The remarkably low number of influenza diagnoses makes it possible for clinical laboratories to stay focused on COVID-19
One positive note for clinical laboratories this winter is the fact that the number of biological samples being submitted for influenza (flu) testing have dropped significantly. This has given medical laboratories more resources for processing COVID-19 tests.
According to a feature published in Nature, the number of samples being submitted to medical laboratories for flu testing has dropped by 61%. More surprisingly, the number of positives has dropped by 98%. The combined flu/COVID-19 “twindemic” that some medical experts feared could crush our healthcare system has not materialized—yet, the Washington Examiner reported.
“In any given winter, hospitals are taxed by the flu,” Brian Garibaldi, MD, a pulmonologist and critical care specialist and Medical Director of the Johns Hopkins Biocontainment Unit told the Washington Examiner. “There’s always a concern that our emergency departments will be overwhelmed, and ICU capacity will be strained [due to the concurrence of flu and COVID-19 outbreaks], particularly with people who have coexisting conditions that then get influenza.”
The 2019-2020 flu season ended earlier than usual, likely because of precautions put in place in the spring to combat the coronavirus pandemic. Most years, the seasonal flu in the US peaks in February and trails off by May, Nature reported in “How Coronavirus Lockdowns Stopped Flu in Its Tracks.”
“Seasonal flu cases in the northern hemisphere usually peak in February and tail off by the end of May,” Nature wrote. “This year, unusually, lab-confirmed cases of influenza dropped precipitously in early April, a few weeks after the coronavirus pandemic was declared on 11 March. The data comes from tests of more than 150,000 samples from national influenza laboratories in 71 countries that report data to FluNet, a global surveillance system.”
Government Leaders and Health Experts Remain Concerned
Despite that encouraging data point, public health experts and political leaders were still concerned. In September, Arizona Governor Doug Ducey said, “The overlap of COVID-19 and flu season presents a perfect storm, and we aren’t taking any chances. We are approaching this fall with a proactive mindset and plan of action to limit the impact of the flu and preserve hospital resources,” the Washington Examiner reported.
The caution was certainly warranted. A normal flu season strains resources, but a severe flu season coupled with a global pandemic could have been disastrous. Luckily, Ducey’s “perfect storm” did not materialize.
Data from the World Health Organization’s FluNet Global Influenza Surveillance and Response System was used by Nature to develop the graphic above. It illustrates how the number of positive Influenza specimens in 2019-2020 declined compared to the previous two years. Some experts believe this is due to protocols implemented to combat the COVID-19 coronavirus by hospitals and clinical laboratories. (Graphic copyright: Nature.)
Why Is There Less Influenza?
So, why is there less flu and other respiratory infections?
Epidemiologist Lisa Lockerd Maragakis, MD, MPH, Associate Professor of Medicine and Senior Director of Infection Prevention at Johns Hopkins Health System, told U.S. News, widespread business and school closures provide fewer opportunities for influenza to spread. “We commonly see flu spread in communities, schools, businesses and through travel each year, so those changes are likely keeping the flu away.”
However, this may have a negative effect as well. Eili Klein, PhD, Associate Professor of Emergency Medicine at Johns Hopkins School of Medicine, warns that “Because of the current restrictions and precautions everyone is taking this season, far fewer people will be infected or exposed to the flu virus, and therefore won’t become immune to certain strains of the virus. So, the number of people who may have more severe infections next year is likely to be greater because immunity will be lower,” the Washington Examiner reported.
Other Viral Infections Also in Decline Due to COVID-19 Precautions, Vaccines
Masking, frequent handwashing, and social distancing certainly played a role in reducing the number of cases of flu reported this year. But influenza is not the only disease that saw reductions. “In Hong Kong, compared with previous years, the number of chickenpox cases dropped by about half to three-quarters,” Nature reported. “In April, cases of measles and rubella were their lowest, globally, since at least 2016, according to data available so far.”
Early in the COVID-19 pandemic, some public health officials were concerned that the decline in influenza cases was actually related to a lack of testing. “However, renewed efforts by public health officials and clinicians to test samples for influenza resulted in adequate numbers tested and detection of little to no influenza virus,” the Centers for Disease Control and Prevention (CDC) reported.
