Judge decides injuries claimed by pathologists are not antitrust injuries and that plaintiffs have no standing to bring antitrust lawsuit
Four pathologists who filed an antitrust lawsuit alleging their former employer “engaged in a series of unfair and deceptive practices” in an effort to maintain a monopoly on clinical pathology services in central Iowa had their lawsuit dismissed by a federal judge. The plaintiffs appealed the decision. Two related state lawsuits are still pending, one in which the plaintiffs are the defendants.
It is common for pathologists in a community to leave one pathology practice and either establish a new practice or join a nearby practice. What is less common is litigation that involves the original group practice and the departed pathologists.
Thus, this example of lawsuits and counter lawsuits is interesting because it creates court rulings about the strengths and weaknesses of the arguments asserted by both plaintiffs and defendants in situations where pathologists leave their employer but continue to practice in the same community.
The court decisions in these cases demonstrate how judges are handling these issues involving antitrust allegations, market share, and non-compete agreements.
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” wrote federal judge Rebecca Goodgame Ebinger, JD (above), in her order granting defendants’ motion to dismiss. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally.” Clinical laboratories and anatomic pathology practices can learn from the decisions handed down in this court case. (Photo copyright: Wikipedia.)
Pathologists Accuse Defendants of Suppressing Competition
In their original complaint, which was filed May 13, 2024, in the US District Court for the Southern District of Iowa, the plaintiffs said that, beginning in 2021, IPA “strongly pressured” them to sign an employment agreement that would have prevented them from launching a competing practice in the Des Moines area. They refused to comply, but “the administrator of these corporations told these pathologists that the Agreement was in effect even though they had not signed it,” the complaint states.
On October 2022, they informed IPA that they intended to leave to form their own pathology practice, according to the complaint.
The new practice, Goldfinch Laboratory in Urbandale, Iowa, began offering pathology services in February 2023.
“Prior to the formation of Goldfinch, IPA was the only independent pathology practice in central Iowa that was not exclusively tied to one source of referrals,” the complaint states. In addition, “it was the only independent pathology practice in central Iowa that offered dermatopathology services.”
After they notified IPA and RLC of their intention to leave, the plaintiffs alleged that the employer engaged in a series of efforts to “suppress competition” and monopolize the local market for pathology and dermatopathology services.
Plaintiffs Allege Defendants’ Behavior Could Have Harmed Patients
The pathologists were barred from entering IPA’s offices, leaving potential referring physicians with the impression that “these pathologists were no longer practicing,” the complaint states, and preventing them from “maintaining on-going relations with potential referral sources.”
IPA, the complaint alleges, “refused to share biopsy slides with Goldfinch pathologists when those slides were required for continuity of care of the patient—even though this practice was contrary to the standard of care and could well have caused harm to patients.” The complaint characterized this as “an effort to induce referral sources not to make referrals to Goldfinch.”
The plaintiffs also alleged that IPA and RLC made “false and deceptive statements to dissuade referral sources from making referrals to Goldfinch,” for example by claiming that legal problems would force the practice to close.
Given their “monopoly power” in the local market, the plaintiffs argued, IPA and RLC “were able to charge supracompetitive prices for their services.” A $1.4 million contract with one hospital corporation was “in the top 5% of Part A contracts in the United States,” the complaint alleges, and rural hospitals paid “at least 400% of the actual Medicare fee schedule amount for the technical component of pathology services for Medicare patients.”
Defendants’ Response to Allegations
In their motion to dismiss the suit, the defendants argued that Goldfinch was “a classic ‘disgruntled competitor’” that had not demonstrated an “antitrust injury” as defined by federal and state law.
“Goldfinch’s owners used to work for IPA and RLC, voluntarily left, and now seek to litigate their personal financial losses under the guise of federal and state antitrust claims,” the motion states.
The defendants also argued that Goldfinch lacked standing to file an antitrust claim.
Goldfinch “alleges the ‘antitrust practices’ of IPA and RLC are harmful to patients and other payers for pathology and dermatopathology services,” the motion states. “But patients and payers are quite capable of noticing and seeking redress for the alleged harms and Goldfinch need not do so on their behalf.”
