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Though Two Analyst Reports Show Depressed Operating Margins for Healthcare, Providers and Clinical Laboratories May See Patient Volumes Rise for the Rest of 2020

 

SIEMENS

July data shows some volume gains for providers since June; however, analysts say current predictions depends on progress of the COVID-19 pandemic

Clinical laboratory managers preparing strategic plans for 2020 and 2021 face a basic and key question: when and if they can expect patient volumes and associated lab test referrals to return to pre-COVID-19 pandemic levels.

Some insights into how to answer that question can be found in two separate reports. Separately, healthcare analysts from Advisory Board and Kaufman Hall explored possible COVID-19 case scenarios and implications for providers’ volumes and operating margins for the remaining months of 2020.

The Advisory Board analysts do not see a snap back to pre-pandemic volume levels happening this year. However, they do envision a gradual volume increase that has already started, they reported in “Projecting Volume Recovery through 2020.”

Patient Volumes Depend on COVID-19 Cases

With 200 experts and more than 4,500 member organizations, the Advisory Board, according to its website, “helps leaders and future leaders in the healthcare industry work smarter and faster by providing provocative insights, actionable strategies, and practical tools to support execution.”

In a Radio Advisory broadcast concerning volume outlook for 2020, Anna Yakovenko, Advisory Board Practice Manager, said there are two likely scenarios for patient volumes, each based on COVID-19 having:
  • An overall plateau of cases;
  • A potential of a second wave in advance of influenza season.

 

“We predict that we’ll continue to see a gradual increase in volumes through the year, getting close to pre-COVID-19 volumes,” Anna Yakovenko (above), Advisory Board Practice Manager, said during a Radio Advisory broadcast. She added, “We do think outpatient visits will climb at a higher trajectory, both because they fell the most and because those who delayed care will begin to return. In addition, outpatient surgeries will continue to see an increase probably eclipsing inpatient surgeries, especially those affected by COVID-19 pushing inpatient surgeries to outpatient.” Yakovenko leads best practices research on hospital strategic and operational challenges. (Photo copyright: Advisory Board.)

What If There’s a Second Wave of COVID-19?

The Advisory Board predicts that, even if a COVID-19 second wave occurs earlier than the traditional mid-autumn influenza outbreak, a gradual recovery for providers will still happen. “But then we think we’ll see a dip in volumes—not remotely the level of dip that we saw in March and April—but a dip nonetheless,” Yakovenko said.

In a blog post, Yakovenko cited a Moody’s Investors Service report showing healthcare systems with more patient encounters in May.  She wrote that providers need to overcome three pandemic-related issues to get volumes back on track in 2020:

  • Patients cancelling care because they are anxious;
  • Loss of jobs and insurance coverage resulting in decreased care demand;
  • Need for safety precautions, which could result in lower efficiency.

Kaufman Hall Report: Margins Could Go as Low as -11% in Q4 2020

The second report looked at hospital finances and patient volumes. It was done by Kaufman Hall, a Chicago firm providing management consulting services and software. The analysis by Kaufman Hall, released by the American Hospital Association (AHA) titled, “The Effect of COVID-19 on Hospital Financial Health,” predicted median hospital operating margin of -3% in the second quarter (Q2) of 2020, and a possible year-end range of -1% and -11% due to COVID-19. The report noted that—even before COVID-19—hospitals had a modest median margin (money made from operations) of 3.5%.

An AHA news release describes two COVID-19 case scenarios that could affect providers’ margins:

  • A steady decrease in cases could see median margin of -1% by the fourth quarter of 2020.
  • A case surge may result in margins of -11%.

Signs of Improvement in July 2020 Data

A Kaufman Hall National Hospital Flash Report in August showed hospital margins had plummeted and were down 96% since the start of the year, as compared to the first seven months of 2019. And even with federal funding through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, operating margins were down 28% January to July, compared to 2019, a news release stated.

 

“Hospitals have shown some incremental signs of potential financial recovery in recent months,” James Blake (above), Managing Director, Kaufman Hall, said in a news release. “Unfortunately, there is no guarantee these trends will continue, and hospitals still have a long way to go to recover from devastating losses in the early months of the pandemic,” he added. (Photo copyright: Kaufman Hall.)

However, Kaufman Hall’s analysts spotted signs of recovery that were evidenced in data for June to July, when operating margins improved 24% due to pent-up demand for patient services, Healthcare Dive reported.

Their analysis also showed that providers in July had boosts in discharges and surgeries due to resumption of elective procedures. Other data for the seven months ending July 31, and for the month-to-month period June to July, showed:

  • Operating margins fell 5% year-over-year, but rose 12% month-over-month.
  • Discharges were down 7% year-over-year, but up 6% month-over-month.
  • Emergency Department visits fell 17% compared to first seven months in 2019 and were up 10% month-over-month.
  • Operating Room minutes were down 15% year-to-date and up 3% month-over-month.
  • Inpatient and outpatient revenues (without CARES funding) are down 5% and 11%, respectively, year-to-date. Inpatient and outpatient revenues June to July increased 6% and 5%, respectively.

“Hospitals saw flat year-over-year gross operating revenue performance, continued high-per-patient expenses, and a fifth consecutive month of volumes falling below 2019 performance and below budget across most metrics. Emergency Department volumes have been hardest hit. Even, so July volumes continued to show some signs of recovery month-over-month,” the Kaufman Hall analysts wrote.

One Provider’s Financial Tale

Allina Health System in Minneapolis, Minn., experienced financial struggles but is reportedly experiencing the type of turnaround the Advisory Board and Kaufman Hall analysts predicted. Allina had an $85 million operating loss in Q2 2020, compared to $14.4 million loss in Q2 2019. But it had positive income for June, according to the Minneapolis/St. Paul Business Journal.