Another factor in the lower numbers of flu cases could be due to the fact that more people have gotten vaccinated this year. More than 188 million flu vaccines were distributed in 2020, an increase compared to the 169 million given in 2019.
“Flu vaccination in the community started earlier this year, as recommended by the CDC, and our community physicians report that vaccine uptake has been higher than usual,” Marie-LouiseLandry, MD, Clinical Virologist, Professor of Laboratory Medicine and of Medicine (Infectious Diseases), and Director of the Clinical Virology Laboratory at Yale School of Medicine, told Healthline.
It may also be that influenza diagnoses are fewer because people are not seeking treatment. Hospitals at or beyond capacity due to the pandemic, or fear of contracting COVID-19, may have motivated people with flu-like symptoms to stay home rather than seek treatment. However, most healthcare experts agree that public health measures to fight COVID-19 are likely the larger reason there is less flu.
“Public health measures such as movement restrictions, social distancing, and increased personal hygiene likely had an effect on decreasing influenza and other respiratory virus transmissions,” the World Health Organization (WHO) told Nature.
What About the Next Flu Season?
Experts are more conflicted regarding what all of this means for coming flu seasons. Some experts think that because there’s less flu this year, there will be less immunity next year, and severe illness will result. Others are more optimistic and hope that some strains of flu will disappear, which could mean less flu in the immediate future. It’s not a simple prediction to make.
Even if the low flu numbers this year mean some strains do not survive, it is unlikely that will remain the case. “I am sure that flu will come back with a vengeance at some stage in the future,” Robert Ware, PhD, a biostatistician, clinical epidemiologist, and Professor of Biostatistics with Griffith University in Queensland, Australia, told Nature.
Thus, clinical laboratories should remain vigilant for future influenza outbreaks. Hopefully by then the COVID-19 pandemic will have peaked and labs will be able to reallocate testing resources appropriately.
Consolidation of hospitals and health systems means consolidated medical laboratory services as well, and that impacts laboratory revenue and staff
Though COVID-19 shifted many healthcare systems’ priorities in 2020—including quite dramatically altering the priorities of the nation’s clinical laboratories—the SARS-CoV-2 pandemic does not appear to have slowed the pace of healthcare mergers and acquisitions. Many such deals are kept secret until closed by Dec. 31. They are then then announced after Jan. 1, so we may see additional big and surprising healthcare acquisitions announced in coming weeks.
Leaving aside the shock waves brought about by COVID-19, transformational changes to the healthcare community have been underway for a while.
In his article on HealthManagement.org, healthcare consultant Paul D. Vitale, MPA, FACHE, noted that for the past several years, health systems have set records in the mergers and acquisitions space. In 2017, he noted, there were more than 115 deals, and by 2019, there was a series of “mega” mergers, each worth more than $10 billion. The pattern continued in 2020, even with economic concerns brought about by the pandemic.
“According to many health systems, acquiring another organization, or merging with it, holds the key to future success. Faced with intense pressure to cut back on costs, mergers and acquisitions can leverage the economies of scale,” he wrote.
Below are several “deals” that closed in 2020 or are expected to close in 2021.
Pre-merger, Atrium Health’s network included 41 hospitals and 900 care locations, while the Wake Forest Baptist Health system was comprised of 42 hospitals and 1,500 care locations. Plans are underway to build a second campus for the school of medicine, where 3,500 students will be trained in more than 100 specialized programs.
“The impact of the strategic combination will be far-reaching, elevating North Carolina as a clear destination of choice to receive medical care for people all across the nation,” Julie Ann Freischlag, MD (above), CEO of Wake Forest Baptist Health and Dean of Wake Forest School of Medicine, told Healthcare Finance News. “Through our combined, nationally recognized clinical centers of excellence in multiple specialties, we will be able to expand our research in signature areas, such as cancer, cardiovascular, regenerative medicine and aging, and target bringing research breakthroughs to the community in less than half the time of the national average.” Freischlag will serve as Atrium Health’s Chief Academic Officer as well. (Photo copyright: Triad Business Journal.)
