Even US military clinical laboratories strive to cut costs, protect quality, and improve outcomes
Defense Health Agency (DHA), a part of the federal Department of Defense (DOD), recently launched a plan to consolidate healthcare facilities within certain geographical regions and to unify and integrate the military’s clinical laboratory operations in those areas. The goal is to streamline efficiencies and lower costs while maintaining quality lab testing services.
The DOD operates a nationwide network of medical treatment facilities (MTFs) that include state-of-the-art clinical and anatomic pathology laboratories serving military personnel and their families. These military labs face the same issues of cost, efficiency, and outcomes as do civilian clinical laboratories throughout the United States.
To address those challenges and bring together clinical laboratory services in specific regions, the DHA established the Tidewater Market in April of 2021 to serve select US Air Force, Army, and Navy MTFs in the Washington DC metro area, central North Carolina, Jacksonville, and coastal Mississippi.
Tidewater is the fifth Military Health System (MHS) market created to manage MTFs as they transition into the DHA.
Health.mil—a website maintained by the MHS as an informational resource for those it serves—describes the MHS as “one of America’s largest and most complex healthcare institutions, and the world’s preeminent military healthcare delivery operation.
“Our MHS saves lives on the battlefield, combats infectious disease around the world, and is responsible for providing health services through both direct care [at military hospitals and clinics known as ‘military treatment facilities’] and private sector care to approximately 9.6 million beneficiaries, composed of uniformed service members, military retirees, and family members,” Health.mil notes.
With 9.6 million beneficiaries, MHS is one of the largest healthcare service organizations operating in the United States.
“The establishment of this market provides a true opportunity to optimize healthcare for our beneficiaries by focusing on outcomes and access across the Tidewater market,” said Navy Rear Admiral Darin Via, MD, Tidewater market manager, in an MHS/DHA news release. “It also allows us to work towards standardization of processes, creating an easier environment for our patients to navigate within.” (Photo copyright: US Navy.)
Finding Efficiencies, Optimizing Clinical Laboratory Processes and Services
In an article outlining the Tidewater Market clinical laboratory initiative, Health.mil noted that “A market is a group of MTFs in one geographic area working together with its TRICARE partners, Veterans Affairs hospitals, other federal healthcare organizations, private sector teaching hospitals and medical universities, as well as other healthcare partners. Markets operate as a system to support the sharing of patients, staff, budget, and other functions across facilities to improve readiness and the delivery and coordination of health services.”
The Tidewater Market provides integrated, affordable, high-quality healthcare services to active-duty service members, military retirees, reservists and national guardsmen, and their families. The market currently serves more than 390,000 beneficiaries.
In 2022, the Tidewater Market Laboratory/Pathology Integration Working Group was created to optimize services while reducing costs within the market. The group was created by US Navy Captain Stacie Milavec, who has more than 23 years of experience in military medicine.
“One of DHA’s goals with setting up a market structure is to find efficiencies and optimize and standardize processes and services wherever possible,” Milavec said in an MHS/DHA news release. “We’ve been able to do exactly that by collaborating within our working group.”
Resource Sharing between Military Clinical Laboratories
The MTFs that are geographically close to each other helped expedite turnaround times for testing results. By working together, they saved the Tidewater Market an estimated $80,000 during fiscal year 2022.
One of the methods they used to streamline testing and lower costs was to allow resource sharing between facilities within the market. For example, the full-service clinical laboratory located at the Naval Medical Center Portsmouth (NMCP) began performing head and neck pathology cases, breast biopsies, and PAP testing for some of the other facilities within the Tidewater Market. These services were previously performed by other means and in some cases were sent to commercially-contracted clinical laboratories for analysis at a high cost.
The NMCP also took on Human Papilloma Virus (HPV) testing for all MTFs within the market.
In February of 2023, NMCP began taking on additional clinical chemistry tests from the 633rd Medical Group at Joint Base Langley-Eustis located in Hampton, Virginia. Prior to that collaboration, those tests were sent out to contracted labs off-base for analysis.