In addition, the defendants argued, Goldfinch failed to adequately define a “plausible” product market or geographic market that was subject to the alleged monopoly power.
“Goldfinch’s alleged geographic market is vaguely ill-defined as ‘central Iowa,’” the motion states. “But there is a difference between the service area and a geographic market.” The motion cited an earlier decision in which the US Court of Appeals for the Seventh Circuit “deemed a relevant market for a pathology practice to be nationwide.”
“As a result of Defendants’ alleged conduct, Goldfinch asserts its ability to compete has been severely undermined and ‘has the potential to harm patients,’” she wrote. “These injuries are not antitrust injuries because they do not stem from conduct affecting competition in the pathology and dermatopathology markets generally. These injuries, instead, are a result of Defendants’ alleged actions targeting Goldfinch and demonstrate an injury to Goldfinch as a competitor—the loss of some patients and referral sources.”
She also agreed with the defendants that Goldfinch lacked sufficient standing to bring an antitrust claim, and that the plaintiffs had failed “to adequately allege a relevant market for pathology and dermatopathology services.”
Goldfinch filed a Notice of Appeal on Jan. 10.
State Lawsuits Pending
Meanwhile, both parties are awaiting a decision in a state court lawsuit in which the Goldfinch partners are the defendants, according to the Iowa Capital Dispatch.
IPA filed the suit late in 2022, shortly after learning that the four pathologists planned to leave and start their own practice. It alleged “breach of contract, breach of the common law duty of loyalty, civil conspiracy and tortious interference,” Iowa Capital Dispatchreported at the time, claiming that the pathologists were improperly attempting to lure clients away.
In a related case, Goldfinch pathologists Milless and Halverson have filed a state discrimination lawsuit against their former employer, “alleging they were paid $200,000 to $350,000 annually, which they claim was far less than what some of the less qualified male doctors were paid,” Iowa Capital Dispatch reported. That case goes to trial in August.
This is a plethora of lawsuits involving pathologists and the pathology practices in the communities where they formally practiced. Pathologists and group pathology managers may find useful insights from a study of the legal arguments made by the two parties, as well as the decisions laid down by judges in these court cases.
Patients concerns about the quality of care provided since Amazon acquired One Medical in 2022 can affect clinical laboratory testing for those providers
Recently, The Washington Post reported on leaked documents that appear to indicate Amazon’s One Medical primary care call center was not using trained, certified medical professionals to field patient phone calls and provide telehealth guidance. Instead, The Post reported, “[One Medical’s] call center is staffed by contractors who receive about two weeks of medical training before responding to patient concerns,” and that, “They have missed urgent issues like blood pressure spikes and sudden stomach pain with blood in one patient’s stool,” MSN’s Business Insider reported.
The Washington Post, which is owned by Amazon founder Jeff Bezos, went on to report, “Amazon’s primary care clinic One Medical circulated talking points telling workers to claim that in cases when its call center failed to escalate potentially urgent calls to medical staff, patients ‘received the care they needed,’ according to screenshots of internal messages seen by The Washington Post.”
The Post’s report highlights the challenges some telemedicine providers using “non-physician” personnel are having in delivering quality primary care.
During the COVID-19 pandemic, social distancing and hospital lockdowns kept many people indoors and unable to access their doctors and clinical laboratories when they needed. As the pandemic progressed, enterprising mega corporations like Amazon saw an opportunity and invested heavily in bringing healthcare to patients where they live and shop.
Amazon, for example, announced in 2022 that it would be purchasing One Medical and all of its primary care clinics nationwide for $3.9 Billion.
“There is an immense opportunity to make the healthcare experience more accessible, affordable, and even enjoyable for patients, providers, and payers,” said Amir Dan Rubin, One Medical’s CEO, in an Amazon press release announcing the acquisition at that time. “We look forward to innovating and expanding access to quality healthcare services, together,” he added.
But it turns out, developing alternative pathways to primary care is not such an easy thing. According to Business Insider, some patients with One Medical are struggling to get adequate care, major patient concerns have been missed, and there are concerns over the efficacy of the services.
