Expect there to be more clinical laboratory testing at pharmacies as retail pharmacy chains expand their primary care offerings
Walgreens Boots Alliance (NASDAQ:WBA) of Deerfield, Illinois, continues to expand its primary care footprint with VillageMD’s latest acquisition of Starling Physicians, a multi-specialty physicians group with 30 locations in Connecticut, according to a VillageMD news release. Walgreens is the majority owner of VillageMD, which now has more than 700 medical centers, Healthcare Dive noted.
This deal continues the trend of corporations acquiring physician practices. Already, the majority of physicians are employees, not partners in a private practice physician group. Under corporate ownership, these physician groups often decide to change their clinical laboratory providers. For that reason, managers and pathologists at local medical laboratories will want to explore how they might provide daily lab testing services to the corporate owners of these primary care clinics.
The Hartford Business Journal called VillageMD’s acquisition of Starling Physicians—which is subject to a state investigation for possible certificate-of-need requirement—one of Connecticut’s “more high-profile healthcare merger and acquisition deals in Connecticut in recent years.”
The Starling Physicians group acquisition comes just a few months after
VillageMD paid $8.9 billion for Summit Health-CityMD of Berkeley Heights, New Jersey, with primary care services in the Northeast and Oregon. Walgreens invested $3.5 billion in that transaction, a Summit Health news release noted.
These acquisitions by Walgreens/VillageMD provide opportunities for local clinical laboratories to serve the physicians in these practices, though the operations may have a different patient flow and work process than traditional family practice clinics located in medical offices around community hospitals.
“Starling shares our vision of being a physician-led model and they provide care in a compassionate and exceptional way to all the patients they serve. By integrating primary care with specialty care, we are able to optimize access to high-quality care for our patients,” said Tim Barry (above), CEO and Chair of VillageMD in the news release. “This is a natural extension of our growth in the Northeast, including our recent acquisition of Summit Health-CityMD. Together, we are transforming the way healthcare is delivered in the United States.” Clinical laboratories in these areas will want to develop a strategy for serving the physicians practicing at these non-traditional locations. (Photo copyright: The Business Journals.)
Primary Care at Retail Locations a Growing Trend
Dark Daily and its sister publication The Dark Report have reported extensively on the growing trend by pharmacy chains and other retail superstores to add primary care services to their footprint.
In “By 2027, Walgreens Wants 1,000 Primary Care Clinics,” The Dark Report covered how Walgreens had disclosed that it would spend $5.2 billion to acquire a 63% interest to become the majority owner of VillageMD. Fierce Healthcare reported that “[Walgreens] planned to open at least 600 Village Medical at Walgreens primary-care practices across the country by 2025 and 1,000 by 2027.”
VillageMD is a primary care provider with same-day appointments, telehealth virtual visits, in-home care, and clinical laboratory diagnostic testing such as blood tests and urinalysis. Many VillageMD practices are located in buildings next door to Walgreens sites throughout the United States. (Photo copyright: Walgreens.)
Other Retailers Investing in Primary Care
Other retailers have recently taken deeper dives into healthcare as well.
According to Forbes, “The acquisition comes amid a flurry of acquisitions across the US for doctor practices, which are being purchased at an unprecedented pace by large retailers like Walgreens Boots Alliance, CVS Health, Amazon, and Walmart. Meanwhile, medical care providers owned by health insurers like UnitedHealth Group’s Optum and Cigna’s Evernorth are also in the doctor practice bidding war.”
And in February, CVS announced plans to acquire for $10.6 billion Oak Street Health, a Chicago-based primary care company with 169 medical centers across 21 states that plans to have more than 300 centers by 2026.
Do Clinical Laboratories Want Retail Customers?
The question of whether clinical laboratories should pursue retail customers is at this point academic. Consumer demand is driving the change and labs that don’t keep up may be left behind.
