This is an excerpt of a 2,987-word article in the March 1, 2021 issue of THE DARK REPORT (TDR). The full article is available to members of The Dark Intelligence Group.
CEO SUMMARY: In Wisconsin, an oncology research lab started sequencing variants of the SARS-CoV-2 virus and found multiple uses for such test results to help hospitals, health systems, schools, and municipalities identify infection sources and track the virus’ spread. In one case, the lab identified a sub-strain of the virus that appeared to be linked to young people socializing in bars. The lab also did variant sequencing in municipal wastewater to detect a virus mutation before a surge in cases, suggesting that such testing may have some utility in forecasting COVID-19 outbreaks.
IN RECENT WEEKS, INTEREST HAS BEEN BUILDING for clinical laboratories and anatomic pathology groups to do molecular SARS-COV-2 testing to identify and report genetic variants of the deadly virus. This trend is the latest example of how the pandemic has created the potential for a clinical opportunity to generate a new stream of revenue—once payers institute reimbursement for variant sequencing of SARS-CoV-2 specimens.
One laboratory director whose lab has tested for genetic variants since the earliest weeks of the pandemic has identified multiple ways that such information could be useful, such as identifying new variants as they emerge, as well as for tracing the spread of the virus in the population. This is essential for hospitals, health systems, schools, businesses, and other organizations that need to distinguish between virus outbreaks and random COVID-19 infections.
“Over the course of the pandemic, our ability to report genetic variants of the COVID-19 virus helped a dialysis center avoid shutting down after administrators found higher-than-normal rates of COVID- 19 infections and feared those infections meant the facility had an outbreak that only a shutdown could contain,” explained Paraic A. Kenny, PhD, Director of the Kabara Cancer Research Institute (KCRI) of the Gundersen Medical Foundation, in La Crosse, Wisconsin. “Much to the relief of administrators, variant sequencing in our lab showed that the infections were the result of unrelated infections.”
In an interview with The Dark Report, Kenny explained how his lab pivoted from doing cancer research in March 2020 to sequencing SARS-CoV-2 positive specimens from the 22 counties that the Gundersen Health System serves in western Wisconsin, northeastern Iowa, and southeastern Minnesota. He also outlined how KCRI has identified clinical and business opportunities for clinical labs and AP groups that can sequence variants to SARS-CoV-2.
Sequencing Variants Has Value
In the past 12 months, KCRI has done fascinating work that other labs seeking to add variant sequencing to their menu of tests could do. Consider, for example, these three examples:
In one case, Kenny’s lab identified a substrain of the virus that seemed to be linked to young people socializing in bars.
In a second case, the lab did variant sequencing for municipalities showing that a virus mutation was detectable in wastewater before a surge in cases, suggesting that such testing may have some utility in forecasting COVID-19 outbreaks.
In a third case, the lab followed the spread of one strain of SARS-CoV-2 over six weeks, from its origin at a meatpacking plant in Postville, Iowa, to individuals in 13 cities in seven counties across the three states—a region spanning hundreds of square miles. In this case, KCRI’s work showed the public health consequences of failing to mitigate the spread of the virus from one industrial setting into the surrounding communities.
In work KCRI did for a hospital-based dialysis center in Wisconsin, the lab identified five cases of COVID-19 infections that occurred over 11 days in November among patients with end-stage renal disease. Facility-wide testing and analysis of genetic sequencing results showed no link among these cases, allowing the facility to remain open.
The following is an edited version of an interview Joseph Burns, Senior Editor of The Dark Report, conducted with Kenny early last month.
EDITOR: Would you describe the clinical and financial opportunities for clinical labs and AP groups capable of identifying variants to the virus from positive specimens and then tracing those infections? In other words, could such work be a viable strategy for labs that are testing patients for COVID- 19 to add variant sequencing?
KENNY: Yes, there are a variety of potential uses for variant sequencing technology, and the dialysis center is a good example. Since about this time last year, we’ve spent all of our time trying to understand the links between SARS-CoV-2 cases as the virus has spread and mutated. The cases in the dialysis center showed why a small number of samples were unconnected, and that information was significant for those who manage the center. Without that information, the center might have been forced to shut down at least temporarily.
EDITOR: Are schools—including colleges and universities—interested in knowing the genetic variants from the COVID-19 testing of their students, faculty, and workers?
KENNY: There are definitely similar opportunities to do this work in schools. In fact, schools are probably more vulnerable in many ways than dialysis centers or other treatment facilities. When the number of cases rises in a community and you see the co-occurrence of cases in a classroom, people can get anxious about the potential risks of widespread infection. That’s when sequencing can eliminate the possibility that something intrinsic is going wrong in the school or among these infected individuals. Without sequencing, for example, we look to see if the infected students all had hockey practice together or if many of the students go to the same church. All of these cases could be completely unrelated. But we don’t know that without sequencing the virus from infected individuals.
EDITOR: Are you saying that without sequencing, schools, businesses, other organizations, and cities and towns tend to implement mitigation strategies based on guess work?
