In preparing to deal with outbreaks of three different respiratory viruses, measures include newly approved vaccines for RSV and reformulated COVID-19 shots
Clinical laboratories are the frontline of testing for respiratory infections, and as such, were heavily involved in last winter’s so-called “tripledemic” of Influenza, SARS-CoV-2, and respiratory syncytial virus (RSV). According to a Kaiser Family Foundation (KFF) survey, 38% of US households were affected. Now, federal health officials are taking steps to prevent a repeat tripledemic season, which includes new vaccines for RSV as well as reformulated COVID-19 vaccines.
The big breakthrough this year is the federal Food and Drug Administration’s (FDA) first-ever approval of RSV vaccines in the US. On May 3, the FDA approved GSK’s Arexvy for use in adults 60 years or older. Then, on May 31, the agency approved Pfizer’s Abrysvo for use in the same age group.
“Older adults, in particular those with underlying health conditions such as heart or lung disease or weakened immune systems, are at high risk for severe disease caused by RSV,” said Peter Marks, MD, PhD, Director of the FDA’s Center for Biologics Evaluation and Research (CBER), in an FDA statement announcing approval of the GSK vaccine. “[The] approval of the first RSV vaccine is an important public health achievement to prevent a disease which can be life-threatening and reflects the FDA’s continued commitment to facilitating the development of safe and effective vaccines for use in the United States.”
A GSK press release notes that a clinical trial is underway to evaluate the vaccine for adults aged 50 to 59.
“The number of elders who die of viral infection every winter in our intensive care units, and also sometimes in the summer, is large—it’s in the tens of thousands of individuals,” pediatrician Ofer Levy MD, PhD (above), an advisor to the FDA, told The New York Times. “Each of these vaccines is a huge win.” Clinical laboratories will be looking for these new vaccines to help protect their customers from tripledemic infections. (Photo copyright: Harvard.)
As of early June, XBB lineages accounted for more than 95% of the SARS-CoV-2 variants circulating in the US, noted a recommendation from the VRBPAC committee. The recommendation also noted that the XBB 1.16 and 2.3 variants are on the rise as XBB 1.5 is declining, but “the protein sequences of XBB.1.5, XBB.1.16, and XBB.2.3 spike protein appear similar, with few amino acid differences. Available evidence suggests little to no further immune evasion from these new substitutions in the XBB.1.16 spike protein compared to XBB.1.5.”
The committee recommended a monovalent vaccine composition in contrast to the current bivalent vaccines, which have separate components targeting the original coronavirus strain and the Omicron variant.
Experts Differ on How Best to Administer New Vaccines
One question is whether the three vaccines—COVID-19, RSV, Influenza—should be given in a single visit or spread out. FDA advisor and pediatrician Ofer Levy MD, PhD, told The New York Times that bundling the shots could result in higher rates of immunization. “Plus, you want to get these shots in arms before the viral respiratory season in the winter,” he said. Levy is Director of the Precision Vaccines Program at Boston Children’s Hospital and Professor of Pediatrics at Harvard Medical School.
However, advisors to the federal Centers for Disease Control and Prevention (CDC) have warned that administering the flu and RSV vaccines at the same time could make both less effective. “I would say, when possible, it might be good to spread them out,” Camille Kotton, MD, Clinical Director of Transplant and Immunocompromised Host Infectious Diseases in the Infectious Diseases Division at Massachusetts General Hospital, told The New York Times. “I remain clinically concerned, especially where influenza vaccine doesn’t engender as much protection as we might like,” she said.
Looking Back at Last Winter
Just how bad was the last triple outbreak? In the KFF survey, 38% of respondents said their households were affected by at least one of the three diseases in the previous month:
27% reported someone in their household having the flu,
“News about the three viruses also made some people more likely to take preventive measures such as:
Wearing a mask in public (31%),
Avoiding large gatherings (26%),
Traveling less (20%),
Avoiding eating indoors at restaurants (18%).”
