How fascinating was it to follow the Theranos story? To see a company fall from a $10 billion valuation to insolvency in a matter of weeks is something I thought I’d see in cryptocurrencies like Bitcoin, but it is certainly not the norm in the clinical laboratory industry. When I look back to the earliest days of Theranos, I can still see understand why so many very savvy investors jumped on board the Theranos train – because the truth is that Theranos was absolutely correct about one thing: it makes no sense for all lab testing to be done at the big, centralized lab facilities. Instead, accessibility, quality and cost should be the key drivers. How does sending specimens across the country to expensive labs billing out of network address any of these issues? Short answer: it doesn’t. That’s why more and more hospital system, ACOs, addiction treatment facilities and physician groups are bringing ancillary lab services in-house. It really comes down to three things:
With an on-site lab, you can say goodbye to patient mix ups, lost samples, “QNS” or leaked specimens in transit. Not to mention that having control of maintenance and quality checks improves patient care and the accuracy of results.
Having full control of turn-around time and never again having to call into an automated system to get an ETA (or another excuse!) on your patient results. As a general rule, health care providers tend to be smart, focused, and work on time-sensitive issues. Running your own samples means no more having to wait in line to get results.
High priced third-party labs with huge sales and marketing budgets are inflating costs for the entire system.
Every reputable analyst in the country will tell you that the health system is trending towards value based reimbursement, and if you read anything about UHC’s latest deal with one of the big labs, you’ll see that the process is well underway in the clinical laboratory space. In the near future, providers are going to be saddled with the expectation of bundled payments for treating different disease states. With laboratory medicine playing a key role in virtual any diagnosis or treatment plan, it’s fair to expect more integrated care systems with end-to-end capabilities to play an increasingly prominent role in the future of our health care system.
But the good news is that you don’t need a “micro-lab” from Theranos to bring an affordable, accessible, high-quality laboratory into a practice. The economics of an in-house lab work great for most practices and often provide substantial ancillary revenue opportunities while simultaneously setting the practices up for long-term financial success. Stop letting the big reference labs eat your lunch. Let us help you build your own in-house lab and recapture that revenue that the big companies have been taking off your hands.
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CEO and Founder, Elite Diagnostics
MBA, Wharton School of Business – University of Pennsylvania