“[Through collaboration between the MTFs] we’ve been able to successfully transition civilian marketplace send-out testing back into the military market by utilizing market resources,” said pathologist US Air Force Captain Dianna Chormanski, MD, Laboratory Medical Director with the 633rd Medical Group at Joint Base Langley-Eustis, in the press release. “I’m a big fan of cooperation and working together, and that’s what a market should be.”
The DHA established the market-based structure as part of the National Defense Authorization Act for Fiscal Year 2017. It’s an example of regional laboratory consolidation within one region of the US where a common effort brought together clinical laboratories operating on military bases of different services. The military’s goal was a unified, integrated medical laboratory operation that could deliver targeted cost savings while maintaining quality lab testing services. It appears to be successful.
Loss could indicate an industrywide slowdown in digital health adoption and suggests medical laboratories will want to continue developing a virtual care strategy
Only two years after Teladoc Health (NYSE:TDOC) completed acquisition of Livongo, a data-based health coaching company, the virtual healthcare provider reported a 2022 net loss of $13.7 billion, a company press release announced.
The loss, which has been described as “historic,” is “mostly from a write-off related to the plummeting value of its Livongo acquisition. … By comparison, in 2021 [just a year earlier], Teladoc posted a net loss of $429 million,” Fierce Healthcare reported.
However, during Teladoc’s fourth quarter earnings call, CEO Jason Gorevic said, “We are pleased with the strong fourth quarter and full-year operating results. Despite a challenging macro environment, we were able to expand our product offerings and enhance the level of care delivered across our integrated whole-person platform.” Teladoc Health’s 2022 revenue was $2,406,840 compared to $2,032,707 in 2021. That’s an 18% increase over last year’s revenue, according to the earnings report. Nevertheless, a month before the earnings call Teladoc laid off 300 non-clinician employees, Fierce Healthcare noted.
“Teladoc Health has been at the forefront of the adoption curve, and we believe that our scale, breadth of product offering, and proven outcomes will enable us to maintain and expand our position in the market,” said Teladoc Health CEO Jason Gorevic during February’s earnings call. Clinical laboratory leaders may view the company’s $13B loss as indication that adoption in telehealth by physicians, healthcare providers, and patients of digital-based health services is not happening as swiftly has been predicted. (Photo copyright: The Business Journals.)
Predictions in Telehealth Adoption Fall Short
Teladoc Health, based in Purchase, New York, acquired Livongo of Mountain View, California, in October 2020 for $18.5 billion.
A news release at that time declared that the merger was “a transformational opportunity to improve the delivery, access, and experience of healthcare for consumers around the world.
“The highly complementary organizations,” the release stated, “will combine to create substantial value across the healthcare ecosystem, enabling clients everywhere to offer high quality, personalized, technology-enabled longitudinal care that improves outcomes and lowers costs across the full spectrum of health.”
The deal was hailed as advancing telemedicine and digital health services. As it turned out, though, the demand for those types of services fell far short of the Teladoc’s expectations. One way to interpret the cause of the multi-billion dollar write-down is that adoption of digital health services by physicians, healthcare providers, and consumers is not happening as fast as Teladoc projected.
It may also be that companies allocated too much money to deals during the COVID-19 pandemic, an unstable period of time for making major business decisions.
Teladoc to Reduce Costs while Pursuing Increased Adoption of Virtual Care
Gorevic told analysts during the earnings call that the company needs to reduce costs and reach a market that is “in the early innings.” Year-over-year growth of 6% to 11% is expected in 2023, he said.
“You should expect us to balance growth and margin with an increased focus on efficiency going forward. Part of that approach is rightsizing the cost structure to reflect the current growth rates of the business,” Gorevic said. “The more balanced approach does not mean that we will stop relentlessly pursing growth and increased adoption of virtual care across the industry. Virtual care’s role within the healthcare industry remains underpenetrated, and we will continue to invest to expand our leadership position,” he added.
