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American Society for Clinical Pathology Website Was Hacked Last Year, Possibly Exposing Credit Card Information of Members and Online Shoppers

Thousands of pathologists and medical technologists may have had their private data stolen, though ASCP investigators did not confirm this as having happened

For a “limited time period” in 2020, the American Society for Clinical Pathology (ASCP) was the target of a cyberattack that “potentially exposed payment card data as it was

being entered” on the ASCP website, according to a letter sent by McDonald Hopkins PLC to then Attorney General of the New Hampshire Department of Justice (DOJ) Gordon MacDonald.

In “World’s Largest Pathologists Association Discloses Credit Card Incident,” Bleeping Computer, an information security and technology news publication, reported that on March 11 of this year, ASCP employees discovered their system had been hacked. They discerned that between March 3, 2020, and November 6, 2020, the attackers had access to personal information being entered on the ASCP website.

Bleeping Computer noted that “[the ASCP’s] member list includes over 100,000 medical laboratory professionals, clinical and anatomic pathologists, residents, and students.”

In a statement, the ASCP said, “We have recently been informed that our e-commerce website was the target of a cybersecurity attack that, for a limited time period, potentially exposed payment card data as it was entered on our website.”

The information that may have been stolen includes data pertaining to individual credit cards, names, credit or debit card numbers, expiration dates, and security codes (CVV) associated with the cards.

“We engaged external forensic investigators and data privacy professionals and conducted a thorough investigation into the incident,” the ASCP said in the statement.

What Type of Cyberattack?

Evidence collected regarding the ASCP data breach indicates the attack was part of a web-skimming assault. This involves installing malicious software, such as Magecart, onto an e-commerce website. The software acts like a credit card skimmer enabling hackers to steal the payment and personal information of customers who are actively inputting data on the attacked website. The data is then sent to remote servers where it is used for identity theft or sold to others.

ASCP says it does not permanently store any of its customers’ payment card data on its servers, Bleeping Computer reported, which greatly reduces the potential risk of data exposure. In addition, the ASCP has implemented extra security measures to prevent similar incidents from happening in the future.

“We resolved the issue that led to the potential exposure on the website. We implemented additional security safeguards to protect against future intrusions. We continue ongoing intensive monitoring of our website, to ensure that it exceeds industry standards to be secure of any malicious activity,” the ASCP said in a statement, Bleeping Computer reported.

Peter-Blum-Group-Product-Manager-Google
In an interview with TechRepublic, Peter Blum (above), Group Product Manager at Google, discussed steps companies can take to proactively manage the threat of Magecart cyberattacks. “The best defense against Magecart attacks is preventing access,” Blum said. “Online companies need a solution that intercepts all of the API [application programming interface] calls your website makes to the browser and blocks access to sensitive data you have not previously authorized. This prevents any malicious script, or any non-critical third-party script, from gaining access to information your customers enter on your website. This same system should also have a monitoring component to alert companies when a third-party attempts to access sensitive information.” (Photo copyright: LinkedIn.)

Federal Rules and Regulations Concerning HIPAA and PHI

The ASCP stated they have no evidence that any customer data was misused after the incident occurred. As of May 14, the organization has not made an official, public statement regarding the situation on their website, but affected individuals and jurisdictions were sent letters to inform them of the data breach.

With over 130,000 current members, Chicago-based ASCP is the largest professional organization for pathologists and clinical laboratory professionals in the world. The organization did not respond to Dark Daily’s inquiries regarding the data breach.

Although no reported violations under the Health Insurance Portability and Accountability Act (HIPAA) occurred in this ASCP data breach, it should be noted that there are rules under HIPAA for data breaches where Protected Health Information (PHI) may have been compromised.

Under the HIPAA Breach Notification Rule, entities that were hacked must perform the following steps:

  • Notify affected individuals within 60 days of the discovery of the breach. Notification should include a brief description of the breach, the types of information that may have been compromised, steps affected individuals should take to protect themselves from potential harm, and a description of what the organization is doing to investigate the breach, mitigate the harm, and prevent further breaches.
  • Hacked entity must inform the Secretary of Health and Human Services (HHS) within 60 days of the breach discovery if 500 or more individuals were affected. For breaches affecting less than 500 people, the breached entity may notify the Secretary of such breaches on an annual basis.
  • For breaches affecting more than 500 individuals, the hacked entity must also provide a notification to prominent media outlets, typically via a press release, that serve the state or jurisdiction.