“The trend of putting full-service primary care clinics in retail pharmacies is a significant development for the clinical laboratory industry,” wrote Robert Michel, Editor-in-Chief of Dark Daily and The Dark Report. “These clinics will need clinical lab tests and can be expected to shift patients away from traditional medical clinic sites for two reasons—lower price and convenience—since this new generation of primary care clinics will be located around the corner from where people live and work.”
Thus, healthcare system laboratories or large reference labs may want to reach out to Walgreens, CVS, Amazon, and Walmart for test referrals. These and other large retailers are investing heavily in the belief that consumers will continue to seek convenience in their healthcare.
New federal funds likely to spark additional growth in hospital-at-home programs across the US while creating need for clinical laboratories to serve these homebound patients
In one of the latest examples of health systems’ providing acute care to patients outside of traditional hospital settings, Orlando Health announced its launch of the Orlando Health Hospital Care at Home program serving central Florida.
According to an Orlando Health press release, “The Orlando Health program is the first in Central Florida to be approved for Medicare and Medicaid patients, with future plans to expand the service for patients with private insurance and at other Orlando Health locations. It is an extension of a federal initiative created during the height of the COVID-19 pandemic to increase hospital capacity and maximize resources.”
Orlando Health is a not-for-profit healthcare system with 3,200 beds at 23 hospitals and emergency departments. It is the fourth largest employer in Central Florida with 4,500 physicians and 23,000 employees. Its Hospital Care at Home program serves patients who meet clinical criteria with 24/7 telehealth remote monitoring and virtual care from the Orlando Health Patient Care Hub. In-person nursing visits are also offered daily, according to Orlando Health.
“Orlando Health wanted to be able to provide a different level of care for its patients and give them a different opportunity to be cared for other than the brick-and-mortar of the hospital,” Linda Fitzpatrick (above), Assistant Vice President for Advanced Care at Orlando Health told Health News Florida. “We’ll have decreased infectious rates in their homes, decreased exposures. It is a healthier and happier place to be in order to heal.” Clinical laboratories in the Orlando area will have the opportunity to serve healthcare providers diagnosing patients in non-traditional healthcare settings. (Photo copyright: Orlando Sentinel.)
Lowering Costs and Avoiding In-hospital Infections, Medical Errors
Treating patients at home, even after inpatient visits, can save them money. At the same time, patients are more comfortable in their own homes and that contributes to faster recoveries.
“[We’ll be able to measure] heart rate, respiration, temperature, and blood pressure. We’ll also do video conferencing from that location with the patient. We’ll have nurses going to the patient’s home at least twice a day,” interventional cardiologist Rajesh Arvind Shah, MD, Senior Medical Director of Hospital Care at Home, Orlando Health, told Health News Florida.
Orlando Health patients can be safely treated in their homes for many conditions including:
According to the American Hospital Association (AHA), “many are seeing the hospital-at-home model as a promising approach to improve value. … This care delivery model has been shown to reduce costs, improve outcomes, and enhance the patient experience. In November 2020, the Centers for Medicare and Medicaid Services launched the Acute Hospital Care at Home program to provide hospitals expanded flexibility to care for patients in their homes.”
Hospital-in-the-Home (HITH) is considered by many experts to be safer for patients, as they are not exposed to nosocomial (hospital-acquired) infections, falls, and medical errors. In its landmark “To Err is Human” report of 1999, the Institute of Medicine (IOM) estimated that medical errors killed as many as 98,000 patients in hospitals annually.
And in “Australia’s Hospital-in-the-Home Care Model Demonstrates Major Cost Savings and Comparable Patient Outcomes,” we predicted that wider adoption of that country’s HITH model of patient care would directly affect pathologists and clinical laboratory managers who worked in Australia’s hospital laboratories. Having more HITH patients would increase the need to collect specimens in patient’s homes and transport them to a local clinical laboratory for testing, and, because they are central to the communities they serve, hospital-based medical laboratories would be well-positioned to provide this diagnostic testing.