Digital Health Investing Falls Off
However, citing digital health market data in the new CB Insights report, Becker’s Hospital Review(Becker’s) suggested the digital health bubble may have “popped,” and that funding by investors is falling fast from the “Golden Age” of 2021.
The digital health category grew by 79% in 2021 to $57.2 billion, a record high, according to data cited by Becker’s. In the fourth quarter of 2021, there were 13 new digital health companies with valuations of at least $1 billion each. But by the end of 2022, digital health funding dropped to $3.4 billion. That’s “a five-year low,” Becker’s reported.
“The drop in funding in digital health companies I feel is a response to the volatility in healthcare where over 50% of hospitals and healthcare providers have posted losses for 2022 and a bleak outlook for 2023,” Darrell Bodnar, Chief Information Officer at North Country Healthcare in Lancaster, New Hampshire, told Becker’s.
And, in a statement about hospitals’ financial health, Fitch Ratings said providers in 2022 reported “weaker profitability and liquidity” as compared to 2021. For most providers, a “rapid financial recovery” is not expected, Fitch noted.
Labs Need Telehealth Strategies
All of this uncertainty in the telehealth/virtual care markets may ultimately benefit clinical laboratories and lab investors who delayed investing in technology that enables supporting physicians and patients using telemedicine visits. Still, it would be smart for medical laboratory leaders to develop a digital health strategy to meet consumer demand for lab testing services in tandem with virtual care visits with healthcare providers.
Though still in trials, early results show tests may be more accurate than traditional clinical laboratory tests for detecting prostate cancer
Within weeks of each other, different research teams in the US and UK published findings of their respective efforts to develop a better, more accurate clinical laboratory prostate cancer test. With cancer being a leading cause of death among men—second only to heart disease according to the Centers for Disease Control and Prevention (CDC)—new diagnostics to identify prostate cancer would be a boon to precision medicine treatments for the deadly disease and could save many lives.
Thus, these are two different pathways toward the goal of achieving earlier, more accurate diagnosis of prostate cancer, the holy grail of prostate cancer diagnosis.
“There is currently no single test for prostate cancer, but PSA blood tests are among the most used, alongside physical examinations, MRI scans, and biopsies,” said Dmitry Pshezhetskiy, PhD (above), Professorial Research Fellow at University of East Anglia and one of the authors of the UEA study. “However, PSA blood tests are not routinely used to screen for prostate cancer, as results can be unreliable. Only about a quarter of people who have a prostate biopsy due to an elevated PSA level are found to have prostate cancer. There has therefore been a drive to create a new blood test with greater accuracy.” With the completion of the US and UK studies, clinical laboratories may soon have a new diagnostic test for prostate cancer. (Photo copyright: University of East Anglia.)
East Anglia’s Research into a More Accurate Blood Test
Scientists at the University of East Anglia (UEA) worked with researchers from Imperial College in London, Imperial College NHS Trust, and Oxford BioDynamics to develop a new precision medicine blood test that can detect prostate cancer with greater accuracy than current methods.
The researchers evaluated their test in a pilot study involving 147 patients. They found their testing method had a 94% accuracy rate, which is higher than that of PSA testing alone. They discovered their test significantly improved the overall detection of prostate cancer in men who are at risk for the disease.
“When tested in the context of screening a population at risk, the PSE test yields a rapid and minimally invasive prostate cancer diagnosis with impressive performance,” Dmitry Pshezhetskiy, PhD, Professorial Research Fellow at UEA and one of the authors of the study told Science Daily. “This suggests a real benefit for both diagnostic and screening purposes.”
The UK scientists hope their test can eventually be used in everyday clinical practice as there is a need for a highly accurate method for prostate cancer screening that does not subject patients to unnecessary, costly, invasive procedures.
Cedars-Sinai’s Research into Nanotechnology Cancer Testing
Researchers from Cedars-Sinai Cancer took a different approach to diagnosing prostate cancer by developing a nanotechnology-based liquid biopsy test that detects the disease even in microscopic amounts.
