Physician acceptance of virtual visits with their patients is being accelerated by the pandemic and the pending merger would combine the nation’s two biggest telehealth companies
Telehealth visits with virtual healthcare providers are increasing as the COVID-19 pandemic continues. This is forcing the entire healthcare industry—clinical laboratories in particular—to adapt to new methods of patient data exchange and communications. What is not clear is how independent clinical laboratories and hospital labs should expect to interact with telehealth providers, receive lab test orders from virtual doctors, and return test results.
But perhaps more important, patients’ acceptance of virtual care—i.e., reduced face-to-face access to their doctors—may be motivating telehealth companies to expand their offerings while also using mergers and acquisitions as a way to expand market share.
The recent announcement of Teladoc Health’s (NYSE:TDOC) agreement to acquire Livongo (NASDAQ:LVGO) is such an example. Some experts believe it could reset the competitive playing field, noted Robert Michel, Editor-in-Chief of Dark Daily.
The Teladoc-Livongo deal, if completed, will combine a virtual care company with a digital chronic disease management company, thus creating one of the largest telehealth companies to ever exist, noted Fierce Healthcare, which reported, “The combination of two of the largest publicly-traded virtual care companies announced Wednesday will create a health technology giant just as the demand for virtual care soars. The combined worth of the two companies is said to be worth about $37 billion, according to Piper Sandler.” Piper Sandler (NYSE:PIPR) is an American multinational “investment bank and institutional securities firm,” according to the company’s website.
During a call announcing the acquisition, Jason Gorevic, CEO of Teladoc, told business analysts that Teladoc will pay $18.5 billion in cash and stock to acquire Livongo, which went public in July at $28/share, and at the time of the acquisition, was worth $159/share, Fierce Healthcare reported.
Details of the Teledoc-Livongo Deal
COVID-19 has accelerated the trend toward expanded use of telehealth, and as a result, both Teladoc and Livongo have seen exponential growth in the last few months. Fierce Healthcare reported that Teladoc has experienced year-over-year growth of 85%, that revenue growth of 30-40% is expected in the next two to three years, and that Livongo has reported 125% revenue growth in the second quarter of 2020. The combined company is expected to reach $1.3 billion in revenue, Fierce Healthcare predicted.
“What Teladoc brings is an incredible access to 70 million people with loads of data and the ability to deliver a one-to-one service at scale. What Livongo brings is a digital-first footprint, a strong data science engine, and the ability to deliver a one-to-many at scale, so it really is the combination of the two organizations that is delivering on that shared common vision of this consumer-center virtual care,” Livongo President and Chief Medical Officer Jennifer Schneider, MD (above), told MobiHealthNews.” What was not discuss is how clinical laboratories fit into the virtual care paradigm. (Photo copyright: Kimberly White/Getty Images for Tech Crunch.)
Analysts who have commented on the deal tend to agree with the leadership of the two companies. “I’d expect this to become a single point of access for virtual care in the next five years with one app to control them all,” Stephanie Davis, Senior Equity Research Analyst at SVB Leerink, an investment bank that specializes in healthcare, told FierceHealthcare.
Along with providing a “single point solution” to consumers, the combined company may be able to improve management of chronic conditions and access to high-quality care. “This combination creates an opportunity to empower patients to manage serious health conditions through a single, integrated delivery platform with robust capabilities,” Daniel Stewart, Managing Director, RBC Capital Markets (NYSE:RY), told FierceHealthcare.
Impact on Clinical Laboratories
Although the Teladoc-Livongo deal may not have immediate or direct repercussions for those who work in clinical laboratories, it represents an accelerating trend toward virtual health. Since there is no widely accepted way to collect lab specimens when a physician sees a patient remotely and orders tests, medical laboratory managers will want to remain flexible so as to develop effective ways to collect and test specimens after a patient’s virtual visit with a physician.
“My advice in these times of change is to do something,” Ted Schwab, Healthcare Strategist and Entrepreneur told attendees at the 24th Annual Executive War College, in New Orleans. “What we know today is that providers—including clinical laboratories and pathology groups—who do nothing will get trampled. However, those providers that do something proactively will most likely be the winners as healthcare continues to transform.”