New Federal Funds for HITH Programs
One recent impetus to create new HITH programs was the passing of the Consolidated Appropriations Act, 2023 (HR 2617). The federal bill includes two-year extensions of the telehealth waivers and Acute Hospital Care at Home (AHCaH) individual waiver that got started during the COVID-19 pandemic.
As of March 20, the federal Centers for Medicare and Medicaid Services (CMS) listed 123 healthcare systems and 277 hospitals in 37 states that had been approved to use the AHCaH wavier.
Now that federal funding for AHCaH waivers has been extended, more healthcare providers will likely start or expand existing HITH programs.
“I think [the renewed funding] is going to allow for additional programs to come online,” Stephen Parodi, MD, Executive Vice President External Affairs, Communications, and Brand, Permanente Federation; and Associate Executive Director, Permanente Medical Group, told Home Health Care News.
“For the next two years, there’s going to be a regulatory framework and approval for being able to move forward. It allows for the collection of more data, more information on quality, safety, and efficiency of these existing programs,” he added. Parodi also oversees Kaiser Permanente’s Care at Home program.
Labs without Walls
Clinical laboratories can play a major role in supporting HITH patients who require timely medical test results to manage health conditions and hospital recovery. Lab leaders may want to reach out to colleagues who are planning or expanding HITH programs now that federal funding has been renewed.
Even US military clinical laboratories strive to cut costs, protect quality, and improve outcomes
Defense Health Agency (DHA), a part of the federal Department of Defense (DOD), recently launched a plan to consolidate healthcare facilities within certain geographical regions and to unify and integrate the military’s clinical laboratory operations in those areas. The goal is to streamline efficiencies and lower costs while maintaining quality lab testing services.
The DOD operates a nationwide network of medical treatment facilities (MTFs) that include state-of-the-art clinical and anatomic pathology laboratories serving military personnel and their families. These military labs face the same issues of cost, efficiency, and outcomes as do civilian clinical laboratories throughout the United States.
To address those challenges and bring together clinical laboratory services in specific regions, the DHA established the Tidewater Market in April of 2021 to serve select US Air Force, Army, and Navy MTFs in the Washington DC metro area, central North Carolina, Jacksonville, and coastal Mississippi.
Tidewater is the fifth Military Health System (MHS) market created to manage MTFs as they transition into the DHA.
Health.mil—a website maintained by the MHS as an informational resource for those it serves—describes the MHS as “one of America’s largest and most complex healthcare institutions, and the world’s preeminent military healthcare delivery operation.
“Our MHS saves lives on the battlefield, combats infectious disease around the world, and is responsible for providing health services through both direct care [at military hospitals and clinics known as ‘military treatment facilities’] and private sector care to approximately 9.6 million beneficiaries, composed of uniformed service members, military retirees, and family members,” Health.mil notes.
With 9.6 million beneficiaries, MHS is one of the largest healthcare service organizations operating in the United States.
“The establishment of this market provides a true opportunity to optimize healthcare for our beneficiaries by focusing on outcomes and access across the Tidewater market,” said Navy Rear Admiral Darin Via, MD, Tidewater market manager, in an MHS/DHA news release. “It also allows us to work towards standardization of processes, creating an easier environment for our patients to navigate within.” (Photo copyright: US Navy.)
Finding Efficiencies, Optimizing Clinical Laboratory Processes and Services
In an article outlining the Tidewater Market clinical laboratory initiative, Health.mil noted that “A market is a group of MTFs in one geographic area working together with its TRICARE partners, Veterans Affairs hospitals, other federal healthcare organizations, private sector teaching hospitals and medical universities, as well as other healthcare partners. Markets operate as a system to support the sharing of patients, staff, budget, and other functions across facilities to improve readiness and the delivery and coordination of health services.”
The Tidewater Market provides integrated, affordable, high-quality healthcare services to active-duty service members, military retirees, reservists and national guardsmen, and their families. The market currently serves more than 390,000 beneficiaries.
In 2022, the Tidewater Market Laboratory/Pathology Integration Working Group was created to optimize services while reducing costs within the market. The group was created by US Navy Captain Stacie Milavec, who has more than 23 years of experience in military medicine.
