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It’s a strange shopping experience. A customer walks into a hole-in-the-wall shop, chooses from a menu of medical tests, produces the sample required – blood, urine, feces, sperm, that strange hair found in a wrong place – and the register goes beep when the transaction’s completed. Prices vary from test to test. It costs about $200 to confirm that, yes, you’re the father (no need to bother Maury), but for as low as $50 a pop you can find out whether you are pregnant, what your cholesterol levels are, what your liver enzymes are up to, whether or not your prostate is acting up or if that weed is out of your system yet. Test results usually arrive in 24 hours.
It’s all hassle-free and you don’t need a doctor to order the tests; you don’t even need to give them your real name. Pay with cash, credit or even that gift certificate a thoughtful someone gave you. The services are priced to sell at serious discounts compared to what hospitals and doctors charge, even though they all send specimens to the same megalaboratory – Burlington, N.C.-based Laboratory Corporation of America, aka LabCorp – for the actual analysis. No insurance company or employer need be notified of the results, and the standard HIPAA rules apply. You’re free to share the results with a doctor or insurance company if you’d like, but that’s your callI
This isn’t something happening in the murky future of President Obama’s health care reform; it’s going on in Orlando right now, and has been for a couple of years. Soon these services could be available at a grocery store near you. In addition to retail operations, there are scores of direct-to-customer (DTC) labs operating online. Contact them via a website, order the tests, pay for them and the broker will e-mail or fax your wishes to the nearest testing center.
Think of a DTC retail clinic as a storefront instead of a screen. It could be win-win-win: Entrepreneurs make wild money, consumers pay less and doctors get reliable diagnostic data. The medical community does have concerns, but Obama’s push for reform doesn’t leave time for sweating the small stuff.
“I think it’s part of an inevitable evolution toward complete transparency and open sourcing of all medical information,” says Dr. Patrick Torcson, chair of the Performance and Standards Committee for the Society of Hospital Medicine. “On the plus side, individuals could benefit by the availability of lab information to be more proactive in managing their personal health conditions like diabetes and high cholesterol. Additionally, more labs could mean more competition for services and therefore costs should come down for these expensive tests and quality should go up, if you believe in free-market principles.
“On the negative side would be an immediate concern about the quality and reliability of the lab test results,” he continues. “There’s a lot of regulatory and scientific standards that go into making these tests accurate and reliable. It is certain that many labs would not meet these quality standards.”
All of that aside, there’s nothing stopping consumers from moseying over to the testing shop – alone or with that special someone – for a 10-minute urine drug screening. And answers to those burning questions about HIV and hep-C can be had in hours, anonymously.
n a visit to the Any Lab Test Now clinic in the Kmart shopping plaza in Winter Park – there are four clinics in the area, owned by a couple of franchises – the intake workers are friendly, if not ultra-professional, and answer questions satisfactorily. When asked about the quality of their products, the staff says LabCorp does the testing and explains that their company has negotiated a better deal with LabCorp than hospitals and doctors, and that the lab reports are identical to what a doctor would receive. The reports offer numbers only, but results are clearly identified as being “normal” or “out-of-range.” If you have any questions beyond that, workers are allowed only to recommend a follow-up with a physician to help you make sense of the numbers.
The decor and atmosphere in the location is more Department of Motor Vehicles than clinic; there are no uniforms for the workers filling orders. The space is tight, so it’s easy to hear conversations without even having to try, even when a customer is in the area where blood is drawn and urine cups are dispensed. That can make for awkward situations; Big Brother may not be watching, but the dude slouched in the next chair over is fascinated. Every facility is different, of course.
The Any Lab Test Now chain, headquartered in Atlanta, claims to offer thousands of tests; hundreds are listed on the website. Solantic, headquartered in Jacksonville with eight Central Florida stores to date, takes another approach. There, customers can see a doctor or choose from a limited “a la carte” menu of medical tests posted behind the front desk and on the website.
Other urgent-care centers are following suit, so it pays to compare prices: Solantic charges $35 for a PSA (prostate specific antigen) test, crucial for diagnosing cancer in men; Any Lab Test Now prices the same test at $49, but offers a $10 coupon on its website.
Why isn’t a go-ahead from a physician needed? Actually, it is. Joe Neely, CEO of Any Lab Test Now, says doctors do review requests at his franchises, as required by law. But a loophole allows specimens to be drawn before the physician’s review.
