Aug 2, 2017 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Agreements to open PSCs in the nation’s largest retail grocery and pharmacy chain stores shows a willingness by clinical laboratories to attract customers through convenience
Greater use of retail stores as the location for patient services centers (PSCs) may be an important new trend for the clinical laboratory industry. That’s because, historically, medical laboratories placed most of their patient service centers in hospital campuses or near medical office buildings.
However, in recent months, both of the nation’s billion-dollar lab companies signed deals with national retailers to put patient service centers in their stores. Dark Daily believes that the motivation for a lab company to put a PSC into a grocery store or retail pharmacy is to make it easier and more convenient for a patient to get their specimen collected at a location that is closer to their home or office. In other words, it is faster for the patient to get to their nearest grocery store for a blood draw than to travel to the hospital campus in their community.
Various news reports indicate that Quest Diagnostics (Quest) may be more active than Laboratory Corporation of America (LabCorp) in opening PSCs in grocery stores and retail pharmacies. Over the last four months, Quest has announced plans to open patient services centers with several retailers, particularly in the states of Texas and Florida. Similarly, in the past four weeks, LabCorp disclosed an agreement with Walgreens Boots Alliance (Walgreens).
Ground zero for this current interest in putting PSCs into retail stories is Phoenix, Arizona. In 2014, to serve its direct-to-consumer lab testing business model, Theranos had PSCs in about 40 Walgreen’s pharmacies. Pathologists and clinical laboratories will recall that in November, 2015, Sonora Quest Laboratories of Phoenix opened a patient service center (PSC) in a Scottsdale, Ariz., supermarket owned by Safeway. It was the first PSC Sonora Quest had opened in collaboration with a grocery store chain, but it was not the last. Less than a year later, Sonora Quest and Safeway expanded their operations by opening additional PSCs in stores throughout the Grand Canyon State.
At the same time Sonora Quest was stepping into the retail blood-drawing business, Theranos of Palo Alto, Calif., was exiting it after opening 40 PSCs in Walgreens pharmacies, most of them in Arizona. However, before leaving the lab-testing business altogether, the embattled company put a lot of effort into educating consumers about the benefits of purchasing lab tests without a physician’s order. Theranos had even supported a bill (HB2645) the Arizona State Legislature passed that allowed patients to order tests without a physician’s requisition.
Now, in 2017, Quest Diagnostics (NYSE:DGX) appears interested in following a similar strategy as Theranos and Sonora Quest by developing Quest-branded PSCs in retail chain stores. On its website, Quest states that in the past several years it has opened 106 PSCs in Albertsons, Randalls, Safeway, Tom Thumb, and Vons retail stores in nine states.
Quest Moves to Open PSCs Across America
Quest has PSCs in the following states:
- California (12 stores);
- Colorado (27);
- Delaware (1);
- Maryland (9);
- Montana (4);
- Oregon (10);
- Texas (26);
- Virginia (7); and
- Washington State (10).
This Quest patient service center operates within a Safeway store location. (Photo copyright: Quest Diagnostics.)
In June 2017, Quest announced it would open 10 additional PSCs in Tom Thumb retail stores in North Texas by the end of the month. Thom Thumb is a division of Albertsons, a food and drug retailer with stores nationwide. In the same announcement, Quest said it plans to open PSCs in 200 Albertson’s-owned stores nationwide by the end of the year.
Give Blood Then Shop
Also in June, Quest and Walmart (NYSE:WMT) announced a deal in which the two companies would open co-branded PSCs in 15 Walmart stores in Florida and Texas by the end of 2017.
In these locations, Quest encourages patients to have their blood drawn and then shop. Such locations can accommodate collecting specimens for routine blood work, such as total cholesterol and white blood cell count, as well as complex gene-based and molecular testing. Even patients with such chronic conditions as cancer, diabetes, and hepatitis, are encouraged to use these PSCs, the lab-testing company stated in the announcement.
Not to be outdone, LabCorp also announced a deal with Walgreens in June. In Forbes, Bruce Japsen reported that Walgreens (NASDAQ:WBA) announced it would collaborate with LabCorp (NYSE:LH) to develop and operate PSCs in Walgreens drugstores in Colorado, Illinois, and North Carolina.
The deal is the first for Walgreens since its troubled relationship with Theranos ended last year. Walgreens’ collaboration with LabCorp will initially begin this summer with five patient service centers in Denver and one in Morrisville, N.C. A seventh location in Deerfield, Ill., will open by the end of the year. Financial terms of the partnership were not disclosed.
Lessons Clinical Laboratories Learned with PSCs in Retail Stores
For Quest, the speed with which it is opening new PSCs is significant, because it seems to have taken lessons that Theranos and Sonora Quest learned earlier in Ariz. and applied them to markets nationwide. It’s worth noting that Safeway and Albertsons were already two of the largest retail grocery chains in the nation before they merged in 2015.
So, while Sonora Quest was working with Safeway, its parent company, Quest, was working with Albertsons.