Additionally, people with compromised immune systems were more likely to take precautions, as were Black and Hispanic adults, KFF reported.
Clinical laboratories will soon have new vaccines to combat another potential tripledemic. Whether people will line up to receive them is another matter.
In partnership with the CDC, the collected samples will be sent to approved clinical laboratories for testing as a way to monitor for traces of the SARS-CoV-2 virus
Microbiologists and virologists engaged in tracing sources of viral infections will be interested to learn that the San Francisco International Airport (SFO), in partnership with the Centers for Disease Control and Prevention (CDC), has launched a clinical laboratory testing program where wastewater from airplanes will be screened to search for traces of emerging SARS-CoV-2 coronavirus variants, the virus responsible for COVID-19 infections.
SFO announced in a press release that it is “The first airport in the United States to launch a CDC program to continuously monitor airplane wastewater samples from the onsite [airline waste] triturator for variants of SARS-CoV-2,” adding, “Concentric by Ginkgo, the biosecurity and public health unit of Boston-based synthetic biology company Ginkgo Bioworks, has installed an automatic sampling device that regularly collects combined wastewater flows from international arriving flights at SFO. These samples are then sent to an approved clinical laboratory for testing.”
This is another example of how the COVID-19 pandemic triggered advances in technologies that detect infectious diseases earlier using various samples—and access to different sources of samples—that have been historically used in the field of public health.
“This program is critical for early detection and filling in many blind spots in global surveillance,” Cindy Friedman, MD, Chief of the Travelers’ Health Branch at the CDC, told Time. Clinical laboratories approved for the SFO/CDC screening program will receive the samples for testing. (Photo copyright: NAFSA.)
CDC Program That Monitors International Travelers for Disease
When SFO wastewater samples test positive for the SARS-CoV-2 virus, scientists will perform genome sequencing on the samples to identify which variant of the pathogen is present. This process takes five to seven days. The results are then reported to the CDC.
“As we know from the COVID-19 pandemic, pathogens can spread quickly across the globe, impacting travel and trade,” said Cindy Friedman, MD, Chief of the Travelers’ Health Branch of the CDC’s Division of Global Migration and Quarantine in an SFO press release. “Testing of airplane wastewater can provide early detection of new COVID-19 variants and other pathogens that can cause outbreaks and pandemics. CDC appreciates the collaboration with SFO to further enhance these efforts.”
Concentric by Ginkgo has installed an automatic device that will collect wastewater samples from various international flights upon arrival at SFO. Those samples will then be sent to a diagnostic laboratory where they will be examined for traces of known and unknown viruses, including new variants of SARS-CoV-2.
“It’s a little gross when you start thinking about it,” epidemiologist Katelyn Jetelina, PhD, a scientific consultant for the CDC, told CNN. “But these are really long flights, and we would expect the majority of people would go to the bathroom.”
Other Airports Conducting CDC Screening
The CDC’s Traveler-based Genomic Surveillance (TGS) program was introduced in 2021 to monitor international travelers entering the US for variants of the SARS-CoV-2 coronavirus. Volunteers participate by providing nasal swabs that get batched into pools at the airport. The pooled samples are then sent to Ginkgo’s lab network where they undergo polymerase chain reaction (PCR) testing. All positive samples then receive genomic sequencing.
According to the CDC website, 110,000 volunteers participated in TGS nasal swab testing between November 2021 and February of this year. During that same period, 2,700 positive pools were sequenced and the samples shared with the CDC for viral characterization.
There are currently seven airports in the US participating in the voluntary TGS initiative. In addition to SFO, the other airports in the CDC program are:
John F. Kennedy International Airport
Newark Liberty International Airport
Hartsfield-Jackson Atlanta International Airport
Los Angeles International Airport
Seattle-Tacoma International Airport
Washington Dulles International Airport
However, at this time, SFO is the only airport where wastewater from aircrafts is being tested for coronavirus variants.
