happen and you surge beyond what you
could imagine, it’s the relationships with people that matter more than
anything,” said Christine
L. Bean, PhD, Administrator of New
Hampshire Public Health Laboratory Division of Public Health Services , Concord,
N.H., during a recent Dark
Daily webinar, titled, “What Hospital and Health System Labs Need to
Know About Operational Support and Logistics During the COVID-19 Outbreak.”
As Bean explained, during the earliest stages of the
pandemic the “CDC was doing the testing” and the state lab’s role was limited
to submitting samples from patients deemed as “presumptive positives.” Then, on
Feb. 4, the FDA granted an emergency
use authorization (EUA) allowing use of the CDC-developed real-time
reverse transcriptase PCR (RT-PCR) assay by designated labs.
The New Hampshire Public Health Laboratory (NHPHL) received
its first test kit on Feb. 10, Bean said. But the kits were recalled due to
validation problems with one of the reagents. On Feb. 26, the CDC
issued revised test instructions allowing use of the test without the N3
primer and probe set that had caused the early validation issues. The NHPHL
verified the test under the new guidelines and went live on March 2, she said.
However, with a capacity of 150 to 200 tests per day, the
lab wasn’t equipped to handle a large volume. “Much of what we do is really
population-based,” she said. “Most of the time we’re not doing patient
diagnostic testing.”
Christine L. Bean, PhD (left), Administrator of the New Hampshire Public Health Laboratory, and Joel Lefferts, PhD (right), Assistant Professor of Pathology and Laboratory Medicine, and Assistant Director of the Molecular Pathology, at Dartmouth’s Geisel School of Medicine, spoke with Dark Daily’s Editor-in-Chief Robert Michel during a webinar on what hospital and health system labs need to know about operational support and logistics during the COVID-19 outbreak. The webinar can be freely downloaded by clicking here. (Photo copyright: Dark Daily.)
NHPHL Turns to the Medical Laboratory at DHMC-CGHT for
Help
The DHMC-CGHT lab began having its own discussions about
testing in the first week of February, said Joel
A. Lefferts, PhD, HCLD, DABCC, Assistant Professor of Pathology and
Laboratory Medicine and Assistant Director of Molecular Pathology at
Dartmouth’s Geisel School of
Medicine. They were unsure of how much need there would be, but “throughout
the month of February, we started exploring different testing options,” he said
during the Dark Daily webinar.
The Dartmouth-Hitchcock lab team began with the CDC test. However,
Lefferts noted that the initial FDA guidance was “somewhat restrictive” and required
specific RNA extraction
kits and real-time PCR instruments. “If our lab didn’t have the capability to
perform everything exactly as indicated, we would be running it off-label and
would have to possibly submit our own EUA submission to the FDA,” he explained.
Later, though, the FDA and CDC loosened those restrictions and the lab began testing with the CDC assay on March 18, using a Thermo Fisher ABI 7500Dx instrument, Lefferts said. According to Thermo Fisher’s website, the ABI 7500Dx “is a real-time nucleic acid amplification and five-color fluorescence detection system available for in vitro diagnostic use.”
However, Lefferts continued, “we only had one of these
7500Dx instruments, and it was a relatively manual and labor-intensive
process.” It allowed a maximum of 29 samples per run, he said, and took about
five hours to produce results.
Then, the FDA granted an EUA for Abbott’s
m2000 assay, which runs on the company’s m2000rt real-time PCR instrument.
“We were really excited, because we happened to have two of these systems in
our lab,” he said. “We quickly got on the phone and ordered some of these
kits.”
The DHMC-CGHT lab went live with the new system on March 23.
It can handle up to 94 samples per run, said Lefferts, and with two instruments
running from 6 a.m. to 9 p.m., “there’s a potential to do as many as 10 runs
per day.”
This was the system they used to help New Hampshire’s Public
Health Lab with its backlog. “It was unbelievable to see that our backlog could
be really wiped out,” said Bean.
Challenges for Medical Labs
Gearing up for testing in a public health emergency poses
many challenges, Lefferts advised. “You need to look at what instrumentation
you have in your laboratory, what the experience level of your lab team is, how
much space you have, your expected batch size, and your needed turnaround
time.”
The two labs also had to deal with regulatory uncertainty. “This EUA process is something for which we don’t have much experience,” he said. “Trying to juggle CLIA, CAP, the FDA, and possibly state regulations is a bit challenging. You definitely need to do your research and talk to other clinical laboratories that are doing this testing to get advice.”
Lefferts explained that the most significant challenges to
develop and validate a molecular assay for COVID-19 included:
Availability of validation materials.
Obtaining “positive [viral] samples may be a challenge, depending on where you
are and what you have access to,” said Lefferts. However, he credits the FDA
for being “very proactive” in suggesting alternative sources for “viral isolates or genomic RNA that’s been
extracted from some of these viral isolates.”
Availability of collection kits. “We can
do a lot more testing now,” he said, but one bottleneck is the limited
availability of supplies such as nasopharyngeal swabs
and viral transport media. “We’re looking at alternative collection options,”
he said, such as 3D-printed swabs or even Q-tips [household cotton swabs], though
“hopefully it won’t come to that.” The DHMC-CGHT lab also considered producing its
own transport media.
Turnaround times. “Our lab wants to get
those results out as soon as possible,” Lefferts said. “So, we’re looking at
alternative methods to get that testing out sooner.” For example, “do we just
do the SARS-CoV-2 testing on a patient, or do we need to do other influenza and other viral
pathogens,” while also keeping up with other routine testing during the
pandemic?
Staffing issues. “Fatigue is a big issue
with members of our labs who put in lots of extra hours,” he said. The
DHMC-CGHT lab has developed contingency plans in case lab personnel get sick.
This critical information will be highly useful for
Laboratory Directors and Managers, Laboratory Supervisors and Team Leaders,
Integrated Health System Leaders, Hospital Group Leaders, Physicians and
Physician Group Leaders, Phlebotomy Managers, Courier and Logistics Managers,
and Safety and Compliance Managers.
