The COVID-19 pandemic not only spawned a host of new pop-up clinical laboratories to test for the SARS-CoV-2 virus, but it also spurred the creation of new “boutique” labs that cater to people who want fast test results and are willing to pay for a premium service.
Between 2020 and 2021, the number of clinical laboratories in the United States certified under the Clinical Laboratory Improvement Amendments (CLIA) increased by about 13 percent, from 286,396 to 323,086, according to data from the Centers for Medicare and Medicaid Services (CMS). Much of this growth is attributed to new COVID-19 testing laboratories. Historically, annual growth of clinical laboratories in the US is closer to 2 percent to 3 percent per year.
During the pandemic, as individuals and businesses needed fast COVID-19 test results for work and travel, labs that could provide sample collection and quick test results in one location became desirable. For many people, waiting two to three days for test results was not acceptable. Rachael McCrary, a self-described entrepreneur, saw a need for premium COVID-19 testing and fast turnaround and in 2020 opened Gather Labs in Beverly Hills, which she describes as “the Starbucks of lab testing.”
With a storefront, individual patient collection rooms, and soothing music playing in the background, Gather Labs caters to consumers who want a more personalized experience, says McCrary. While many clients pay out of pocket for testing, Gather Labs does accept some insurance. Gather also contracts with production companies, businesses, and other organizations to offer COVID-19 testing for their employees or members. Gather Labs is a CLIA-certified high-complexity lab that performs laboratory testing on site, but it’s the customer service that really sets Gather apart from other labs, says McCrary.
“We make testing for COVID and STDs and influenza fast, safe, easy, and really fun, so people want to do it and enjoy the experience,” she says. Clients pay $190 for a PCR COVID test with results in 29 minutes, $65 for a rapid antigen COVID test, and $75 for an influenza A+B test. For $275, the lab will send a clinician to your home, office, or hotel in West Hollywood or Beverly Hills to perform COVID testing.
Though it’s unclear just how many companies offer concierge laboratory testing services, a quick online search turns up a number of companies that offer concierge PCR COVID-19 testing, including LabDX, which offers in-home COVID-19 testing with generally same-day results in Miami Gardens, Florida; Welz, which offers same-day in-home rapid testing in New York, Philadelphia, and Los Angeles, as well as PCR testing in New York; and DMCovid-19 Test, which offers travel PCR testing by house call nationwide in all states except Alaska and Hawaii.
The next iteration of direct-to-consumer testing
Clinical laboratories like Gather Labs, which offer self-pay diagnostic testing, may be the next logical iteration of direct-to-consumer (DTC) testing, in which consumers order diagnostic tests directly, without physician involvement, and have specimens collected at a local laboratory contracted by an online business (typically Quest or Labcorp). While Gather Labs processes its own tests on site and has an actual storefront, the self-pay model for lab testing has been around since DTC testing first began in 2008. DTC testing, also known as direct-access testing and consumer-directed testing, is currently allowed in 37 states and the District of Columbia. It is not typically reimbursed by insurance companies or other payors.
The global DTC testing market is expected to grow
According to The Wheel, a virtual health care company based in Austin, Texas, the rise of patient-consumerism has flipped the concept of diagnostic testing on its head. “As patients increasingly adopt a self-service health care mentality, the popularity of direct-to-consumer lab testing has grown exponentially over the past few years,” the company says in an article on its website, noting that the global market for DTC testing is expected to grow from $1.4 billion in 2020 to $2.6 billion by 2025, with a compound annual growth rate of 14.2 percent during that period. A number of factors are driving the growth of DTC testing, including concerns about privacy or stigma, ownership of health data, convenience, cost savings, early disease detection and access to tests that aren’t covered by insurance.
"Whether it’s a premium service such as in-home specimen collection or a routine blood test ordered online, one thing is certain—consumer-initiated testing is here to stay."
Jon Harol, president of Lighthouse Lab Services, a consulting company that helps new labs get started, says that consumer-initiated testing is a movement that has been accelerated by COVID-19 and driven by individuals wanting a more user-friendly lab testing experience.
“The overall trend is toward a more consumer-packaged laboratory solution,” he says. “In the past, laboratory testing was not very consumer friendly. Often patients didn’t know what tests were being ordered or didn’t understand their results. Companies that offer consumer-initiated testing are much more focused on the client and ensuring that the experience is a positive one.”
While in the past clinical laboratory services have often been treated as a commodity, Harol believes that is now changing as health care providers and payers understand the value of laboratory data, and as labs are getting better at reaching out to consumers directly. Whether through a DTC online testing intermediary or through an actual lab that offers self-directed and self-pay testing services, consumer-initiated testing is certain to grow.
Walk-In Lab, an online DTC company, was an early entrant in the consumer testing market. The company, founded in 2009, offers more than 2,000 lab tests that can be ordered online. Customers go to a local Quest or Labcorp patient service center to have specimens collected and tests run. Results are provided by Walk-In Lab, which directs customers to online resources for more information about their results. In some cases, such as test results for sexually transmitted disease or cancer markers, a customer service specialist or a contracted physician will contact the customer to discuss the results and direct them to follow up with their primary-care physician, says Amanda Wootan, vice president of research and development.
“Since COVID hit, a lot of people are taking their health a lot more seriously,” she notes. “That and the high cost of health care are leading people to order tests themselves rather than go through a doctor.”
Though Walk-In Lab does not accept insurance, the company will provide receipts with CPT codes that customers can submit to their insurance company to get reimbursed (although reimbursement is never guaranteed).
What’s the future of concierge lab testing?
While DTC testing or consumer-initiated testing is expected to grow, the future for labs offering COVID-19 testing or concierge at-home services is uncertain. To survive, COVID-19 testing laboratories will need to expand their test menus, says Harol, noting that Lighthouse Lab Services has helped set up more than 60 COVID-19 testing labs in the past two and a half years.
“We are having conversations with them right now about pivoting into other areas,” he says. “I don’t think COVID-only labs can make it based only on COVID testing, but there are opportunities for them to add on other types of testing.”
As for concierge lab medicine or boutique labs that offer at-home specimen collection for a fee, these services probably only make sense in high-income areas, such as Beverly Hills, where clients are willing and able to pay premium out-of-pocket prices for expedited COVID-19 testing services for travel and special events, believes Dennis Weissman, a lab industry thought leader and president of Dennis Weissman and Associates, a lab consulting company based in Falls Church, VA.
“Though COVID is almost certainly going to be around for the foreseeable future, I don’t see the long-term business proposition for premium or boutique labs unless they also offer other types of specialized and expedited lab testing services aimed squarely at high-income population clusters,” he says.
Whether it’s a premium service such as in-home specimen collection or a routine blood test ordered online, one thing is certain—consumer-initiated testing is here to stay.