Clearly, the researchers studying patient volumes recognize that it is possible for patient volumes to return to pre-pandemic levels. However, a surge in the number of COVID-19 cases would obviously discourage patients from returning to get routine care and schedule elective procedures with their local hospitals. In turn, that would restrict the volume of clinical laboratory test referrals flowing into the nation’s medical laboratories.

Pathologists and medical laboratory managers should take into account these expert predictions and the supporting data in these two research reports as they plan staffing schedules and consider major purchasing of instruments and test supplies.

—Donna Marie Pocius

 

 

Related Information:

 

Advisory Board Expert Insights: Projecting Volume Recovery through 2020

Moody’s: Hospitals Are Seeing an Increase in Patient Volumes After COVID-19 Closures

The Effect of COVID-19 on Hospital Financial Health

New Analysis Shows Dramatic Impact COVID-19 on Hospitals and Health Systems

National Hospital Flash Report: August 2020

Hospital Operating Margins Down

Hospital Operating Margins Nearly Eliminated through July, Kaufman Hall Says

Allina Health Lost $40 Million a Week During COVID Lockdown, Q2 Results Say

 

 

Kissinger, Mattis, and Murdoch Possible Government Witnesses for the Prosecution against Elizabeth Holmes in Theranos Clinical Laboratory Testing Fraud Case

The federal trial, now set to begin in March 2021, could become a media spectacle given the marquee names on the witness list

Clinical laboratories following the federal criminal proceedings against Theranos founder and former CEO Elizabeth Holmes will have to wait until next year for the case to go to trial. When it does, it could become a media spectacle given the list of prominent witnesses who may be called as government witnesses.

The names, according to a letter that prosecutors sent April 3 to Holmes’ defense team, include former US Cabinet Secretaries Henry Kissinger and James “Mad Dog” Mattis, both of whom sat on the board of the ill-fated diagnostics company. Prosecutors may also call media mogul Rupert Murdoch to testify, the (San Jose) Mercury News reported.

To Fingerstick or Not to Fingerstick

As readers of Dark Daily will recall, Holmes claimed that Theranos had developed ground-breaking blood-testing technology that allowed for a range of blood tests using only 25 to 50 microliters of blood drawn by fingerstick rather than conventional venipuncture. Use of capillary specimens for many clinical laboratory tests was regularly touted by Holmes as one of Theranos’ technology secrets and a key to its plans to disrupt the clinical laboratory marketplace.

However, in “Theranos: Many Questions, But Very Few Answers,” published April 20, 2015, our sister publication, The Dark Report, noted that Theranos had ceased using fingerstick collections in the Phoenix market.

Dark Daily covered the company’s first expansion into an existing clinical laboratory testing market in “Theranos Selects Phoenix Metro to Plant Its Flag and Enter the Competitive Market for Clinical Pathology Laboratory Testing,” May 4, 2015. By then, the company had a stock valuation of $9 billion, and Inc. magazine touted Holmes as, “the next Steve Jobs,” The Washington Post reported.

But then a series of articles by The Wall Street Journal (WSJ) in the fall of 2015 revealed serious problems with Theranos’ management and technology, eventually leading to the company’s downfall.

Charges of Fraud

According to documents filed with the US Department of Justice (DOJ) US Attorney’s Office Northern District of California, on June 15, 2018, a federal grand jury indicted Holmes and Theranos president Ramesh Balwani with 11 counts related to wire fraud. The government alleges one scheme to defraud investors and another to defraud doctors and patients. The defendants each face up to 20 years in prison for each count plus fines and restitution. They have pleaded not guilty.

“Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’ blood testing laboratory services, even though, according to the government, the defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests,” the government stated in an announcement of the indictment. “It is further alleged that the tests performed on Theranos technology were likely to contain inaccurate and unreliable results.”

Prosecutors later added a 12th felony charge tied to a patient’s blood-test result, as Dark Daily reported in July. That charge was later withdrawn and then restored amid legal wrangling about the composition of the grand jury.

The start of the trial has been delayed twice due to the COVID-19 pandemic. Jury selection is now set to begin March 9, 2021, the East Bay Times reported.

Elizabeth Holmes, founder and former CEO of Theranos is back in court
Elizabeth Holmes, founder and former CEO of Theranos, is seen above with her attorneys exiting the Robert F. Peckham US Federal Court in San Jose, California. Jury selection for her trial will begin on March 9, 2021. She has been charged with two counts of conspiracy and nine counts of wire fraud, CNBC reported. (Photo copyright: CNBC.)

Witnesses for the Prosecution

Dark Daily has reviewed the April 3 letter sent by prosecutors to the defense team. It lists witnesses and documents that may be used as evidence in the case. The defense attorneys included the letter in a June 30 filing indicating that they will seek to exclude or limit much of the prosecution evidence.

The April 3 letter “did not identify the particular acts Ms. Holmes supposedly committed and continued to rely on vague themes,” they wrote. “It did not disclose what evidence the government would introduce outside its case in chief. And it did not provide any explanation of which particular acts the hundreds of witness statements and the thousands of pages of discovery it identified would support.”

One section, with the heading “False and misleading representations made to Theranos’ Board of Directors,” includes the following former board members as possible witnesses:

  • Riley Bechtel, former chairman of the Bechtel Corporation, a large engineering and construction company.
  • David Boies, a prominent attorney who also served as the company’s legal counsel.
  • William Frist, a former US Senator from Tennessee who also served as CEO of Hospital Corporation of America.
  • Henry Kissinger, US Secretary of State and National Security Advisor in the Nixon and Ford Administrations.
  • James Mattis, former US Secretary of Defense in the Trump Administration and a lieutenant general in the US Marine Corps.
  • Sam Nunn, former US Senator from Georgia.
  • William Perry, US Secretary of Defense in the Clinton Administration.
  • Robert Shapiro, an attorney best known as a member of the defense team in the O.J. Simpson murder trial.
  • George Shultz, US Secretary of State in the Reagan Administration and US Secretary of the Treasury in the Nixon Administration.