“One of DHA’s goals with setting up a market structure is to find efficiencies and optimize and standardize processes and services wherever possible,” Milavec said in an MHS/DHA news release. “We’ve been able to do exactly that by collaborating within our working group.”
Resource Sharing between Military Clinical Laboratories
The MTFs that are geographically close to each other helped expedite turnaround times for testing results. By working together, they saved the Tidewater Market an estimated $80,000 during fiscal year 2022.
One of the methods they used to streamline testing and lower costs was to allow resource sharing between facilities within the market. For example, the full-service clinical laboratory located at the Naval Medical Center Portsmouth (NMCP) began performing head and neck pathology cases, breast biopsies, and PAP testing for some of the other facilities within the Tidewater Market. These services were previously performed by other means and in some cases were sent to commercially-contracted clinical laboratories for analysis at a high cost.
The NMCP also took on Human Papilloma Virus (HPV) testing for all MTFs within the market.
In February of 2023, NMCP began taking on additional clinical chemistry tests from the 633rd Medical Group at Joint Base Langley-Eustis located in Hampton, Virginia. Prior to that collaboration, those tests were sent out to contracted labs off-base for analysis.
“[Through collaboration between the MTFs] we’ve been able to successfully transition civilian marketplace send-out testing back into the military market by utilizing market resources,” said pathologist US Air Force Captain Dianna Chormanski, MD, Laboratory Medical Director with the 633rd Medical Group at Joint Base Langley-Eustis, in the press release. “I’m a big fan of cooperation and working together, and that’s what a market should be.”
The DHA established the market-based structure as part of the National Defense Authorization Act for Fiscal Year 2017. It’s an example of regional laboratory consolidation within one region of the US where a common effort brought together clinical laboratories operating on military bases of different services. The military’s goal was a unified, integrated medical laboratory operation that could deliver targeted cost savings while maintaining quality lab testing services. It appears to be successful.
Loss could indicate an industrywide slowdown in digital health adoption and suggests medical laboratories will want to continue developing a virtual care strategy
Only two years after Teladoc Health (NYSE:TDOC) completed acquisition of Livongo, a data-based health coaching company, the virtual healthcare provider reported a 2022 net loss of $13.7 billion, a company press release announced.
The loss, which has been described as “historic,” is “mostly from a write-off related to the plummeting value of its Livongo acquisition. … By comparison, in 2021 [just a year earlier], Teladoc posted a net loss of $429 million,” Fierce Healthcare reported.
However, during Teladoc’s fourth quarter earnings call, CEO Jason Gorevic said, “We are pleased with the strong fourth quarter and full-year operating results. Despite a challenging macro environment, we were able to expand our product offerings and enhance the level of care delivered across our integrated whole-person platform.” Teladoc Health’s 2022 revenue was $2,406,840 compared to $2,032,707 in 2021. That’s an 18% increase over last year’s revenue, according to the earnings report. Nevertheless, a month before the earnings call Teladoc laid off 300 non-clinician employees, Fierce Healthcare noted.
“Teladoc Health has been at the forefront of the adoption curve, and we believe that our scale, breadth of product offering, and proven outcomes will enable us to maintain and expand our position in the market,” said Teladoc Health CEO Jason Gorevic during February’s earnings call. Clinical laboratory leaders may view the company’s $13B loss as indication that adoption in telehealth by physicians, healthcare providers, and patients of digital-based health services is not happening as swiftly has been predicted. (Photo copyright: The Business Journals.)
Predictions in Telehealth Adoption Fall Short
Teladoc Health, based in Purchase, New York, acquired Livongo of Mountain View, California, in October 2020 for $18.5 billion.
A news release at that time declared that the merger was “a transformational opportunity to improve the delivery, access, and experience of healthcare for consumers around the world.