“The opportunity to transform healthcare and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” said Amir Dan Rubin (above), One Medical’s CEO, in an Amazon press release. Clinical laboratories that service One Medical’s providers may want to follow this developing story. (Photo copyright: LinkedIn.)
Call Center Contractors Spark Concerns
One Medical was started by Harvard-trained internist Thomas Lee, MD, in an effort to streamline medical services to the benefit of stakeholders and patients, according to Forbes. This subscription based service offered patients 24/7 virtual care with access to in-person appointments.
“One Medical was founded in 2007 as a concierge medical network before going public in 2020 and purchasing Iora Health, a value-based provider for seniors, in 2021. By the end of 2022, a majority of One Medical’s revenue came from capitated contracts. The company currently operates more than 200 clinics and a telehealth service in a membership model,” Healthcare Dive reported.
But according to reports reviewed by journalists at The Washington Post, on more than one occasion elderly patients have been failed by the One Medical call center in Tempe, Arizona. Patients began to be rerouted to this call center about a year after the Amazon acquisition.
The Post reported that several patients reported symptoms such as pain and swelling, blood in stool, a spike in blood pressure and sudden rib pain, and that the call center failed to escalate these calls to clinical staff—instead simply scheduling an appointment sometimes for days later.
The workers at the Tempe call center included newly hired contractors with what The Post described as “limited training and little to no medical experience.” Internal sources at One Medical are raising the alarm bell about the dangers of Amazon’s frugal approach. “There were a lot of things slipping through the cracks,” one anonymous source told The Post.
Quantity over Quality
In an interview with PBS, Caroline O’Donovan, the reporter at The Washington Post who broke this story said, “In the documents that were leaked to us, there’s a doctor who wrote a note saying, ‘I don’t think these call center people even realize that they’re triaging patients, which is not something that they’re qualified to do.’”
Amazon contends that no one was harmed in the cases where protocol was not followed.
In an email statement concerning the Washington Post report, Amazon spokesperson Dawn Brun wrote, “While the patients ended up receiving the care they needed (during in-person visits with their providers), the initial call could have been managed more effectively,” The Post reported.
“We take patients’ feedback seriously and the [Washington Post] story mischaracterizes the dedication we have to our patients and care teams,” she added.
However, O’Donovan says that the patients—and some employees—she spoke with challenged that idea. “The patients I spoke to again and again—and some of the One Medical employees I spoke to—said there’s a difference between getting your phone call answered faster, literally someone picking up the phone, and actually getting your problem solved,” she told PBS.
When data-driven companies like Amazon get involved in healthcare certain care standards may be sacrificed in the name of optimization.
This story shows that there is not an easy solution/answer to developing alternative primary care pathways. Clinical laboratories have a stake in the evolution and developments in the field of primary care and telemedicine because often these patients need lab tests.
Sessions at this annual medical laboratory conference demonstrated that lab outreach continues to be a productive clinical and business line at numerous hospitals and IDNs
Sept. 26-Chicago: During the past 24 months, there have been multiple news stories announcing that different hospitals or integrated delivery networks (IDNs) had signed agreements to sell their clinical laboratory outreach businesses to one of the two multi-billion-dollar commercial lab corporations. Some Wall Street analysts have taken these lab outreach acquisitions as a sign that hospitals are struggling to compete in the outreach laboratory marketplace. They predict that the big commercial labs will continue to scoop up hospital laboratory outreach businesses at a brisk pace.
However, this may be an example of popular wisdom not reflecting the true state of the outpatient/outreach market for clinical laboratory testing services. Evidence of the contrary view—that many hospitals and IDNs have flourishing lab outreach programs—was in plain view last week here in the Windy City.
During last week’s “Leveraging the Laboratory” outreach conference in Chicago, produced by Mayo Clinic Laboratories, the individuals pictured above each presented different aspects of success in operating an effective hospital clinical laboratory outreach program. Front row top to bottom they are Henry Givray, Leadership’s Calling; Brianne Newton, Mayo Clinic Laboratories; Nilesh Kachalia, Yuma Medical Center; Trudie Milner, PhD, Yuma Regional Medical Center. And rear row top to bottom: Robert Michel, The Dark Report; Tony Bull, Medical University of South Carolina; Nicholas Rambow, Corewell Health; Jane Hermansen, Mayo Clinic Laboratories; Ellen Dijkman Dulkes, Mayo Clinic Laboratories. (Photo copyright: The Dark Report.)