This breach of credit card information belonging to a sizeable number of pathologists and clinical laboratory professionals using the ASCP website should be a warning to all clinical laboratories and anatomic pathology groups—along with colleges, societies, and associations—that their websites and digital systems can be attacked at any time. As well, clinical laboratory and pathology professionals should be on the alert and take all necessary precautions to minimize the possibility of data breaches.

—JP Schlingman

Related Information:

World’s Largest Pathologists Association Discloses Card Incident

American Society for Clinical Pathology—Incident Notification

ASCP Disclosed Payment Card Web Skimming Incident

Magecart Attack: What It is, How it Works, and How to Prevent It

What is Magecart? How This Hacker Group Steals Payment Card Data

A Deep Dive into Magecart: What Is Magecart?

Compliance Perspectives: State Enforcement Raises Liability Risks of Data Breaches

Three Federal Agencies Warn Healthcare Providers of Pending Ransomware Attacks; Clinical Laboratories Advised to Assess Their Cyberdefenses

University of California San Diego Researchers Demonstrates How Easily Medical Laboratory Systems and Devices Can Be Compromised, Putting Patient Lives at Risk

WannaCry Ransomware Holds Critical Data Hostage Worldwide, Including UK’s National Health Service and Russia’s Interior Ministry

Federal Prosecutors Signal That Accuracy of Theranos’ Blood Tests Will Be Centerstage in August Fraud Trial

Pregnant former Theranos CEO Elizabeth Holmes makes her first court appearance in 15 months as pre-trial maneuvering continues in court case involving clinical laboratory tests

During pre-trial hearings for the August fraud trial of former Theranos CEO, Elizabeth Holmes, federal prosecutors signaled that the accuracy of Theranos’ blood tests will be center stage in their arguments. This latest installment in the continuing saga of defunct medical laboratory testing company Theranos took place when a now-pregnant Holmes made her first in-person court appearance in 15 months.

Clinical laboratory scientists have watched with interest as the often-delayed fraud trial inched closer to its new August 31 start date. After being delayed multiple times by the COVID-19 pandemic, United States District Court Judge Edward Davila ruled in March that the trial would be postponed from mid-July to late August due to Holmes’ pregnancy. She is due to give birth in July.

Do Prosecutors Lack Proof Theranos’ Blood Testing Technology Is Inaccurate?

As Dark Daily previously reported, Holmes faces 12 counts of wire fraud charges for alleged false claims that Theranos created a revolutionary technology for performing a wide range of clinical laboratory tests using a tiny amount of blood.

In its 2015 investigative report, The Wall Street Journal (WSJ) alleged Theranos had not disclosed publicly that the vast majority of its tests were performed with traditional machines purchased from Siemens AG and other companies, not its so-called breakthrough proprietary technology.

The recent three-day hearing provided Holmes’ attorneys and federal prosecutors with an opportunity to present arguments regarding what evidence can be presented at the upcoming trial.

In a recent article, the WSJ reported that Holmes’ attorneys argued the US Attorney’s Office for the Northern District of California built its case on anecdotal evidence.

According to the WSJ article, Holmes’ defense team is trying to block the government from calling patients and medical professionals to testify about the accuracy of Theranos’ blood test results. At the hearing, attorney Amy Saharia, a Williams and Connolly LLP partner, maintained prosecutors lack scientific proof Theranos tests were inaccurate. She called this lack of scientific evidence a “gigantic hole” in the government’s case.

“This trial is going to be a sprawling mess of irrelevant, prejudicial evidence,” she told the court, the WSJ reported.

