By Nick van Terheyden aka Dr Nick, Principal, ECG Management Consulting
Twitter: @drnic1
Host of Healthcare Upside Down – #HCupsidedown
If you’ve ever had a blood test at your physician’s office, you probably know how the process works: a phlebotomist draws your blood, and then a few days later, your doctor contacts you with the results. The testing itself doesn’t actually take that long, but the sample has to be shipped to a laboratory—which, like many healthcare organizations, may struggle with a shortage of both personnel and supplies. The decision to order laboratory tests is often a choice between accuracy and expediency.
And that was true even before COVID-19.
The pandemic revealed yet another crack in our healthcare services. The centralized nature of testing services has long made it difficult for labs to keep up with demand. The pandemic amplified these challenges with an urgent demand for rapid, accurate testing to identify patients infected with the coronavirus. Instead we saw the infrastructure creaking under the strain and turnaround time rising to days and sometimes weeks.
“The larger consumer community had a need, and the demand was not coming only from doctors and hospitals—it was coming from everybody,” explains Gary Frazier, Founder and CEO of Worksite Labs. “And so in that environment, you need a decentralized approach versus a very centralized, institutional approach.”
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A healthcare industry veteran with a penchant for developing innovative strategies and technologies, Gary introduced a novel solution to the testing problem—converting shipping containers into mobile laboratories. His company, Worksite Labs, provides businesses with on-site labs, which the company builds, staffs, and operates according to CLIA standards. The labs can be staffed 7 days a week for test screening and analysis through daily testing and diagnosis.
As with other pandemic-inspired solutions, the mobile labs were conceived as a temporary fix for what many thought would be a short-term problem. But with COVID-19 demonstrating its staying power, the need for rapid, on-site testing is likely to persist.
On this episode, Gary talks about a reimagined laboratory business and the advantages of keeping healthcare local. Here are three takeaways from our conversation.
The impetus for Worksite Labs.
In the early months of the pandemic, Gary was contacted by a correctional facility that had a problem. “They didn’t want to bring in new detainees and have them infect inmates that they had already tested and knew were COVID negative,” he explains. “But they also have rules around how long they can hold the detainees before releasing them into the general population. They did not have a CLIA-certified laboratory on site. They had to swab people in the jail and send specimens out to a large, traditional laboratory. And during that time, laboratories were turning specimens around in days, not hours—days. Well, that was a problem.
“And we looked at the problem and said, ‘What if we put the lab on site in a parking lot of the jail?’ And that was the first big use case of us solving a problem for vulnerable population.”
That the solution came in the form of a repurposed shipping container may seem novel, but it’s a functional solution designed to meet the needs of the moment. The labs can be assembled quickly and folded up and moved to a new location on short notice. A business can order one without having to hire staff or build new infrastructure.
As demand for testing grew, so did the venture. “One thing led to the next and we were having conversations with Hawaiian Airlines. They wanted to have a private network of laboratories at airports for people coming from the mainland to Hawaii. We were able to pop up labs within 30 to 40 days at airports all across the West Coast.”
A short-term solution with long-term implications.
Like so many people, Gary figured the pandemic would be over fairly quickly, and he designed his business model accordingly. “The vaccines were going to come in and change everything for us, right? So we really built a business that was to be quasi-temporary,” he says. “The business model was, ‘you stand it up and you tear it down easily.’ It couldn’t be something that was permanent. Now here we are two years later, and that turns out to be a good long-term strategy, because it made us very adaptable, nimble, and quick.”
But the agility Gary describes is only part of what’s helped his company grow. Vertical integration is what distinguishes the venture and positions it to endure. Many testing centers sprung up at the height of the pandemic, but as Gary notes, they were limited in scope. “They’re not labs—they’re just doing COVID swabbing collection services. Some of them aren’t even in healthcare; they’re just popping up COVID testing so they can make money,” he explains. “What makes us special is that we do the collection, we do the lab processing, we’ve built our own tech. Soup to nuts, we control the experience all the way through to the end. We have a 24-hour guarantee. There are very few labs that are actually doing the front-end components. That’s what sets us apart.”
Keeping healthcare local.
The pandemic will end, eventually, but Gary doesn’t expect the demand for on-site lab testing to diminish. For one thing, all indications are that COVID-19 will be with us indefinitely. “As long as people will be required to test to go to other countries, chances are, we’ll be in the business of doing COVID testing,” Gary says.
And his company isn’t limiting itself to screening for COVID-19.“We are a high-complexity, CLIA-certified laboratory that has labs scattered across the United States,” Gary explains. “We can do STI, we can do LDLs, we can do blood panels. We’re CAP accredited, which is the College of American Pathology. We can do the same thing that LabCorp and Quest and any other major lab can do,” but locally, and with quicker turnaround times.
That can translate into expanded lab access—not just at airports and high-traffic areas, but in communities throughout the US. Gary says that “the ability for us to be local, where our providers are,” is an advantage for patients and providers. “The ability for urgent care centers and primary care physicians to have the fast turnaround times, and the high-touch, high-performance services of a laboratory, versus shipping stuff to a different state every day—that elevates their performance to their patients.”
About the Show
The US spends more on healthcare per capita than any other country on the planet. So why don’t we have superior outcomes? Why haven’t the principles of capitalism prevailed? And why do American consumers have so much trouble accessing and paying for healthcare? Dive into these and other issues on Healthcare Upside/Down with ECG principal Dr. Nick van Terheyden and guest panelists as they discuss the upsides and downsides of healthcare in the US, and how to make the system work for everyone.
This article was originally published on the ECG Management Consulting blog and is republished here with permission.