Optimism was High at Mayo’s Lab Outreach Conference
Throughout the two days of the conference, there was enthusiasm for the viability of hospital laboratory outreach programs. There was also optimism that these local and regional outreach businesses will continue to be profitable and can support better patient care. Had any of the Wall Street analysts been in attendance, they would have heard the other side of the coin about the profitability and viability of hospital laboratory outreach programs—a story documented by the presentations of different hospital and IDNs that operate flourishing lab outreach programs.
“What makes this meeting unique is that it is the longest-running and biggest conference devoted to best practices in hospital and health system laboratory outreach programs,” said Jane Hermansen, Manager, Outreach and Network Development at Mayo Clinic Laboratories. “There are signs that increased integration within multi-hospital health systems requires a common lab test menu with consistent methodologies and reference ranges.
“During the conference, we heard many participants describe one part of their lab testing services to office-based physicians as ‘inreach’ when it involves employed providers of the parent health system,” she continued. “This is evidence that health system administration recognizes the value of a full longitudinal lab test record for their patients—whether from inpatient, inreach, or outreach testing.
“As well, this year’s exceptionally large attendance shows that hospital-based labs across the United States are forging ahead with their lab outreach services in ways that generate many benefits,” Hermansen noted. “The most important is to help physicians deliver better care to patients. At the same time, the added test volumes from a productive hospital laboratory outreach program improves the productivity of the laboratory while generating much needed income that helps that lab’s parent organization.”
Day one of this two-day event featured presentations about successful hospital laboratory outreach programs. Speakers included:
Day two was organized around hands-on workshops that addressed the management, operational, financial, and sales/marketing elements that make up a growing, dynamic hospital laboratory outreach business. Attendees were fully engaged in these sessions as they learned best practices. Innovations and clever approaches to increasing physician and patient satisfaction were shared during peer-to-peer exchanges.
Local Clinical Laboratories Serving their Communities
Hospital laboratories are uniquely positioned to deliver value to the physicians and other providers in the towns and regions they served. The obvious benefit is that the lab, its employees, and its clinical pathologists all live in the community. They have professional relationships that may go back decades with the physicians who order medical laboratory tests for their patients.
These local hospital labs can report many test results on the same day that they get the specimens from the doctors’ offices. Another benefit for those physicians and patients is that when a hospital lab performs all the tests originated in inpatient, outreach, and outpatient settings, it has a full longitudinal record of a patient’s lab test results, which often covers years of testing. This is important when patients show up in specialists’ offices or hospital emergency departments. Physicians in these settings can see all of the patient’s lab test history, and the tests are performed with the same methodology and have the same reference ranges.
Ways to Differentiate Hospital Laboratory Outreach Services
Hospital and health system laboratory outreach programs have multiple ways to differentiate their lab testing services. During his presentation, Tony Bull, System Administrative Officer, Pathology and Laboratory Medicine, Medical University of South Carolina, Charleston, South Carolina, provided the following list of different benefits that a lab outreach program can offer to local physicians, patients, and consumers:
Ease of access
Patient experience
Couriers
Pricing
Payer contracts
Customer service
Marketing and sales
Physician perception
One point of competitive advantage the speakers emphasized was the outreach laboratory’s access to lab test data. When lab data is combined with patient demographics and other sets of data, an outreach laboratory can develop clinically actionable intelligence that helps physicians and health insurers improve patient care, while lowering the total cost of care. When packaged correctly, these enriched data offerings can generate a new source of revenue for lab outreach programs.
Given the tough finances experienced by health systems and hospitals across the United States in recent years, it’s notable that the attendees at Mayo Clinic Laboratories’ “Leveraging the Laboratory” conference reported positive growth and profitable results from their laboratory outreach programs.
That’s solid evidence that there continues to be an opportunity for pathologists and clinical laboratory leaders of IDNs to ramp up their laboratory outreach businesses to win new client-physicians and produce additional cash flow for their labs.