As ever-larger numbers of physicians and patients grow comfortable with the use of telehealth because of the COVID-19 pandemic, clinical laboratories will benefit from adapting their specimen collection and transport arrangements to meet the needs of patients who do not physically visit their physicians’ offices and do not go to a laboratory patient service center.
Patients who visit providers in person can leave the office with a doctor’s order for lab tests and go directly to a lab’s patient service, often in the same building. But what will the process be when they have just completed a virtual office visit with their providers?
In their letter, the Representatives wrote, “As you are aware, the recently enacted Paycheck Protection Program and Health Care Enhancement Act (PPPHCE Act) invests $25 billion in the [Public Health and Social Services Emergency Fund (PHSSEF)], including $11 billion for states, localities, territories, and tribes, to enhance all aspects of COVID-19 testing capacity. This funding is in addition to the funds already appropriated to the PHSSEF under the CARES Act.
“While laboratories are eligible, along with other providers, for these funds,” they continued, “there have been no federal funds specifically designated for the laboratories that have stepped up in this public health crisis and have made significant investments to expand access to COVID-19 testing despite 40-60 percent reductions in regular commercial volume due to the economic lockdowns.
“As laboratories work to maintain their investments in critical resources for testing platforms, reagents, swabs, and PPE, as well as hiring, training, and overtime pay for the laboratory workforce, we urge HHS to direct a portion of funding that has not already been allocated towards these efforts. These funds will ensure that labs can continue to rapidly scale up diagnostic and antibody testing, particularly for healthcare workers, first responders, and other Americans on the frontlines of this pandemic,” concluded the Representatives.
ACLA President Made Similar Plea for Direct Funding to Clinical Laboratories
“In order to deliver accurate, reliable results for patients at a national scale, we must allocate funding to support [clinical laboratories’] expanded efforts,” she said in a statement following an April 27 meeting at the White House.
In her letter, Khani wrote, “It is essential that HHS allocate $10 billion from the fund to support labs’ further expansion of testing capacity to fulfill the testing needs of all of the states and to protect the lives and livelihood of all Americans.
“Further,” she continued, “HHS should note that investing in the nation’s laboratories will not only enhance testing capacity in the short-term, but it also will allow the country to benefit from a robust testing infrastructure for the duration of the COVID-19 pandemic and beyond.”
President Trump signed H.R.266 into law on April 24. It includes $25 billion earmarked for research, development, validation, manufacturing, purchasing, administering, and expanding capacity for COVID-19 testing. According to the language of H.R.266, that includes, “tests for both active infection and prior exposure, including molecular, antigen, and serological tests, the manufacturing, procurement and distribution of tests, testing equipment and testing supplies, including personal protective equipment needed for administering tests, the development and validation of rapid, molecular point-of-care tests, and other tests, support for workforce, epidemiology, to scale up academic, commercial, public health, and hospital laboratories, to conduct surveillance and contact tracing, support development of COVID-19 testing plans, and other related activities related to COVID-19 testing.”
“As the demand for testing continues to grow, clinical laboratories need dedicated funding to plan for challenges that lie ahead. Strong federal coordination and leadership is essential, and we’re looking forward to working with HHS to ensure that laboratories have the resources necessary to continue to expand our role at the forefront of the nation’s response,” said Julie Khani (above), President of the American Clinical Laboratory Association (ACLA), in a press release following the June 8 letter sent to HHS by 30 members of Congress requesting funds from H.R.266 be sent directly to clinical laboratories. Khani will be speaking on federal policies now impacting clinical laboratories at the upcoming 25th annual Executive War College on Laboratory and Pathology Management in New Orleans on July 14-15. (Photo copyright: ACLA.)
Financial Struggles for Hospitals and Clinical Laboratories
This new round of stimulus funding comes at a time when many providers and clinical laboratories are struggling financially, despite the influx of COVID-19 patients.