Wastewater Best Way to Assess Infections in Community
“Biology doesn’t respect borders, and airports and other ports of entry are critical nodes for monitoring the spread of pathogens,” said Matthew McKnight, General Manager, Biosecurity, at Ginkgo Bioworks, in the SFO press release. “We are proud to partner with SFO on developing cutting-edge biosecurity technology to support public health.”
Because traces of the virus that causes COVID-19 can be detected in human fecal matter, even if symptoms are not present, wastewater sampling will continue to be an important tool in the fight against the coronavirus.
“Wastewater surveillance is really the best way to assess infections in the community because people just aren’t testing as much due to the relaxing of testing requirements and a rise in testing fatigue, among other factors,” Ashish Jha, MD, a general internist physician and White House Coronavirus Response Coordinator, told CNN.
“So, when I look at data every day on trying to assess where we are with infections, I look at wastewater data,” he added.
And so, since clinical laboratories will continue to be relied upon for sample testing and population health screenings, we will continue to monitor and report on advances in wastewater testing for SARS-CoV-2, as well as other infectious agents that might be added to these sampling programs.
As mergers and acquisitions of large-scale hospital systems continue, their clinical laboratories feel the pressure of deteriorating finances and ongoing staff shortages
In response to the latest National Hospital Flash Report from Kaufman Hall, the financial/performance consulting firm’s Senior Vice President, Eric Swanson, wrote that 2022 was “shaping up to be one of the worst financial years on record for hospitals.
“Expense pressures—particularly with the cost of labor—outpaced revenues and drove poor performance [in hospitals]. While emergency department visits and operating room minutes increased slightly, hospitals struggled to discharge patients due to internal staffing shortages and shortages at post-acute facilities,” Swanson noted.
Like their parent organizations, hospital and health system-based medical laboratories are dealing with ongoing staffing shortages, which Dark Daily covered extensively in multiple ebriefings.
Non-profit healthcare systems are particularly hard hit, leading to merger/acquisition deals that continue the trend of hospital consolidation.
“Consolidation will continue. Here’s the scary part. The old solutions of jacking up treatment volumes and commercial payment rates aren’t working. Evidence of business model failure abounds. A fiscal storm is raging,” David Johnson, CEO, 4sight Health, wrote in an article for the Healthcare Financial Management Association. The results of these business failures have a direct impact on hospital-based medical laboratories as well as clinical laboratories in surrounding areas that service a health system’s physicians. (Photo copyright: 4sight Health.)
The numbers speak volumes. Looking at financial statements from 2022, Ascension, Cleveland Clinic, CommonSpirit Health, Providence, and Mass General Brigham all posted losses of more than $316 million dollars, the HFMA series noted. Two in that group (CommonSpirit and Providence) posted losses over $1.1 billion. Providence’s losses represented only nine months of data from 2022.
So, what’s the problem? In another HFMA article titled, “The End of Traditional Nonprofit Healthcare Business Models?” Johnson wrote, “Even in the best of times, the nonprofit hospital business model has never been robust. Hospitals are capital-intensive, labor-intensive, highly-regulated, low-margin businesses that require high-cost facilities and highly expert personnel to operate.
“Competing mission and business priorities make running nonprofit hospitals even more difficult,” he added. “The existential question is whether current operating losses at nonprofit health systems are aberrant or indicate a broader collapse of their models. I believe it’s the latter. Structural weaknesses, combined with pernicious macro forces, make this a period of unprecedented challenge for nonprofit providers.”
In his “Cracks in the Foundation” series, Johnson lists five “deeply embedded defects in current nonprofit business models.” They are:
Artificial economics
Needs-services mismatch
Brittle business models
Regulatory headwinds
Inadequate leadership
“Under pressure, health systems are struggling to right the ship, but they are defaulting to old habits,” Johnson wrote. “They’re chasing volume and rates under fee-for-service (FFS) medicine. While this has worked in the past, it is not a viable long-term strategy. Powerful macro forces are aligning against healthcare business practices. Ignoring them won’t make them go away.”