Doctors Acquire a Controlling Stake of Steward Health Care
In June, physicians in Dallas purchased a controlling stake of Steward Health Care through a structured recapitalization transaction. Though not strictly a merger and acquisition, the deal represents a similar transformational change of a health system. The change makes Steward the largest physician-owned-and-operated health system in the country, noted a news release.
Ralph de la Torre, MD (above), CEO and founder of Steward, says the industry is in the midst of a transformational moment. “The COVID-19 global pandemic has exposed serious deficiencies in the world’s healthcare systems, with a disproportionate impact on underserved communities and populations,” he stated in the news release. “We believe that future healthcare management must completely integrate long-term clinical needs with investments. As physicians first, we will focus on creating structures and timelines that meet the long-term clinical needs of our communities and the short-term needs of our patients.” (Photo copyright: The Boston Globe.)
Harrington Healthcare System and UMass Memorial Health Care
In January 2020, Harrington Healthcare of Massachusetts announced it was pursuing a corporate affiliation with UMass Memorial Health Care. The transaction was expected to be finalized by 2021.
“When we entered into our initial agreement with UMass Memorial in January, we had no idea what the next several months would bring,” said Ed Moore (above), President and CEO of Harrington Healthcare, in a news release. “Our team performed exceptionally well, and the community supported us every step of the way, but we could not have provided the outstanding care we did without the partnership and support of the clinical team at UMass Memorial. This experience redoubled our confidence that becoming part of the system would offer maximum benefit to our community at a time that requires flexibility, scale, and resources.” (Photo copyright: Worcester Telegram.)
Will More Announcements Come in 2021? Probably
For clinical laboratory managers and pathologists, the healthcare mergers and acquisitions of greatest interest are those that involve hospitals and health systems. When two big health systems merge—such as the transaction involving Atrium Health and Wake Forest Baptist Health—one of the first clinical services to undergo rationalization and consolidation is the clinical laboratory. One reason for this is because it is much easier to move more lab test specimens around the system than it is to move patients. So, many healthcare merger and acquisition deals directly affect the medical laboratory professionals employed by the institutions involved in the transaction.
Despite the pandemic—or because of the financial stresses created by it—there continue to be strong buyers and financially-weak sellers. For this reason alone, pathologists and clinical laboratory administrators should expect to see a regular flow of merger or acquisition announcements involving major healthcare organizations during 2021.
It’s the latest example of how the ongoing SARS-CoV-2 pandemic is making it possible for new competitors to enter the clinical laboratory marketplace
In response to increasing demand for COVID-19 testing, warehouse retailer Costco (NASDAQ:COST) is seizing the opportunity to sell at-home saliva self-collection test kits to its customers. It makes Costco the latest company to enter the market for SARS-CoV-2 testing and compete against clinical laboratories.
And these non-invasive tests—which are as simple as spitting saliva into a container and mailing it to a medical laboratory—may be more effective at detecting the SARS-CoV-2 coronavirus than uncomfortable nasal swabs.
Costco is selling its COVID-19 Saliva PCR Test Kit for $129.99 ($139.99 with video observation). Included in the price is a self-collection device, a biohazard bag, a sticker for personal data, and a box for shipping the saliva to a medical laboratory.
The test is actually P23 Labs’ TaqPath SARS-CoV-2 assay and will be administered by Azova, a digital health services provider. P23 says their test has a 98% sensitivity and 99% specificity, according to Business Insider.
The Costco P23 test kit above, “uses parts from Thermo Fisher Scientific and works with collection kits made by testing companies Everlywell and OraSure Technologies, according to the FDA and a P23 spokesperson,” Business Insider reported. “Samples are tested in [P23’s] lab in Little Rock, Arkansas.” (Photo copyright: Costco.)
Saliva-Collection Kits Gain Popularity and FDA Emergency Use Authorizations
P23 Labs’ assay is one of 12 COVID-19 home tests that have received US Food and Drug Administration (FDA) Emergency Use Authorization (EUA). Three of which use saliva specimens.
The FDA’s EUA authorization summary for the P23 assay states it is “for use with saliva specimens that are self-collected at home or in a healthcare setting with or without the supervision and/or assistance of [a healthcare provider (HCP)], by individuals using the P23 At-Home COVID-19 Test Collection Kit, when determined to be appropriate by an HCP based on the results of a COVID-19 medical questionnaire. This test is also for use with nasal swab specimens that are self-collected at home or in a healthcare setting with or without the supervision and/or assistance of an HCP by individuals.”