Saharia added, “We have all become very familiar with testing this year. Testing involves many different variables,” CNBC reported. “What the government offers is without scientific basis, they have to establish Theranos technology was responsible for erroneous results. Just because it happened doesn’t mean it was because of Theranos technology.”

pregnant-elizabeth-holmes-leaving-courthouse
Pregnant Elizabeth Holmes (above), who is due to give birth in July, is seen entering the courtroom for a pretrial hearing in San Jose, Calif., in the US government’s fraud case against the former Theranos CEO. In the hearing, federal prosecutors indicated the accuracy of Theranos’ clinical laboratory tests will be at the center of their arguments. (Photo copyright: Mercury News.)

Defense Tries to Block Pathologists’ Testimony

During the second day of hearings, federal prosecutors responded to defense attorneys’ efforts to block clinical pathologist Stephen Master, MD, PhD, from testifying. Defense attorneys argued the government is using Master as a “parrot” and argue his views on Theranos’ blood tests are “based on emails and customer complaints” not personal familiarity with the tests, CNBC reported. Master is Division Chief and Director, Metabolic and Advanced Diagnostics at Children’s Hospital of Philadelphia, and an Associate Professor of Pathology and Laboratory at University of Pennsylvania’s Perelman School of Medicine.

Assistant US Attorney Robert Leach, however, said, “Miss Holmes went out, told the world and told investors: we have tests with the highest accuracy rate,” adding that testimony from their expert witness “puts the lie to that,” CNBC reported.

Before Theranos was dissolved in 2018, Holmes rose to rock star status in Silicon Valley. She graced magazine covers, rubbed elbows with VIPs, and became known for her Steve Jobs-like signature black turtleneck.

In his summary of Holmes’ 2016 presentation at the annual meeting of the American Association of Clinical Chemistry (AACC), titled, “After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of Its Technology,” Robert Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report, wrote, “It would be safe to summarize most reactions as skeptical.”

Holmes’ presentation, Michel noted, was met with suspicion as her credibility with the media and clinical laboratory scientists eroded. “Holmes did not fool many in the audience.”

One clinical chemist who attended the AACC meeting said, “I came to see scientific data about this remarkable technology that could do up to 70 medical laboratory tests on a single drop of capillary blood. Instead, I heard her talk about the new corporate strategy at Theranos, including the details as to how their analyzer works. The data that followed had nothing to do with anything but their new analyzer.”

Prosecutors Claim Fraud Paid for Holmes’ Extravagant Lifestyle

Holmes’ celebrity status helped fuel Theranos’ rapid valuation growth, which reached a high of $10 billion in 2015. But her gold-plated lifestyle became a point of contention during the recent pre-trial hearing. Prosecutors maintained that Theranos’ fraud propelled Holmes’ extravagant spending.

“In addition to her salary, the company provided for her luxurious travel on private jets and expensive lodging,” Assistant US Attorney John Bostic told CNBC. “The point here is the so-called success of Theranos was entirely the product of fraud.”

But according to CNBC, the judge “pushed back” on the government’s argument, stating Holmes’ benefits likely were on par with other CEOs. “What’s the value that she’s at the Four Seasons or a Motel 6?” the judge asked the prosecutors.

CNBC reported the two sides also sparred over whether jurors will learn about Holmes’ private text messages and regulatory reports.

Holmes and former Theranos President and Chief Operating Officer Ramesh Balwani have both pleaded not guilty. Balwani will face a separate trial after Holmes’ court case concludes.

Clinical laboratory scientists will watch with interest as the Holmes and Balwani trials finally get under way, since the accuracy of Theranos’ blood tests will be under the microscope along with Holmes’ participation in the alleged fraud.

Andrea Downing Peck

Related Information:

Elizabeth Holmes Makes First Courtroom Appearance in Over a Year

Hot Startup Theranos Has Struggled with its Blood-Test Technology

Elizabeth Holmes Lavish Lifestyle Looms over Theranos Fraud Case

Accuracy of Theranos Blood Tests at Heart of Elizabeth Holmes’ Criminal Case

Elizabeth Holmes Reappears in Court for First Time in 15 Months Putting Silicon Valley Culture Under Scrutiny

After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of its TechnologyFederal Prosecutors Add a 12th Felony Fraud Charge in Latest Criminal Indictment Against Theranos Founder Elizabeth Holmes

Community Anatomic Pathology Groups Show Increased Interest in Adopting Digital Pathology and Whole-Slide Imaging, But Can They Do It on a Budget?

