Quest and Labcorp in trouble?
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Free Labs for Quest and Labcorp employees is a nice perk, but if I worked for these two companies I would be more concerned about the passion the Theranos CEO has for improving what most patients would consider a glutinous and clunky segment of our healthcare industry. The fact that she’s apparently not trying to shop the company to the highest bidder and focuses on significant cost reductions could win the public PR battle IF SHE’S RIGHT! I guess adding former Sen. Bill Frist, MD to the BOD that most small companies would dream of will help them navigate the regulatory mountains ahead of them. I bet LabCop and Quest both have offers in on this company.
Doctor’s will resist as most have noted since they profit from the labs. But I see most of them slowly losing their fight if the technology is validated and this takes flight.
Why do I care? Last year I went to my PCP for stiff joints. The doctor tells me that she wants to run a “few lab tests to see what’s going on with me.” I never had any health concerns, so the fact that I elected cheap health insurance from my employer with a 40% coinsurance rate suddenly popped into my head. I tried to ask the receptionist at check-out what the labs drawn would cost and she said they couldn’t tell me the breakdown in cost. I asked if any of the labs were unusual and her comment was “it shouldn’t hurt too bad.” Weeks later I receive a bill from LabCorp for my 40% of the labs for a total of over $2,000 for my portion not including the 60% insurance picked up. When I finally got to the Rhuematologist, the comment was “well, they certainly ran a full array of tests that I probably wouldn’t have ordered.”
Months later I ran across the Theranos articles and interviews and a couple things stood out based on my recent experience:
1. Up front pricing (just like most consumer items, the customer knows the cost before agreeing to the service). Labcorp/Quest – Please find a way to inform customers and not simply tell us you ran what the doctor ordered and drew in the office.
2. Cost – If someone could improve (and then prove) the technology to where tests can be run cheaper, why would medicare and insurance companies not lower the reimbursement rate? I see what is charged even for the basic tests and this puts people with no insurance out of the market for most testing. The fact they charge insurance and people without insurance the same rate is a very honorable aspect if this pans out. There is nothing new about this technology, why does the cost for old technology keep increasing?
3. Pain – I get labs drawn on a regular basis to monitor medication. She has a point about little effort to improve the way basic labs are taken. We can now do some less invasive surgical procedures that used to require cutting us wide open. Why can’t we improve the technology to accurately test blood from a few small drops from a finger stick? I’m not a scientist and I’m sure there are clotting issues, etc., but it can be done if you follow the logic of other technological advances. Compare the cell phone you have in your pocket to your very first cell phone for reference. Both make phone calls.
Whether this is just a big dream remains to be seen. I hope the take away for Labcorp and Quest is that they better get onboard with customer service and actually caring about patients or they will lose the PR battle if this takes flight. You only have to look as far as Blackberry or Kodak to see examples of companies that thought they were bullet proof. Plus, wouldn’t it be nice if patients respected you for being honest and publishing the rates for each test for the world to see?
Does former Senate Majority Leader Bill Frist count as a physician? I hear he knows a thing or two about medicine and leading regulatory change? It should be obvious to anyone who looks at the names of the BODs that they have much bigger plans than just putting a lab in every Walgreens over the next couple years.
I am a patient with minimal knowledge of what it takes to validate lab tests. The reference to 23andme does not appear to be fair comparison since patients will need a physician’s orders for the Theranos’ tests just like any other lab. Please help me understand the comparison.
I am also curious for feedback from the Fortune article. My understanding is their lab is accredited through CLIA, certified by CMS in every state and currently seeking FDA clearance on every test they offer. I also understand Quest and Labcorp do not have FDA clearance for all their tests and opposition to FDA approval exists within the lab industry. Question – What else will be required to prove the tests are accurate if they have CLIA, CMC and FDA clearance?
Have you seen the prices that are clearly posted on their website next to the Medicare allowable rate? I would lose sleep if this goes nationwide and prices stay similar.
I regularly pay for labs, so i had to pick my jaw up off the floor after comparing their prices to what I pay now. If the science is confirmed and there is a lab in every Walgreens, I for one will insist that my doctor order labs from Theranos. I now have great insurance but healthcare costs drive our insurance premiums and I will do my part to help.
Two of my doctors gave me reqs for blood test for Theranos. They love them 
and I love the price!!
and I love the price!!Two of my doctors gave me reqs for blood test for Theranos. They love them
I wrote the post above yours. I'm curious to know if the upfront pricing is true and what the experience is like having the blood drawn. Did the quote for the service match your final bill? Do they also have an app that allows you to keep all labs saved to a convenient source? Were results available as quickly as they say? Did your doctors have any concerns about the new technology? Sorry to be so full of questions, but please share your experience. I guess you live in Arizona or Palo Alto if you can use Theranos.
“The pricing isn't that big of a difference really.”
Response: Prices listed on Theranos website for basic tests are significantly lower
“The two hour turn around time any lab could do on most tests, it's the travel time to get the specimen to a testing site you have to get around.”
Response: This was not my experience as a patient while waiting for lab results to change my medicine.
“Every year around this time you hear a bunch of great things about Theranos and how everyone should beware, you read an interview in the WSJ with the CEO, or see an interview on Fox news with the CEO. But if you look at their website the same open positions have been posted for over a year, and if you provide your email for updates you haven't received anything.”
Response: Patients are also customers and my point is not that anyone “should beware.” We as a nation were still trying to land on the moon when this technology was transformed. Why hasn’t Quest or Labcorp invested in technology to reduce the need for common lab tests to a few drops of blood? Why hasn’t Labcorp and Quest been the least little concerned about providing a good customer experience or cost saving initiatives? Your allegiance is to the doctors and I think we know why. $$$ Clearly you are worried about this company if you have tracked open positions for the last year. Perhaps they use the titles as shells to not tip the hat to competitors? Plus, maybe they are intentionally role it out slow to make sure they have it right.
