Cancer Diagnoses Declined Sharply During First Year of Pandemic

Cancer Diagnoses Declined Sharply During First Year of Pandemic

Cancer Diagnoses Declined Sharply During First Year of Pandemic

New diagnoses of eight common cancers (prostate, breast, colorectal, lung, pancreatic, cervical, gastric and esophageal) significantly declined during most of the first 13 months of the pandemic (March 2020-March 2021), according to a study by Quest Diagnostics published August 31 in JAMA Network Open, Oncology. It is believed to be the largest and most comprehensive analysis of cancer diagnosis rates during the pandemic.

Lockdown measures and fear of going to doctor’s offices and hospitals are believed to have led many people to put off preventative care like routine screenings that could have resulted in diagnosis of cancer during the first year of the pandemic, the study suggests.

The Quest study included 799,496 patients (45% women/55% men) with an average age of 68. Data over four time periods was analyzed: prepandemic, March to May 2020, June to October 2020, and November 2020 to March 2021.

Prepandemic, January 2019 to February 2020, the average monthly number of new diagnoses for the eight cancers was 32,407. During March to May 2020, the monthly average fell by 30% to 22,748 cases. It fell by 10% to 29,304 cases in the next period, June to October 2020. Finally, new cancer diagnoses fell 19% to an average 26,204 cases in the last period, November 2020 to March 2021.

Delayed cancer diagnosis can lead to more advanced disease, more aggressive and costly treatment, and worse outcomes, noted the Quest study.

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ACLA Study Cites Emerging Crisis of Undiagnosed Diseases and Delayed Treatment
A separate study of Medicare claims data found that clinical lab test utilization overall fell by 18% from 2019 to 2020, even when taking into account the large volume of Covid-19 testing conducted in 2020. The study was sponsored by the American Clinical Laboratory Association and performed by Braid Forbes Research (Silver Spring, MD). The analysis compared the volume of CLFS tests for Medicare beneficiaries in the first nine months of 2020 to the volume of tests performed in the same period of 2019. Key findings included:

Cancer testing decreased by 31% on average across key tests, including:

EGFR test volume for non-small cell lung cancer fell by 47%
BRCA test volume for breast and ovarian cancer fell by 35%
Prostate specific antigen (PSA) test volume fell by 16%

Diabetes testing decreased by 29% on average across key tests, including:

A1c test volume fell by 20%
Glucose test volume fell by 36%

Other tests seeing substantial volume declines included chronic kidney disease (-31%), liver disease (-23%), lipid panel (-22%) and drug testing (-21%).

Quest Completes Acquisition of Mercy’s Outreach Lab Business

Quest Completes Acquisition of Mercy’s Outreach Lab Business

Quest Completes Acquisition of Mercy’s Outreach Lab Business

Quest Diagnostics has completed its previously announced acquisition of the clinical lab outreach business of Mercy (St. Louis, MO) in an all-cash asset transaction (see LE, March 2021). The purchase price has not yet been disclosed. Cain Brothers served as Mercy’s transaction advisor.

Under the deal, Mercy’s clinical lab outreach tests will transition to Quest’s full-service laboratory in Lenexa, Kansas. Mercy’s clinical lab outreach business currently operates from 29 hospital laboratories and two independent clinical laboratories serving providers and patients in Arkansas, Kansas, Missouri and Oklahoma.

Mercy will continue to wholly own and operate its hospital laboratories for tests connected to inpatient and hospital-based outpatient services.

Publicly-Traded Lab Revenue Falls 1.4% In First-Half 2020

Publicly-Traded Lab Revenue Falls 1.4% In First-Half 2020

Publicly-Traded Lab Revenue Falls 1.4% In First-Half 2020

On a combined basis, 20 publicly-traded labs reported a revenue decrease of 1.4% to $9.8 billion during the first six months of 2020 (after adjusting for acquisitions), according to financial reports collected by Laboratory Economics.

Among five national clinic al labs (Quest Diagnostics, LabCorp, Sonic, BioReference and Enzo), combined revenue fell by 3.1% (after adjusting for acquisitions). BioReference had the strongest revenue growth, up 18% to $421.8 million, driven by Covid-19 PCR testing. BioReference processed approximately 2.2 million Covid-19 PCR tests during the first six months of 2020.

Among 15 specialty and genetic testing labs, combined pro-forma revenue increased by 7.3%.

Pro-forma revenue growth was fastest at DermTech, up 98.4% to $2.4 million. Other fast-growing companies included Castle Biosciences, up 54.9% to $30.1 million; Guardant Health, up 47.7% to $133.8 million; and CareDx, up 39.6% to $80.2 million.

Top 25 Fastest-Growing Labs by Medicare Part B Volume of Services

Quest Diagnostics Mid-Year 2020 Review

Quest Diagnostics Mid-Year 2020 Review

Quest Diagnostics Mid-Year 2020 Review

Quest Diagnostics (Madison, NJ) reported net income of $284 million for the six months ended June 30, 2020, down 27.2% from $390 million in the same period for 2019. Overall, Quest’s reported half-year revenue was down 5.1% to $3.649 billion. Looking specifically at Quest’s lab testing business: revenue was down 4.8% to $3.508 billion, including 0.7% gained from acquisitions. Here’s a summary of some key topics discussed during the company’s July 23 conference call with analysts.