One other point that is significant about Quest’s efforts is that not many other clinical laboratories have a presence in retail stores. It’s unknown just how much specimen volume these retail operations generate for Quest, one of the largest clinical lab companies in America. And, it is unknown if these PSCs in retail settings are breaking even or making a profit.
One result, however, is clear. That Quest is being so aggressive in opening PSCs testifies to the company’s level of interest in serving consumers directly. In other words, these PSCs are not primarily a direct-to-consumer play, but are aimed at building market share by adding regular lab testing done for patients. In this way, the direct-to-consumer business that Quest generates is a bonus.
The deals by Quest and LabCorp also imply that both clinical laboratory companies are willing to bet on the fact that consumers may prefer the convenience of using PSCs located in retail stores they currently frequent, rather than going to patient service centers in hospitals and sitting in a waiting rooms.
—Joseph Burns
Related Information:
Quest Diagnostics and Walmart Team Up to Expand Access to Healthcare Services
Walgreens Partners with LabCorp in New Diagnostic Testing Deal
Walgreens to Roll Out Urine, Blood Testing at Some Stores
Walgreens Partners with LabCorp on In-Store Lab Testing Services
Walmart and Quest Team Up for Lab Services
Quest’s Lab Services in New, Convenient Locations
You Can Now Get Lab Tests Done at Safeway Stores – from Theranos’ Rival
Jun 16, 2017 | Digital Pathology, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology
Pathologists and clinical lab managers can help physicians more effectively select appropriate genetic tests and better interpret results to identify the most appropriate therapies for their patients
Clinical laboratories and pathology groups aren’t the only healthcare providers being scrutinized for cost cutting and workflow efficiencies. Physicians ordering genetic tests are now in the spotlight thanks to a study of genetic test misordering by one healthcare institution.
In her award-winning presentation, “Genetic Testing Costs and Compliance with Clinical Best Practices,” given at the 2016 annual clinical and scientific meeting of the American College of Obstetricians and Gynecologists (ACOG), Kathleen Ruzzo, MD, revealed some startling facts to the attendees. Ruzzo is an obstetrics and gynecology (OB-GYN) resident at the Naval Medical Center (NMC) in San Diego. She and a team of NMC researchers had reviewed all genetic tests ordered during a 3-month period. They found that more than one-third of the genetic tests examined were unnecessary and had led to more than $20,000 in additional healthcare expenditures. This got the attention of the ACOG, which awarded her 1st prize.
Critical Importance of Staying Informed on Genetic Tests
The researchers examined 114 charts that contained billing codes for genetic tests. They evaluated the charts for compliance with practice guidelines and completed a cost analysis of the tests. The tests were classified per GeneReviews guidelines and were labeled as:
- Appropriate;
- Misordered/Not Indicated;
- Misordered/False Reassurance; or
- Misordered/Inadequate.
GeneReviews is an online database focusing on information, diagnosis, management, and counseling of single-gene disorders. It is published by the National Center for Biotechnology Information.
The researchers found that:
- 44 of the 114 charts examined (39%) were misordered based on the guidelines;
- 24 of the tests were labeled as misordered/not indicated;
- Eight tests were classified as misordered/false reassurance; and
- 12 tests were determined to be misordered/inadequate.
“We know there is an ever-expanding number of genetic tests available for clinicians to order, and there is more direct marketing to the patient,” stated Ruzzo in an Ob. Gyn. News article. “It can be difficult to stay on top of that as we have so many different clinical responsibilities.”
Kathleen Ruzzo, MD (above right) and Monica Lutgendorf, MD (above left) of the Naval Medical Center in San Diego, reviewed 114 genetic tests ordered during a three-month period. They discovered that 39% of the tests were misordered according to guidelines, costing a total of $75,000. (Photo copyright: Naval Medical Center.)
The actual testing was performed by Laboratory Corporation of America and occurred over a three-month period. The seven common genetic tests that were reviewed were tests for:
The cost analysis of the tests revealed that $20,000 could have been saved by following the GeneReviews guidelines. The total costs affiliated with the 114 tests reached $75,000. Potential savings were thus 26.6% of the total cost of the genetic tests involved in this study. In many clinical settings, if pathologists and medical laboratory managers could help physicians better utilize genetic tests while reducing the cost of such testing by almost 27%, that would be a major contribution. Plus, patients would be getting better care.
Ordering the Right Genetic Test Saves Money and Protects Patients
According to the National Institutes of Health (NIH), costs affiliated with genetic tests can range from less than $100 to more than $2,000 depending on the type and intricacy of the test. The NIH notes that many insurance companies will pay for genetic testing if ordered by a physician.
Ruzzo also shared that many of her cohorts were surprised at the results of the research.
“I think it opened a lot of people’s eyes … to be more meticulous about [genetic] testing and to ask for help when you need help,” she stated in the Ob. Gyn. News article. “Having trained individuals, reviewing genetic tests could save money in the healthcare system more broadly. We could also approve the appropriate testing for the patient.”