Post-merger, a first goal is often to achieve cost savings by consolidating hospital laboratory testing into fewer medical laboratory sites
Major integrated delivery network (IDN) healthcare systems continue to acquire other hospitals. These deals are getting larger in scope and confirm that the trend of hospital consolidation is robust and ongoing. They also present a challenge for clinical laboratories that service the IDN’s physicians from both inside and outside the networked systems.
One most recent example is the announced mega-merger of non-profit BJC HealthCare (BJC) in St. Louis and faith-based non-profit Saint Luke’s Health System (St. Luke’s) in Kansas City, both in Missouri. St. Louis Post-Dispatch described the deal as “one of the biggest local hospital mergers in recent memory.”
And for good reason. According to Healthcare Dive, the partnership that will create a 28-hospital, $10 billion dollar health system with more than 100 specialty and primary care offices serving patients in Illinois, Kansas, and Missouri. Fiscally, BJC showed $6.3 billion in revenue last year and Saint Luke’s $2.4 billion.
Mega mergers are a big deal (pun intended). They can give the new healthcare organization unrivaled competitive authority in the marketplace potentially passing along lower healthcare prices to patients. But they come at cost to embedded clinical staff, including medical laboratories.
The health system merger gives BJC/St. Luke’s “huge leverage in terms of negotiating power with the insurers,” Ryan Barker, an independent healthcare policy consultant, told the St. Louis Post-Dispatch. Clinical laboratories are also impacted in these mergers when hospital systems consolidate their testing capabilities and locations. (Photo copyright: Missouri Foundation for Health.)
Impact of the BJC/St. Luke’s Merger
BJC and St. Luke’s signed a non-binding agreement to merge on May 31 and plan to reach a final agreement before the year’s end barring regulatory interference. The duo’s combined 28-hospital system will operate out of two headquarters: One in St. Louis managing southern Illinois and eastern Missouri, and another in Kansas City to serve parts of Kansas as well as western Missouri, Healthcare Dive reported.
The merger of BJC and St. Luke’s means the formation of a “clear market leader in Missouri,” St. Louis Post-Dispatch reported, adding that BJC has 40% of the market’s patient discharges and St. Luke’s holds 20% of the market share in the “state’s second largest metropolitan area.”
This will likely manifest itself in leverage during negotiations with healthcare payers that service that area.
“It continues to be the case that the hospitals are trying to gain the upper hand on the insurers,” John Romley, PhD, Associate Professor in the University of Southern California (USC) Price School of Public Policy and USC Mann School of Pharmacy and Pharmaceutical Sciences, told the St. Louis Post-Dispatch. Romley is also an economist at the USC Schaeffer Center for Health Policy and Economics, and adjunct economist at the Rand Corporation. “That was true 10 years ago. That’s true today,” he added.
“That’s what I always worry about with consolidation is the impact on [healthcare] pricing,” Ryan Barker, an independent healthcare policy consultant in St. Louis and former Vice President of Health Policy at Missouri Foundation for Health, told the Post-Dispatch.
Other Large Health System Mergers and Acquisitions
There have been a growing number of large-scale mergers and acquisitions of IDNs in the last few months. Dark Daily’s sister publication The Dark Report has covered these deals in multiple intelligence briefings.
Healthcare policy makers were surprised by the merger, as Kaiser and Geisinger were often cited as two of the best IDNs in the nation.
Now under single ownership there will be implications that take years to play out, especially for clinical laboratories that now must service a significantly larger physician base. Conversely, if the new combined healthcare system decides to combine multiple medical laboratories to save on costs it will have a huge impact on lab staff.
Another deal recently announced involves UPMC’s (University of Pittsburgh Medical Center) announcement to merge with multihospital Washington Health System (WHS) in Washington, Pennsylvania, a WHS news release noted. But the move has drawn pushback from elected officials and organized labor, the Pittsburgh Post-Gazette reported.
UPMC has recorded rapid growth over the year acquiring smaller hospitals, but hospital mergers are getting closer inspections from federal regulators, the Pittsburgh Post-Gazette noted.