The letter also indicates that some of these former board members could be called to testify about alleged efforts by defendants Holmes and Balwani to conceal a romantic relationship, as well as alleged efforts by the defendants to avoid subjecting Theranos technology to “meaningful comparative tests.”

Murdoch, executive chairman of News Corp., is one of six potential witnesses who may be called to testify about “threats, influence, or vilification of journalists in response to negative coverage with Theranos.” News Corp. is the parent company of The Wall Street Journal.

Another section relates to alleged “false and misleading representations made to journalists.” It references articles published in Wired, Fortune, CNN, The Economist, Medscape, and The New Yorker.

Other sections of the letter offer a broader picture of the government’s case against Holmes and Balwani. It lists potential witnesses and documents related to the following subjects, though some names have been redacted:

  • False and misleading representations directed at insured patients.
  • False and misleading representations directed at doctors.
  • False and misleading representations made to Walgreens.
  • False and misleading representations made to Safeway.
  • Fostering culture of secrecy and forcing employees and others to sign non-disclosure agreements.
  • Restricting access to laboratory areas within Theranos.
  • Harassing, threatening, or otherwise influencing doctors or patients who had negative experiences with Theranos.
  • Blaming and vilifying competing companies.
  • Threatening or intimidating employees and former employees.
  • False and misleading representations made to FDA, CMS, CDPH, and other regulatory organizations.
  • Violations of industry standards and government regulations or rules regarding research and development procedures, medical devices, and clinical laboratory practices.
  • Altering or tampering with third-party medical devices.
  • Multiplexing test results and disregarding outliers to mask inconsistency.
  • Improperly setting and altering reference ranges.
  • Withholding critical test results and other important information from doctors and patients.
  • Decommissioning Theranos’ Laboratory Information System (LIS) database.
  • Obtaining personal benefit from position at Theranos.

One interesting aspect to the rise and fall of Elizabeth Holmes and Theranos is that the clinical laboratory and anatomic pathology professions were never fooled by all the publicity and news coverage of the company. Pathologists and clinical laboratory scientists knew that, over the 10-plus years of Theranos’ existence, its scientific team had never published any research findings of significance in a respected, peer-reviewed journal.

That was strong evidence that Theranos had no new break-through, disruptive, diagnostic technologies that would allow it to perform multiple tests on a single drop of blood that was collected by a fingerstick procedure.

Since the collapse of Theranos and the downfall of Elizabeth Holmes, many in the clinical laboratory profession have hoped that federal prosecutors would prosecute her under the full extent of the law.

—Stephen Beale

Related Information:

Theranos Founder Elizabeth Holmes’ Fraud Case: Mattis, Kissinger, Murdoch are Possible Witnesses

Theranos: A Fallen Unicorn

US v. Elizabeth Holmes, et al.

Theranos Founder Elizabeth Holmes’ Twice-delayed Trial To Start in March: Judge

Theranos: Feds Throw Molotov Cocktail Case at Elizabeth Holmes Over Grand Jury Request

Theranos Founder Holmes Hit with 12th Fraud Charge—Again

Theranos: Deadlines Set after Elizabeth Holmes Claims Coronavirus Changes May Have Violated Her Rights

Theranos Destroyed Patient Test Data, Prosecutor Alleges

Theranos Founder Elizabeth Holmes’ Trial Delayed Again by Coronavirus

Theranos Founder Holmes, on Firm’s Reported False-Negative Pregnancy Test: ‘How Did That Happen?’

Delays in Reporting Results of COVID-19 Clinical Laboratory Tests Prompt Florida Governor to End SARS-CoV-2 Testing Contract with Quest Diagnostics

Quest said a ‘technical issue’ had delayed reporting of test data to the state and claimed that patients and providers still received the results in a timely manner

Florida Governor Ron DeSantis has ordered state agencies to cut ties with Quest Diagnostics due to delays in reporting nearly 75,000 COVID-19 clinical laboratory test results going back as far as April. The medical laboratory giant provided the backlogged data in what the state described as an “unacceptable dump” that inflated the state’s case count and SARS-CoV-2 test positivity rate reported for August 31.

The Florida Department of Health (DOH) announced the move in a press release. The order also applies to the Florida Division of Emergency Management (FDEM).

“The law requires all COVID-19 results to be reported to DOH in a timely manner,” DeSantis said in a statement following the announcement of his directives. “To drop this much unusable and stale data is irresponsible. I believe that Quest has abdicated their ability to perform a testing function in Florida that the people can be confident in. As such I am directing all executive agencies to sever their COVID-19 testing relationships with Quest effective immediately.”

DeSantis later elaborated during a Sept. 1 press conference. “These labs know that their results are being used by people to determine the course of certain policies,” he said. “Someone will say the positive rate has gone up. Maybe we can’t go [to] in-person schooling.”

Florida Governor Ron DeSantis (above) answers questions from reporters concerning COVID-19 reporting. Click here to watch a video of the press briefing. (Video copyright: Miami Herald.)

Quest Diagnostics Said, ‘Technical Issue’ Caused Delay in Reporting

In a statement that described the delay as a “technical issue” involving a subset of the approximately 1.4 million test results reported to the State of Florida, Quest said the issue has been resolved and that it “did not affect or delay reporting of test results to providers and patients.”