Their test isolates and identifies extracellular vesicles (EVs) from blood samples. EVs are microscopic non-reproducing protein and genetic material shed by all cells. Cedars-Sinai’s EV Digital Scoring Assay accurately extracts EVs from blood and analyzes them faster than similar currently available tests.
“This research will revolutionize the liquid biopsy in prostate cancer,” said oncologist Edwin Posadas, MD, Medical Director of the Urologic Oncology Program and co-director of the Experimental Therapeutics Program in Cedars-Sinai Cancer in a press release. “The test is fast, minimally invasive and cost-effective, and opens up a new suite of tools that will help us optimize treatment and quality of life for prostate cancer patients.”
The researchers tested blood samples from 40 patients with prostate cancer. They found that their EV test could distinguish between cancer localized to the prostate and cancer that has spread to other parts of the body.
Microscopic cancer deposits, called micrometastases, are not always detectable, even with advanced imaging methods. When these deposits spread outside the prostate area, focused radiation cannot prevent further progression of the disease. Thus, the ability to identify cancer by locale within the body could lead to new precision medicine treatments for the illness.
“[The EV Digital Scoring Assay] would allow many patients to avoid the potential harms of radiation that isn’t targeting their disease, and instead receive systemic therapy that could slow disease progression,” Posadas explained.
Other Clinical Laboratory Tests for Prostate Cancer Under Development
According to the American Cancer Society, the number of prostate cancer cases is increasing. One out of eight men will be diagnosed with the illness during his lifetime. Thus, developers have been working on clinical laboratory tests to accurately detect the disease and save lives for some time.
In “University of East Anglia Researchers Develop Non-Invasive Prostate Cancer Urine Test,” Dark Daily reported on a urine test also developed by scientists at the University of East Anglia that clinical laboratories can use to not only accurately diagnose prostate cancer but also determine whether it is an aggressive form of the disease.
And in “UPMC Researchers Develop Artificial Intelligence Algorithm That Detects Prostate Cancer with ‘Near Perfect Accuracy’ in Effort to Improve How Pathologists Diagnose Cancer ,” we outlined how researchers at the University of Pittsburgh Medical Center (UPMC) working with Ibex Medical Analytics in Israel had developed an artificial intelligence (AI) algorithm for digital pathology that can accurately diagnose prostate cancer. In the initial study, the algorithm—dubbed the Galen Prostate AI platform—accurately detected prostate cancer with 98% sensitivity and 97% specificity.
More research and clinical trials are needed before the new US and UK prostate cancer testing methods will be ready to be used in clinical settings. But it’s clear that ongoing research may soon produce new clinical laboratory tests and diagnostics for prostate cancer that will steer treatment options and allow for better patient outcomes.
The deal will enable Crosscope’s digital pathology platform to layer around Clarapath’s histology automation hardware, a combination that could improve quality and efficiencies in diagnostic services for future customers, according to a Clarapath press release.
Clarapath’s goal with its products is to automate certain manual processes in histology laboratories, while at the same time reducing variability in how specimens are processed and produced into glass slides. In an exclusive interview with Dark Daily, Eric Feinstein, CEO and President at Clarapath said he believes the resulting data about these activities can drive further changes.
“A histotechnologist turns a microtome wheel and makes decisions about a piece of tissue in real time,” noted Feinstein, who will speak at the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management on April 25-26 in New Orleans. “All of that real-time data isn’t captured. Imagine if we could take all of that data from thousands of histotechnologists who are cutting every day and aggregate it. Then you could start drawing definitive conclusions about best practices.”
“Clarapath’s foundation is about creating consistency and standardizing steps in histology—and uncovering the data that you need in order to accomplish those goals as a whole system,” Eric Feinstein (above), CEO and President at Clarapath told Dark Daily. “A histology lab’s workflow—from when the tissue comes in to when the glass slide is produced—should all be connected.” Many processes in histology and anatomic pathology continue to be manual. Automated solutions can contribute to improved productivity and reducing variability in how individual specimens are processed. (Photo copyright: Clarapath.)