“The Board of Directors reads like a who's who of Washington politics and well connected people. Not one medical doctor on the board.”
Response: They do have a physician on the board. Looks like they have their Generals in place to lead the resistance that big money will put up to keep the current cash cow flowing. This company would be crushed if they could not navigate Washington and special interest.
“It would be interesting for someone to bring something to market that is patient oriented and brings real value to physicians making medical decisions for less cost and more timely.”
Response: I hate having my blood drawn even now that I’m getting used to it. I have respect for this company because they cared enough to develop a way to draw/test blood thru a finger stick. Nobody else has been remotely interested in patient experience. Upfront reduced cost pricing and less pain during the draw go a long way to a customer-oriented approach. I believe the company’s intent is to get the results to the doctor faster. Accuracy of the results is the only other piece that should be of concern to doctors. Wait until patients start demanding a lab order for Theranos or they will not get labs drawn. What will doctors say if there is a Thernos lab at a nearby Walgreens?
“It's time to stop threatening LabCorp and Quest and stop making it about your competition and bring the darn product to market. Put up or shut up!”
Response: Nobody is threatening you, but I do sense some sensitivity since this company is of interest to you. I would love for Quest and Labcorp to develop similar technologies to improve the patient experience. It hurts me inside when I think of children having to face the needle knowing how much I hate having my blood drawn. This should have been a no-brainer for research and development over the last couple decades. As for your “put up or shut up!” comment, is the deal to eventually put a lab in 8000 Walgreens count? Are the test sites in Arizona a start? Would Walgreens allow their reputation to be destroyed by allowing unproven technology to be placed in every store? I can’t image they would have taken this deal if the science is not sound.
If nothing else, I hope Labcorp and Quest will now be laser focused on patients as much as doctors and develop their own finger stick method. Please take this feedback to your management.
I guess we revisit this post in a couple years and see how things turned out.
Now let me get this straight. If I go out somewhere to enjoy a meal and there is a choice between prime rib and a hot dog, I should always choose the hot dog. After all I'm getting fed with the hot dog and its a lot cheaper than the prime rib.
When it comes to my health care I want the best and I'm willing to pay for it. I would rather go without than to pay for something that may or may not mean something. Why do you think Cancer Care Centers are so successful? When it comes to a person's health it's serious business. Cancer Care facilities know that when faced with cancer and death, patients are going to mortgage the house if necessary. If I need lab work for whatever reason, I want to know I'm getting accurate information so I can make the correct decisions.
When it comes to my health care I want the best and I'm willing to pay for it. I would rather go without than to pay for something that may or may not mean something. Why do you think Cancer Care Centers are so successful? When it comes to a person's health it's serious business. Cancer Care facilities know that when faced with cancer and death, patients are going to mortgage the house if necessary. If I need lab work for whatever reason, I want to know I'm getting accurate information so I can make the correct decisions.
From a patient perspective, I do not want to trade prime rib for hotdogs. I would prefer for the cost of my prime rib to be based on the company serving it, not sweetheart deals in a rigged market and preset pricing with the simple goal of maximizing the absolute cost per test since only people with insurance can afford lab testing. People forget this is a huge portion of healthcare that insurers gladly pass along to consumers and taxpayers. I am OK with companies competing for my business by continually improving their service. As it stands now, the patient is the last one to be considered since all we see is the person clearly not happy with having to draw our blood and the disrespectful billing department when questions are asked. My favorite steak house is not mean to me when serving my prime rib. They hope I come back and tell my friends, so they are nice to me and make my experience as pleasant as possible.
I too want the best from my healthcare. I don’t understand all the regulations behind certifying a lab but my understanding is they carry the exact same certifications as the big boys do and are going a step further by voluntarily seeking FDA clearance on all tests performed. Would they take this extra step if they were worried about their technology being at least as good as current method? I also believe they had to show Walgreens some sort of head-to-head testing against the big boys to further prove the technology is solid. I just can’t see a company like Walgreens signing a deal to put a lab in every store without assurance this is legitimate. It will destroy Walgreens if this turns out to be inferior technology. is there data to show head-to-head comparisons between existing labs to prove which is superior? One other interesting fact from the interviews is that they have also eliminated most of the pre testing activities that involve human involvement that are the usual culprits for lab errors.
The head-to-head data will eventually come once all the patents and infrastructure are in place. This just makes good business and common sense. There is another side to this coin. What if the head-to head testing proves significant flaws in current testing? Maybe they are not releasing the data to avoid scaring the public. That scenario is less likely, but possible, so careful what you ask for. I simply can’t believe that a 50 year-old technology cannot be improved. Look at the world around us and compare it to what life was like 50 years ago when the current technology was developed. Medicine has come a long way in the last half century.
May the best prime rib WIN!!!
The patient experiences I have read involved getting a conventional venous draw. I don't know why they act like all the testing is done from a finger prick.
Theranos will be getting the low hanging fruit but won't cause much change in the industry. Direct access testing without a physician order has existed for years, with prices posted on lab websites. It's only legal in 26 states but I anticipate that most of Theranos' business will be direct acess testing. Very few physicians will be refering patients there. Bundling of payments will also be keeping the patient specimens sent to the hospital, who own the physician practice to begin with.
Theranos will be getting the low hanging fruit but won't cause much change in the industry. Direct access testing without a physician order has existed for years, with prices posted on lab websites. It's only legal in 26 states but I anticipate that most of Theranos' business will be direct acess testing. Very few physicians will be refering patients there. Bundling of payments will also be keeping the patient specimens sent to the hospital, who own the physician practice to begin with.