Test Volume Trends
Quest reported a 10.2% decline in its requisition volume for the first six months of 2020 versus the same period in 2019. Non-Covid-19 requisition volume fell by approximately 19%.

Quest CEO Steve Rusckowski said volumes were rebounding strongest at primary care offices, including Ob/Gyns, and also for anatomic pathology testing. He said that the weakest volume trends were in life insurance testing, pre-employment drug screening and wellness program testing
for employers.

At the low end of its outlook, Quest is assuming an average 20% decline for its non-Covid-19 requisition volumes through the remainder of the year.

Covid-19 Testing
Quest has performed a total of roughly 8.5 million Covid-19 PCR-based tests year to date through June 30. Quest currently has the capacity to perform up to 130,000 Covid-19 PCR-based tests per day and plans to expand its capacity to 150,000 by early September.

Pooling patient samples for Covid-19 PCR-based tests will help expand capacity. Quest has begun combining four patient samples for pooled testing in locations where Covid-19 positivity rates are less than 5% (e.g., the Northeast). Quest has stated that it plans to bill for four tests when it performs pooled testing on four patient samples.

Meanwhile, Quest has performed a total of more than 2.5 million Covid-19 antibody tests year to date through June 30. Quest is currently performing about 20,000 antibody tests per day, well below its capacity for 200,000.

UnitedHealthcare’s Preferred Lab Network
Rusckowski said that as a member of UnitedHealthcare’s Preferred Lab Network, Quest had secured business from more than 180 out-of-network UHC labs.

Lab Acquisitions
“If anything, the pandemic could be an additional catalyst to help drive industry consolidation. Some transactions in the pipeline that were paused
because of the pandemic are being revisited,” said Rusckowski. Quest acquired Memorial Hermann Diagnostic Labs for $120 million on April 6, and completed its purchase of 100% of the joint venture Mid America
Clinical Labs in early August.

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Top 25 Lab and Pathology Companies Receiving PRF Payments

Top 25 Lab and Pathology Companies Receiving PRF Payments

Top 25 Lab and Pathology Companies Receiving PRF Payments

Not surprisingly, Quest Diagnostics ($65 million) and LabCorp ($56 million) top the list in terms of highest PRF payments received by lab and pathology companies. Exact Sciences, including Genomic Health, received $23.5 million, while Sonic Healthcare, including Aurora Diagnostics, received $12.4 million. In total, the top 25 lab and pathology companies received $222.6 million in PRF payments.

Top 25 Fastest-Growing Labs by Medicare Part B Volume of Services

Quest Completes Acquisition of Mercy’s Outreach Lab Business

Quest Reports Full-Year 2019 Financial Results

Quest Reports Full-Year 2019 Financial Results

Quest Diagnostics reported net income of $858 million for full-year 2019, up from $736 million in 2018. Quest’s overall revenue increased by 2.6% to $7.726 billion, with acquisitions contributing more than 2% to revenue growth. Quest’s average revenue per requisition decreased by 1.3% to an estimated $44.86 per req. A summary of key topics discussed by CEO Steve Rusckowski and CFO Mark Guinan on a January 30 conference call follows.

Volume Growth
Overall, Quest’s gene-based and esoteric testing grew by approximately 5% to $2.5 billion in 2019. The growth drivers included drug monitoring, tuberculosis testing (QuantiFERON and T-SPOT), Hemepath, blood cancer testing and Cardio IQ cardiovascular testing, according to Rusckowski.

Immunoassay Vendor Consolidation
Siemens Healthineers has won a contract to provide up to 120 Atellica Solution immunoassay analyzers to 19 esoteric and core laboratories owned by Quest in the U.S. The Atellica system will also be installed at the new 250,000-square-foot lab that Quest is building in northern New Jersey. The consolidation to one immunoassay vendor is expected to save Quest $35 million per year.

Increased Competition for Hospital Send-Out Testing
Guinan said that hospitals are focusing more on pricing when selecting a reference lab. “In the past you might extend the [reference lab] contract with the understanding that you had a good reasonable price and they had good quality and all those kind of things. More and more of these are going to RFP where there’s an opportunity for price competitors to come in and compete on price very highly.”

Wage Pressure
“We have pressure in some geographies to up our wages more than we have historically because we have to be competitive with other companies,” said Rusckowski. He noted that Quest employs about 12,000 phlebotomists, more than 3,500 couriers, and thousands of specimen processors. “And so, if you look at the front end of our value chain, that’s where we see some pressure.”

UnitedHealth’s Preferred Laboratory Network                                                    Guinan said that United was focusing on how to reduce out-of-network usage. “They’ve done a number of things to try to reduce that, including sharing that information with members of the PLN, where we can go out and target some of those accounts and explain to the physician why there’s a benefit in steering patients to a preferred lab member.”

Guinan said that United began rolling out the PLN benefit, which offers members zero-dollar out-of-pocket cost for lab tests, to its fully-insured plans in January. “And then there’s the sponsored plans, which is the next step. So this is a long-term initiative that is certainly reaping some benefits. But it’s not in terms of a steep change where this is going to overnight move on dramatically.”

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