Still, “Quest Diagnostics takes seriously our responsibility to report laboratory data to public health authorities in a timely manner to aid pandemic response,” the company said. “We apologize for this matter and regret the challenge it poses for public health authorities in Florida.”

The company added that it “has provided more COVID-19 testing on behalf of the citizens of Florida than any other laboratory and we believe we are well positioned to continue to effectively aid patient care and public health response for the state. We remain open to working with the state Department of Health to provide testing that meets the needs required for patient care and public health response.”

A Quest spokesperson told WTLV-TV in Jacksonville that the glitch was related to missing contact information for some of the tested patients. The missing data “was maintained in a separate system outside our typical data reporting process to the state,” she said. “When we became aware that we had not reported the [COVID-19 test] data—once the missing information was completed—to state public health [officials], we promptly informed the appropriate state authorities of the delayed reporting, provided the information on the specimens, and remedied our procedure.”

Impact of Reporting Delay on State

Most of the delayed results of the COVID-19 tests were more than two weeks old, and some were almost five months old, the DOH said. The Tampa Bay Times reported that most were from mid-June to mid-July, “when Florida was reporting record-high cases.”

Without the backlogged data, the state would have reported 3,773 new cases on August 31, the DOH said, but the delayed results added 3,870 cases, bringing the total to 7,643. The backlogged data also inflated the reported positivity rate from 5.9% to 6.8%, the DOH said. The positivity rate is regarded as a key indicator of the degree of disease transmission in a community, Johns Hopkins Bloomberg School of Public Health noted.

Impact on Quest Diagnostics

Most of Quest’s COVID-19 testing in Florida has been conducted at private sites, the Tallahassee Democrat reported. However, in May, June, and July, the Florida Division of Emergency Management announced a series of partnerships with Quest Diagnostics to provide walk-up and drive-in testing services at local retailers, including Publix and The Home Depot (NYSE:HD).

“Quest Diagnostics was only being utilized at a limited number of state-supported sites,” FDEM spokesman Jason Mahon told the Tallahassee Democrat, adding that the state should be able to find other clinical laboratory companies to replace that work.

However, even if Quest’s testing for the state was limited, the governor’s order could still be costly to the company. A search of the Florida Accountability Contract Tracking System database indicates that the state paid Quest nearly $1.8 million for COVID-19 testing services. And the state has used Quest to provide non-COVID-19 services amounting to $7.9 million in 2019 and 2020 as well, according to the database. It’s not clear how the latter will be affected by Governor DeSantis’ directives.

Overall, Quest accounts for at least 13% of the six million COVID-19 tests run in the Florida, the Tampa Bay Times reported, citing data from the DOH.

Other Times Florida Had Issues with Clinical Laboratory Companies

Quest is not the first clinical laboratory company to run afoul of Florida regulatory agencies. On August 12, the DOH announced that Niznik Lab Corp. of Miami submitted a backlog of 4,000 cases dating back to June 23, CBS News reported.

“This backlog severely skews today’s daily report for Miami-Dade County and is not reflective of current trends,” the agency stated in a press release.

And this isn’t the first time that Florida has had issues with COVID-19 testing contracts, as Dark Daily previously reported.

On May 15, the state cancelled a contract with MicroGen Diagnostics to provide testing services, due to concerns about reliability and processing speed, Florida Bulldog reported. AdventHealth, a large non-profit health system in Altamonte Springs, Fla., cited similar issues in cancelling a contract with MicroGen Diagnostics, according to USA Today

According to Florida Bulldog, “Gov. Ron DeSantis touted an $11-million COVID-19 testing deal with a Texas-based lab now embroiled in controversy and facing questions about the reliability of its tests,” and that, “under pressure” the Governor in an April 22 press conference said, “we have two contracts in place with two new labs that will increase our lab capacity by 18,000 samples per day.”

Florida Bulldog went on to state, “One of those firms was Southwest Regional PCR, of Lubbock, Texas, which does business as MicroGenDX, headquartered in Orlando. The Executive Office of the Governor had signed an $11-million contract the day before with the firm for ‘COVID-19 Diagnostic Testing ($99 per test 8,000 tests per day for 14 days).’

“Less than a month later, however, the governor’s office quietly canceled the contract amid questions about MicroGenDX’s dependability,” Florida Bulldog reported.

In addition, an $11.3 million state contract with Indur Services was reduced to $2.2 million for testing supplies after media outlets reported that the company’s founder had pleaded guilty to multiple federal insurance fraud charges in Texas, Florida Bulldog reported.

All levels of government in the United States are under extreme pressure to respond to the COVID-19 pandemic in an effective and timely manner. The results of clinical laboratory tests for SARS-CoV-2 are the closely-watched measure of whether infections are increasing, holding steady, or decreasing in a community, a region, or a state.

That is why any delay in reporting the tests results to government entities is a cause for concern. It is also why the news media are quick to report any problems clinical laboratories have with their COVID-19 testing programs.

—Stephen Beale

Related Information:

Florida Department of Health and Florida Division of Emergency Management Sever Ties with Quest Diagnostics After Quest Failed to Follow Florida Law

Quest Diagnostics Media Statement about COVID-19 Testing

Florida Cuts Ties with Quest for Failing to Report 75,000 COVID-19 Tests

DeSantis, DOH Sever Ties with Quest Diagnostics Over COVID-19 Testing Backlog

Florida Cuts Ties with Quest Diagnostics Lab for 75,000 Withheld Coronavirus Tests

Florida Drops Quest for Coronavirus Testing After Lab Reports Backlog of 75,000 Test Results

Florida Drops Quest Diagnostics over Failure to Report Nearly 75,000 COVID Results Dating Back to April

Florida Cuts Ties with Quest Diagnostics After Delay in Reporting Months of COVID-19 results