This chart, taken from 4sight Health CEO David Johnson’s HFMA article, shows the five large health systems that showed operating losses in 2022. The numbers displayed are drawn from each health system’s publicly released financial statements for the periods shown, HFMA noted. (Graphic copyright: Healthcare Financial Management Association.)
Deteriorating Outlook for Health Systems
Increased expenses for labor and supplies paired with inflation is what a 2022 Fitch Ratings report cited as contributing to a “‘deteriorating’ outlook for systems,” Healthcare Dive reported.
“Labor will remain the largest hurdle for hospitals this year even as they struggle with inflation and spiking COVID-19 admissions that can dent revenue. The labor story just dwarfs the inflation story,” financial analyst Kevin Holloran, Senior Director and Sector Leader USPF Healthcare at Fitch Ratings, told Healthcare Dive.
Holloran has worked for Fitch since 2017, joining after 14 years at S/P Global Ratings. He has 20-years experience in the healthcare sector.
Nonprofit hospitals that posted COVID-19-related operating losses are struggling with higher costs for labor and supplies while navigating declining and neutral admission volumes, Healthcare Dive noted, citing that healthcare systems have turned to staffing agencies and contracted labor to counter the loss of burned-out employees who go on strike or who leave healthcare entirely. On a positive note, Holloran sees contract labor use decreasing in the future.
What’s Next?
There’s a steep road ahead for nonprofits but Holloran see positive changes. “We are beginning to come out of the worst of it,” he told Healthcare Dive. However, he added, “Hospitals should not expect to ‘grow [their] way out’ of soaring labor expenses by raising revenues or increasing hospital admissions.”
Like Johnson, Holloran stressed the importance of looking for long-term solutions. With rising expenses, declining revenues, and increased labor costs projected to continue for years, “hospitals are putting recruiting and retention efforts ‘on steroids’ amid challenges,” he noted.
One coming improvement is that hospitals “can look toward commercial payer contracts to ease high expenses,” Holloran predicted.
“Payer contracts fall in the approximately 25% to 30% of non-fixed revenue that hospitals have the ability to control. … The ratings agency [Fitch] now expects to see a shift from long-term contracts to single-year contracts as nonprofits attempt to ease expenses,” Healthcare Dive noted.
It appears that, for the foreseeable future, clinical laboratories will continue to feel the pressures brought on by mergers and acquisitions as the healthcare industry struggles to find solutions to the economic downturn and loss of qualified staff following the COVID-19 pandemic.
Research could lead to new microbiome assays that clinical laboratories could use to identify genetic and other health conditions in developing baby
It would seem to be common sense, but now a study conducted by the Broad Institute of MIT and Harvard confirms that a pregnant mother’s microbiome has an effect on the development of her baby’s own gut microbiota. These findings could create opportunities for clinical laboratories to help in diagnosing a broader range of health conditions by testing the gut bacteria of pregnant mothers.
The Broad Institute’s study suggests the mother’s gut microbiome helps form the baby’s gut bacteria not only during pregnancy and birth, but into the baby’s first year of life as well.
“This study helps us better understand how the rich community of microbes in the gut initially forms and how it develops during infancy,” said Tommi Vatanen, PhD, a co-first author on the study who is now a researcher and associate professor at the University of Helsinki, in a Broad Institute news release. “The microbiome is very dynamic and develops along with other systems, so there’s a lot going on in the first years of life.”
“We’ve shown that the maternal microbiome plays an important role in seeding the infant microbiome, and that it’s not a one-time event, but a continuous process,” said gastroenterologist and senior study author Ramnik Xavier, MD, of the Broad Institute. Clinical laboratories and microbiologists may soon have new tools for testing a mother’s microbiome during pregnancy. (Photo copyright: Maria Nemchuk, Broad Institute.)
Study Highlights Physiological Connection Between Mother and Child
This study, according to the Broad Institute news release, is the “first to uncover large-scale horizontal gene transfer events between different species of maternal and infant gut bacteria.” The researchers also found that the bacteria in the mother’s microbiome “donate” genes that go into the bacteria of her unborn child. The mother’s genes help the baby in other ways as well during pregnancy and after birth.
