Self-insured and campus health markets are contract opportunities for small and midsize clinical laboratories through investment in data infrastructure and management
Bordenave spoke this week at the Executive War College in San Antonio. During two intriguing presentations, she shared that the self-insured employer and campus health markets are areas of opportunity for small and midsize clinical laboratories. This is because employer groups and college campuses are busy communities of covered individuals, and these population health groups are well-suited for proactive care models.
In fact, she said, some clinical laboratories may already be well-positioned to serve these customers.
Self-Insured Employer Groups and Campus Health Markets as New Clinical Laboratory Customers
According to CMS national health expenditure data, in 2020, a whopping $4 trillion was spent on healthcare in the US. In the middle of all that are people living, going to school, and working who have high blood pressure, rising lipid levels, lower-back pain, migraines, and other health conditions waiting to be diagnosed and flagged for follow-up.
And as pathologists and clinical laboratory managers know, 80% of those healthcare encounters result in lab test data.
Clinical laboratories, therefore, can gain customers among self-insured employer groups and similarly functioning campus health markets that serve students.
During her presentations at the 2021 Executive War College in San Antonio, Kristine Bordenave, MD, FACP (above), a strategic consultant in precision medicine, population health, Medicare compliance, and cost management, noted that “just about all paths forward post-COVID will require the data infrastructure of clinical laboratories to achieve an advanced level of functionality.” (Photo copyright: The Dark Intelligence Group.)
In one example she gave during her presentation, Bordenave noted that self-insured employer groups “were more than willing to contract directly, and they were contracting for care that directly relates to lab. Anything that would help reduce presenteeism and absenteeism with their employees.”
Presenteeism and Absenteeism
For years, presenteeism and absenteeism have plagued employee productivity in organizations large and small. Both have been attributed to numerous individual health and wellness factors among individuals. At some point, these issues culminate into various forms of reactive healthcare services and safety issues, she added.
The cost of presenteeism is estimated at between $150 billion and $225 billion. Meanwhile, at least 60% of employees are now covered in fully-funded or partially-funded self-insured plans, Healthcare Finance reported.
The way a campus health system operates is similar to a self-insured model but more of an integrated delivery system, Bordenave said. Among the priorities are controlling the spread of infectious diseases, such as COVID-19 and measles.
Clinical Laboratory Data Valuable in Treating-to-Goal and Closing Care Gaps
During two featured Executive War College general session discussions, Bordenave explained the focus of her work: aligning primary care with the clinical laboratory to treat-to-goal and close care gaps.
“There was a lot of focus on us taking laboratory information and treating people to goal, and that was with respect to diabetes, cholesterol, and hypertension, because those are three common diseases that exist within their [employee] populations. [Primary care doctors] know [that] if they [can] maximize the care in those patients—so that the patient is maximally treated—that patient performs. There’s a lot of literature around this.”
In the state of New Mexico where Bordenave’s project evolved, a culture of innovation prevails, where like-minded people have an opportunity to “do the unique,” she explained. The state’s population is spread out, there is a shortage of healthcare providers, and people generally lack access to health services and other social determinants of health. The liberty to think outside the box—to ensure care in creative ways—was essential to the success of Bordenave’s project.
“Blue Cross Blue Shield paid handsomely for improving healthcare outcomes in diabetes,” she said, adding, “and we never did a standard visit with any of those patients, ever. Then we got paid by a big employer group to do the same thing for them.”
Future of Clinical Laboratory Functionality
Bordenave noted that just about all paths forward post-COVID will require the data infrastructure of clinical laboratories to achieve an advanced level of functionality. Dark Daily will cover more opportunities for labs to capitalize on their structured data in future ebriefings.
Executive War College is scheduled to reconvene April 27-28, 2022, in New Orleans. In the meantime, recordings of this year’s presentations will be available for download, including:
A Roundtable Discussion on Current Activity Involving Clinical Laboratory and Pathology Mergers and Acquisitions.
Taking a Deeper Dive into How Artificial Intelligence Analyzes a Digital Pathology Image: What Current Technology Can and Cannot Do, Steps to Implement, and Understanding How the FDA Views AI in Digital Pathology.
Open Conversation About the Healthcare Data Aggregation Hub Model.
And more.
To learn about Executive War College’s complete program package, send an email request to info@darkreport.com.
Following a nearly two-year disruption due to the SARS-CoV-2 pandemic, pathologists and clinical laboratory professionals once again have an opportunity to gather and learn from each other
It is good news that the daily number of new cases of COVID-19 continue declining here in the United States. That fact, and the growing number of vaccinations, have encouraged state and federal officials to lift many restrictions on business and social activities.