“Across the country, laboratories have made significant investments to expand capacity, including purchasing new platforms, retraining staff, and managing the skyrocketing cost of supplies. To continue to make these investments and expand patient access to high-quality testing in every community, laboratories will need designated resources. Without sustainable funding, we cannot achieve sustainable testing,” said Khani in an ACLA statement.
As the COVID-19 coronavirus pandemic evolves, federal regulations, as well as emergency funding for COVID-19 testing that is provided by federal legislation, will evolve in unexpected ways. For that reason, clinical laboratory leaders will want to closely track announcements by such federal agencies as the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, the Food and Drug Administration, the Centers for Disease Control and Prevention, and the Federal Emergency Management Administration as decisions are made about how to assign the $25 billion authorized in H.R.266 for “testing.”
This is an opportunity for top-producing sales reps from medical laboratories, anatomic pathology groups, and lab vendors to achieve national recognition at the upcoming Executive War College
Nominations are now open for The Dark Report’s 5th
Annual National Lab Sales Excellence Awards. This awards program recognizes
those laboratory sales professionals who exceed sales goals and successfully
help their lab organization win new clients and expand market share.
Nominating applications are available at Executive War College/5th Annual National Lab Sales Excellence Awards and should be submitted by the sales professional’s sales manager based on the sales rep’s 2019 performance. Winners will receive an all-expense paid trip to New Orleans for the 25th Annual Executive War College on Lab and Pathology Management on April 28-29.
Each winner will also receive a check for $2,000!
“This is the fifth year for this first and only national recognition program in the United States for sales professionals involved in the clinical laboratory profession,” stated Robert L. Michel, Editor-in-Chief of The Dark Report. “It’s important for our industry because it shows the leaders and pathologists in other labs that, despite negative trends in the lab marketplace, there are sales professionals who continue to generate substantial volumes of new clients, new specimens, and new revenue for the clinical labs and pathology groups they represent.
“Moreover, as the sales team in your lab learns what some of
their top-performing peers have accomplished, it raises the bar and motivates
them to achieve more and reach for stretch goals that benefit them personally
and contribute to the success of the lab that they represent,” emphasized
Michel.
“Each year, the winners of the National Lab Sales Excellence
Award tell us that this recognition was not only important for them, but that
their hospital CEO and senior administrators took notice and it raised the
profile of the lab throughout the entire hospital because of the national
recognition for the accomplishments of the lab’s top sales producer. In some
cases, the local newspapers picked up the story and reported it—another
positive benefit for the lab in the community. Some award winners report that
just the news coverage of the award led to new accounts from physicians who
wanted the top service these lab sales professionals deliver.”
Winners are selected in each of three categories that represent
the major sectors of the lab testing marketplace. The sectors are:
Hospital Laboratory Outreach;
Independent Clinical/Anatomic Pathology
Laboratory (including molecular and genetic testing); and
Robert L. Michel, Editor-in-Chief of The Dark Report, is shown above with Tammy W. Mullen, Sales Representative with HealthLab in Aurora, Ill., a full-service, pathologist-directed clinical laboratory that is part of Northwestern Medicine. Mullen received her award during the 2019 Executive War College on Laboratory and Pathology Management in New Orleans. Each year, Laboratory Sales professionals are recognized for their achievements with the National Lab Sales Excellence Award. (Photo copyright: The Dark Report.)
Nominations for National Lab Sales Excellence Awards
“We are asking that the sales managers and sales VPs of
these sales reps nominate their top candidates. Nominations of these
high-achieving medical lab industry sales professionals for the National Lab
Sales Excellence Award are being accepted now. Details and the nominating form
are available by clicking here
or by copy and pasting this URL into your web browser: https://www.executivewarcollege.com/lab-sales-excellence-award-contest/.
To be considered, nominee applications should encompass
actual sales results, feedback from nominating managers, and references from
clients. Lab sales professionals will also be judged on other variables, such
as:
The competitive environment;
Compliance with all state and federal
regulations; and
Ethical behavior.
