In-Office Testing Continues to Grow at Rapid Pace

Despite the ever-growing offerings of exotic molecular tests and the resumption of stronger volumes for national laboratory giants Quest Diagnostics and LabCorp, in-office medical testing remains a robust component of the laboratory sector. And data suggests it’s only going to continue getting bigger. The growth of in-office testing—also known as point-of-care tests—is being driven by a variety of factors. They include a boom in toxicology testing (which can often be performed with a relatively straightforward urine assay), a continued drop in prices and increasing sophistication of the technologies required to produce and perform such tests, and the desire of small to medium-sized medical practices to earn money on an ancillary service--particularly as they’re being squeezed by government and commercial payers by the other services they perform. Point-of-care testing also seems to sit well with the American ethos of do-it-yourself independence and the potential for reaping commercial gains. However, other entities aside from physician offices are getting into the point-of-care game. That includes outpatient and community clinics and retail clinics operated by national drugstore chains such as CVS. “Some of these retail clinics are integrating their (test results) and physician office access into their business models, which is also causing on-site testing to rise,” said Robert Gregory, chief business officer for Atlas Medical, a California-based consulting firm that focuses on coordinating diagnostic services. But the trend in point-of-care testing is also bumping up against some other issues, such as the Food and Drug Administration’s move to try to more closely regulate some facets of testing, the consolidation of medical practices, and a desire by the provider community to try and aggregate patient data into a single electronic health record. Nevertheless, in-office testing was a $2.44 billion market worldwide in 2014. The U.S. accounts for 58 percent of that market, even though it represents only about 5 percent of the global population, according to the Maryland-based research firm Kalorama Information. By contrast, Europe accounts for less than a third of the overall market. Meanwhile, the U.S. market is growing at a compounded annual growth rate of 4.5 percent, compared to 1 percent in Europe and 1.6 percent in Japan. "The United States is the center of the physician office lab trend," said Kalorama Publisher Bruce Carlson. According to a Kalorama report published last year, “one multispecialty practice in the Midwest with 40 physicians has a lab that does 500,000 tests each year, including moderate and high-complexity tests ... the practice runs an average of 250 patients during a day and employs seven full-time technologists (and) seven phlebotomists.” Peter Francis, who runs a Maryland-based laboratory consulting firm, noted that many hematology and oncology offices perform complete blood count testing in-house, primarily because of the need for a rapid turnaround while the patient is still present. But the capabilities of some of the point-of-care tests have given him pause. “I once uncovered an OB/GYN in Rockford, Ill. that was performing Affirm III in his office,” he said, referring to a complex molecular test for vaginitis that most physicians typically send out to a reference lab. “I remember being shocked at the time of seeing this in-house capability–I had never witnessed it before,” he added. Francis noted that there are also some in-office arrangements that are far less complex and are intended primarily to capture extra revenue. That would include a dermatology or dermopathology practice setting up a technical component lab that bills for preparing slides that are then sent out for interpretation. Despite the delicacy of such arrangements, the physical nuts-and-bolts of point-of-care testing remain fairly simple. They often avoid complications such as the use of multiple reagents or wet chemistry handling. And if they are required, such steps are sometimes compressed into disposable cassettes or cards. As a result, assays in this realm are usually waived under CLIA regulations, meaning they’re minimally regulated. That typically includes such tests as urinalysis, hormone tests, and rapid assays for diseases such as HIV or hepatitis. On average, about 650 such tests per year have been waived under CLIA between 2010 and 2013—mostly for drug abuse testing and urinalysis, according to data compiled by Kalorama. Whether the FDA’s recent move to regulate laboratory developed tests will affect that specific market remains to be seen. The American Clinical Laboratory Association and other laboratory lobbies have objected to any regulation of LDTs, suggesting instead that a tightening of CLIA regulations would suffice instead. However, it seems unlikely that this would impede the granting of waivers for the point-of-care market because such tests usually don’t impose grave risks on a patient if they’re misapplied or misinterpreted. “Labs performing LDTs likely already have high-complexity CLIA certification. On the other hand, point-of-care diagnostics, at least in the U.S. and particularly in the case of physician offices and near-patient testing, is heavily reliant upon the ‘dumbing down’ of established ... tests,” said Emil Salazar, a Kalomar analyst who wrote its point-of-care report. “At a certain point, a test is deemed by the FDA to have minimal enough risk on patient health (in the event of an erroneous result and subsequent impact on therapy) and/or low enough risk of user error that it is granted waived status.” The other issue is whether such testing winds up being properly integrated into a patient’s overall electronic health record. The Kalorama report suggests that many new point-of-care tests are far more highly connected than in the past, with many able to transmit results directly to desktop or laptop computers. It noted that “continued consolidation in health care systems and mounting pressure to coordinate care and eliminate unnecessary repeat services will encourage greater penetration of connectivity solutions among (testing) instruments and devices.” One of the biggest issues that Atlas’ Gregory often encounters is “siloization”—where a test is performed in the physician’s office but is not shared with a patient’s other providers. “The physician making ordering decisions must be working with the most current patient information available. Our view is that labs must maintain dynamic access to the most complete set of patient data and make that information available to order makers as part of their workflow at the time they are ordering testing,” Gregory said. “The more that ‘islands’ of data are perpetuated, without the means of integrating that data into the continuum of care, the more likely inappropriate or unnecessary tests will be performed.” Takeaway: In-office/point-of-care testing is continuing to grow at a rapid pace in the U.S., spurred on by market conditions that appear to be unique compared to the rest of the world.