KENNY: That is often the case. Organizations commonly enact policies to mitigate COVID-19 infections without a meticulous understanding of how the disease is spreading and without knowing all of the risk factors in a variety of situations. That’s where sequencing to identify variants can provide a fuller understanding of how the virus spreads and how to contain the spread.
EDITOR: Is it correct to assume that a sales staff for a clinical lab or an AP group could make the argument that variant sequencing could help all kinds of institutions, including schools, hospitals, and businesses, avoid the need to shut down if they know the source of an outbreak?
KENNY: In theory, yes. In fact, that’s the situation we had with the dialysis facility. Our local public health department was concerned about infections in that facility because they involved a number of cases occurring together in a congregate setting among high-risk patients. In Wisconsin, the requirement is to do facility-wide testing every seven days until that site can demonstrate a certain number of consecutive days with no new COVID-19 cases. Essentially, the dialysis center was mandated to do facility-wide testing. That much testing is not cheap. Therefore, identifying the variants involved in this case had the potential to save at least some of the costs of facility-wide testing.
EDITOR: Is it correct to assume, then, that facilities with COVID-19 testing programs can justify the cost of variant testing by doing a cost-benefit analysis to analyze facility-wide versus variant sequencing?
KENNY: The short answer is yes. A more complete answer is that organizations doing SARS-CoV-2 testing recognize how knowledge about the presence or non-presence of variant strains determines if additional testing is needed. Our work was useful because sequencing basically showed why the outbreak that everyone feared was occurring was actually not happening. Having that information may have prevented at least two more rounds of testing, which could have cost $8,000 to $10,000 per round. There’s definitely an economic value right there.
EDITOR: But these organizations would still need to pay for variant sequencing, and there’s a cost for that work, right?
KENNY: Yes, and mostly the way clinical laboratories test for variants is actually just to do the sequencing on positive specimens. So, from a business point of view, and from a clinical care point of view, there needs to be a rationale to test any individual positive specimen for a variance.
EDITOR: How would a clinical laboratory develop such a rationale?
KENNY: Given the current knowledge about the virus, one way is to identify the presence of the so-called spike in the virus that identifies a potential variant. Labs have seen that spike in numerous places around the world on distinct virus lineages, and we know that at least one spike predicts resistance to the monoclonal antibody therapies.
EDITOR: How might that knowledge be useful?
KENNY: With that information, a health system or health insurer might want to consider doing variant sequencing before implementing monoclonal antibody drug therapy because that therapy could be completely ineffective for a patient who has the virus with a certain spike on its genome. We don’t know yet if there’s a break-even point for deploying a test like that. But if certain variants become more widespread and some number of patients are being considered for infusion with monoclonal antibody drugs, there might then be a value proposition for health systems, clinical labs, and payers to consider.
EDITOR: You’ve described a theoretical path to reimbursement. But your lab has done variant sequencing on SARS-CoV-2 specimens for almost a full year now. How does your lab get paid for that work?
KENNY: The first case of COVID-19 in our region last year happened on March 18. Our lab had its first genome completed sometime around March 25 or 26. At the time, we were about the 15th lab or so in the United States to report a COVID-19 genome sequence to GISAID, which means we were very early adopters. The GISAID Initiative is a global effort to promote the sharing of data from all influenza viruses and the coronavirus that causes the COVID-19 illness.
EDITOR: Were your lab’s early gene sequencing efforts financed internally?
KENNY: The institute is a research lab, and, just as in any lab, we get economies of scale by doing more sequencing of the virus. The more viruses a lab can sequence in parallel, the cheaper it gets when costs are averaged on a per-sample basis. So, for us, it costs about $200 per sample when we roll in all labor and all of our other costs into the variant sequencing work we do. That said, the research department here at Gundersen has borne most of the costs of this work because they see the value that our efforts add to the other research we do and to the organization itself.
EDITOR: Given that KCRI’s lab is unusual in that respect, how would other labs address the cost of adding variants to their COVID-19 test reports?
KENNY: In certain labs with certain equipment, I would estimate that the cost could be a lot less than $200 per sample. In our lab, we basically have one sequencer—the Thermo Fisher Ion Torrent S5—which works really well for us and has the kind of throughput we need. Many clinical laboratories will have instruments capable of much higher throughput and more robotics to help bring the cost down substantially. Some labs might be able to do variant sequencing for below $200 and possibly as low as $100 per specimen. That means that our cost of $200 may be on the upper end of the scale.
EDITOR: How would you describe the value that variant sequencing brings to COVID-19 testing programs?
KENNY: We’ve published articles on the variant sequencing we did for the dialysis facility and for other organizations. All of that work helps to justify our existence because those are significant contributions to our healthcare system. But in addition, we are learning useful information about COVID infections and SARS-CoV-2 variants.
Will your lab consider variant sequencing for SARS-CoV-2? Please share your thoughts with us in the comments below.