“A panel of judges will evaluate each nomination,” noted
Michel. “These are individuals with their own impressive track record in sales
and marketing. They understand the techniques of ethical selling, the unique
aspects of marketing laboratory tests, and how much effort is required to build
the number of clients, specimen volume, and revenue from assigned territories.”
It’s the medical laboratory industry’s first and only National Laboratory Sales Award program. Sales representatives employed by clinical laboratories, anatomic pathology groups, specialty molecular and genetic testing lab companies, in vitro diagnostics companies, and laboratory information technology companies will be competing for national recognition as The Dark Report announces the winners of its 5th annual National Lab Sales Excellence Awards during the Executive War College on Laboratory and Pathology Management, which takes place April 28-29, 2020, in New Orleans. (Image copyright: The Dark Report.)
2020 Lab Sales Awards to Be Announced on April 29 in New
Orleans
Nominations for the National Lab Sales Achievement Award are
to be submitted to the offices of The Dark Report by Friday, March 20,
2020. Winners in each of the three categories will be notified by April 3 to
allow them time to make arrangements to travel to New Orleans to be at the
Executive War College for the award ceremony.
“Lab CEOs and hospital/health network lab administrators should recognize how having a winner from their sales team can turbo-charge their entire clinical laboratory sales program,” observed Michel. “By their nature, the 20% of the sales reps in your marketing program who do 80% of the business are highly competitive. We’ve had the sales vice presidents who nominated their top sales producer tell us, a year later, that having a National Lab Sales Excellence Award winner motivated the entire sales team, and that their lab saw substantial increases in specimen volume and revenue because other sales reps wanted to step up to the plate and show what they could produce.”
Michel also took the time to address the long-standing
popular wisdom in the clinical laboratory industry that every lab wants to keep
its top sales producers under wraps, because if competitors knew how much new
lab business they were generating, competitors would recruit them away.
“This is one of those clinical lab industry widely-held beliefs that
needs to disappear,” he explained. “The reality is that, in every community,
competing labs (and competing sales reps) always know who the top producers
are. Good lab leaders know how to retain their top performers and one way to do
that is to boost their reputations and recognize their sales achievements by
nominating these high-energy, result-driven producers for the unique
recognition that comes from the National Lab Sales Excellence Award.”
Lab CEOs, administrators, Sales VPs, and Sales Managers—you can click here to get the nominating form for the 5th Annual National Lab Sales Excellence Awards (or by pasting this URL into your browser: http://www.executivewarcollege.com/wp-content/uploads/National-Lab-Sales-2020-Nomination-Form_02-13-2020.pdf).
Strategists agree that big tech is disrupting healthcare,
so how will clinical laboratories and anatomic pathology groups serve virtual
healthcare customers?
Visionary XPRIZE founder Peter Diamandis, MD, sees big tech as “the doctor of the future.” In an interview with Fast Company promoting his new book, “The Future Is Faster Than You Think,” Diamandis, who is the Executive Chairman of the XPRIZE Foundation, said that the healthcare industry is “phenomenally broken” and that Apple, Amazon, and Google could do “a thousandfold” better job.
Diamandis, who also founded Singularity University, a global learning and innovation community that uses exponential technologies to tackle worldwide challenges, according to its website, said, “We’re going to see Apple and Amazon and Google and all the data-driven companies that are in our homes right now become our healthcare providers.”
If this prediction becomes reality, it will bring significant changes in the traditional ways that consumers and patients have selected providers and access healthcare services. In turn, this will require all clinical laboratories and pathology groups to develop business strategies in response to these developments.
Amazon Arrives in Healthcare Markets
Several widely-publicized business initiatives by Amazon, Google, and Apple substantiate these predictions. According to an Amazon blog, healthcare insurers, providers, and pharmacy benefit managers are already operating HIPAA-eligible Amazon Alexa for:
Alexa also enables HIPAA-compliant blood glucose updates as part of the Livongo for Diabetes program. “Our members now have the ability to hear their last blood glucose check by simply asking Alexa,” said Jennifer Schneider, MD, President of Livongo, a digital health company, in a news release.