SEIU Healthcare Pennsylvania—part of the Service Employees International Union—was first to request an investigation by the US Department of Justice for what it called a “long and egregious history of labor law violations.” It also claimed that UPMC merged with 27 hospitals from 1996 to 2019, adding 10 between 2016 and 2018, the Pittsburgh Post-Gazette reported.
Concentrated ownership of diagnostic services impacts clinical laboratories in many ways. The Dark Report noted that combined IDNs often review clinical laboratory services across the entire healthcare network. Opportunities for third-party commercial labs to step in and run the hospitals’ local laboratory services may also present themselves.
Impact IDN Mergers Have on Clinical Laboratories
Mergers occur for many reasons. Monetary stress has a wide-reaching impact, and some healthcare researchers suggest that financial pressures may cause hospitals formerly hopeful about their medical laboratory outreach businesses to consider selling their programs, as The Dark Report noted.
One significant impact that health system mergers and acquisitions can have on clinical laboratories is to reduce their number, particularly by consolidating testing from multiple sites into a core laboratory.
“There is a growing body of empirical research about the potential for competitive harm to labor markets from consolidation and concentration,” Federal Trade Commissioner Rebecca Kelly Slaughter, JD and FTC Chair Lina M. Khan, JD, wrote in a joint 2022 statement about the merger of the first and second biggest healthcare providers in Rhode Island. “The loss of competition from mergers may be especially pernicious in the healthcare sector where skilled medical professionals are uniquely limited in employer options within their local geographic area,” the Pittsburgh Post-Gazette reported.
In this case, the plans to merge were ended after the FTC sued to block the partnership.
More IDN Mergers on the Way
But increased FTC scrutiny does not seem to have slowed the trend toward larger merger and acquisition deals. Kaufman Hall’s 2023 National Hospital Flash Report states that both mergers and acquisitions are trending toward cross-regional partnerships and predicts a “new wave of transaction activity,” Healthcare Dive reported. The report looks at actual and budget data collected over the past three years that was sampled from more than 900 hospitals on a recurring monthly basis.
And so, moving into the future, clinical laboratories can expect to see more mergers and acquisitions of IDNs, with consolidation, regionalization, and standardization occurring in the combined IDN’s clinical laboratory once the merger is completed and leadership begins to look for ways to save costs. Labs are generally first to be consolidated because it is easier to move lab specimens than it is to move patients.
Hospital-at-home programs like that of Atrium Health are a trend that may create new opportunities for local clinical laboratories to support physicians treating patients in the comfort of their own homes
Here is a deal that shows the hospital-at-home (HaH) movement is gaining momentum, a trend that clinical laboratories need to recognize for the opportunities it represents. Best Buy Health is partnering with 40-hospital Atrium Health in an HaH program that the healthcare system plans to scale nationally.
This newly-announced collaboration means that Charlotte, North Carolina-based Atrium Health—as partner—may include the hospitals and providers that are part of the 26-hospital Advocate Aurora Health system (now known as Advocate Health), a non-profit healthcare system that Atrium merged with in December of 2022. Providers and hospitals from North/South Carolina, Georgia, Wisconsin, Illinois, Indiana, and Ohio all could be participating in the new HaH venture.
This latest partnership between a retail giant and healthcare network demonstrates how innovation is working its way into the US healthcare system via companies not traditionally involved in direct patient care. These two organizations see an opportunity to combine their strengths to “enhance the patient experience of receiving hospital-level care at home,” according to a Best Buy news release.
“This is the coming together of technology and empathy,” said Rasu Shrestha, MD (above), Executive Vice President and Chief Innovation and Commercialization Officer at Advocate Health, in a press release. “We’re able to leverage the power of social workers, paramedics, nurses and physicians, but also technology to take care of the patients in their homes. We can bring forward things like remote patient monitoring and sophisticated wearable devices that capture their vital signs and combine it with the human touch—bringing it directly into our patients’ homes.” Clinical laboratories that support providers in the states Advocate Health serves may want to contact Best Buy Health. (Photo copyright: Advocate Health.)