“We still provide a physician’s order for the lab, and we still have a consulting physician in a retail environment,” says Neely.
The major objection to DTC testing stems from questions regarding accuracy and the potential for fraud with genetic testing. Local DTC testing clinics don’t offer expensive in-depth genetic testing, except for a few options to learn paternity and ancestry DNA, which can help determine heritage and lineage. For ancestry DNA, samples are swabbed from inside the cheek; the results measure the percentage of markers you share with global subgroups, including Sub-Saharan African, Native American, European and East Asian.
Neely says tests most frequently requested at retail clinics are split according to economics. In lower-income areas, there’s more demand for employee drug screenings, pregnancy tests, STD profiles and infidelity diagnostics (yes, you can bring in the proverbial blue dress with a weird spot on it). Locations in higher-income neighborhoods see a more educated clientele, he says, requesting wellness monitoring for things like cholesterol counts and prostate cancer screenings.
How can the tests be so cheap? Because they are priced to hook customers. Neely says there isn’t much competition in the Orlando area at the moment, but wants to secure the market before it does, inevitably, arrive. “We are pioneering in the industry, just as the small clinics in drug stores and grocery stores did. What [Any Lab Test Now] is paying for now is the cost of educating the consumer.”
s of this writing, 25 states and the District of Columbia allow DTC testing; 13 have banned it and 12 more allow limited testing. “States that ban DTC testing typically have a requirement that laboratory tests be requested by a licensed physician,” writes Mark Terry in a January 2008 article published by Washington G-2 Reports, a newsletter publisher specializing in analysis and reporting in the medical business field.
DTC testing – including at-home genetic testing – is estimated to represent “$100 million in annual revenue out of the overall $51.7 billion U.S. laboratory testing market,” writes Terry. “Though a small segment, it appears to be growing at 15 percent to 20 percent annually, driven in part by the approximately 45 million uninsured Americans and the aging of the baby boomers as they begin to retire.”
But another article, published by Washington G-2 Reports in April, notes that the laboratory-testing market in the United States could almost double in near future, up to $98.4 billion. That looks promising for the growth of the DTC niche as well.
Nonetheless, growth has slowed in the DTC segment recently, Terry says, due to the economy and the fact that retail clinics are operating on a “pretty low margin” of profitability to stay competitive.
“I think there are a couple of things going on,” he says. “They are putting clinics in Wal-Marts and CVS pharmacies and other types of drugstores. And [retail clinics] run on profit per square footage.” So repurposing space inside existing buildings cuts operating costs. Down the line, the payoffs could be tremendous for the retail clinics, or they could be driven out of the market.
ut right now, the advantage goes to the consumer.
“Employers are moving from indemnity health insurance plans to health savings account plans,” says Neely. “Over the last 20 years, health insurance costs have been spiraling. To fight that, employers are moving to high-deductible health savings accounts. … What an HSA does is empower the consumer, because you are given tax-free money to spend however you see fit. It’s real money; it’s money that could go into retirement; it’s part of the whole consumerism movement in health care. That the maintenance cost is coming out of your pocket gives you more incentive to take care of yourself.”
Health savings accounts could come as a shock to consumers who don’t want to quit smoking, exercise or stop eating mountains of sugar. In the future, Type II diabetes could be considered the consequence of a lifestyle choice, for example, and care for the condition would not be covered. With HSAs, health care will require discipline and careful decision-making on the part of the subscribers, who’ll be advised to shop for the most affordable choices.
As Torcson of the Society of Hospital Medicine says, regulating the quality and reliability of the lab results, as well as the interpretation standards, is going to be a major challenge. For now, lab reports are delivered in the context of statistical ranges, though there are variations within the industry. Also, says Torcson, there is a built-in statistical error margin of approximately 5 percent. He says, “Many people will have abnormal test results and not have any disease.”
Studies are currently underway on the reliability of DTC testing, notes Terry, including a big one by the Mayo Clinic, which has incorporated it into its business model. And the Cleveland Clinic in Ohio has already opened a DTC retail clinic within its facilities and reports positive response, especially for wellness testing.
But until standards are established and regulation in place, buyer beware.
“It’s a complicated business,” says Terry. “It strikes me that there is a little bit of a disconnect. Does the government want you to have good access to health care, or do they want to send you to a store where you might have a limited health care experience?”
The results aren’t in.