In a news release announcing the first diagnostic test using saliva specimens, oncologist and FDA Commissioner Stephen Hahn, MD, said that “Authorizing additional diagnostic tests with the option of at-home sample collection will continue to increase patient access to testing for COVID-19. This (saliva sample collection) provides an additional option for the easy, safe, and convenient collection of samples required for testing without traveling to a doctor’s office, hospital, or testing site.” That test was manufactured by Clinical Genomics laboratory of Rutgers New Jersey Medical School.
Below is a list from Business Insider for at-home self-collection SARS-CoV-2 coronavirus tests that have received an FDA EUA. Most can be ordered online, and prices range from $109 to $149, which may be covered by insurance depending on the health plan.
Binx Health Home Nasal Swab COVID-19 sample collection kit
Yale Study Indicates Saliva Tests Have Greater Detection Sensitivity over Swab
Should consumers choose COVID-19 saliva tests over nasal cavity swab tests? Maybe.
A study led by the Yale School of Public Health found and “conducted at Yale New Haven Hospital with 44 inpatients and 98 health care workers—found that saliva samples taken from just inside the mouth provided greater detection sensitivity and consistency throughout the course of an infection than the broadly recommended nasopharyngeal (NP) approach. The study also concluded that there was less variability in results with the self-sample collection of saliva,” states a Yale University news release.
Anne Wyllie, PhD, Associate Research Scientist at Yale School of Public Health, told Time magazine, “Saliva itself is a newer diagnostic method, and a lot of people don’t know how to work with it, are scared to work with it, or not sure how to work with it. Just because a protocol is working with swabs doesn’t mean the same protocol will work with saliva.” Nevertheless, public demand for less invasive COVID-19 testing means clinical laboratories may soon be receiving more requests for processing saliva over nasal swabs. (Photo copyright: Yale University.)
Yale received FDA EUA for SalivaDirect, a real-time quantitative polymerase chain reaction (RT-qPCR) for detection of SARS-CoV-2. However, SalivaDirect is not an “at-home” test. It requires saliva samples to be self-collected into a sterile container in the presence of a healthcare professional, and is being provided by Yale to clinical laboratories as an “open source” protocol, the FDA said in a news release.
“We are trying to work with smaller local labs that want to get up and running to support schools, community groups, universities, and colleges,” Wyllie told Time.
In “Saliva or Nasopharyngeal Swab Specimens for Detection of SARS-CoV-2,” published in the New England Journal of Medicine (NEJM), Wyllie and others suggest saliva can be just as effective in detecting the coronavirus that causes COVID-19. In their study, COVID-19 patients who were tested by healthcare workers using nasopharyngeal swabs were then asked to collect their own saliva samples.
The researchers found that “Collection of saliva samples by patients themselves negates the need for direct interaction between healthcare workers and patients. This interaction is a source of major testing bottlenecks and presents a risk of nosocomial infection. Collection of saliva samples by patients themselves also alleviates demands for supplies of swabs and personal protective equipment. Given the growing need for testing, our findings provide support for the potential of saliva specimens in the diagnosis of SARS-CoV-2 infection.”
The Yale scientists used primer sequences identified by the Centers for Disease Control and Prevention to detect the coronavirus. They found more SARS-CoV-2 RNA in saliva specimens than in the nasopharyngeal swab specimens. Also, 81% of saliva samples were positive one to five days after diagnosis, as compared to 71% of the nasopharyngeal swab specimens.
“The findings suggest saliva specimens and nasopharyngeal swab specimens have at least similar sensitivity in the detection of SARS-CoV-2 during the course of hospitalization,” the researchers wrote in their NEJM paper.
The increasing popularity of at-home COVID-19 testing—along with studies showing that results improve when specimens are self-collected—suggest that medical laboratory managers should closely monitor the rise of COVID-19 home tests, as well as progress being made in saliva for diagnosing the SARS-CoV-2 coronavirus.