Acceptance of digital pathology and whole-slide imaging is now almost universal among academic health center pathology departments and the nation’s largest pathology companies

Across the United States, many private practice anatomic pathology groups now recognize that digital pathology is the path forward for the entire profession. During the past decade, most academic pathology departments and large pathology lab companies have incorporated digital pathology (DP) and whole-slide imaging (WSI) into many of their labs’ daily activities.

However, in community hospital-based anatomic pathology groups, there have been barriers to even the partial adoption of digital pathology. The two biggest barriers are well-known and discussed frequently at conferences and in the literature.

Some Pathologists Reluctant to Give Up Light Microscopes

One recognized barrier to wider adoption of DP is the reluctance of many long-serving pathologists to give up their familiar light microscopes and glass slides so they can make the transition to reading pathology images on a computer screen. These pathologists remain loyal to the tools and workflows that have served them well throughout their careers.

They generally oppose their group’s move to digital pathology when the subject is discussed in partner meetings and strategic retreats. Since many pathology groups require 100% of partners or shareholders to approve major business decisions, even one recalcitrant and stubborn pathologist-partner can block the motion to adopt digital pathology that is supported by most partners.

The second barrier is the fully-loaded cost to acquire, validate, implement, and use a digital pathology system with whole-slide imaging. A full-featured scanner can cost $250,000 or more and acquiring all the software, systems, and tools needed by a group to fully incorporate digital pathology into daily workflow can easily total $500,000 to $1,000,000.

This substantial commitment of a pathology group’s capital can trigger the same intense debates as the original question of whether the pathologists in the group should adopt DP and WSI. And, not surprisingly, in most pathology groups the same dynamics come into play when votes are tallied on the motion for the pathology group to commit the funds necessary to acquire a digital pathology system, the scanners, and associated tools.

Just one or two partner holdouts can block the decision to spend the money, despite that most of the pathologist partners are ready to make the commitment.

More Community Pathology Groups Considering Digital Pathology

Yet, the momentum in favor of adopting DP and WSI continues to build. “Those pathology labs that are early adopters report multiple clinical and financial benefits. These can include generating positive financial outcomes—including the ability to attract new clients, increasing case referrals, and generating new sources of revenue to the group. In turn, the increased revenue can allow the group to increase pathologist compensation,” said Robert L. Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report.

Every day, more anatomic pathologists in the United States use a digital pathology system with a workstation (like above) to view whole-slide images and manage their daily caseload. Most academic center pathology departments use digital pathology, as do many of the nation’s largest pathology lab companies. (Photo copyright: WizardHealth.)

“We are in a time when health insurers are hammering away at the reimbursement paid to anatomic pathologists,” Michel continued. “Year after year, payers cut reimbursement for technical component and professional component services. They exclude many pathology groups from payer networks. That is why more community pathology groups are recognizing several important benefits with the use of DP and WSI that can increase a pathology group’s revenue and boost its pathologist compensation.

Community Pathology Groups Can Use Digital Pathology to Add Value

Equally important, there are specific ways that digital pathology and whole-slide imaging increase the value of the clinical services pathologists deliver to their client physicians. These dual benefits of DP are often overlooked—or not discussed—when community pathology groups conduct their annual retreats and debate the key points of when to adopt—and how to fund—a digital pathology system for their group. These benefits range from giving physicians a faster diagnostic answer on their cancer cases to helping the group’s subspecialist pathologists get more case referrals from physicians in other states.

“It’s important for all surgical pathologists to recognize several realities in today’s pathology marketplace,” Michel noted. “First, almost every sector in healthcare is digitizing itself. Reinforcing this trend is the federal government’s mandates for interoperability across EHRs, HISs, and LISs. Any private pathology group practice that lags in its adoption of digital capabilities and digital images will find itself falling farther and farther behind as physicians switch their case referrals to other pathology labs that have converted to digital pathology and whole-slide images.