Clinical laboratories are watching a big drop in the daily number of COVID-19 tests they perform, even as routine test volumes climb and more patients show up in doctors’ offices for the typical mix of ailments and health conditions.
It’s true that many familiar routines are back. But it is also true that things are not exactly the way they were pre-pandemic. And that’s the rub. Going forward, what should medical laboratory managers and pathologists expect to be the “post-pandemic normal” in how patients access care and how providers deliver clinical services? How will healthcare in this country be different from what it was pre-pandemic?
Preparing Clinical Lab Leaders for What Comes Next
These questions and more will be front and center when the Executive War College on Lab and Pathology Management returns on Nov. 2-3, 2021, at the Hyatt Riverwalk Hotel in San Antonio. The theme of this first live gathering since the spring of 2019 will be “Preparing Your Clinical Laboratory and Pathology Group for Post-Pandemic Success.”
“Today, lab managers have the interesting challenge of understanding the new opportunities they can use to advance their labs, both clinically and financially,” stated Robert L. Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report, and founder of the Executive War College. “It isn’t that the pandemic changed healthcare in fundamental ways. Rather, it is that the pandemic accelerated changes that were underway before the outbreak began.
“That’s true of telehealth as well, for example,” he continued. “Once the nation was locked down, utilization of virtual physician visits and telehealth services skyrocketed. Today, national surveys confirm that as many as 50% of all patients and physicians have used a telehealth service, are comfortable with this type of appointment, and are ready to continue to use virtual office visits.
Robert Michel (above), Editor-in-Chief of Dark Daily, its sister publication The Dark Report, and founder of The Dark Intelligence Group, will host the first live edition of the Executive War College since May 2019 in San Antonio. The theme will be “Preparing Your Clinical Laboratory and Pathology Group for Post-Pandemic Success.” Attendees from clinical laboratories and pathology groups will gain critical insights they can act on immediately. (Photo copyright: The Dark Report.)
“Another trend accelerated by the pandemic is patient self-testing at home,” Michel added. “Government health officials saw the benefit of clearing for clinical use different specimen collection systems and COVID-19 test methods designed for use by consumers in the comfort of their home. Today, consumers can choose from multiple specimen collection products and SARS-CoV-2 tests designed for in-home use. Clinical laboratory managers should consider this development to be a consumer home-test baseline. Federal officials have created a regulatory pathway that will make it easier and faster for federal regulators to clear other types of diagnostic tests for consumer home use.”
What if the FDA Approves More Consumer At-Home Tests?
There are implications to each of the two trends described above. In the case of telehealth, if patients see their doctors virtually and the doctors order medical tests, how do clinical laboratories access these patients to collect the specimens needed to do this testing?
Similarly, if, in coming years, the federal Food and Drug Administration (FDA) increases the number of diagnostic test specimen-collection kits that consumers can use from home, how should local clinical laboratories position themselves to receive those kits and perform those tests?
These are two examples of important questions to be answered at sessions scheduled for the Executive War College in San Antonio on Nov. 2-3. Case studies by innovative lab leaders will address topics ranging from high-level strategy to daily management, operations, marketing, and managed care contracting.
Attendance Limited at This Fall’s Executive War College
At the first live edition of the Executive War College since May 2019, attendees will notice one significant difference from earlier years. By design, and for the safety and well-being of attendees, the number of attendees will be limited to 300. The hotel follows the Centers for Disease Control and Prevention (CDC) guidelines and is prepared to adjust those numbers as CDC guidance evolves. Thus, those interested in attending this year’s conference are advised to register early to guarantee their place and avoid being disappointed.
Suggestions for session topics and speakers are welcome and can be sent to info@darkreport.com. Conference details, session topics, and speakers will be updated regularly at www.executivewarcollege.com.
So, register today because seating is limited at the 2021 Executive War College Presents “Preparing Your Clinical Laboratory and Pathology Group for Post-Pandemic Success.” To ensure your place at this valuable conference, click HERE or place this URL (https://dark.regfox.com/2021-ewc-presents) into your browser.
CEOs of NorDx Laboratories, Sonora Quest Laboratories, and HealthPartners/Park Nicollet Laboratories expect demand for SARS-CoV-2 tests to only increase in coming months
The short answer is that large volumes of COVID-19 testing will be needed for the remaining weeks of 2020 and substantial COVID-19 testing will occur throughout 2021 and even into 2022. This has major implications for all clinical laboratories in the United States as they plan budgets for 2021 and attempt to manage their supply chain in coming weeks. The additional challenge in coming months is the surge in respiratory virus testing that is typical of an average influenza season.