Dispatching Geek Squads to Support Telehealth in Patients’ Homes
Best Buy Health brings to its collaboration with Atrium Health expertise in omnichannel business strategies, supply chain, and a platform to enable telehealth connectivity between patients and providers, as well as deploying specially trained Geek Squad agents for in-home support, according to an Atrium Health press release.
“With Atrium Health, we want to help enable healthcare at home for everyone. It’s getting the devices to the home when Atrium Health and the patient needs them,” said Deborah Di Sanzo, President of Best Buy Health.
Atrium Health sees Best Buy Health as a partner that can grow its program while addressing complex in-home technology that can be “tricky” to operate, Retail Dive reported.
“This transition that happens from discharging a patient from a hospital to the void of their home is the dark side of the moon: it’s disconnected, confusing, expensive. What we’ve been doing in the past is working through our hospital-at-home program and putting together a lot of these devices,” Rasu Shrestha, MD, Executive Vice President and Chief Innovation and Commercialization Officer at Advocate Health, told Fierce Healthcare.
“By working with Best Buy Health, we’re developing the seamless connected care experience and an opportunity to truly scale this,” he added.
Supporting hospital-at-home services in collaboration with Atrium Health will be a new role for at least some members of the Geek Squad. “They won’t necessarily be the same team that’s doing your home theater. They will be Geek Squad agents specially trained in health to deliver specific services in the home,” said Deborah Di Sanzo, President of Best Buy Health. (Photo copyright: Best Buy.)
Best Buy’s Healthcare Acquisitions and Growth in Hospital-at-Home Programs
Current Health, a remote monitoring care-at-home platform, in 2021.
While Best Buy was busy acquiring healthcare companies, more HaH programs popped up across the US due in part to rising inpatient costs and providers’ need to be more efficient and resourceful.
Atrium Health started its Hospital-at-Home program in March 2020 as a way to care for COVID-19 patients. The HaH program now serves people with:
According to Healthcare Dive, Shrestha claimed Atrium’s HaH program “has served more than 6,300 patients and freed 25,000 hospital bed days since it launched in March 2020,” and produced clinical outcomes that were “the same or better” when compared to the health systems’ own hospitals, and with higher patient satisfaction scores.
“We anticipate the partnership will combine Atrium Health operational and clinical expertise with Best Buy Health’s technical and logistical expertise to allow us to scale the program to 100 patients at a time and beyond within our market,” Shrestha told Healthcare Dive. “When you put that into context, this would be the equivalent of having an additional mid-sized hospital and have a real impact on capacity in our bricks-and-mortar facilities.”
Taking Atrium’s HaH Program Nationwide
According to federal Centers for Medicare and Medicaid Services predictions, healthcare spending will reach $6.8 trillion by 2030. This might explain why Best Buy increased its investment in healthcare at the same time its sales declined 9.3% in the fourth quarter of 2022 amid softening consumer demand for electronics, Reuters reported.
And, according to Forbes, though financial terms on the Best Buy/Atrium Health partnership were not released, additional investments are planned to “scale [Atrium’s HaH program] beyond the system.”
“We combine our omnichannel, Geek Squad, caring centers, and Current Health services to enable care,” Di Sanzo told Forbes. “At scale, no other company has the holistic combination of resources that when combined, will change the lives of consumers and enable them to heal right in their own home surrounding by the people and things they love the most. Those strengths, combined with Atrium Health’s extensive clinical expertise and deep experience leading in virtual care, will help us improve and enable care in the home for everyone.”
Clinical Laboratory Testing at Home
Clearly there are opportunities for clinical laboratories to support providers who treat patients in their homes. Lab leaders may want to reach out to colleagues who are planning HaH programs in partnership with Best Buy Health, Atrium Health, or other companies around the nation launching similar hospital-at-home programs.
As medical laboratories address staffing challenges, HaH strategies for performing blood tests and other diagnostics on patients in their homes could lead to important new revenue.
Expect there to be more clinical laboratory testing at pharmacies as retail pharmacy chains expand their primary care offerings
Walgreens Boots Alliance (NASDAQ:WBA) of Deerfield, Illinois, continues to expand its primary care footprint with VillageMD’s latest acquisition of Starling Physicians, a multi-specialty physicians group with 30 locations in Connecticut, according to a VillageMD news release. Walgreens is the majority owner of VillageMD, which now has more than 700 medical centers, Healthcare Dive noted.