And Cigna’s “Answers By Cigna” Alexa “skill” gives members who install the option responses to 150 commonly asked health insurance questions, explained a Cigna news release.
“Google plans to disrupt healthcare and use data and artificial intelligence,” Toby Cosgrove, Executive Advisor to the Google Cloud team and former Cleveland Clinic President, told B2B information platform PYMNTs.com.
PYMNTs speculated that Google, which recently acquired Fitbit, could be aiming at connecting consumers’ Fitbit fitness watch data with their electronic health records (EHRs).
“Ultimately what’s best is human and AI collaboratively,” Peter Diamandis, MD, founder of XPRIZE Foundation and Singularity University told Fast Company. “But I think for reading x-rays, MRIs, CT scans, genome data, and so forth, that once we put human ego aside, machine learning is a much better way to do that.” (Photo copyright: SALT.)
Apple Works with Insurers, Integrating Health Data
The Apple Watch health app also enables people to access medical laboratory test results and vaccination records, and “sync up” information with some hospitals, Business Insider explained.
Virtual Care, a Payer Priority: Survey
Should healthcare providers feel threatened by the tech giants? Not necessarily. However, employers and payers surveyed by the National Business Group on Health (NBGH), an employer advocacy organization, said they want to see more virtual care solutions, a news release stated.
“One of the challenges employers face in managing their healthcare costs is that healthcare is delivered locally, and change is not scalable. It’s a market-by-market effort,” said Brian Marcotte, President and CEO of the NBGH, in the news release. “Employers are turning to market-specific solutions to drive meaningful changes in the healthcare delivery system.
“Virtual care solutions bring healthcare to the consumer
rather than the consumer to healthcare,” Marcotte continue. “They continue to
gain momentum as employers seek different ways to deliver cost effective,
quality healthcare while improving access and the consumer experience.”
“In AI, there are three trends to watch,” said health strategist Ted Schwab (above) while speaking at the 2019 Executive War College. “The first major AI trend will affect clinical laboratories and pathologists. It involves how diagnosis will be done on the Internet and via telehealth. The second AI trend is care delivery, such as what we’ve seen with Amazon’s Alexa—you should know that Amazon’s business strategy is to disrupt healthcare. And the third AI trend involves biological engineering,” he concluded. (Photo copyright: Dark Daily.)
“If you use Google in the United States to check symptoms,
you’ll get five-million to 11-million hits,” Schwab told The Dark Report.
“Clearly, there’s plenty of talk about symptom checkers, and if you go online
now, you’ll find 350 different electronic applications that will give you
medical advice—meaning you’ll get a diagnosis over the internet. These
applications are winding their way somewhere through the regulatory process.
“The FDA just released a report saying it plans to regulate
internet doctors, not telehealth doctors and not virtual doctors,” he
continued. “Instead, they’re going to regulate machines. This news is
significant because, today, within an hour of receiving emergency care, 45% of
Americans have googled their condition, so the cat is out of the bag as it
pertains to us going online for our medical care.”
Be Proactive, Not Reactive, Health Leaders Say
Healthcare leaders need to work on improving access to primary care, instead of becoming defensive or reactive to tech companies, several healthcare CEOs told Becker’s Hospital Review.
Clinical laboratory leaders are advised to keep an eye on
these virtual healthcare trends and be open to assisting doctors engaged in
telehealth services and online diagnostic activities.
Through partnerships with CVS, Utah Health, and Kaiser Permanente the new UPSFF drone service could deliver savings to healthcare consumers and reduced TATs for clinical laboratories
United Parcel Service (UPS) successfully delivered by air medical prescriptions from a CVS pharmacy to customers’ residences in Cary N.C. This was the next step in the package delivery company’s plan to become a major player in the use of drones in healthcare and it has major implications for clinical laboratories and pathology groups.
Earlier this year, Dark Daily’s sister publication, The Dark Report (TDR), covered UPS’ launch of a drone delivery service on the WakeMed Health and Hospitals medical campus in Raleigh, N.C. The implementation followed a two-year test period during which UPS used drones manufactured by Matternet, a company in Menlo Park, Calif., to fly clinical laboratory specimens from a medical complex of physicians’ offices to the health system’s clinical laboratory more than 100 times. (See TDR, “WakeMed Uses Drone to Deliver Patient Specimens,” April 8, 2019.)