Stan Schofield (above center), President of NorDx, a regional laboratory corporation that supports an integrated delivery system at MaineHealth in Portland, Maine.
Rick L. Panning (above right), MBA, MLS(ASCP)CM, retired as of Oct. 2 from the position of Senior Administrative Director of Laboratory Services for HealthPartners and Park Nicollet in Minneapolis-St. Paul, Minnesota.
Each panelist was asked how his parent health system and clinical laboratory was preparing to respond to the COVID-19 pandemic through the end of 2020 and into 2021.
First to answer was Panning, whose laboratory serves the Minneapolis-Saint Paul market.
A distinguishing feature of healthcare in the Twin Cities is that it is at the forefront of operational and clinical integration. Competition among health networks is intense and consumer-focused services are essential if a hospital or physician office is to retain its patients and expand market share.
Panning first explained how the pandemic is intensifying in Minnesota. “Our state has been on a two-week path of rising COVID-19 case numbers,” he said. “That rise is mirrored by increased hospitalizations for COVID-19 and ICU bed utilization is going up dramatically. The number of hospitalized COVID-19 patients has doubled during this time and Minnesota is surrounded by states that are even in worse shape than us.”
These trends are matched by the outpatient/outreach experience. “We are also seeing more patients use virtual visits to our clinics, compared to recent months,” noted Panning. “About 35% of clinical visits are virtual because people do not want to physically go into a clinic or doctor’s office.
“Given these recent developments, we’ve had to expand our network of specimen collection sites because of social distancing requirements,” explained Panning. “Each patient collection requires more space, along with more time to clean and sterilize that space before it can be used for the next patient. Our lab and our parent health system are focused on what we call crisis standards of care.
“For all these reasons, our planning points to an ongoing demand for COVID-19 testing,” he added. “Influenza season is arriving, and the pandemic is accelerating. Given that evidence, and the guidance from state and federal officials, we expect our clinical laboratory will be providing significant numbers of COVID-19 tests for the balance of this year and probably far into 2021.”
COVID-19 Vaccine Could Increase Antibody and Rapid Molecular Testing
Arizona is seeing comparable increases in new daily COVID-19 cases. “There’s been a strong uptick that coincides with the governor’s decision to loosen restrictions that allowed bars and exercise clubs to open,” stated Dexter. “We’ve gone from a 3.8% positivity rate up to 7% as of last night. By the end of this week, we could be a 10% positivity rate.”
Looking at the balance of 2020 and into 2021, Dexter said, “Our lab is in the midst of budget planning. We are budgeting to support an increase in COVID-19 PCR testing in both November and December. Arizona state officials believe that COVID-19 cases will peak at the end of January and we’ll start seeing the downside in February of 2021.”
The possible availability of a SARS-CoV-2 vaccine is another factor in planning at Dexter’s clinical laboratory. “If such a vaccine becomes available, we think there will be a significant increase in antibody testing, probably starting in second quarter and continuing for the balance of 2021. There will also be a need for rapid COVID-19 molecular tests. Today, such tests are simply unavailable. Because of supply chain difficulties, we predict that they won’t be available in sufficient quantities until probably late 2021.”
COVID-19 Testing Supply Shortages Predicted as Demand Increases
At NorDx Laboratories in Portland, Maine, the expectation is that the COVID-19 pandemic will continue even into 2022. “Our team believes that people will be wearing masks for 18 more months and that COVID-19 testing with influenza is going to be the big demand this winter,” observed Schofield. “The demand for both COVID-19 and influenza testing will press all of us up against the wall because there are not enough reagents, plastics, and plates to handle the demand that we see building even now.
“Our hospitals are already preparing for a second surge of COVID-19 cases,” he said.
COVID-19 patients will be concentrated in only three or four hospitals. The other hospitals will handle routine work. Administration does not want to have COVID-19 patients spread out over 12 or 14 hospitals, as happened last March and April.
“Administration of the health system and our clinical laboratory think that the COVID-19 test volume and demand for these tests will be tough on our lab for another 12 months. This will be particularly true for COVID-19 molecular tests.”
As described above, the CEOs of these three major clinical laboratories believe that the demand for COVID-19 testing will continue well into 2021, and possibly also into 2022. A recording of the full session was captured by the virtual Executive War College and, as a public service to the medical laboratory and pathology profession, access to this recording will be provided to any lab professional who contacts info@darkreport.com and provides their email address, name, title, and organization.