“Benign bacteria in the maternal gut share genes with the child’s intestinal microbes during early life, potentially contributing to immune and cognitive development,” states the news release, adding, “The microbiomes of the mother and baby change during pregnancy and the first year of life … some bacteria in the mother’s gut donate hundreds of genes to bacteria in the baby’s gut. These genes are involved in the development of the immune and cognitive systems and help the baby to digest a changing diet as it grows.”
The study also sheds light on a baby’s unique metabolites (chemicals produced by bacteria) and how they connect with the mother’s microbiome.
“This is the first study to describe the transfer of mobile genetic elements between maternal and infant microbiomes,” gastroenterologist Ramnik Xavier, MD, Core Institute Member, Director of the Immunology Program, and Co-Director of the Infectious Disease and Microbiome Program at the Broad Institute, told Neuroscience News.
“Our study also, for the first time, integrated gut microbiome and metabolomics profiles from both mothers and infants and discovered links between gut metabolites, bacteria, and breastmilk substrates,” he added.
Researchers Use Multiomics
The human microbiome influences health in many ways. For several years, Broad Institute scientists have been trying to better understand the human microbiome and the role it plays in diseases like type 1 diabetes, cancer, and inflammatory bowel disease.
According to the organization’s website, the scientists recently began using multiomics techniques in their research that include:
Xavier and his colleagues were particularly interested in the development of the microbiome during the first year of the baby’s life.
“The perinatal period represents a critical window for cognitive and immune system development, promoted by maternal and infant gut microbiomes and their metabolites,” the researchers wrote in Cell. “Here, we tracked the co-development of microbiomes and metabolomes from late pregnancy to one year of age using longitudinal multiomics data.”
The researchers deployed bacterial DNA sequencing from stool samples of 70 mother and child pairs.
They found “hundreds of genes” in the infant gut bacterial genome that originated in the mother. According to the scientists, this suggests a mother does not transfer her genes all at once during childbirth. Instead, it likely occurs in an “ongoing” gene transfer from mother to baby through the baby’s first year of life, the news release explains.
Here are details on the study findings, according to Neuroscience News:
Genes associated with diet were involved in the “mother-to-infant interspecies transfer of mobile genetic elements.”
Infant gut metabolomes were less diverse than maternal metabolomes.
Infants had 2,500 unique metabolites not detected in the mothers.
Infants that received baby formula had distinct metabolites and cytokine signatures as compared to those receiving breast milk.
A link between pregnancy and an increase in steroid compounds could be due to impaired glucose tolerance in mothers.
“We also found evidence that prophages—dormant bacteriophages (viruses that reside on bacterial genomes)—contribute to the exchange of mobile genetic elements between maternal and infant microbiomes,” Xavier told Neuroscience News.
Research Could Lead to New Clinical Laboratory Assays
Microbiologists and clinical laboratory scientists are gaining a deeper understanding of the role gut bacteria play in many aspects of human life. But how a mother’s microbiome influences a baby’s development during and after birth is particularly intriguing.
“We’ve shown that the maternal microbiome plays an important role in seeding the infant microbiome, and that it’s not a one-time event, but a continuous process,” said Xavier in the Broad Institute news release. “This may be yet another benefit of prolonged bonding between mother and child, providing more chances for these beneficial gene transfer events to occur.”
Pediatricians, microbiologists, and clinical laboratories may one day have new microbiome assays to help identify a broad range of health conditions in mothers and infants and explore gut bacteria’s effects on a baby’s developing health.
Microbiology team has tracked 37 unique strains of the coronavirus since they began researching lineages two years ago
Microbiologists and clinical laboratory scientists will be interested to learn about the discovery of a new strain of SARS-CoV-2, the coronavirus that caused the COVID-19 pandemic, in wastewater sampled in Ohio.
According to an article published in Nature Reviews Genetics, a CVG is “a genetic variation that normally has little or no effect on phenotype but that—under atypical conditions that were rare in the history of a population—generates heritable phenotypic variation.”