FDA Investigates Lab as Tens of Thousands of COVID-19 Test Results in Florida are Questioned

Florida Department of Health Updates New COVID-19 Cases, Announces Two Hundred Twelve Deaths Related to COVID-19

South Florida Lab Under Investigation for Holding on to Thousands of COVID Test Results

COVID-19 Testing: Understanding the “Percent Positive”

US Government Purchases 150 Million COVID-19 Antigen Tests from Abbott Laboratories for $760 Million; Only CLIA-Certified Clinical Laboratories Can Do Testing

Abbott sends the SARS-CoV-2 test results directly to patients’ smartphones, which can be displayed to gain entrance into areas requiring proof of COVID-19 testing

There is no greater example that COVID-19 is a major force for change in the clinical laboratory industry than the fact that—though the US federal government pays 50% of the nation’s total annual healthcare spend of $3.5 trillion—it recently spent $760 million to purchase 150 million COVID-19 tests from Abbott Laboratories (NYSE:ABT), an American multinational medical devices and healthcare company headquartered in Abbott Park, Ill., “to expand strategic, evidence-based testing in the United States,” according to the company’s website.

In August, the federal Food and Drug Administration (FDA) granted an emergency use authorization (EUA) to Abbott for its BinaxNOW portable rapid-response COVID-19 antigen (Ag) test. The credit-card sized test costs $5 and can return clinical laboratory test results in minutes, rather than hours, days, or in some cases, weeks, the Wall Street Journal (WSJ) reported.

The test includes a free smartphone app called NAVICA, which enables those tested to receive their test results directly on their mobile devices—bypassing the patient’s primary care physicians.

According to Abbott’s website, the app “allows people who test negative to get an encrypted temporary digital NAVICA Pass, similar to an airline boarding pass. NAVICA-enabled organizations will be able to verify an individual’s negative COVID-19 test results by scanning the individual’s digital NAVICA Pass to facilitate entry into facilities.”

This feature of Abbott’s new COVID-19 test is a good example of how quickly innovation in the medical laboratory testing profession is bringing new features and new capabilities to the marketplace. By marrying the SARS-CoV-2 test with the NAVICA Pass feature, Abbott hopes to deliver increased value—not just to physicians and their patients—but also to employers with employee screening programs and federal government programs designed to screen federal employees, as well as being used for screening travelers at airports and other transportation hubs.

Abbott appears to be banking that in the future such identification will be required to “enter organizations and other places where people gather,” as the company’s website states.

Testing Limited to CLIA-Certified Clinical Laboratories

An HHS news release announcing the government’s planned distribution of the BinaxNOW tests stated that “Testing will be potentially deployed to schools and to assist with serving other special needs populations.”

In the news release, Alex Azar, HHS Secretary, said, “By strategically distributing 150 million of these tests to where they’re needed most, we can track the virus like never before and protect millions of Americans at risk in especially vulnerable situations.”

The EUA adds that “Testing of nasal swab specimens using [BinaxNOW] … is limited to laboratories certified under CLIA that meet the requirements to perform high, moderate, or waived complexity tests. This test is authorized for use at the [point of care], i.e., in patient care settings operating under a CLIA Certificate of Waiver, Certificate of Compliance, or Certificate of Accreditation.”

The FDA’s EUA describes the BinaxNOW portable rapid-response COVID-19 antigen test (above) as “a lateral flow immunoassay intended for the qualitative detection of nucleocapsid protein antigen from SARS-CoV-2 in direct nasal swabs from individuals suspected of COVID-19 by their healthcare provider within the first seven days of symptom onset.” The test costs $5 and Abbott sends results directly to the patient’s smartphone using the free NAVICA app included with the test. (Photo copyright: Abbott Laboratories.)

IVD Companies See Boom in COVID-19 Test Sales

Demand for COVID-19 testing has created opportunities for in vitro diagnostics (IVD) companies that can develop and bring tests to market quickly. 

Recent issues of Dark Daily’s sister print publication—The Dark Report (TDR)—covered IVD companies’ second quarter (Q2) boom in sales of COVID-19 instruments and tests, while also noting a fall-off in routine clinical laboratory testing during the COVID-19 pandemic. 

Abbott Laboratories saw molecular diagnostics sales increase 241% in Q2 driven by $283 million in sales of COVID-19 testing, while rapid diagnostic COVID-19 testing rose 11% on $180 million in sales in Q2, TDR reported, based on Abbott data.

“There is huge economic incentive for diagnostic companies to develop technologies that can be used to create rapid tests that are cheap to perform,” said Robert Michel, Publisher and Editor-in-Chief of TDR and Dark Daily. “In this sense, COVID is a major force for change.”

“This new COVID-19 antigen test is an important addition to available tests because the results can be read in minutes, right off the testing card,” said Jeff Shuren, MD, JD (above), Director of the FDA’s Center for Devices and Radiological Health (CDRH), in an FDA news release announcing the federal government’s $760 million purchase of 150 million Abbott BinaxNOW rapid-response antigen COVID-19 tests. “This means people will know if they have the virus in almost real-time. Due to its simpler design and the large number of tests the company anticipates making in the coming months, this new antigen test is an important advancement in our fight against the pandemic.” (Photo copyright: The New York Times.)

Abbott Invests in Proving BinaxNOW’s Capabilities

Abbott has a lot riding on the BinaxNOW test. Its portable, rapid molecular ID NOW COVID-19 test was touted by President Trump during a White House press briefing in March as “a whole new ballgame.” But then, researchers at New York University (NYU) published study data that questioned the accuracy and reliability of the test, which Dark Daily covered in “Abbott Labs’ ID NOW COVID-19 Rapid Molecular Test Continues to Face Scrutiny Over False Negatives.”