Robert L. Michel, Panelist—Publisher, Editor-in-Chief, The Dark Report and Dark Daily, Spicewood, Texas.
Given the importance of sound strategic planning for all clinical laboratories and pathology groups during their fall budget process, the virtual Executive War College is opening this session to all professionals in laboratory medicine, in vitro diagnostics, and lab informatics.
Physician acceptance of virtual visits with their patients is being accelerated by the pandemic and the pending merger would combine the nation’s two biggest telehealth companies
Telehealth visits with virtual healthcare providers are increasing as the COVID-19 pandemic continues. This is forcing the entire healthcare industry—clinical laboratories in particular—to adapt to new methods of patient data exchange and communications. What is not clear is how independent clinical laboratories and hospital labs should expect to interact with telehealth providers, receive lab test orders from virtual doctors, and return test results.
But perhaps more important, patients’ acceptance of virtual care—i.e., reduced face-to-face access to their doctors—may be motivating telehealth companies to expand their offerings while also using mergers and acquisitions as a way to expand market share.
The recent announcement of Teladoc Health’s (NYSE:TDOC) agreement to acquire Livongo (NASDAQ:LVGO) is such an example. Some experts believe it could reset the competitive playing field, noted Robert Michel, Editor-in-Chief of Dark Daily.
The Teladoc-Livongo deal, if completed, will combine a virtual care company with a digital chronic disease management company, thus creating one of the largest telehealth companies to ever exist, noted Fierce Healthcare, which reported, “The combination of two of the largest publicly-traded virtual care companies announced Wednesday will create a health technology giant just as the demand for virtual care soars. The combined worth of the two companies is said to be worth about $37 billion, according to Piper Sandler.” Piper Sandler (NYSE:PIPR) is an American multinational “investment bank and institutional securities firm,” according to the company’s website.
During a call announcing the acquisition, Jason Gorevic, CEO of Teladoc, told business analysts that Teladoc will pay $18.5 billion in cash and stock to acquire Livongo, which went public in July at $28/share, and at the time of the acquisition, was worth $159/share, Fierce Healthcare reported.
Details of the Teledoc-Livongo Deal
COVID-19 has accelerated the trend toward expanded use of telehealth, and as a result, both Teladoc and Livongo have seen exponential growth in the last few months. Fierce Healthcare reported that Teladoc has experienced year-over-year growth of 85%, that revenue growth of 30-40% is expected in the next two to three years, and that Livongo has reported 125% revenue growth in the second quarter of 2020. The combined company is expected to reach $1.3 billion in revenue, Fierce Healthcare predicted.
“What Teladoc brings is an incredible access to 70 million people with loads of data and the ability to deliver a one-to-one service at scale. What Livongo brings is a digital-first footprint, a strong data science engine, and the ability to deliver a one-to-many at scale, so it really is the combination of the two organizations that is delivering on that shared common vision of this consumer-center virtual care,” Livongo President and Chief Medical Officer Jennifer Schneider, MD (above), told MobiHealthNews.” What was not discuss is how clinical laboratories fit into the virtual care paradigm. (Photo copyright: Kimberly White/Getty Images for Tech Crunch.)
Analysts who have commented on the deal tend to agree with the leadership of the two companies. “I’d expect this to become a single point of access for virtual care in the next five years with one app to control them all,” Stephanie Davis, Senior Equity Research Analyst at SVB Leerink, an investment bank that specializes in healthcare, told FierceHealthcare.
Along with providing a “single point solution” to consumers, the combined company may be able to improve management of chronic conditions and access to high-quality care. “This combination creates an opportunity to empower patients to manage serious health conditions through a single, integrated delivery platform with robust capabilities,” Daniel Stewart, Managing Director, RBC Capital Markets (NYSE:RY), told FierceHealthcare.
Impact on Clinical Laboratories
Although the Teladoc-Livongo deal may not have immediate or direct repercussions for those who work in clinical laboratories, it represents an accelerating trend toward virtual health. Since there is no widely accepted way to collect lab specimens when a physician sees a patient remotely and orders tests, medical laboratory managers will want to remain flexible so as to develop effective ways to collect and test specimens after a patient’s virtual visit with a physician.
“My advice in these times of change is to do something,” Ted Schwab, Healthcare Strategist and Entrepreneur told attendees at the 24th Annual Executive War College, in New Orleans. “What we know today is that providers—including clinical laboratories and pathology groups—who do nothing will get trampled. However, those providers that do something proactively will most likely be the winners as healthcare continues to transform.”