Details Behind Clarapath’s Deal to Acquire Crosscope
As part of its acquisition, Clarapath of Hawthorne, New York, has retained all of Crosscope’s employees, who are located in Mountain View, California, and Bombay, India. Financial terms of the deal were not disclosed.
Clarapath’s flagship histology automation product is SectionStar, a tissue sectioning and transfer system designed to automate inefficient and manual activities in slide processing. The device offers faster and more efficient sample processing while reducing human involvement. Clarapath expects SectionStar be on the market in 2023. The company is currently taking pre-orders.
Meanwhile, Crosscope developed Crosscope Dx, a turnkey digital pathology solution that provides workflow tools and slide management as well as AI and machine learning to assist pathologists with their medical decision-making and diagnoses.
Adoption of Digital Pathology and Automation Can Be Challenging
Digital pathology has experienced growing popularity in the post-COVID-19 pandemic world. This is not only because remote pathology case reviews have become increasingly acceptable to physicians but also because of the ongoing shortages in clinical laboratory staffing.
“A pain point today for clinicians and laboratories is labor. That’s across the board,” Feinstein said. “We can help solve that with SectionStar.”
Feinstein does not believe adoption of digital pathology and histology automation is proceeding slowly, but he does acknowledge barriers to healthcare organizations installing the technologies.
“There are lots of little things that—from a workflow perspective—people have outsized expectations about,” he explained. “Clinicians and administrators are not used to innovating in a product sense. They may be innovating on how they deliver care or treatment pathways, but they’re not used to developing an engineering product and going through alpha and beta stages. That makes adopting new technology challenging.”
Medical laboratory managers and pathologists interested in pursuing histology automation and digital pathology should first determine what processes are sub-optimal or would benefit from the standardization hardware and software can offer. Being able to articulate those gains can help build the case for a return on investment to decision-makers.
Another resource to consider: Feinstein will speak about innovations for remote histology laboratory workers at the upcoming Executive War College for Clinical Laboratory, Diagnostics, and Pathology Management on April 25-26 in New Orleans. His session is titled, “Re-engineering the Classic Histology Laboratory: Enabling the Remote Histotechnologist with New Tools That Improve Productivity, Automate Processes, and Protect Quality.”
Research in the UK and US into how rapid WGS can prevent deaths and improve outcomes for kids with rare genetic diseases may lead to more genetic testing based in local clinical laboratories
Genetic scientists with the National Health Service (NHS) in England have embarked on an ambitious plan to offer rapid whole genome sequencing (rWGS) for children and babies with serious illnesses, as part of a larger initiative to embrace genomic medicine in the United Kingdom (UK).
The NHS estimates that the plan will benefit more than 1,000 children and babies each year, including newborns with rare diseases such as cancer, as well as kids placed in intensive care after being admitted to hospitals. Instead of waiting weeks for results from conventional tests, clinicians will be able to administer a simple blood test and get results within days, the NHS said in a press release.
The press release notes that about 75% of rare genetic diseases appear during childhood “and are responsible for almost a third of neonatal intensive care deaths.”
Here in the United States, pathologists and clinical laboratory managers should see this development as a progressive step toward expanding access to genetic tests and whole genome sequencing services. The UK is looking at this service as a nationwide service. By contrast, given the size of the population and geography of the United States, as this line of medical laboratory testing expands in the US, it will probably be centered in select regional centers of excellence.
“This strategy sets out how more people will be empowered to take preventative action following risk-based predictions, receive life-changing diagnoses, and get the support needed to live with genomically-informed diagnoses alongside improved access to cutting-edge precision [medicine] treatments. It also outlines how the NHS will accelerate future high-quality genomic innovation that can be adopted and spread across the country, leading to positive impacts for current and future generations,” the NHS wrote.