Further, it might be a smart strategy for clinical laboratories with the capability to perform this testing to approach retailers in their region and establish relationships where retailers sell the collection kits, and the lab performs the test and reports the results.
Since patients pay cash for the SARS-CoV-2 tests at the time they purchase the kits, clinical labs are guaranteed payment for the tests without the need to submit claims to consumers’ insurance companies. That’s another benefit to these types of arrangements.
United Airlines creates pilot program for on-site rapid PCR tests, as other airlines facilitate at-home specimen collection for rapid coronavirus testing
Four US airlines attempting to recover lost business due to the COVID-19 pandemic are partnering with developers of rapid RT-PCR (reverse transcription polymerase chain reaction) tests to facilitate testing of passengers either at airports before they board their flights, at drive-through testing sites, or at-home in advance of scheduled travel.
This would be a great opportunity for clinical laboratories to gain business, but few details are known about how these airlines are selecting providers for the COVID-19 tests that will be part of their programs.
The deals come amid calls from the International Air Transport Association (IATA) “for the development and deployment of rapid, accurate, affordable, easy-to-operate, scalable and systematic COVID-19 testing for all passengers before departure as an alternative to quarantine measures” in many countries, states an IATA press release.
“The key to restoring the freedom of mobility across borders is systematic COVID-19 testing of all travelers before departure,” said Alexandre de Juniac, IATA Director General and CEO, in the IATA press release. “This will give governments the confidence to open their borders without complicated risk models that see constant changes in the rules imposed on travel.”
From a clinical laboratory testing perspective, the requirement for passengers to be tested prior to travel may contribute to two changes in the lab testing marketplace:
Consumers may become accustomed to buying home collection kits for COVID-19 and sending specimens to clinical laboratories. This could have the added benefit of helping consumers become comfortable doing this for other diagnostic tests as well.
Pursuit of profit from manufacturing COVID-19 tests that utilize consumer-collected specimens may increase competition in this market and would likely increase the number of at-home specimen collection products that are easier and more convenient to use.
US carriers offering the COVID-19 tests include United Airlines, American Airlines, Hawaiian Airlines, and JetBlue.
United Airlines
United is providing on-site testing through pilot programs at San Francisco International Airport (SFO) and Newark Liberty International Airport (EWR). At SFO, passengers are tested before taking flights to Hawaii. At EWR, they are tested prior to boarding a thrice-weekly flight to London Heathrow.
“We believe the ability to provide fast, same-day COVID-19 testing will play a vital role in safely reopening travel around the world and navigating quarantines and travel restrictions, particularly to key international destinations like London,” said Toby Enqvist, United’s Chief Customer Officer, in a press release.
United began offering testing at SFO on Oct. 15. According to “COVID-19 Testing for United Travelers,” the San Francisco to Hawaii passengers have two options:
A $105 drive-through test administered two or three days prior to flights by Color, a San Francisco Bay area health technology company.
The airline says a negative test ensures that travelers can bypass Hawaii’s mandatory quarantine requirements in Lihue, Maui, and Honolulu. For the Newark-to-London flights, United plans to run a pilot rapid testing program from Nov. 16 to Dec. 11. for passengers boarding Flight 14, departing at 7:15 p.m. Mondays, Wednesdays, and Fridays. Premise Health will administer the testing, which will be free to passengers. Those who choose not to be tested will be placed on other flights.
A United Airlines flight attendant (above) receives an RT-PCR test for COVID-19 prior to boarding. If the flying public embraces preflight coronavirus testing, including at-home specimen collection kits, clinical laboratories may see a spike in requests for test processing. (Photo copyright: The Washington Post.)
American Airlines
American is offering COVID-19 testing for passengers scheduled on flights to Hawaii, Latin America, and the Caribbean, according to a press release. For the most part, these are at-home specimen collection RT-PCR tests provided by healthcare testing services company PrivaPath Diagnostics, Inc. (d.b.a., LetsGetChecked). Customers receive their results within 24 to 72 hours after the lab receives the samples.
As with the United flights to Hawaii, the testing program allows passengers to bypass quarantine requirements at their destinations. Customers pay $119 for the LetsGetChecked at-home specimen-collection kit and subsequent RT-PCR testing.