“Second, pathology groups that adopt DP and WSI put themselves in a position to build market share in their service region, while at the same time increasing case referrals for their in-house subspecialist pathologists from throughout the United States,” Michel continued. “Also, when the histology is done locally, the local pathology group can deliver faster diagnostic answers and provide digital images as appropriate to referring physicians and hospitals in that region without the need to transport glass slides by couriers.

“Third—and this is an often-overlooked benefit of digital pathology—the local pathology group with DP and WSI can recruit today’s graduating pathology residents and fellows who have trained on DP and WSI. These new pathologists typically limit their job search to pathology groups that have gone digital,” Michel noted. “Millennial pathologists trained with digital images in their residency program. They are eager to work with the automated image analysis algorithms now coming to market.”

To help pathology groups better understand the opportunities and challenges associated with implementing digital pathology and whole-slide imaging, Dark Daily is presenting a special webinar, “Adopting Digital Pathology on a Budget: Getting Started, Knowing What’s Feasible, and Funding Your DP from Overlooked Sources,” on Thursday, May 27, from 1:00 PM to 2:30 EDT.

On Thursday, May 27, at 1:00 PM EDT, Keith Kaplan, MD, Chief Medical Officer of Corista (left), Andrew Evans, MD, Medical Director of Laboratory Medicine at Mackenzie Health (center left), William DeSalvo, President of Collaborative Advantage Consulting and Manager of Histology Operations at Sonora Quest Laboratories in Tempe, Ariz. (center right), and Lisa-Jean Clifford, COO and Chief Strategy Officer at Gestalt Diagnostics (right) will present “Adopting Digital Pathology on a Budget: Getting Started, Knowing What’s Feasible, and Funding Your DP from Overlooked Sources.” Anatomic pathologists, clinical laboratory directors, laboratory managers, clinical pathologists, and laboratory technicians will gain a critical understanding of which components a fully integrated digital pathology system requires, the differences between your lab’s existing LIS and a digital pathology system, budget-minded approaches to buying the components of a digital pathology system and implementing them in a stepwise fashion, and much more! (Photo copyright: Dark Daily.)

Recognizing the significant capital investment needed to acquire and deploy digital pathology and WSI, one goal of the webinar’s panel of experts is to identify ways that pathology groups can go digital on a budget. “We will do our best to identify different ways that pathology groups with limited financial resources can get into digital pathology,” said Keith Kaplan, MD, Chief Medical Officer at Corista in Concord, Mass., who will chair the upcoming webinar. “This may be the first public presentation where there is candid information about different financial strategies that your pathology group can utilize to acquire the scanners, the DP systems, and the associated tools needed for a full conversion to daily digital pathology.”

Don’t overlook how your participation in this webinar can be the foundation for helping your pathology group practice develop a timely, cost-effective path forward to introduce digital pathology and whole-slide imaging. Use of DP and WSI can become an important factor in helping your group offset payer prices cuts, develop new clients and sources of revenue, and increase pathologist compensation.

Click HERE to register today (or copy and paste this URL into your browser: https://www.darkdaily.com/webinar/adopting-digital-pathology-on-a-budget/). Make sure to have your pathology practice administrator and your histology manager join you for this important webinar.

—Michael McBride

Related Information:

Digital Pathology Launched in the ‘Era of COVID-19’: Memphis Lab Company Makes the Business Case for Scanning Slides to Cut Costs, Boost Productivity

Anatomic Pathology at the Tipping Point? The Economic Case for Adopting Digital Technology and AI Applications Now

Digital Pathology Systems Will Create Opportunities: Community Pathologists Discuss Benefits of Being Early Adopters of Digital Pathology

Even as Digital Pathology Is Poised to Be Disruptive in Primary Diagnosis, Most Anatomic Pathology Groups Are Unprepared for How Their Incomes Will Change

Twenty Years of Digital Pathology: An Overview of the Road Travelled, What Is on the Horizon, and the Emergence of Vendor-Neutral Archives

Next Generation Diagnostic Pathology: Use of Digital Pathology and Artificial Intelligence Tools to Augment a Pathological Diagnosis

South Korean Telecommunications Partner with Direct-to-Consumer Genetic Testing Companies to Send Test Results to Consumers’ Mobile Devices

As consumer demand increases for medical laboratory testing services that bypass the supervision of primary care doctors, clinical laboratories may be affected

Direct-to-consumer (DTC) genetic testing organizations and telecommunications companies in South Korea are collaborating to help consumers stay informed of their health status by sending lab test results directly to their mobile devices without requiring physician involvement. What can labs in the West learn from these developments?