“This global first is an incredible moment for the NHS and will be revolutionary in helping us to rapidly diagnose the illnesses of thousands of seriously ill children and babies—saving countless lives in the years to come,” said NHS chief executive Amanda Pritchard (above) in a press release announcing the program. (Photo copyright: Hospital Times.)
New Rapid Whole Genome Sequencing Service
The NHS announced the plan following a series of trials last year. In one trial, a five-day old infant was admitted to a hospital in Cheltenham, Gloucester, with potentially deadly levels of ammonia in his blood. Whole genome sequencing revealed that changes in the CPS1 gene were preventing his body from breaking down nitrogen, which led to the spike in ammonia. He was given life-saving medication in advance of a liver transplant that doctors believed would cure the condition. Without the rapid genetic test, doctors likely would have performed an invasive liver biopsy.
Using a simple blood test, the new newborn genetic screening service in England is expected to benefit more than 1,000 critically ill infants each year, potentially saving their lives. “The rapid whole genome testing service will transform how rare genetic conditions are diagnosed,” explained Emma Baple, PhD, Professor of Genomic Medicine at University of Exeter Medical School and leader of the National Rapid Whole Genome Sequencing Service in the press release. “We know that with prompt and accurate diagnosis, conditions could be cured or better managed with the right clinical care, which would be life-altering—and potentially life-saving—for so many seriously unwell babies and children,” Precision Medicine Institute reported.
According to The Guardian, test results will be available in two to seven days.
Along with the new rWGS testing service, the NHS announced a five-year plan to implement genomic medicine more broadly. The provisions include establishment of an ethics advisory board, more training for NHS personnel, and an expansion of genomic testing within the existing NHS diagnostic infrastructure. The latter could include using NHS Community Diagnostics centers to collect blood samples from family members to test for inherited diseases.
UK’s Longtime Interest in Whole Genome Sequencing
The UK government has long been interested in the potential role of WGS for delivering better outcomes for patients with genetic diseases, The Guardian reported.
In 2013, the government launched the 100,000 Genomes Project to examine the usefulness of the technology. In November 2021, investigators with the project reported the results of a large pilot study in which they analyzed the genomes of 4,660 individuals with rare diseases. The study, published in the New England Journal of Medicine (NEJM) titled, “100,000 Genomes Pilot on Rare-Disease Diagnosis in Health Care—Preliminary Report,” found “a substantial increase in yield of genomic diagnoses made in patients with the use of genome sequencing across a broad spectrum of rare disease.”
The study’s findings suggest that use of WGS “could save the NHS millions of pounds,” The Guardian reported.
Whole Genome Sequencing System for Newborns in the US
“This NBS-rWGS [newborn screening by rapid whole genome sequencing] system is designed to complement the existing newborn screening process and has the potential to eliminate the diagnostic and therapeutic odyssey that many children and parents face,” Kingsmore said in a press release. “Currently, only 35 core genetic disorders are recommended for newborn screening in the United States, but there are more than 7,200 known genetic diseases. Outcomes remain poor for newborns with a genetic disease because of the limited number of recommended screenings. With NBS-rWGS, we can more quickly expand that number and therefore potentially improve outcomes through precision medicine.”
A more recent 2023 study which examined 112 infant deaths at Rady Children’s Hospital found that 40% of the babies had genetic diseases. In seven infants, genetic diseases were identified post-mortem, and in five of them “death might have been avoided had rapid, diagnostic WGS been performed at time of symptom onset or regional intensive care unit admission,” the authors wrote.
“Prior etiologic studies of infant mortality are generally retrospective, based on electronic health record and death certificate review, and without genome information, leading to underdiagnosis of genetic diseases,” said Christina Chambers, PhD, co-author of the study, in a press release. “In fact, prior studies show at least 30% of death certificates have inaccuracies. By implementing broad use of genome sequencing in newborns we might substantially reduce infant mortality.”
Pioneering work with whole genome sequencing for newborns, such as that being conducted by the clinical laboratory and genetic teams at Rady Children’s Hospital and the UK’s NHS, could allow doctors to make timely interventions for our most vulnerable patients.