Ruzzo did admit there were limitations to the study; the researchers only looked at small amounts of tests for a short period and they did not concentrate on the consequences of the misordering to the patients.
Monica Lutgendorf, MD, Maternal Fetal Medicine Physician at the Naval Medical Center, was one of the coauthors of the paper. In the Ob. Gyn. News article, she described the findings as “a call to action in general for ob-gyns to get additional training and resources to handle the ever-expanding number of [genetic] tests.”
“I don’t think that this is unique to any specific institution. I think this is part of the new environment of practice that we’re in,” Lutgendorf concluded.
Due to the costs of genetic testing and the fact that so many physicians have not been able to keep up with all the latest advances in genetic medicine and testing, misordering will, most likely, continue to be a problem. Nevertheless, pathologists and clinical laboratory managers can serve a crucial role in helping physicians be more effective at selecting the correct genetic tests and assisting them in interpreting results to choose the most appropriate therapies for their patients.
Meanwhile, for those pathologists and medical laboratory professionals interested in developing effective utilization management programs for lab tests, Dark Daily is presenting a special webinar, titled, “Simple, Swift Approaches to Lab Test Utilization Management: Proven Ways for Your Clinical Laboratory to Use Data and Collaborations to Add Value.” It will take place on Thursday, June 29, 2017 at 1PM EDT.
For information about this high-value webinar and to register, use this link (or copy this URL and paste into your browser: https://ddaily.wpengine.com/webinar/simple-swift-approaches-to-lab-test-utilization-management-proven-ways-for-your-clinical-laboratory-to-use-data-and-collaborations-to-add-value.)
—JP Schlingman
Related Information:
More Than One-Third of Genetic Tests Misordered, Study Finds
Genetic Tests Often Overused and Misinterpreted, Sometimes with Tragic Consequences
Webinar: Simple, Swift Approaches to Lab Test Utilization Management: Proven Ways for Your Clinical Laboratory to Use Data and Collaborations to Add Value
Research Awards Announced for ACOG 2017 Annual Meeting
Unnecessary Genetic Tests Wastes $500 Million Annually
Apr 3, 2017 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Report states IVD companies are focusing on core lab, seeking China FDA approval, and targeting urgent care
Several of the same powerful trends reshaping healthcare and clinical laboratory services are having equally significant influence on in vitro diagnostics (IVD) manufacturers. In particular, the consolidation of hospitals and physicians, as well as the emergence of new sites of service—such as urgent care centers and retail clinics—are motivating IVD companies to tailor new diagnostic systems to the unique needs of these entities.
Kalorama, a division of MarketResearch.com, has released its list of Top-Trends that will affect IVD developers in 2017. IVDs are at the heart of the medical laboratory industry. Thus, these reports are critical to keeping clinical laboratory managers and pathology groups informed on anything that could affect the production, voracity, and availability of diagnostic testing. (more…)
Feb 8, 2017 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing
In vitro diagnostic manufacturers and medical distributors share concerns, along with other types of medical labs in nation’s small cities and hinterlands that include rural hospital labs and physician office labs (POLs) because, along with financial erosion, there is the potential of reduced access by Medicare beneficiaries to clinical lab tests where they live
SAN ANTONIO, TEXAS—Owners and managers of community and regional independent lab companies and community laboratories gathered here last week at a lab conference to assess what many believe is a bleak future. That’s because, in less than 11 months, medical laboratories across the United States will be dealing with unprecedented price cuts to the Medicare Part B clinical laboratory fee schedule (CLFS) and how those price cuts erode the financial stability of these essential labs, often the only local medical laboratory serving smaller communities and rural areas throughout the nation.
The number one financial threat of concern to these community and regional lab owners is how the Protecting Access to Medicare Act (PAMA) rule for private-payer market-price reporting will be used by the Centers for Medicare and Medicaid Services (CMS) to make fee cuts—effective on January 1, 2018—that will be financially devastating to the nation’s small and mid-sized community and regional labs, rural hospitals, some individual and group physician practices, and community hospitals—while causing increased market concentration that benefits the nation’s two dominant publicly-traded lab companies. (more…)
Sep 30, 2016 | Laboratory Instruments & Laboratory Equipment, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Test ordering and results interpretation can confuse the public says Dartmouth Institute, which is why some clinical laboratories limit the types of lab tests that people can request
Giving consumers direct access to medical laboratory testing continues to be a subject of some controversy. One factor in this debate is Theranos, which brought much attention to direct access testing, followed by extensive news coverage in recent months of its problems with reporting accurate clinical laboratory test results.
Concerns about allowing consumers to have direct access to lab testing were the subject of a recent National Public Radio (NPR) Shots Health News story. Several medical experts were interviewed and described why they had concerns about direct access testing (DAT).
One such expert is H. Gilbert Welch, MD, MPH, Professor of Medicine, Community and Family Medicine at The Dartmouth Institute (Dartmouth). According to Welch, DAT could contribute to over-diagnosis and give people an inaccurate impression of what good health actually means. (more…)