One such example involves in vitro diagnostics (IVD) developer NGeneBio, which according to the company’s website, came about “as a joint venture between cancer diagnostics developer Gencurix and Korea Telecom (KT).” NGeneBio develops in vitro diagnostics, companion diagnostics (CDx), and bioinformatics software with cutting-edge technologies, including next-generation sequencing (NGS), the website states.

Founded in 2015, NGeneBio provides smartphone-based healthcare services for individuals who solicit genetic testing. Through the partnership, KT plans to combine its knowledge of artificial intelligence (AI) and cloud computing with NGeneBio’s genetic decoding expertise to “provide services such as tailored health management (diet and exercise therapy) services, and storage and management of personal genome analysis information.”

No Doctors Involved?

Outside of genealogy, the general intent of DTC genetic testing is to equip consumers with certain genetic data that may help them manage their healthcare without requiring visits to their healthcare provider. The healthcare information provided through the NGeneBio venture will include data delivered directly to customers’ smartphones on the status of their:

  • skin,
  • hair,
  • nutrition, and
  • muscular strength.

According to an article in Korean business news publication Pulse, “Genetic test services in Korea are restricted to some 70 categories, such as the analysis of the risk of hair loss, high blood pressure, and obesity.” 

Last September, Pulse reported, Korean mobile carrier SK Telecom Co. announced a similar partnership with Macrogen Inc. to introduce a mobile app-based DNA testing service called “Care8 DNA.” To utilize this service, consumers order a DNA test kit, take a saliva sample via mouth swab, and then send the kit to a clinical laboratory for analysis. Users typically receive their test results on the Care8 DNA app (available from both Google Play and Apple’s App Store) within a few weeks.

The service costs ₩8,250 South Korean won ($7.36 US) per month. A one-year subscription to the service costs ₩99,000 won or $88.36 US. The Care8 DNA app features 29 testing services, including:

  • skin aging,
  • possibility of hair loss,
  • resistance to nicotine,
  • the body’s recovery speed after exercise,
  • and more.

Along with those results, consumers can receive personalized health coaching guidance from professionals like nutritionists and exercise physiologists to improve their overall wellbeing, Pulse noted. 

Korea-Genetic-Labs-team-member-displaying-product
KoreaTechToday reports that the Macrogen/SK Telcom Care8 DNA app (above) “links the consumer immediately to a gene testing company instead of going through a medical institute first. BIS Research [a marketing research and intelligence company located in Freemont, Calif.] estimates the global direct-to-consumer (DTC) gene test market would increase to ₩7.6 trillion won in 2028.” That is more than $6.7 billion US dollars. Such a shift toward DTC home testing would likely have a huge financial impact on clinical laboratories that process genetic tests as well as the healthcare providers who order them. (Photo copyright: SK Telecom Co.)

In February 2019, Macrogen became the first company in South Korea to take advantage of the government’s relaxed regulations on DTC genetic testing, Korea Biomedical Review reported. In addition to the basic services offered through the Care8 DNA app, Macrogen’s DTC tests also can cover 13 diseases, including:

Other Korean Genetic Testing Companies Adding DTC Services

“Industry officials think DTC genetic tests should include testing for diseases,” an industry official told Korea Biomedical Review in April. “There will be more companies who make these attempts.”

One Korean genetics testing company that started its own DTC genetic testing service in 2020 is Theragen Bio. Korea Biomedical Review reported that Theragen had procured permits to test for all 70 traits allowed under DTC genetic testing per the Korea Disease Control and Prevention Agency.