Johnson tracked the lineage of the cryptic strain to Ohio, where it appears to have originated from one individual who travels regularly between the cities of Columbus and Washington Court House. He believes this person may have a form of long COVID and is unaware that he or she is infected with the coronavirus.
“This person was shedding thousands of times more material than a normal person ever would,” Johnson told The Columbus Dispatch. “I think this person isn’t well. … I’m guessing they have GI issues.”
“If someone has this infection, the chances are nil that they’re going to figure out what it is,” Marc Johnson, PhD, Professor of Molecular Microbiology and Immunology at the University of Missouri School of Medicine, told Insider. Microbiologists and clinical laboratory scientists in the Columbus, Ohio, area may be able to help locate this person. (Photo Copyright: University of Missouri.)
Other Cryptic COVID-19 Lineages
This isn’t the only “Cryptic COVID” case identified by Johnson and his team. In Wisconsin, another unique strain was discovered and narrowed down to a single facility and about 30 individuals. Two thirds of the employees were tested but, unfortunately, all tests came back negative. The cryptic strain seemed to have disappeared.
“We don’t know why,” Johnson told The Hill. “Either [the infected person] left the job, or got better, or is in remission—we don’t know. But we’re still monitoring it. And we’ve actually now gotten started collecting stool samples from the company.”
“We systematically sampled [sewer] maintenance holes to trace the Wisconsin lineage’s origin. We sequenced spike RBD [receptor-binding domain] domains, and where possible, whole viral genomes, to characterize the evolution of this lineage over the 13 consecutive months that it was detectable.
“The high number of unusual mutations found in these wastewater-specific cryptic sequences raises the possibility that they originate from individual prolonged shedders or even non-human sources. The Wisconsin lineage’s persistence in wastewater, single-facility origin, and heavily mutated Omicron-like genotype support the hypothesis that cryptic wastewater lineages arise from persistently infected humans.”
Johnson and his team have tracked 37 unique strains of the COVID-19 virus, including one in New York City, The New York Times reported.
In a statement to The Columbus Dispatch regarding the Columbus strain, the federal Centers for Disease Control and Prevention (CDC) noted that, “The virus lineage in question is not currently spreading or a public health threat.
“Unusual or ‘cryptic’ sequences identified in wastewater may represent viruses that can replicate in particular individuals, but not in the general population,” the CDC noted. “This can be because of a compromised immune system. CDC and other institutions conduct studies in immunocompromised individuals to understand persistent infection and virus evolution.”
In identifying these lineages, and the individuals who shed them, scientists can learn more about how COVID-19 mutates and spreads.
Mitigating Consequences of COVID-19 Variants
Although the CDC says that particular strain is not a threat to the public it could pose a long-term health risk for the individual suffering. And this individual may hold clues for the future of how the COVID-19 virus mutates and grows. Therefore, locating these people is a priority.
“The coronavirus will continue to spread and evolve, which makes it imperative for public health that we detect new variants early enough to mitigate consequences,” Rob Knight, PhD, Founding Director of the Center for Microbiome Innovation and Professor of Pediatrics, Computer Science and Engineering at the University of California San Diego (UCSD).
“Before wastewater sequencing, the only way to do this was through clinical testing, which is not feasible at large scale, especially in areas with limited resources, public participation, or the capacity to do sufficient testing and sequencing,” said Knight in a UCSD press release. “We’ve shown that wastewater sequencing can successfully track regional infection dynamics with fewer limitations and biases than clinical testing to the benefit of almost any community.”
Although tracing the individuals shedding cryptic COVID-19 lineages may not have an immediate effect on public health, it could lead to future discoveries about the SARS-CoV-2 coronavirus that can help shape public health goals in fighting future pandemics.
At the very least, one individual in Columbus may learn how to treat long COVID’s adverse symptoms. Microbiologists and clinical laboratory scientists involved in COVID-19 wastewater research can learn much from following these research investigations.
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.