“The highly complementary organizations,” the release stated, “will combine to create substantial value across the healthcare ecosystem, enabling clients everywhere to offer high quality, personalized, technology-enabled longitudinal care that improves outcomes and lowers costs across the full spectrum of health.”
The deal was hailed as advancing telemedicine and digital health services. As it turned out, though, the demand for those types of services fell far short of the Teladoc’s expectations. One way to interpret the cause of the multi-billion dollar write-down is that adoption of digital health services by physicians, healthcare providers, and consumers is not happening as fast as Teladoc projected.
It may also be that companies allocated too much money to deals during the COVID-19 pandemic, an unstable period of time for making major business decisions.
Teladoc to Reduce Costs while Pursuing Increased Adoption of Virtual Care
Gorevic told analysts during the earnings call that the company needs to reduce costs and reach a market that is “in the early innings.” Year-over-year growth of 6% to 11% is expected in 2023, he said.
“You should expect us to balance growth and margin with an increased focus on efficiency going forward. Part of that approach is rightsizing the cost structure to reflect the current growth rates of the business,” Gorevic said. “The more balanced approach does not mean that we will stop relentlessly pursing growth and increased adoption of virtual care across the industry. Virtual care’s role within the healthcare industry remains underpenetrated, and we will continue to invest to expand our leadership position,” he added.
Digital Health Investing Falls Off
However, citing digital health market data in the new CB Insights report, Becker’s Hospital Review(Becker’s) suggested the digital health bubble may have “popped,” and that funding by investors is falling fast from the “Golden Age” of 2021.
The digital health category grew by 79% in 2021 to $57.2 billion, a record high, according to data cited by Becker’s. In the fourth quarter of 2021, there were 13 new digital health companies with valuations of at least $1 billion each. But by the end of 2022, digital health funding dropped to $3.4 billion. That’s “a five-year low,” Becker’s reported.
“The drop in funding in digital health companies I feel is a response to the volatility in healthcare where over 50% of hospitals and healthcare providers have posted losses for 2022 and a bleak outlook for 2023,” Darrell Bodnar, Chief Information Officer at North Country Healthcare in Lancaster, New Hampshire, told Becker’s.
And, in a statement about hospitals’ financial health, Fitch Ratings said providers in 2022 reported “weaker profitability and liquidity” as compared to 2021. For most providers, a “rapid financial recovery” is not expected, Fitch noted.
Labs Need Telehealth Strategies
All of this uncertainty in the telehealth/virtual care markets may ultimately benefit clinical laboratories and lab investors who delayed investing in technology that enables supporting physicians and patients using telemedicine visits. Still, it would be smart for medical laboratory leaders to develop a digital health strategy to meet consumer demand for lab testing services in tandem with virtual care visits with healthcare providers.
Though still in trials, early results show tests may be more accurate than traditional clinical laboratory tests for detecting prostate cancer
Within weeks of each other, different research teams in the US and UK published findings of their respective efforts to develop a better, more accurate clinical laboratory prostate cancer test. With cancer being a leading cause of death among men—second only to heart disease according to the Centers for Disease Control and Prevention (CDC)—new diagnostics to identify prostate cancer would be a boon to precision medicine treatments for the deadly disease and could save many lives.
Thus, these are two different pathways toward the goal of achieving earlier, more accurate diagnosis of prostate cancer, the holy grail of prostate cancer diagnosis.
“There is currently no single test for prostate cancer, but PSA blood tests are among the most used, alongside physical examinations, MRI scans, and biopsies,” said Dmitry Pshezhetskiy, PhD (above), Professorial Research Fellow at University of East Anglia and one of the authors of the UEA study. “However, PSA blood tests are not routinely used to screen for prostate cancer, as results can be unreliable. Only about a quarter of people who have a prostate biopsy due to an elevated PSA level are found to have prostate cancer. There has therefore been a drive to create a new blood test with greater accuracy.” With the completion of the US and UK studies, clinical laboratories may soon have a new diagnostic test for prostate cancer. (Photo copyright: University of East Anglia.)