Theragen’s GeneStyle DTC services website states that the testing includes:

  • Body mass index (BMI)
  • Triglyceride concentration
  • Cholesterol
  • Blood glucose control
  • Blood pressure control
  • Caffeine metabolism
  • Skin aging
  • Pigmentation
  • Hair loss
  • Hair thickness
  • Metabolism of vitamin C  

“A DTC genetic test is a contactless healthcare service suitable for the COVID-19 era. The expansion of detailed test items allows users to comprehensively check nutrients, obesity, skin, hair, eating habits, and exercise characteristics at one time,” an official at Theragen Bio told Korea Biomedical Review. “We expect that our service will attract more attention from consumers.”

What Can Be Learned?

Countries in Asia—particularly South Korea, Japan, and Taiwan—are among the fastest adopters of new technology in the world. Thus, it can be instructive to see how their consumers use healthcare differently than in the West, and how those users embrace new technologies to help them manage their health.

It is not certain how all this will impact clinical laboratories and genetic doctors in the western nations. Direct-to-consumer genetic testing has had its ups and downs, as Dark Daily reported in multiple e-briefings.

Nevertheless, these developments are worth watching. Worldwide consumer demand for genetic home testing, price transparency, and easy access to test results on mobile devices is increasing rapidly. 

JP Schlingman

Related Information:

Genetic Testing Providers Join up with Telcos to Allow Health Status Quo in Hands

KT, NGeneBio Sign Deal for Genetic Data-based Digital Health Care Service

SK Telecom Introduces Mobile App-Based DNA Test Service, Care8 DNA

Genomics Firms Aim to Widen Direct-to-Consumer Genetic Testing

Consumer Reports Identifies ‘Potential Pitfalls’ of Direct-to-Consumer Genetic Tests

Blackstone Buys Stake in Ancestry for $4.7 Billion, While Interest in Direct-to-Consumer Genealogy Genetic Tests May Be Fading Among Consumers

Popularity of Direct-To-Consumer Genetic Tests Still Growing, Regardless of Concerns from Provider and Privacy Organizations

Walmart to Open 4,000 Healthcare ‘Supercenters’ by 2029 That Include ‘Comprehensive’ Clinical Laboratory Services

With the majority of Americans living just a few miles from a Walmart, how might independent clinical laboratories compete?

Retail giant Walmart (NYSE:WMT) plans to install 4,000 primary care “supercenters” in stores by 2029 that will include clinical laboratory testing services. This is on top of the dozens of Walmart Health locations already in operation in Georgia, Florida, Arkansas, Illinois, and Texas.

Clinical laboratories already have growing competition in the healthcare marketplace from pharmacy chains CVS (NYSE:CVS), Walgreens (NASDAQ:WBA), and Rite Aid (NYSE:RAD) which have installed in-store healthcare clinics in their retail locations—many of which offer limited, but common, medical laboratory services—as well as from existing Walmart Health locations.

Now, Walmart is poised to become a much bigger healthcare player. According to MedCity News, Walmart is “looking beyond traditional retail clinics as it seeks to create ‘supercenters’ with comprehensive healthcare services.”

Presumably, this includes an expanded menu of clinical laboratory testing services—along with the EKGs, vision care, dental care, and more—that Walmart Health locations currently provide for children and adults.

And though Becker’s Hospital Review reported in March that Walmart’s “plan is in flux,” the major national retailer continues to disrupt healthcare in significant ways.

Not the Average Retail Health Clinic

In “Walmart Health Opens Two Primary Care Clinics at Retail Supercenters in Chicago with Plans to Open Seven Florida Locations in 2021,” Dark Daily covered CNBC’s question, “Is Walmart the future of healthcare?” from its article, “How Walmart Plans to Take Over Health Care.”

We reported that Walmart Health’s list of services included:

  • Primary care,
  • Dental,
  • Counseling,
  • Clinical laboratory testing,
  • X-rays,
  • Health screening,
  • Optometry,
  • Hearing,
  • Fitness and nutrition, and
  • Health insurance education and enrollment.

However, the new Walmart Healthcare supercenters differ from Walmart Health clinics and the clinics operated by Walmart’s retail competitors Target, CVS, Walgreens, and Rite Aid.

Those clinics are designed to draw customers into existing retail setting. Walmart has a different goal with its healthcare supercenter concept.