Thus, Abbott is determined to ensure this product launch is successful and that the test works as promised. According to a news release, “In data submitted to the FDA from a clinical study conducted by Abbott with several leading US research universities, the BinaxNOW COVID-19 Ag Card demonstrated sensitivity of 97.1% (positive percent agreement) and specificity of 98.5% (negative percent agreement) in patients suspected of COVID-19 by their healthcare provider within the first seven days of symptom onset.”

“The massive scale of this test and app will allow tens of millions of people to have access to rapid and reliable testing,” said Joseph Petrosino, PhD, professor and chairman, Molecular Virology and Microbiology, Baylor College of Medicine, in the Abbott news release. “With lab-based tests, you get excellent sensitivity but might have to wait days or longer to get the results. With a rapid antigen test, you get a result right away, getting infectious people off the streets and into quarantine so they don’t spread the virus.”

Abbott has invested hundreds of millions of dollars in two manufacturing facilities where the tests will be made, John Hackett Jr, PhD, an immunologist and Abbott’s Divisional Vice President Applied Research and Technology, and lead scientist on the BinaxNOW project, told The Atlantic.

“Our nation’s frontline healthcare workers and clinical laboratory personnel have been under siege since the onset of this pandemic,” said Charles Chiu, MD, PhD, professor of Laboratory Medicine at University of California, San Francisco, in the Abbott news release. “The availability of rapid testing for COVID-19 will help support overburdened laboratories, accelerate turnaround times, and greatly expand access to people who need it.”

However, other experts are not so sure. In the Atlantic article, Michael Mina MD, PhD, Assistant Professor Epidemiology at Harvard’s T.H. Chan School of Public Health, voiced the need to test both asymptomatic and pre-symptomatic people. “This is the type of [COVID-19] test we have been waiting for—but may not be the test.”

Nevertheless, the federal government’s investment is significant. Abbott plans to start shipping tens of millions of tests in September and produce 50 million tests per month starting in October, Forbes reported.

Shifting Clinical Laboratory Paradigms

BinaxNOW will be performed without doctors’ orders, in a variety of locations, and results go directly to patients’ smartphone—without a pathologist’s interpretation and medical laboratory report. This is new ground and the impact on non-CLIA labs, and on healthcare in general, is yet to be seen.

Clinical laboratory managers will want to monitor the rise of rapid-response tests that can be easily accessed, conducted, and reported on without physician input. 

—Donna Marie Pocius

Related Information:

Trump Administration Will Deploy 150 Million Rapid Tests in 2020

In Vitro Diagnostics Firms Report Boom in Sales of COVID-19 Instruments, Tests

FDA Authorizes First Diagnostic Test Where Results Can Be Read Directly from Testing Card

Abbott’s Fast, $5, 15-Minute Easy-to-Use COVID-19 Antigen Test Receives FDA Emergency Use Authorization; Mobile App Displays Test Results to Help Our Return to Daily Life; Ramping Production to 50 Million Tests a Month

Performance of the Rapid Nucleic Acid Amplification by Abbott ID NOW COVID-19 in Nasopharyngeal Swabs Transported in Viral Media and Dry Nasal Swabs, in a New York City Academic Institution

Trump to Announce Deal with Abbott Laboratories for 150 Million Rapid COVID-19 Tests

Abbott Labs’ ID NOW COVID-19 Rapid Molecular Test Continues to Face Scrutiny Over False Negatives

Abbott Provides Update on ID NOW

A New Era of Coronavirus Testing is About to Begin

U.S. Approves Abbott Labs’ $5 Mass-Scale COVID-19 Test

‘There’s an App for That’ is Becoming the Norm in Healthcare as Smartphones Provide Access to Patient Medical Records and Clinical Laboratory Test Results

Amazon’s app-based employee healthcare service could be first step toward retailer becoming a disruptive force in healthcare; federal VA develops its own mHealth apps

More consumers are using smartphone applications (apps) to manage different aspects of their healthcare. That fact should put clinical laboratories and anatomic pathology groups on the alert, because a passive “wait and see” strategy for making relevant services and lab test information available via mobile apps could cause patients to choose other labs that do offer such services.

Patient use of apps to manage healthcare is an important trend. In January, Dark Daily covered online retail giant Amazon’s move to position itself as a leader in smartphone app-based healthcare with its launch of Amazon Care, a virtual medical clinic and homecare services program. At that time, the program was being piloted for Seattle-based employees and their families only. Since then, it has been expanded to include eligible Amazon employees throughout Washington State.

Mobile health (mHealth) apps are giving healthcare providers rapid access to patient information. And healthcare consumers are increasingly turning to their mobile devices for 24/7 access to medical records, clinical laboratory test results, management of chronic conditions, and quick appointment scheduling and prescription refills.

Thus, hearing ‘There’s an app for that’ has become part of patients’ expectations for access to quality, affordable healthcare.

For clinical laboratory managers, this steady shift toward mHealth-based care means accommodating patients who want to use mobile apps to access lab test results and on-demand lab data to monitor their health or gain advice from providers about symptoms and health issues.

Amazon, VA, and EMS Develop Their Own mHealth Apps

The Amazon Care app can be freely downloaded from Apple’s App Store and Google Play. With it, eligible employees and family members can:

  • Communicate with an advice nurse;
  • Launch an in-app video visit with a doctor or nurse practitioner for advice, diagnoses, treatment, or referrals;
  • Request a mobile care nurse for in-home or in-office visits;
  • Receive prescriptions through courier delivery.

The combination telehealth, in-person care program, mobile medical service includes dispatching nurses to homes or workplaces who can provide “physical assessments, vaccines or common [clinical laboratory] tests.”