As ever-larger numbers of physicians and patients grow comfortable with the use of telehealth because of the COVID-19 pandemic, clinical laboratories will benefit from adapting their specimen collection and transport arrangements to meet the needs of patients who do not physically visit their physicians’ offices and do not go to a laboratory patient service center.
Patients who visit providers in person can leave the office with a doctor’s order for lab tests and go directly to a lab’s patient service, often in the same building. But what will the process be when they have just completed a virtual office visit with their providers?
In their letter, the Representatives wrote, “As you are aware, the recently enacted Paycheck Protection Program and Health Care Enhancement Act (PPPHCE Act) invests $25 billion in the [Public Health and Social Services Emergency Fund (PHSSEF)], including $11 billion for states, localities, territories, and tribes, to enhance all aspects of COVID-19 testing capacity. This funding is in addition to the funds already appropriated to the PHSSEF under the CARES Act.
“While laboratories are eligible, along with other providers, for these funds,” they continued, “there have been no federal funds specifically designated for the laboratories that have stepped up in this public health crisis and have made significant investments to expand access to COVID-19 testing despite 40-60 percent reductions in regular commercial volume due to the economic lockdowns.
“As laboratories work to maintain their investments in critical resources for testing platforms, reagents, swabs, and PPE, as well as hiring, training, and overtime pay for the laboratory workforce, we urge HHS to direct a portion of funding that has not already been allocated towards these efforts. These funds will ensure that labs can continue to rapidly scale up diagnostic and antibody testing, particularly for healthcare workers, first responders, and other Americans on the frontlines of this pandemic,” concluded the Representatives.
ACLA President Made Similar Plea for Direct Funding to Clinical Laboratories
“In order to deliver accurate, reliable results for patients at a national scale, we must allocate funding to support [clinical laboratories’] expanded efforts,” she said in a statement following an April 27 meeting at the White House.
In her letter, Khani wrote, “It is essential that HHS allocate $10 billion from the fund to support labs’ further expansion of testing capacity to fulfill the testing needs of all of the states and to protect the lives and livelihood of all Americans.
“Further,” she continued, “HHS should note that investing in the nation’s laboratories will not only enhance testing capacity in the short-term, but it also will allow the country to benefit from a robust testing infrastructure for the duration of the COVID-19 pandemic and beyond.”
President Trump signed H.R.266 into law on April 24. It includes $25 billion earmarked for research, development, validation, manufacturing, purchasing, administering, and expanding capacity for COVID-19 testing. According to the language of H.R.266, that includes, “tests for both active infection and prior exposure, including molecular, antigen, and serological tests, the manufacturing, procurement and distribution of tests, testing equipment and testing supplies, including personal protective equipment needed for administering tests, the development and validation of rapid, molecular point-of-care tests, and other tests, support for workforce, epidemiology, to scale up academic, commercial, public health, and hospital laboratories, to conduct surveillance and contact tracing, support development of COVID-19 testing plans, and other related activities related to COVID-19 testing.”
“As the demand for testing continues to grow, clinical laboratories need dedicated funding to plan for challenges that lie ahead. Strong federal coordination and leadership is essential, and we’re looking forward to working with HHS to ensure that laboratories have the resources necessary to continue to expand our role at the forefront of the nation’s response,” said Julie Khani (above), President of the American Clinical Laboratory Association (ACLA), in a press release following the June 8 letter sent to HHS by 30 members of Congress requesting funds from H.R.266 be sent directly to clinical laboratories. Khani will be speaking on federal policies now impacting clinical laboratories at the upcoming 25th annual Executive War College on Laboratory and Pathology Management in New Orleans on July 14-15. (Photo copyright: ACLA.)
Financial Struggles for Hospitals and Clinical Laboratories
This new round of stimulus funding comes at a time when many providers and clinical laboratories are struggling financially, despite the influx of COVID-19 patients.
“Across the country, laboratories have made significant investments to expand capacity, including purchasing new platforms, retraining staff, and managing the skyrocketing cost of supplies. To continue to make these investments and expand patient access to high-quality testing in every community, laboratories will need designated resources. Without sustainable funding, we cannot achieve sustainable testing,” said Khani in an ACLA statement.
As the COVID-19 coronavirus pandemic evolves, federal regulations, as well as emergency funding for COVID-19 testing that is provided by federal legislation, will evolve in unexpected ways. For that reason, clinical laboratory leaders will want to closely track announcements by such federal agencies as the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, the Food and Drug Administration, the Centers for Disease Control and Prevention, and the Federal Emergency Management Administration as decisions are made about how to assign the $25 billion authorized in H.R.266 for “testing.”