“There’s a big difference between offering healthcare services to drive more people to your store and offering healthcare services because you’re in the healthcare business,” said former President of Health and Wellness for Walmart, Sean Slovenski, during a panel hosted by the American Telemedicine Association. “We’re in healthcare,” he continued, “We’re not in retail healthcare. We’re recruiting physicians in all of these areas and bringing them in.”

Providing Transparency with Clear, Consistent Pricing

In response to consumer demand for transparency, Walmart is taking a different approach to charging patients for healthcare services. The cost of an appointment for primary care is $40 for an adult and $20 for a child. The patient can choose to bill insurance or not, and people without insurance can pay out-of-pocket.

Prices for individual services are equally transparent. Explaining why Walmart is becoming a player in the healthcare industry, Marcus Osborne, Senior Vice President Walmart Health, told Fierce Healthcare, “It’s issues of affordability. That people can’t afford the care they need for themselves and their families. It’s issues of access … That really is the business that we’ve been in. Walmart’s business has been about helping people afford the things they need, getting them in a more accessible, convenient way, and doing it in ways that are simple. Healthcare’s no different in that regard.”

According to STAT, some 35 million Americans were uninsured in 2020. Thus, the idea of transparent pricing and walk-in affordable care should appeal to a sizable market. Walmart is banking on that. Considering that 90% of Americans live within 10 miles of a Walmart, the potential success of the healthcare supercenters becomes clear, Becker’s Hospital Review noted.

Walmart’s Other Healthcare Moves

In addition to opening 20 Walmart Health Centers, and its plans for 4,000 healthcare supercenters, Walmart has made other moves that indicate its intention to disrupt the healthcare industry.

Walmart Insurance Services, for example, partnered with eight payers during the open enrollment period in 2020 to sell its Medicare products. Through a partnership with Clover Health, a Preferred Provider Organization (PPO), and a Health Maintenance Organization (HMO) with a Medicare contract, Walmart made its insurance plans available to 500,000 people in Georgia, Becker’s Hospital Review reported.

“We’re going to have a consumer revolution in retail for point of care,” John Sculley, former Apple CEO and current chairman at RxAdvance (now called nirvanaHealth), told CNBC. “Why? Because if the Walmart tests are successful, and I suspect they will be, people will be able to go in and get these kinds of health services at a lower cost than if they had health insurance.”

“A lot of the opportunity is just about bringing what we’re doing to more people. I think about Walmart Health and what we launched a little over a year ago in Georgia and the impact we’ve seen in the communities where it launched. I think one of the biggest things to do is how do we continue to find ways to make that model work so we can reach more people with it in more communities,” Marcus Osborne (above), Senior Vice President Walmart Health, told Fierce Healthcare. Walmart certainly has experience in disruption. The retailer upended the grocery industry from the moment it entered the market, and it was the first to offer $4 prescriptions, which disrupted long-standing retail relationships consumers had with their pharmacies. Clinical laboratories should realize that Walmart
will likely make similar waves in the healthcare sector. (Photo copyright: Consumer Goods Forum.)

How Will Clinical Laboratories Compete?

Change is constant. Clinical laboratories that cannot adapt to changing market forces are ill-equipped to withstand the coming “consumer revolution.” However, labs that have already begun to plan for more direct-to-consumer interactions will be better positioned to adjust as changes come.

“My goal is that we have done the work on Walmart Health as a model, to really get it to work from a consumer perspective and get it to work in a way that it scales effectively, that we are able to reach more people,” Osborne told Fierce Healthcare.

Clinical laboratory leaders should understand that this trend is being driven by consumer demand for convenience, lower costs, and price transparency. Labs that don’t prepare to address those forces will be left behind as Walmart provides what consumers want.

Dava Stewart

Related Information:

Walmart Opens Second Health Center Offering Clinical Laboratory Tests and Primary Care Services

9 Numbers That Show How Big Walmart’s Role in Healthcare Is

Walmart Divulges Plans for ‘Healthcare Supercenters’

Why Does Walmart Think It Has a Right to Play in Healthcare? Top Health Exec Osborne Explains

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