At the 24th Annual Executive War College on Lab and Pathology Management in April, Chairman and CEO David Abney (above) explained why UPS is investing in drone technology for clinical laboratory health network delivery. “Healthcare is a strategic imperative for us,” Abney said. “We deliver a lot of important things, but lab [shipments] are critical, and they’re very much a part of patient care.” (Photo copyright: Dark Daily.)
In October, UPS signed a letter of intent with CVS Health to “explore drone deliveries, expanding UPS’ sights from hospital campuses to the homes of CVS customers as it builds out its drone delivery subsidiary,” Modern Healthcare reported.
In November, UPS succeeded in these goals with UPS Flight Forward, Inc. (UPSFF), UPS’ new drone delivery service which, according to its website, is the first “drone airline” to receive full Part 135 certification (Package Delivery by Drone) from the Federal Aviation Administration (FAA).
“This drone delivery, the first of its kind in the industry, demonstrates what’s possible for our customers who can’t easily make it into our stores,” said Kevin Hourican, EVP, CVS Health and President of CVS Pharmacy, in a UPS press release. “CVS is exploring many types of delivery options for urban, suburban, and rural markets. We see big potential in drone delivery in rural communities where life-saving medications are needed and consumers at times cannot conveniently access one of our stores.”
Drones Deliver Clinical Lab Specimens and Pharmaceuticals
Since March, UPSFF has completed more than 1,500 drone
flights (with 8,000 clinical laboratory samples) at WakeMed in Raleigh, N.C.
UPS’ drone delivery decreased delivery time of clinical laboratory specimens
between WakeMed’s physician office building to the hospital-based lab from 19
minutes to three minutes, according to UPS data reported in October by an Advisory
Board daily briefing.
WakeMed is seeking to “provide advantages in patient care
that cannot be obtained in any other way” Michael
Weinstein, MD, PhD, Director of Pathology Laboratories at WakeMed, told TDR.
With the signing of the UPS (NYSE:UPS)-UPSFF (UPS Flight
Forward)-CVS (NYSE:CVS.N) agreement in October—and initial first flights which
took place on November 1 between a CVS pharmacy and customers’ residences in
Cary, NC—UPS completed the “the first revenue-generating drone delivery of a
medical prescription from a CVS pharmacy directly to a consumer’s home,” the
UPS press release states.
“When we launched UPS Flight Forward, we said we would move quickly to scale this business … and that’s exactly what we are doing,” Scott Price (above), UPS Chief Strategy and Transformation Officer, told Supply Chain Dive. “We started with a hospital campus environment and are now expanding scale and use-cases,” he added. Clinical laboratories can probably look forward to similar UPS drone delivery services in all 50 states and Washington, DC. (Photo copyright: UPS.)
Other Healthcare Organizations on Board
WakeMed and CVS are not alone in UPS drone deployment for
healthcare deliveries. Advisory Board reported that UPSFF also partnered
with other healthcare systems to provide drone flights for on-campus delivery of
pharmaceuticals and medical supplies, including:
AmerisourceBergen:
to move pharmaceuticals, supplies, and records to “qualifying” medical
campuses;
Kaiser
Permanente: to send medical supplies between buildings at different campus
sites; and
University
of Utah Health’s hospital campuses: to transport biological samples,
documents, supplies, and medical instruments between their facilities.
Drone delivery of clinical laboratory specimens is swiftly become a global reality that labs should watch closely. Past Dark Daily e-briefings reported on drone deliveries being conducted in Virginia, North Carolina, Australia, Switzerland, and Rwanda.
Pathologists and medical laboratory managers need to stay
abreast of these developments, as widespread drone delivery of clinical laboratory
specimens may happen on a surprisingly fast timeline. Drone delivery already
has TAT improvement implications and could be a way for labs to differentiate
their businesses and enhance workflow.