“Our initial preflight testing has performed remarkably well, including terrific customer feedback about the ease and availability of testing options,” American Airlines President Robert Isom said in the press release.
Hawaiian Airlines and JetBlue
In separate press releases, Hawaiian Airlines and JetBlue announced partnerships with Vault Health to offer at-home saliva tests to passengers. After receiving the at-home specimen collection kit, customers can connect through Zoom video conferencing with a Vault Health supervisor who ensures the sample is collected properly.
Hawaiian Airlines also offers drive-through testing at SFO and Los Angeles International Airport through a partnership with Worksite Labs. Passengers pay $90 to receive test results within 36 hours or $150 for express service on the day of travel. Worksite uses a Droplet Digital PCR shallow nasal swab test. The airline says it plans to expand this to other airports.
The Vault Health and Worksite Labs tests meet the state’s guidelines for exemption from the 14-day quarantine requirement, the airlines say.
Impact on Medical Laboratories
Airlines offering COVID-19 testing to their passengers may trigger both an opportunity and a change in the clinical laboratory testing marketplace. First, there is a business opportunity for labs to provide rapid molecular SARS-COV-2 tests to airlines.
Second, if consumers begin using at-home specimen collection kits in greater numbers as part of their air travel requirements, might this make them more comfortable doing self-collection for other types of clinical laboratory tests? A shift in consumer willingness to collect their own medical laboratory specimens—accompanied by ongoing innovations in diagnostic technologies, may eventually reduce the need for medical labs to operate extensive networks of patient service centers.
Of course, such a scenario is years away. But airline COVID-19 testing programs are just one of the progressive steps that can help make that possibility into a reality.
Clinical laboratory managers and pathology practice administrators should consider how these trends may affect their business and patients when planning for the future.
The McKinsey graphic above illustrates the “six trends that are likely to shape post-COVID-19 healthcare.” Clinical laboratories that support health networks struggling with any of these challenges should take steps to prepare for anticipated changes to healthcare delivery. (Graphic copyright: McKinsey and Company.)
1: Healthcare Reform
McKinsey identified three areas where the coronavirus pandemic may impact healthcare reform:
“COVID-19-era waivers that could become permanent.
“Actions that may be taken to strengthen the healthcare system to deal with pandemics.
“Reforms to address the COVID-19-induced crisis.”
McKinsey reports that “the Centers for Medicare and Medicaid Services has introduced more than 190 waivers since the beginning of March 2020.” These waivers can affect all aspects of healthcare, from clinical practice to reimbursement. Some of them, according to McKinsey, are “only relevant during the crisis (for example, the waiver of intensive care unit death reporting). A retrospective assessment of others (for example, expansion of telehealth access) could reveal beneficial innovation worth preserving.”
Several areas that McKinsey says are clearly ripe for reform include improving the resiliency of the healthcare system and the way the system is funded.
Public sector budgets are generally kept strictly separate, each with its own rules and policies that dictate operations. But in his article, “After COVID-19—Thinking Differently About Running the Health Care System,” published in JAMA Health Network, Stuart M. Butler, PhD, Senior Fellow in Economic Studies at the Brookings Institution, wrote, “The intensity of the COVID-19 pandemic … is forcing jurisdictions all across the country to find ways to be nimble so that multiple agencies can work together.”
Thus, McKinsey recommends, “Given the substantial shifts in relative market positioning among industry players that prior reforms have created, leaders would do well to plan ahead now.”
2: Better Access to Healthcare Services
Some people who develop COVID-19 are at far greater risk of hospitalization and death than others, including those who have:
Chronic health conditions, including obesity.
Mental and behavioral health challenges, such as substance abuse.
Unmet social needs, such as food or housing insecurity.
Poor access to healthcare.
McKinsey wrote that these “intersecting health and social conditions,” combined with certain races that have higher risk for severe complications, including Black, Indian, and Hispanic/Latino Americans, “correlated with poorer health outcomes.”
Value-based healthcare, telehealth, and greater attention to the social determinants of health may help address some of these issues, McKinsey notes, but the pandemic has shined a spotlight on how lack of care increases risk for certain populations during a public health crisis.