Glen Tullman, Executive Chairman of Livongo
“Amazon is a company that is experimenting a lot with a variety of opportunities in healthcare,” Glen Tullman (above), Executive Chairman of Livongo, a healthcare company specializing in treating diabetes, and an Amazon partner company, told CNBC. “It’s one to watch.” (Photo copyright: CNBC.)

However, the US federal Department of Veterans Affairs (VA) also is becoming a major player in the mHealth space with the development of its own mobile app—VA Launchpad—which serves as a portal to a range of medical services.

Veterans can access five categories of apps that allow them to manage their health, communicate with their healthcare team, share health information, and use mental health and personal improvement tools.

Neil C. Evans, MD, Chief Officer in the VA Office of Connected Care
“The VA was an early adopter of digital health tools and remains a leader within US healthcare in leveraging technology to enhance patient engagement,” Neil C. Evans, MD (above), Chief Officer in the VA Office of Connected Care, told Healthcare IT News. “These digital tools are allowing veterans to more actively understand their health data, to better communicate with VA clinical teams, and to engage more productively as they navigate their individual health journeys,” Evans added. (Photo copyright: Department of Veterans’ Affairs.)

mHealthIntelligence reported that mobile health tools also are enabling first responders to improve emergency patient care. At King’s Daughters Medical Center in Brookhaven, Miss., emergency medical technicians (EMTs) are using a group of mHealth apps from DrFirst called Backline to gain real-time access to patients’ HIPAA-compliant medication histories, share clinical data, and gain critical information about patients prior to arriving on the scene.

Using Backline, EMTs can scan the barcode on a patient’s driver’s license to access six months’ worth of medication history.

“In the past, we could only get information from [patients] who are awake or are willing to give us that information,” Lee Robbins, Director of Emergency Medical Services at King’s Daughters Medical Center in Brookhaven, Miss., told mHealthIntelligence. “Knowing this information gives us a much better chance at a good outcome.”

Smartphone App Detects Opioid Overdose

The opioid crisis remains one of the US’ greatest health challenges. The federal Centers for Disease Control and Prevention (CDC) reported 47,600 opioid-related deaths in 2017, and the problem has only gotten worse since then.

To curtail these tragic deaths, University of Washington (UW) researchers developed a smartphone app called Second Chance, that they believe can save lives by quickly diagnosing when an opioid overdose has occurred.

The app uses sonar to monitor an opioid user’s breathing rate and, according to a UW press release, can detect overdose-related symptoms about 90% of the time from up to three feet away. The app then contacts the user’s healthcare provider or emergency services.

The UW researchers are applying for US Food and Drug Administration (FDA) clearance. They published their findings in the journal Science Translational Medicine.

While Demand for mHealth Apps Grows, Concern over Privacy and Security also Increases  

According to mobile data and analytics company App Annie, global downloads of medical apps grew to more than 400 million in 2018, up 15% from two years earlier.

“As with mobile banking, consumers are showing they trust mobile apps with their most sensitive information and are willing to leverage them to replace tasks traditionally fulfilled in-person, such as going into a bank branch or, in the case of medical apps, to a doctor’s office,” App Annie’s website states.

However, the proliferation of mHealth apps has raised privacy and safety concerns as well. While the FDA does regulate some mobile health software functions, it does not ensure an mHealth app’s accuracy or reliability.

In his article, “Dangers of Defective Mobile Health Apps and Devices,” published on the Verywell Health website, Kevin Hwang, MD, MPH, physician, researcher, and Medical Director of UT Physicians General Internal Medicine Center in the Texas Medical Center at the University of Texas Medical School at Houston, points out that “most mHealth apps have not been tested in a rigorous manner.”

Fierce Healthcarereported that federal lawmakers are worried veterans who use the VA’s 47 mHealth apps could find their sensitive healthcare information shared or sold by third-party companies. In fiscal year 2018, veterans participated in more than one million video telehealth visits, a VA press release reported.

US Rep. Susie Lee, D-Nevada, Chairperson of the House Veterans’ Affairs Subcommittee on Technology Modernization, told Fierce Healthcare, “As we assess the data landscape at the VA and the larger health IT space, we need to look at where protections exist or don’t exist and whether we need more guardrails.”

What does all this mean for clinical laboratories? Well, lab managers will want to keep an eye on the growing demand from consumers who want direct access to laboratory test data and appointment scheduling through mHealth apps. And, also be aware of HIPAA regulations concerning the sharing of that information.

—Andrea Downing Peck

Related Information:

How Amazon is Using IoT to Care for Its Employees

Amazon Launches Amazon Care, a Virtual Medical Clinic for Employees

VA Seeing Substantial Growth in Telehealth, Key Patient Engagement Tools

VA Releases Launchpad App to Streamline Healthcare Access for Veterans and Caregivers

Drug Overdose Deaths

Smartphone App Can Detect Opioid Overdoes Using Sonar

VA Exceeds More than One Million Video Telehealth Visits in FY2018

Medical Apps Transform How Patients Receive Medical Care

Dangers of Defective Mobile Health Apps and Devices

mHealth Tools Help Providers Access Data When They Most Need it

Here’s How Amazon Employees Get Health Care Through a New App—A Glimpse of the Future of Medicine

VA Launches New mHealth App to Consolidate Vets’ Access to Resources

The VA Recommends Apps for PTSD and Pain Management. It’s Led to New Veteran Privacy Concerns

New Understanding of CRISPR-Cas9-Guided Base Editors Could Trigger Development of Gene-Editing Tools Targeting Diseases and New Types of Clinical Laboratory Tests

Being able to study the 3D-structure of a CRISPR base editor could help refine the entire CRISPR system, says lead study author Jennifer Doudna, PhD

Molecular biology laboratories engaged in CRISPR gene editing will be interested to note that researchers at the University of California Berkeley (UC Berkeley) have created for the first time a three-dimensional (3D) view of the molecular structure of a base editor for CRISPR-Cas9. This breakthrough may lead to new, more accurate gene-editing tools for biomedical research and gene therapy.