This deal continues the trend of corporations acquiring physician practices. Already, the majority of physicians are employees, not partners in a private practice physician group. Under corporate ownership, these physician groups often decide to change their clinical laboratory providers. For that reason, managers and pathologists at local medical laboratories will want to explore how they might provide daily lab testing services to the corporate owners of these primary care clinics.
The Hartford Business Journal called VillageMD’s acquisition of Starling Physicians—which is subject to a state investigation for possible certificate-of-need requirement—one of Connecticut’s “more high-profile healthcare merger and acquisition deals in Connecticut in recent years.”
The Starling Physicians group acquisition comes just a few months after
VillageMD paid $8.9 billion for Summit Health-CityMD of Berkeley Heights, New Jersey, with primary care services in the Northeast and Oregon. Walgreens invested $3.5 billion in that transaction, a Summit Health news release noted.
These acquisitions by Walgreens/VillageMD provide opportunities for local clinical laboratories to serve the physicians in these practices, though the operations may have a different patient flow and work process than traditional family practice clinics located in medical offices around community hospitals.
“Starling shares our vision of being a physician-led model and they provide care in a compassionate and exceptional way to all the patients they serve. By integrating primary care with specialty care, we are able to optimize access to high-quality care for our patients,” said Tim Barry (above), CEO and Chair of VillageMD in the news release. “This is a natural extension of our growth in the Northeast, including our recent acquisition of Summit Health-CityMD. Together, we are transforming the way healthcare is delivered in the United States.” Clinical laboratories in these areas will want to develop a strategy for serving the physicians practicing at these non-traditional locations. (Photo copyright: The Business Journals.)
Primary Care at Retail Locations a Growing Trend
Dark Daily and its sister publication The Dark Report have reported extensively on the growing trend by pharmacy chains and other retail superstores to add primary care services to their footprint.
In “By 2027, Walgreens Wants 1,000 Primary Care Clinics,” The Dark Report covered how Walgreens had disclosed that it would spend $5.2 billion to acquire a 63% interest to become the majority owner of VillageMD. Fierce Healthcare reported that “[Walgreens] planned to open at least 600 Village Medical at Walgreens primary-care practices across the country by 2025 and 1,000 by 2027.”
VillageMD is a primary care provider with same-day appointments, telehealth virtual visits, in-home care, and clinical laboratory diagnostic testing such as blood tests and urinalysis. Many VillageMD practices are located in buildings next door to Walgreens sites throughout the United States. (Photo copyright: Walgreens.)
Other Retailers Investing in Primary Care
Other retailers have recently taken deeper dives into healthcare as well.
According to Forbes, “The acquisition comes amid a flurry of acquisitions across the US for doctor practices, which are being purchased at an unprecedented pace by large retailers like Walgreens Boots Alliance, CVS Health, Amazon, and Walmart. Meanwhile, medical care providers owned by health insurers like UnitedHealth Group’s Optum and Cigna’s Evernorth are also in the doctor practice bidding war.”
And in February, CVS announced plans to acquire for $10.6 billion Oak Street Health, a Chicago-based primary care company with 169 medical centers across 21 states that plans to have more than 300 centers by 2026.
Do Clinical Laboratories Want Retail Customers?
The question of whether clinical laboratories should pursue retail customers is at this point academic. Consumer demand is driving the change and labs that don’t keep up may be left behind.
“The trend of putting full-service primary care clinics in retail pharmacies is a significant development for the clinical laboratory industry,” wrote Robert Michel, Editor-in-Chief of Dark Daily and The Dark Report. “These clinics will need clinical lab tests and can be expected to shift patients away from traditional medical clinic sites for two reasons—lower price and convenience—since this new generation of primary care clinics will be located around the corner from where people live and work.”
Thus, healthcare system laboratories or large reference labs may want to reach out to Walgreens, CVS, Amazon, and Walmart for test referrals. These and other large retailers are investing heavily in the belief that consumers will continue to seek convenience in their healthcare.