3: Era of Exponential Improvement Unleashed
Some of the trends that appear to be accelerating as a result of the pandemic are good news. McKinsey cites several benefits, including:
Improved understanding of patients.
Delivery of more convenient and individualized care.
$350-$410 billion in annual revenue by 2025.
Through telehealth and other types of virtual care enabled by digital technology, “intuitive healthcare ecosystems” may arise and offer a more integrated experience for patients and their caregivers, McKinsey notes.
“While the pace of change in healthcare has lagged other industries in the past, potential for rapid improvement may accelerate due to COVID-19. An example is the exponential uptake of digitally enabled, virtual care,” McKinsey wrote. “Our analysis … showed that health systems, primary care, and behavioral health practices are reporting increases of more than 50–175 times in telehealth visits, and the potential market size for virtual care could reach around $250 billion.”
The graphic above is taken from the McKinsey and Co. report, which noted, “Proliferation of digitally enabled, virtual care could further contribute to the rise of personalized and intuitive healthcare ecosystems [that] have the potential to deliver an integrated experience to consumers, enhance productivity of providers, engage both formal and informal caregivers, and improve outcomes while lowering cost.” (Graphic copyright: McKinsey and Company.)
4: The Big Squeeze
The pandemic has caused an enormous outflow of cash from the healthcare system, and some experts don’t expect an injection of funding until 2022. “This outflow is expected to be primarily driven by coverage shifts out of employer-sponsored insurance and possible coverage reductions by employers as well as Medicaid rate pressures from states,” McKinsey states.
“We estimate that COVID-19 could depress healthcare industry earnings by between $35 billion and $75 billion compared with baseline expectations,” McKinsey predicted, adding, “Select high-growth segments will remain attractive (for example, virtual care, home health, software and platforms, specialty pharmacy) and will disproportionally drive growth. These high-growth areas are expected to increase more than 10% over the next five years, while other segments may stagnate or decline altogether.”
5: Fragmented, Integrated, Consolidated Care Delivery
McKinsey says, “The shift of care out of hospitals is not new but has been accelerated by COVID-19.” Rather than the hospital being the center of care delivery, patients are increasingly choosing to receive care at a range of sites across many healthcare ecosystems that are connected digitally and through analytics.
Early in the course of the pandemic, visits to ambulatory care facilities dropped nearly 60% by early April. But by mid-May, those visits were beginning to rebound.
In, “The Impact of the COVID-19 Pandemic on Outpatient Visits: A Rebound Emerges,” the Commonwealth Fund reported that “the relative decline in visits remains largest among surgical and procedural specialties and pediatrics” but is “smaller in other specialties, such as adult primary care and behavioral health.”
The McKinsey graphic above shows how “virtual care and outpatient options show more potential revenue growth through 2022.” Clinical laboratories that support those healthcare settings, especially ambulatory surgery, behavioral health, and retail clinics, should experience similar growth. (Graphic copyright: McKinsey and Company.)
6: Adoption of Next-Generation Managed Care Is Accelerating
How will COVID-19 affect the managed care industry? McKinsey says the “next generation” of managed care might use Medicare Advantage as a model.
“Payers pursuing the next generation of managed care model (through deep integration with care delivery) demonstrate better financial performance, capturing an additional 50 basis points of earnings before interest, taxes, depreciation, and amortization above expectation,” McKinsey noted, adding, “Employers and payers could consider fundamentally rethinking how employer-sponsored health coverage is structured. Learning from Medicare Advantage could provide inspiration for such a reimagination.”
What Should Clinical Laboratory Managers Do?
The McKinsey article concludes by stating, “While the challenges are numerous, leaders who seize the mindset that “disruptive change provides an opportunity to separate yourself from the pack” will build organizations meaningfully stronger than the ones they ran going into the crisis.”
The McKinsey article authors recommend that healthcare organizations take several proactive steps, including:
Launch a plan-ahead team.
Question your role and your future business model.
Prepare to transform your business.
Reimagine your organization to make faster decisions.
Take action to drive health equity.
Though the McKinsey and Company article covered healthcare in general, many of the authors’ observations and recommendations can apply to clinical laboratories and pathology groups as well and may be valuable in future planning.