Clinical laboratories involved in genetic testing may find this welcomed news, after a pair of studies conducted in 2019 raised concerns about CRISPR base editing. The researchers of those studies observed that it “causes a high number of unpredictable mutations in mouse embryos and rice,” Chemical and Engineering News (C&EN) reported, adding, “Other groups have raised concerns about off-target mutations caused when the traditional CRISPR-Cas9 form of gene editing cuts DNA at a location that it wasn’t supposed to touch. The results of the new studies are surprising, however, because scientists have lauded base editors as one of the most precise forms of gene editing yet.”

Dark Daily covered similar study findings by Massachusetts General Hospital (MGH) in “Researchers at Massachusetts General Hospital Identify Ways That CRISPR DNA Base Editors Sometimes Unintentionally Alter RNA,” May 31, 2019.

Nevertheless, UC Berkeley’s latest breakthrough is expected to drive development of new and more accurate CRISPR-Cas genome-editing tools, which consist of base editors as well as nucleases, transposases, recombinases, and prime editors.

The UC researchers published their findings in the journal Science, titled, “DNA Capture by a CRISPR-Cas9–Guided Adenine Base Editor.”

Understanding CRISPR Base Editors At a ‘Deeper Level’

Harvard University Chemistry and Chemical Biology Professor David Liu, PhD, who co-authored the study, explained the significance of this latest discovery.

“While base editors are now widely used to introduce precise changes in organisms ranging from bacteria to plants to primates, no one has previously observed the three-dimensional molecular structure of a base editor,” he said in a UC Berkeley news release. “This collaborative project reveals the beautiful molecular structure of a state-of-the-art highly-active base editor—ABE8e—caught in the act of engaging a target DNA site.”

UC Berkeley Professor Jennifer Doudna, PhD (above), who served as senior author of the study, says scientists may now have the information necessary to refine base editors and improve their precision and genome-targeting ability. “This structure helps us understand base editors at a much deeper level,” she said in the UC Berkeley statement. “Now that we can see what we’re working with, we can develop informed strategies to improve the system.” (Photo copyright: UC Berkeley.)

Jennifer Doudna, PhD, UC Berkeley Professor, Howard Hughes Medical Institute Investigator, and senior author of the study, has been a leading figure in the development of CRISPR-Cas9 gene editing. In 2012, Doudna and Emmanuelle Charpentier, PhD, Founding, Scientific and Managing Director at Max Planck Unit for the Science of Pathogens in Berlin, led a team of researchers who “determined how a bacterial immune system known as CRISPR-Cas9 is able to cut DNA, and then engineered CRISPR-Cas9 to be used as a powerful gene editing technology.” In a 2017 news release, UC Berkeley noted that the work has been described as the “scientific breakthrough of the century.”

Viewing the Base Editor’s 3D Shape

CRISPR-Cas9 gene editing allows scientists to permanently edit the genetic information of any organism, including human cells, and has been used in agriculture as well as medicine. A base editor is a tool that manipulates a gene by binding to DNA and replacing one nucleotide with another.

According to the recent UC Berkeley news release, the research team used a “high-powered imaging technique called cryo-electron microscopy” to reveal the base editor’s 3D shape.

Genetic Engineering and Biotechnology News notes that, “The high-resolution structure is of ABE8e bound to DNA, in which the target adenine is replaced with an analog designed to trap the catalytic conformation. The structure, together with kinetic data comparing ABE8e to earlier ABEs [adenine base editors], explains how ABE8e edits DNA bases and could inform future base-editor design.”

The graphic above, taken from the UC Berkeley news release, shows the “3D structure of a base editor, comprised of the Cas9 protein (white and gray), which binds to a DNA target (teal and blue helix) complementary to the RNA guide (purple), and the deaminase proteins (red and pink), which switch out one nucleotide for another.” (Image and caption copyright: UC Berkeley.)

Knowing the Cas9 fusion protein’s 3D structure may help eliminate unintended off-target effects on RNA, extending beyond the targeted DNA. However, until now, scientists have been hampered by their inability to understand the base editor’s structure.

“If you really want to design truly specific fusion protein, you have to find a way to make the catalytic domain more a part of Cas9, so that it would sense when Cas9 is on the correct target and only then get activated, instead of being active all the time,” study co-first author Audrone Lapinaite, PhD, said in the news release. At the time of the study, Lapinaite was a postdoctoral fellow at UC Berkeley. She is now an assistant professor at Arizona State University.

“As a structural biologist, I really want to look at a molecule and think about ways to rationally improve it. This structure and accompanying biochemistry really give us that power,” added UC Berkeley postdoctoral fellow Gavin Knott, PhD, another study co-author. “We can now make rational predications for how this system will behave in a cell, because we can see it and predict how it’s going to break or predict ways to make it better.”

Clinical laboratory leaders and pathologists will want to monitor these new advances in CRISPR technology. Each breakthrough has the power to fuel development of cost-effective, rapid point-of-care diagnostics.

—Andrea Downing Peck

Related Information:

New Understanding of Crispr-Cas9 Tool Could Improve Gene Editing

DNA Capture by a CRISPR-Cas9-Guided Adenine Base Editor

CRISPR Base Editors Cause Unexpected Mutations

How CRISPR Works

Cryo-EM Captures CRISPR-Cas9 Base Editor in Action

Researchers at Massachusetts General Hospital Identify Ways That CRISPR DNA Base Editors Sometimes Unintentionally Alter RNA

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