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August 12, 2022

Diagnostics as a Service - what’s the latest?

Commentary
Meaghan Schedel
&

COVID-19 showed that there’s a willingness for at-home testing. A Harvard T.H Chan School of Public Health poll noted that 86% of Americans said they would test themselves using at-home rapid COVID-19 tests. Individuals are becoming more engaged in their healthcare decision making and the ownership of their personal health information. There’s a demand for faster and more accessible alternatives to inconvenient and time consuming in-person lab tests. Is Diagnostics as a Service (DaaS) the answer? 

What is Diagnostics as a Service (DaaS)?

Historically, individuals have gone to healthcare facilities to have blood drawn or samples collected. After processing by a lab, several days or weeks later the patient typically receives a call from their physician to relay the results of the test. DaaS disrupts this workflow by creating an opportunity for individuals to purchase and conduct many tests over-the-counter with at-home kits or through streamlined services, all without a physician’s order. 

Many at-home kits, like rapid COVID-19 tests, can be completed by the user without any support from a laboratory service. Others may be collected by the user at-home and then mailed to a laboratory for analysis. Where individuals are less comfortable drawing a sample or where the test’s requirements exceed those of an at-home kit or need a trained professional’s support, other streamlined services such as the online booking of laboratory services at local locations or even concierge phlebotomists for at-home collection can be arranged. 

These direct-to-consumer tests are often used to help individuals monitor existing health conditions, identify new health conditions, or provide general health and wellness data. Tests are available for the detection of a number of diseases. Though not all tests are diagnostic and some provide more general health information. Examples of available tests include COVID-19, food allergy, pregnancy, diabetes risk, sexually transmitted infections, colorectal cancer, and more. Quest Diagnostics also offers an over the counter “Comprehensive Health Profile '' test for $299+ that includes a “Health Quotient Score.'' This is a score from 1-100 developed by Quest to provide a numerical representation of health. 

While some individuals may seek out these tests for peace of mind, or pure interest, DaaS has great potential to improve ease of access for people that lack access to healthcare facilities. There’s also an opportunity to simplify testing for people who need frequent screening such as those with chronic conditions or people who are immunocompromised who may wish to avoid repeated trips to crowded doctors' offices. 

What are its limitations? 

While the opportunity for DaaS to monitor existing diseases or potentially uncover new ones at an early stage are vast, there are concerns over test accuracy and the ability for individuals to properly understand and interpret test results. Consumers may also not understand the limitations of tests and may adopt a false sense of security from the results. Alternatively, consumers may act on results and make changes to their lifestyle or seek out over-the-counter treatments without first consulting a physician.  

There are also concerns over access and health equity. A recent publication by the CDC on the use of at-home tests for COVID-19 showed that test use was lower among people who self-identified as Black, were 75 years or older, had lower incomes, and had a high school level education or less. 

With the cost of some tests ranging between $29 and $300+ depending on the type of test, price may also be a barrier to uptake. Generally health insurance companies only pay for tests that have been ordered by a physician so most self-directed tests would need to be paid out-of-pocket or with flexible spending accounts (FSA) or health savings accounts (HSA) funds. However, Labcorp has expressed plans to expand their D2C offering through physicians, insurers, and employers later this year.  

What are mobile medical services and how are major labs using them? 

Mobile medical services provide a bridge between at-home kits and in-person visits to a health center. These services contract or employ technicians and phlebotomists to help facilitate specimen collection in a home setting where the support of a trained professional is needed. They are typically more common in urban areas where consumers with higher incomes are more willing to pay for the convenience of a concierge service. However, Getlabs, a partner of Labcorp, is available in 50 U.S. markets and reaches more than 50% of the U.S. population. 

According to their website, Getlabs phlebotomists are “full-time employees trained to collect blood, saliva, stool, urine, vitals, liquid biopsies, H.pylori breath tests, and more.” This full-time employee element is a crucial part of their partnership with Labcorp and a barrier for other services that use contract technicians or phlebotomists. By employing and training their phlebotomists, Getlab has control and oversight over their practices and can ensure better customer service and higher quality sample collection. This is important to Labcorp because once they’ve accepted the sample for processing, they become liable for the actions of the phlebotomist. Contract labor is not subject to the same level of oversight and training, making the use of this labor a major liability for laboratories that choose to work with them. 

What trends are we seeing? 

While Labcorps and QuestDiagnostics, two of the biggest laboratory services in the US, are both pursuing the DaaS model, it’s unclear how profitable these pursuits will be. Where mobile phlebotomy services are required, variations in price point and the cost of labor lead to small profit margins. 

Fast growing companies like LetsGetChecked, are also trying to make their mark in this space by partnering with giants like CVS and Walmart. LetsGetChecked’s B2B strategy provides access to their tests through employers, health plans, providers, and public sector agencies. Newer entrants may be able to offer more in terms of customer service than the Labcorps and QuestDiagnostics of the world. However, major laboratories are looking to stay ahead of this by also partnering with customer service experts like Walgreens and Walmart

We’re still in the early days of seeing how DaaS will play out given its boost from COVID and the continued demand for convenience and accessibility in healthcare. However, in terms of commercial benefit, the greatest strength of DaaS may lie in its ability to bring patients into the ecosystem, collect more data, facilitate more e-consults, and prescribe medicines. 

References:

https://phlebotomynetwork.com/uber-for-healthcare/?utm_source=substack&utm_medium=email

https://www.fiercebiotech.com/medtech/labcorp-launches-online-platform-for-ordering-at-home-tests-scheduling-person-appointments

https://www.labcorp.com/labcorp-launches-convenient-home-diagnostic-test-collection-service-collaboration-getlabs?utm_source=substack&utm_medium=email

https://www.aacc.org/advocacy-and-outreach/position-statements/2019/direct-to-consumer-laboratory-testing?utm_source=substack&utm_medium=email 

https://ovsecondopinion.substack.com/p/diagnostics-as-a-service-may-be-one?utm_source=email 

https://questdirect.questdiagnostics.com/products 

https://www.cdc.gov/mmwr/volumes/71/wr/mm7113e1.htm 

https://www.getlabs.com/

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