East Anglia’s Research into a More Accurate Blood Test
Scientists at the University of East Anglia (UEA) worked with researchers from Imperial College in London, Imperial College NHS Trust, and Oxford BioDynamics to develop a new precision medicine blood test that can detect prostate cancer with greater accuracy than current methods.
The researchers evaluated their test in a pilot study involving 147 patients. They found their testing method had a 94% accuracy rate, which is higher than that of PSA testing alone. They discovered their test significantly improved the overall detection of prostate cancer in men who are at risk for the disease.
“When tested in the context of screening a population at risk, the PSE test yields a rapid and minimally invasive prostate cancer diagnosis with impressive performance,” Dmitry Pshezhetskiy, PhD, Professorial Research Fellow at UEA and one of the authors of the study told Science Daily. “This suggests a real benefit for both diagnostic and screening purposes.”
The UK scientists hope their test can eventually be used in everyday clinical practice as there is a need for a highly accurate method for prostate cancer screening that does not subject patients to unnecessary, costly, invasive procedures.
Cedars-Sinai’s Research into Nanotechnology Cancer Testing
Researchers from Cedars-Sinai Cancer took a different approach to diagnosing prostate cancer by developing a nanotechnology-based liquid biopsy test that detects the disease even in microscopic amounts.
Their test isolates and identifies extracellular vesicles (EVs) from blood samples. EVs are microscopic non-reproducing protein and genetic material shed by all cells. Cedars-Sinai’s EV Digital Scoring Assay accurately extracts EVs from blood and analyzes them faster than similar currently available tests.
“This research will revolutionize the liquid biopsy in prostate cancer,” said oncologist Edwin Posadas, MD, Medical Director of the Urologic Oncology Program and co-director of the Experimental Therapeutics Program in Cedars-Sinai Cancer in a press release. “The test is fast, minimally invasive and cost-effective, and opens up a new suite of tools that will help us optimize treatment and quality of life for prostate cancer patients.”
The researchers tested blood samples from 40 patients with prostate cancer. They found that their EV test could distinguish between cancer localized to the prostate and cancer that has spread to other parts of the body.
Microscopic cancer deposits, called micrometastases, are not always detectable, even with advanced imaging methods. When these deposits spread outside the prostate area, focused radiation cannot prevent further progression of the disease. Thus, the ability to identify cancer by locale within the body could lead to new precision medicine treatments for the illness.
“[The EV Digital Scoring Assay] would allow many patients to avoid the potential harms of radiation that isn’t targeting their disease, and instead receive systemic therapy that could slow disease progression,” Posadas explained.
Other Clinical Laboratory Tests for Prostate Cancer Under Development
According to the American Cancer Society, the number of prostate cancer cases is increasing. One out of eight men will be diagnosed with the illness during his lifetime. Thus, developers have been working on clinical laboratory tests to accurately detect the disease and save lives for some time.
In “University of East Anglia Researchers Develop Non-Invasive Prostate Cancer Urine Test,” Dark Daily reported on a urine test also developed by scientists at the University of East Anglia that clinical laboratories can use to not only accurately diagnose prostate cancer but also determine whether it is an aggressive form of the disease.
And in “UPMC Researchers Develop Artificial Intelligence Algorithm That Detects Prostate Cancer with ‘Near Perfect Accuracy’ in Effort to Improve How Pathologists Diagnose Cancer ,” we outlined how researchers at the University of Pittsburgh Medical Center (UPMC) working with Ibex Medical Analytics in Israel had developed an artificial intelligence (AI) algorithm for digital pathology that can accurately diagnose prostate cancer. In the initial study, the algorithm—dubbed the Galen Prostate AI platform—accurately detected prostate cancer with 98% sensitivity and 97% specificity.
More research and clinical trials are needed before the new US and UK prostate cancer testing methods will be ready to be used in clinical settings. But it’s clear that ongoing research may soon produce new clinical laboratory tests and diagnostics for prostate cancer that will steer treatment options and allow for better patient outcomes.
